exv10w1



 





Exhibit 10.1



FIRST AMENDED AND RESTATED




CREDIT AGREEMENT




DATED AS OF JULY 19, 2006




AMONG




NORTH AMERICAN ENERGY PARTNERS INC.

as Borrower,




THE LENDERS LISTED HEREIN,

as Lenders




and




BNP PARIBAS (CANADA),

as Administrative Agent and Collateral Agent










(First Amended and Restated Credit Agreement)



 









 











	 	 	 	 	 
	SECTION 1. DEFINITIONS
	 	 	1	 
	1.1 Certain Defined Terms
	 	 	1	 
	1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement
	 	 	34	 
	1.3 Other Definitional Provisions and Rules of Construction
	 	 	35	 
	1.4 Amendment and Restatement
	 	 	35	 
	SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
	 	 	35	 
	2.1 Revolving Loan Commitments; Making of Loans; the Register
	 	 	35	 
	2.2 Interest on the Loans
	 	 	42	 
	2.3 Fees
	 	 	45	 
	2.4 Repayments; Voluntary and Mandatory Prepayments; Application of Proceeds
	 	 	45	 
	2.5 Use of Proceeds
	 	 	52	 
	2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality
	 	 	52	 
	2.7 Statement of Lenders; Obligation of Lenders to Mitigate
	 	 	55	 
	2.8 Replacement of a Lender
	 	 	56	 
	2.9 Illegality
	 	 	56	 
	SECTION 3. BANKERS’ ACCEPTANCES
	 	 	57	 
	3.1 Acceptance of Bankers’ Acceptances; Form and Execution
	 	 	57	 
	3.2 Power of Attorney; Provision of Bankers’ Acceptances to Lenders
	 	 	59	 
	3.3 Mechanics of Issuance
	 	 	61	 
	3.4 Rollover of Bankers’ Acceptances
	 	 	62	 
	3.5 Conversion into Bankers’ Acceptances
	 	 	62	 
	3.6 Conversion from Bankers’ Acceptances
	 	 	62	 
	3.7 BA Equivalent Advances
	 	 	62	 
	3.8 Termination of Bankers’ Acceptances
	 	 	63	 
	3.9 Stamping Fees
	 	 	63	 
	SECTION 4. LETTERS OF CREDIT
	 	 	63	 
	4.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein
	 	 	63	 
	4.2 Letter of Credit Fees
	 	 	66	 
	4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit
	 	 	66	 
	4.4 Obligations Absolute
	 	 	69	 
	4.5 Nature of Issuing Lenders’ Duties
	 	 	70	 






 









 






	 	 	 	 	 
	SECTION 5. SECURITY
	 	 	71	 
	5.1 Collateral Documents
	 	 	71	 
	5.2 Registration
	 	 	72	 
	5.3 Sharing Collateral Documents
	 	 	73	 
	5.4 Form of Collateral Documents
	 	 	74	 
	5.5 After-Acquired Property
	 	 	74	 
	5.6 Continuing Collateral Documents
	 	 	75	 
	5.7 Dealing with Collateral Documents
	 	 	75	 
	5.8 Effectiveness
	 	 	75	 
	5.9 Release and Discharge of Collateral Documents
	 	 	75	 
	SECTION 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT
	 	 	76	 
	6.1 Conditions to the Restatement
	 	 	76	 
	6.2 Conditions to All Loans
	 	 	81	 
	6.3 Conditions to Letters of Credit
	 	 	82	 
	6.4 Waiver
	 	 	83	 
	SECTION 7. COMPANY’S REPRESENTATIONS AND WARRANTIES
	 	 	83	 
	7.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries
	 	 	83	 
	7.2 Authorization of Borrowing, etc
	 	 	84	 
	7.3 Financial Condition
	 	 	84	 
	7.4 No Material Adverse Change; No Restricted Junior Payments
	 	 	85	 
	7.5 Title to Properties; Liens; Real Property; Intellectual Property
	 	 	85	 
	7.6 Litigation; Adverse Facts
	 	 	86	 
	7.7 Payment of Taxes
	 	 	87	 
	7.8 Performance of Agreements; Material Contracts
	 	 	87	 
	7.9 Benefit Plans
	 	 	87	 
	7.10 Certain Fees
	 	 	88	 
	7.11 Environmental Protection
	 	 	88	 
	7.12 Employee Matters
	 	 	89	 
	7.13 Solvency
	 	 	89	 
	7.14 Matters Relating to Collateral
	 	 	89	 
	7.15 Disclosure
	 	 	90	 






 - 2 -









 






	 	 	 	 	 
	7.16 Related Documents
	 	 	90	 
	7.17 Accounts
	 	 	90	 
	7.18 Compliance with Existing Senior Notes and Senior Second Lien Secured Notes
	 	 	91	 
	7.19 Deemed Repetition
	 	 	91	 
	SECTION 8. COMPANY’S AFFIRMATIVE COVENANTS
	 	 	91	 
	8.1 Financial Statements and Other Reports
	 	 	91	 
	8.2 Existence, etc
	 	 	97	 
	8.3 Payment of Taxes and Claims; Tax
	 	 	97	 
	8.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds
	 	 	98	 
	8.5 Inspection Rights; Lender Meeting
	 	 	100	 
	8.6 Compliance with Laws, etc
	 	 	101	 
	8.7 Environmental Matters
	 	 	101	 
	8.8 First Priority Liens
	 	 	102	 
	8.9 Execution of Subsidiary Guarantee; Collateral Documents After the Restatement Date; Further Assurances
	 	 	103	 
	SECTION 9. COMPANY’S NEGATIVE COVENANTS
	 	 	104	 
	9.1 Indebtedness
	 	 	104	 
	9.2 Liens and Related Matters
	 	 	105	 
	9.3 Investments; Acquisitions
	 	 	107	 
	9.4 Contingent Obligations
	 	 	108	 
	9.5 Restricted Junior Payments
	 	 	109	 
	9.6 Financial Covenants
	 	 	110	 
	9.7 Restriction on Fundamental Changes; Asset Sales
	 	 	112	 
	9.8 Transactions with Shareholders and Affiliates
	 	 	114	 
	9.9 Sales and Lease-Backs
	 	 	114	 
	9.10 Conduct of Business
	 	 	115	 
	9.11 Amendments or Waivers of Certain Agreements
	 	 	115	 
	9.12 Fiscal Year
	 	 	116	 
	SECTION 10. EVENTS OF DEFAULT
	 	 	116	 
	10.1 Failure to Make Payments When Due
	 	 	116	 
	10.2 Default in Other Agreements
	 	 	116	 






 - 3 -









 






	 	 	 	 	 
	10.3 Breach of Certain Covenants
	 	 	117	 
	10.4 Breach of Warranty
	 	 	117	 
	10.5 Other Defaults Under Loan Documents
	 	 	117	 
	10.6 Involuntary Bankruptcy; Appointment of Receiver, etc
	 	 	117	 
	10.7 Voluntary Insolvency
	 	 	118	 
	10.8 Judgments and Attachments
	 	 	118	 
	10.9 Dissolution
	 	 	118	 
	10.10 Seizure
	 	 	119	 
	10.11 Change in Control
	 	 	119	 
	10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations
	 	 	119	 
	10.13 Conduct of Business By Holdings
	 	 	119	 
	10.14 Conduct of Business by Finance Co.
	 	 	120	 
	10.15 Amendment of Certain Documents of Holdings
	 	 	120	 
	SECTION 11. ADMINISTRATIVE AGENT AND COLLATERAL AGENT
	 	 	121	 
	11.1 Appointment
	 	 	121	 
	11.2 Powers and Duties; General Immunity
	 	 	122	 
	11.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness
	 	 	124	 
	11.4 Right to Indemnity
	 	 	124	 
	11.5 Successor Agents and Swing Line Lender
	 	 	125	 
	11.6 Collateral Documents and Guarantees
	 	 	126	 
	11.7 Duties of Other Agents
	 	 	127	 
	11.8 Administrative Agent May File Proofs of Claim
	 	 	127	 
	11.9 Borrowing Base Communication
	 	 	128	 
	SECTION 12. MISCELLANEOUS
	 	 	128	 
	12.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit
	 	 	129	 
	12.2 Expenses
	 	 	132	 
	12.3 Indemnity
	 	 	133	 
	12.4 Set-Off; Security Interest in Deposit Accounts
	 	 	135	 
	12.5 Ratable Sharing
	 	 	136	 
	12.6 Amendments and Waivers
	 	 	136	 






 - 4 -









 






	 	 	 	 	 
	12.7 Independence of Covenants
	 	 	139	 
	12.8 Notices; Effectiveness of Signatures
	 	 	139	 
	12.9 Survival of Representations, Warranties and Agreements
	 	 	139	 
	12.10 Failure or Indulgence Not Waiver; Remedies Cumulative
	 	 	140	 
	12.11 Marshalling; Payments Set Aside
	 	 	140	 
	12.12 Severability
	 	 	140	 
	12.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver
	 	 	140	 
	12.14 Release of Subsidiary Guarantee
	 	 	141	 
	12.15 Release of Security Interest on Asset Disposition
	 	 	141	 
	12.16 Applicable Law
	 	 	142	 
	12.17 Construction of Agreement; Nature of Relationship
	 	 	142	 
	12.18 Consent to Jurisdiction and Service of Process
	 	 	142	 
	12.19 Waiver of Jury Trial
	 	 	143	 
	12.20 Confidentiality
	 	 	143	 
	12.21 Paramountcy; Superseding Effect
	 	 	145	 
	12.22 Counterparts; Effectiveness
	 	 	145	 






 - 5 -









 





EXHIBITS




	 	 	 
	I

	 	FORM OF NOTICE OF BORROWING
	II

	 	FORM OF NOTICE OF CONVERSION/ROLLOVER
	III

	 	FORM OF REQUEST FOR ISSUANCE
	IV

	 	INTENTIONALLY LEFT BLANK
	V

	 	FORM OF BA DISCOUNT NOTE
	VI

	 	FORM OF BORROWING BASE CERTIFICATE
	VII

	 	FORM OF COMPLIANCE CERTIFICATE
	VIII

	 	INTENTIONALLY DELETED
	IX

	 	FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
	X

	 	INTENTIONALLY LEFT BLANK
	XI

	 	FORM OF OPINION OF COMPANY COUNSEL
	XII

	 	FORM OF OPINION OF FINANCE CO. COUNSEL
	XIII

	 	FORM OF GLOBAL CONSENT AND CONFIRMATION






  









 





SCHEDULES




	 	 	 
	1.1

	 	LENDER HEDGE AGREEMENTS
	1.2

	 	EXISTING LETTERS OF CREDIT
	2.1

	 	LENDERS’ COMMITMENTS AND PRO RATA SHARES
	7.1

	 	SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
	7.5B

	 	REAL PROPERTY INTERESTS
	7.5C

	 	MATERIAL SERIAL NUMBER EQUIPMENT
	7.5D

	 	INTELLECTUAL PROPERTY
	7.8

	 	MATERIAL CONTRACTS
	9.1

	 	EXISTING INDEBTEDNESS
	9.2

	 	PERMITTED LIENS
	9.3

	 	EXISTING INVESTMENTS
	9.4

	 	CONTINGENT OBLIGATIONS







 









 






NORTH AMERICAN

ENERGY PARTNERS INC.




FIRST AMENDED AND RESTATED CREDIT AGREEMENT




          This FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July 19, 2006 and entered into
by and among NORTH AMERICAN ENERGY PARTNERS INC., a Canadian corporation, THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
“Lender” and collectively as “Lenders”), BNP PARIBAS (CANADA), as administrative agent for Lenders
(in such capacity, “Administrative Agent”) and as collateral agent (in such capacity, the
“Collateral Agent”).




R E C I T A L S




          WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth
for such terms in Section 1.1 hereof;




          WHEREAS, Company, and the lenders party thereto, Administrative Agent and GE Canada Finance
Holding Company (“GE”) are party to a Credit Agreement dated as of May 19, 2005 (the “Original
Credit Agreement”);




          WHEREAS, the parties hereto desire to amend and restate the Original Credit Agreement in its
entirety as set forth herein;




          WHEREAS, Company will continue to secure all of its Obligations hereunder and under the Loan
Documents with a First Priority Lien granted to Collateral Agent, for the benefit of the Lenders,
Swap Lenders and Agents, on all of its present and after acquired real and personal property,
including a pledge of the Capital Stock of each of its Subsidiaries; and




          WHEREAS, each of the Subsidiaries of Company will continue to guarantee the Obligations of
Company hereunder and under the Loan Documents, and to secure their respective guarantees with a
First Priority Lien granted to Collateral Agent, for the benefit of the Lenders, Swap Lenders and
Agents, on all of their respective present and after acquired real and personal property, including
a pledge of the Capital Stock of each of their Subsidiaries, and Holdings will continue to
guarantee the Obligations hereunder, with recourse limited to a pledge by Holdings of the Capital
Stock of Company.




          NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:



Section 1. DEFINITIONS




     1.1 Certain Defined Terms.



(First Amended and Restated Credit Agreement)





 









 








          The following terms used in this Agreement shall have the following meanings:




          “Acquisition Agreement” means that certain Purchase Agreement among Norama Ltd. and NAEL, as
sellers, Martin Gouin and Roger Gouin, as Principals, and NACG Preferred Corp. and NACG Acquisition
Inc., as Buyers, entered into as of October 31, 2003.




          “Administrative Agent” has the meaning assigned to that term in the introduction to this
Agreement and also means and includes any successor Administrative Agent appointed pursuant to
subsection 11.5A.




          “Advisory Services Agreement” means the letter Advisory Services Agreement dated November 21,
2003 among the Permitted Holders, the Company, NACG, Parent, Holdings and each of their present and
future direct and indirect wholly-owned subsidiaries.




          “Advisory Services Termination Payment” mean a one-time payment of up to Cdn. $4,000,000 to
the Permitted Holders made with the proceeds of a Qualifying IPO, so long as (i) such payment
satisfies in full all amounts owing by Parent, Holdings, Company and its Subsidiaries under the
Advisory Services Agreement and (ii) upon the making of such payment, the Advisory Services
Agreement is terminated, such that the Parent, Holdings, Company and its Subsidiaries have no
further obligations thereunder (except for indemnification obligations which, by the terms of the
Advisory Services Agreement, survive termination thereof).




          “Affiliate”, as applied to any Person, means any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or otherwise.




          “After-Acquired Property” has the meaning assigned to that term in subsection 5.5.




          “Agents” means Administrative Agent and Collateral Agent.




          “Agreement” means this First Amended and Restated Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time.




          “Amalgamation” means the amalgamation of Parent, Holdings and the Company with the resulting
corporation retaining the name of the Company.




          “Applicable Law” means any and all laws, regulations, ordinances, or other legally binding
rules, judgments, orders, decrees, permits, concessions, grants, franchises or governmental
restrictions issued or promulgated by a Governmental Authority and applicable to the matter in
question.




(First Amended and Restated Credit Agreement)




 -2 -









 








          “Approved Fund” means a Fund that is administered or managed by (i) a Lender, (ii) an
Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a
Lender.




          “Asset Sale” means the sale by Company or any of its Subsidiaries to any Person other than
Company or any of its wholly-owned Subsidiaries that is a Subsidiary Guarantor of:





     (i) any of the Capital Stock of any of Company’s Subsidiaries,




     (ii) all or substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or




     (iii) any other assets (whether tangible or intangible) of Company or any of its
Subsidiaries other than:




          (a) inventory sold in the ordinary course of business,




          (b) sales, assignments, transfers or dispositions of accounts in the ordinary
course of business for purposes of collection,




          (c) asset dispositions permitted by clauses (iii) (as to obsolete and worn out
property only), (v), (vi) or (vii) of subsection 9.7, and




          (d) any such other assets to the extent that (I) the aggregate value of such
assets sold in any single transaction or related series of transactions is equal to
or less than Cdn.$5,000,000, (II) the aggregate value of such assets sold in any
consecutive 12 month period is equal to or less than Cdn.$10,000,000, and
(III) the aggregate value of such assets sold from the Restatement Date to the date
of determination is equal to or less than Cdn.$25,000,000, provided,
however, that if Company has provided an Officer’s Certificate as
contemplated in subclause 2.4A(iii)(a)(2), and is otherwise in compliance with
clauses 2.4A(iii)(a) and 9.7(iv), such sale of assets shall constitute an Asset Sale
and shall not count against the amounts set forth in this clause (d), in each case
to the extent of the Net Asset Sale Proceeds which are the subject of such Officer’s
Certificate.



          “Assignment Agreement” means an Assignment and Assumption Agreement in substantially the form
of Exhibit IX annexed hereto.




          “BA Discount Note” means a non-interest bearing promissory note of Company, denominated in
Cdn. Dollars, issued by Company to a Non-Acceptance Lender as part of an issuance of Bankers’
Acceptances, and substantially in the form attached as Exhibit V or such other form as may
be agreed to by the Administrative Agent, Company and such Non-Acceptance Lender.




          “BA Discount Proceeds” means, in respect of any Bankers’ Acceptance, the amount obtained by
multiplying (a) the aggregate face amount of such Bankers’ Acceptance by (b) the amount (rounded up
or down to the fifth decimal place with .000005 being rounded up)



(First Amended and Restated Credit Agreement)



 -3 -









 









determined by dividing one by the sum of one plus the product of (i) the BA Discount Rate, and
(ii) a fraction, the numerator of which is the number of days in the BA Interest Period of such
Bankers’ Acceptance and the denominator of which is 365.





     “BA Discount Rate” means:




     (i) in relation to a Bankers’ Acceptance accepted by a Schedule I Lender, the CDOR
Rate;




     (ii) in relation to a Bankers’ Acceptance accepted by a Schedule II Lender or Schedule
III Lender, the lesser of:




          (a) the average Discount Rate applicable to such issue as quoted by the
Schedule II Reference Lenders; and




          (b) the CDOR Rate plus 0.10% per annum;




provided that if both such rates are equal, then the “BA Discount Rate”
applicable thereto shall be the rate specified in (ii)(a) above; and




     (iii) in relation to a BA Equivalent Advance:




          (a) made by a Schedule I Lender, the CDOR Rate; and




          (b) made by a Lender which is not a Schedule I Lender, the rate determined in
accordance with subparagraph (ii) of this definition.



          “BA Equivalent Advance” means, in relation to a borrowing of, Conversion into or Rollover of
Bankers’ Acceptances, a Loan in Cdn. Dollars made by a Non-Acceptance Lender as part of such Loan,
as provided in Section 3.7.




          “BA Interest Period” means, with respect to each Bankers’ Acceptance, the period selected by
Company hereunder and being of 1, 2, 3 or 6 months’ duration, subject to market availability (or,
subject to the agreement of the Lenders, a longer or shorter period) commencing on the date of
borrowing, Rollover or Conversion in respect thereof, provided that:




          (i) the last day of each BA Interest Period shall be also the first day of the next BA
Interest Period in the case of a Rollover; and




          (ii) the last day of each BA Interest Period shall be a Business Day.




          “Bankers’ Acceptance” means a non-interest bearing draft drawn by Company in Cdn. Dollars,
accepted by a Lender and issued for value pursuant to this Agreement and includes a depository bill
under the DBNA and a bill of exchange under the Bills of Exchange Act (Canada).




(First Amended and Restated Credit Agreement)




 -4 -









 








          “Bankruptcy Law” means (i) the Bankruptcy and Insolvency Act (Canada), the Companies
Creditors’ Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), (ii) Title
11 of the United States Code entitled “Bankruptcy”, and (iii) any analogous laws relating to
bankruptcy and insolvency, each as now and hereafter in effect, or any successor statute.




          “Benefit Plan” means any employee benefit plan, including pensions, maintained by Company or
any of its Subsidiaries that is mandated or governed by any Applicable Law.




          “Board of Directors” means, as to any Person, the board of directors (or similar governing
body) of such Person or any duly authorized committee thereof.




          “Bonding Program” means one or more agreements with one or more bonding companies under which
bonding companies provide, for the account of Company and/or its Subsidiaries, bid bonds,
performance bonds, labour and material payment bonds, maintenance bonds and other bonds used in the
ordinary course of business of Company and its Subsidiaries, as the same may be amended, modified
or replaced (including with another bonding company) from time to time.




          “Borrowing Availability” means, as of any date of determination, the lesser of (i) the amount
of the Revolving Loan Commitments as of such date, less the Total Utilization of Revolving Loan
Commitments, and (ii) the Borrowing Base as of such date, less the First Lien Exposure.




          “Borrowing Base” means, as at any date of determination, an aggregate amount equal to:




          (i) 60% of the book value of Consolidated PP&E, plus




          (ii) 75% of the value of Eligible Accounts Receivable, plus




          (iii) unrestricted Cash and Cash Equivalents of Company and its Subsidiaries in excess of Cdn.
$15,000,000.




          “Borrowing Base Certificate” means a certificate substantially in the form of Exhibit
VI annexed hereto delivered to Administrative Agent and Collateral Agent by Company pursuant to
subsection 8.1(xiv), with appropriate attachments.




          “Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of Alberta, Ontario or Quebec, or is a day on which banking institutions located in
either such province are authorized or required by Applicable Law or other governmental action to
close.




          “Canadian Dollars”, “Cdn. Dollars”, “Cdn. $”and the sign “$” (unless otherwise specified) mean
the lawful money of Canada.




(First Amended and Restated Credit Agreement)




 -5 -









 








          “Capital Lease”, as applied to any Person, means any lease of any property (whether real or
personal) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.




          “Capital Stock” means the capital stock or other equity interests of a Person.




          “Cash” means money, currency or a credit balance in a Deposit Account.




          “Cash Equivalents” means, as at any date of determination,





     (i) marketable securities (a) issued or directly and unconditionally guaranteed as to
interest and principal by the Government of Canada or the United States Government, or (b)
issued by any agency of Canada or the United States, the obligations of which are guaranteed
by the Government of Canada or backed by the full faith and credit of the United States,
respectively, in each case maturing within one year after such date;




     (ii) marketable direct obligations issued by any province of Canada or state of the
United States of America, or any political subdivision of either, or any public
instrumentality thereof, in each case maturing within one year after such date and having,
at the time of the acquisition thereof, the highest rating obtainable from either Standard &
Poor’s (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”);




     (iii) commercial paper maturing no more than one year from the date of creation thereof
and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P, at
least P-1 from Moody’s, or at least R-1 high from Dominion Bond Rating Service Limited;




     (iv) deposits at or financial instruments issued by any Canadian chartered bank which
has a long-term debt rating of at least A+ by S&P, A1 by Moody’s or A(high) by Dominion Bond
Rating Service Limited;




     (v) certificates of deposit or bankers’ acceptances maturing within one year after such
date and issued or accepted by any Lender, or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of Columbia, if
such commercial bank (a) is at least “adequately capitalized” (as defined in the regulations
of its primary federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than U.S.$100,000,000; and




     (vi) shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) through (v)
above, and (b) has net assets of not less than Cdn. $500,000,000.



          “CDOR Rate” means, on any date which Bankers’ Acceptances are to be issued pursuant hereto,
the per annum rate of interest which is the rate determined as being the arithmetic average of the
annual yield rates applicable to Cdn. Dollar bankers’ acceptances




(First Amended and Restated Credit Agreement)




 -6 -









 







having identical issue and comparable maturity dates as the Bankers’ Acceptances proposed to
be issued by Company displayed and identified as such on the display referred to as the “CDOR Page”
(or any display substituted therefor) of Reuters Monitor Money Rates Service as at approximately
10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day, then on the
immediately preceding Business Day (as adjusted by Administrative Agent in good faith after 10:00
a.m. (Toronto time) to reflect any error in a posted rate or in the posted average annual rate),
provided if such a rate does not appear on such CDOR Page, then the CDOR Rate, on any day,
shall be the Discount Rate quoted by Administrative Agent determined as of 10:00 a.m. (Toronto
time) on such day which would be applicable in respect of an issue of bankers’ acceptances in a
comparable amount and with comparable maturity dates to the Bankers’ Acceptances proposed to be
issued by Company on such day, or if such day is not a Business Day, then on the immediately
preceding Business Day.




          “Change in Control” means any of the following:





     (i) any Person or group (as such term is used in section 13(d) of the Exchange Act) of
Persons (other than a Permitted Holder and any entity formed by a Permitted Holder solely
for the purpose of owning Capital Stock of Holdings or Company) shall become the beneficial
owner, directly or indirectly (with beneficial ownership being as defined and calculated as
set forth in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), of shares representing more
than 50% of the Capital Stock (measured by voting power rather than number of shares) that
is at the time entitled to vote for the election of the Board of Directors of the Company
or, prior to the Amalgamation, Holdings;




     (ii) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Company or, prior to the Amalgamation,
Holdings (together with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company or, prior to the Amalgamation,
Holdings, as applicable, was approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason (other than death
or disability) to constitute a majority of the Board of Directors then in office;




     (iii) prior to the Amalgamation, the failure at any time of Holdings to legally and
beneficially own and control 100% of the issued and outstanding shares of capital stock of
Company (other than the New Preferred Stock held by common shareholders of Parent or their
Affiliates) or the failure at any time of Holdings to have the ability to elect all of the
Governing Body of Company;




     (iv) the failure at any time of Company to legally and beneficially own and control
100% of the issued and outstanding shares of capital stock of NACG;




     (v) there is a report filed with any securities commission or securities regulatory
authority in Canada, disclosing that any offeror (as the term “offeror” is defined in
Section 89(1) of the Securities Act (Ontario) for the purpose of Section 101 of



(First Amended and Restated Credit Agreement)




 -7 -









 









the Securities Act (Ontario), or any successor provision to either of the foregoing),
other than the Company, any Subsidiary Guarantor or any employee benefit plan of either the
Company, any Subsidiary Guarantor, or any Permitted Holder has acquired beneficial ownership
(within the meaning of the Securities Act (Ontario)) of, or the power to exercise control or
direction over, any Capital Stock or Securities convertible into, any Capital Stock of the
Company, that together with such offeror’s securities (as the term “offeror’s securities” is
defined in Section 89(1) of the Securities Act (Ontario) or any successor provision thereto
in relation to the Capital Stock of the Company) would constitute voting stock of the
Company representing more than 50% of the total voting power attached to all voting stock of
the Company then outstanding; or




     (vi) the occurrence of any “Change of Control” as defined in the Senior Second Lien
Secured Note Indenture or the Senior Note Indenture.


As used herein, the term “beneficially own” or “beneficial ownership” shall have the meaning set
forth in clause (i) above.




          “Clearing House” shall have the meaning ascribed thereto in the DBNA, including for certainty
The Canadian Depository For Securities Limited or its nominee, CDS & Co.




          “Collateral” means, collectively, all of the real and personal property (including Capital
Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security
for the Obligations and the Secured Swap Obligations.




          “Collateral Account” means an interest-bearing bank account in the name of Administrative
Agent, with all amounts on deposit therein being the subject of a First Priority Lien in favour of
the Collateral Agent pursuant to the Debenture of the Company.




          “Collateral Agent” has the meaning assigned to that term in recitals to this Agreement and
also means and includes any successor Collateral Agent appointed pursuant to subsection 11.5A.




          “Collateral Documents” means the Mortgages, the Deposit Instruments, the Holdings Pledge
Agreement, the Company Pledge Agreement, the Subsidiary Pledge Agreements, and all other
instruments or documents delivered by any Loan Party pursuant to this Agreement or any of the other
Loan Documents in order to grant to Collateral Agent, on behalf of Lenders, Swap Lenders and
Agents, a First Priority Lien on any real or personal property of that Loan Party as security for
the Obligations and the Secured Swap Obligations.




          “Company” means North American Energy Partners Inc., a Canadian corporation, as the same may
be continued as an Alberta corporation. For greater certainty, on and after the Amalgamation, the
“Company” shall be the corporation which results from the amalgamation of the Company, Parent and
Holdings.




(First Amended and Restated Credit Agreement)




 -8 -









 








          “Company Pledge Agreement” means the Securities Pledge Agreement executed and delivered by
Company on the Original Closing Date, substantially in the form of Exhibit XV annexed to
the Original Credit Agreement, as such Company Pledge Agreement may thereafter be amended,
supplemented or otherwise modified from time to time in accordance herewith, including by the
further pledge of Capital Stock from time to time in accordance herewith.




          “Compliance Certificate” means a certificate substantially in the form of Exhibit VII
annexed hereto.




          “Consolidated Capital Expenditures” means, for any period, the sum of the aggregate of all
expenditures paid in cash by Company and its Subsidiaries during that period that, in conformity
with GAAP, are included in “additions to property, plant or equipment” or comparable items
reflected in the consolidated statement of cash flows of Company and its Subsidiaries. For
purposes of this definition, the purchase price of equipment that is purchased (a) simultaneously
with the trade-in of existing equipment, or (b) with insurance proceeds, shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such purchase price
less the credit granted by the seller of such equipment for the equipment being traded in at such
time or the amount of such proceeds, as the case may be. The aggregate of the net cash proceeds of
dispositions of assets by Company and its Subsidiaries during the period that, in conformity with
GAAP, were included in “dispositions of property, plant or equipment” or comparable items reflected
in the consolidated statement of cash flows of Company and its Subsidiaries, will be deducted from
Consolidated Capital Expenditures for the period.




          “Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for
such period, excluding any interest expense not payable in Cash (such as non-cash
amortization and write-off of discount and debt issuance costs).




          “Consolidated EBITDA” means, for any period, the sum, without duplication, of the amounts for
such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions
for taxes based on income, (iv) total depreciation expense, (v) total amortization expense, (vi)
costs and expenses incurred by Company in entering into this Agreement, (vii) accrual of stock
based compensation expense to the extent not paid in cash, and (viii) other non-cash items (other
than any such non-cash item to the extent it represents an accrual of or reserve for cash
expenditures in any future period), but only, in the case of clauses (ii)-(viii), to the extent
deducted in the calculation of Consolidated Net Income, less other non-cash items added in the
calculation of Consolidated Net Income (other than any such non-cash item to the extent it will
result in the receipt of cash payments in any future period), all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries in conformity with GAAP.




          “Consolidated Interest Expense” means, for any period, total interest expense (including that
portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company
and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of
Company and its Subsidiaries, including all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers’ acceptance financing, net costs under Interest Rate
Agreements and amounts referred to in subsection 2.3 payable to




(First Amended and Restated Credit Agreement)




 -9 -









 







Administrative Agent and Lenders that are considered interest expense in accordance with GAAP,
but excluding any such amounts referred to in subsection 2.3 payable on or before the
Restatement Date.




          “Consolidated Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of
(a) Consolidated Total Debt as at such day to (b) Consolidated EBITDA for the consecutive four
Fiscal Quarters ending on such day.




          “Consolidated Net Income” means, for any period, the net income (or loss) of Company and its
Subsidiaries on a consolidated basis for such period taken as a single accounting period determined
in conformity with GAAP, provided that there shall be excluded:





     (i) the income (or loss) of any Person (other than a Subsidiary of Company) in which
any other Person (other than Company or any of its Subsidiaries) has a joint interest,
except in the case of income to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during such period,




     (ii) the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Company or is merged into or consolidated with Company or any of its
Subsidiaries or that Person’s assets are acquired by Company or any of its Subsidiaries,




     (iii) the income of any Subsidiary of Company that is not a Subsidiary Guarantor to the
extent that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms of its
Organizational Documents or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary,




     (iv) any after-tax gains or losses attributable to asset sales or returned surplus
assets of any pension plan,




     (v) to the extent not included in clauses (i) through (iv) above, any net extraordinary
gains or net non-cash extraordinary losses, and




     (vi) the impact of currency translation gains and losses and mark-to-market gains and
losses on any Hedge Agreement.



          “Consolidated PP&E” means, as at any date of determination, the assets (net of depreciation)
of Company and its Subsidiaries on a consolidated basis which may properly be classified as
property, plant and equipment in conformity with GAAP, excluding any assets subject to a
Lien in favour of any Person other than Collateral Agent for the benefit of the Lenders that ranks
pari passu with or ahead of the Liens created by the Collateral Documents, to the extent of the
lesser of the fair market value of such asset and the amount secured by such Lien.




(First Amended and Restated Credit Agreement)




 -10 -









 








          “Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance
sheet amount of all Indebtedness of Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP (with the amount of any such Indebtedness incurred in any currency
other than Canadian Dollars, to the extent of the principal amount hedged pursuant to a Currency
Agreement, determined by reference to the exchange rate between such currency and Canadian Dollars
set forth in such Currency Agreement as the basis for determining the respective parties
obligations thereunder).




          “Contingent Obligation”, as applied to any Person, means any direct or indirect liability,
contingent or otherwise, of that Person (but without duplication):





     (i) with respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole or in part) against
loss in respect thereof,




     (ii) with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or




     (iii) under Hedge Agreements.


Contingent Obligations shall include (a) the direct or indirect guarantee, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance by any other party
or parties to an agreement, and (c) any liability of such Person for the obligation of another
through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital contributions or
otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent Obligation is specifically
limited.




          “Contractual Obligation”, as applied to any Person, means any provision of any contract,
undertaking, agreement, indenture, mortgage, deed of trust or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or any of its properties
is subject, or any provision of any Securities issued by that Person.




(First Amended and Restated Credit Agreement)





 -11 -










 









          “Contribution Agreement” means the share contribution agreement dated March 31, 2006 among
Parent, Holdings and the Company, as amended, restated or otherwise modified from time to time.




          “Conversion” means the conversion or deemed conversion of a Loan to another type of Loan in
accordance with Section 2.2C and in the case of Bankers’ Acceptances, Section 3, in each case, or
otherwise as occurs automatically hereunder, but in any case under the same credit facility under
which the original Loan was made.




          “Currency Agreement” means any foreign exchange contract, or any, currency swap agreement,
futures contract, option contract, synthetic cap or other similar agreement or arrangement, in each
case to which Company or any of its Subsidiaries is a party.




          “DBNA” means the Depository Bills and Notes Act (Canada).




          “Debenture” means a Fixed and Floating Charge Debenture executed and delivered by the Company
and each Subsidiary Guarantor on the Original Closing Date, substantially in the form of
Exhibit XIII annexed to the Original Credit Agreement, as such Debenture may thereafter be
amended, supplemented or otherwise modified from time to time.




          “Deposit Account” means a demand, time, savings, passbook or similar account maintained with a
Person engaged in the business of banking, including a savings bank, savings and loan association,
credit union or trust company.




          “Deposit Instrument” means a deposit agreement in respect of each Debenture executed and
delivered by the Company and each Subsidiary Guarantor, substantially in the form of Exhibit
XIV annexed to the Original Credit Agreement, as such Deposit Instrument may thereafter be
amended, supplemented or otherwise modified from time to time.




          “Discount Rate” means, with respect to the issuance of a bankers’ acceptance in the Canadian
bankers’ acceptance market, the rate of interest per annum, calculated on the basis of a year of
365 days (rounded upwards, if necessary, to the nearest whole multiple of 1/100th of one percent)
which is equal to the discount exacted by a purchaser taking initial delivery of such bankers’
acceptance, calculated as a rate per annum and as if the issuer thereof received the discount
proceeds in respect of such bankers’ acceptance on its date of issuance and had repaid the
respective face amount of such bankers’ acceptance on the maturity date thereof.




          “Domestic Subsidiary” means any Subsidiary of Company that is incorporated or organized under
the laws of Canada or any province of territory thereof.




          “Eligible Accounts Receivable” means, with respect to Company and its Subsidiaries, the
accounts receivable of Company and its Subsidiaries acceptable to each of the Collateral Agent and
the Administrative Agent, for inclusion in the calculation of the Borrowing Base. In determining
the amount to be so included, the face amount of such accounts receivable shall be reduced by the
amount of all returns, discounts, deductions, claims, credits, charges, or




(First Amended and Restated Credit Agreement)




- 12 -









 




other allowances.
Unless otherwise approved in writing by Collateral Agent and Administrative Agent, an account
receivable shall not be an Eligible Account Receivable if:





     (i) it arises out of a sale made by such Loan Party to an Affiliate of such Loan Party
or any other Loan Party;




     (ii) its payment terms are longer than 60 days from date of invoice,




     (iii) it is unpaid more than 120 days from date of invoice;




     (iv) it is from the same account debtor or its Affiliate and 25% or more of all
accounts receivable from that account debtor (and its Affiliates) are ineligible under (iii)
above;




     (v) the account debtor for such account receivable is a creditor of Company or any
Subsidiary of Company and has asserted in writing a right of setoff against Company or any
Subsidiary of Company, or has disputed its liability or otherwise has made any claim with
respect to such account receivable or any other account receivable which has not been
resolved, in each case to the extent of the amount of such asserted right of setoff, or the
amount of such dispute or claim, as the case may be;




     (vi) the account debtor has filed a petition or commenced a voluntary case under any
applicable Bankruptcy Laws, as now constituted or hereafter amended, or any similar law in
any other jurisdiction or made an assignment for the benefit of creditors, or if a decree or
order for relief has been entered by a court having jurisdiction over the account debtor in
an involuntary case under such Bankruptcy Laws, or if any other petition or other
application for relief under such Bankruptcy Laws has been filed by or against the account
debtor, or if the account debtor has failed, suspended business, declared itself to be
insolvent, is unable to pay its debts as they become due (or has admitted same in writing)
or has consented to or suffered a receiver, receiver-manager, trustee, liquidator or
custodian to be appointed for it or any portion of its assets or affairs;




     (vii) such account receivable is not payable in Canadian Dollars or U.S. Dollars or the
account debtor for such account receivable is located outside the United States or Canada,
unless such account receivable is supported by an irrevocable letter of credit or accounts
receivable insurance satisfactory to Administrative Agent and Collateral Agent (as to form,
substance and issuer) and assigned to and directly drawable by Collateral Agent, or is
otherwise supported on terms acceptable to Collateral Agent in its sole discretion;




     (viii) the sale to the account debtor is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval or consignment basis or made pursuant to any other written
agreement providing for repurchase or return;




     (ix) Collateral Agent determines by its own credit analysis that collection of such
account receivable is reasonably uncertain or that such account receivable will likely



(First Amended and Restated Credit Agreement)




- 13 -









 





     not
be paid (provided that for certainty, Collateral Agent shall have no obligation to
do so);



     (x) the account debtor is a Canadian federal, provincial, municipal or local
government, governmental or public department, central bank, court, commission, board,
bureau, agency or instrumentality, unless such account receivable has been assigned to
Collateral Agent on behalf of Lenders, Swap Lenders and Agents in accordance with all
Applicable Laws;



     (xi) the goods giving rise to such account receivable have not been shipped and
delivered to and accepted by the account debtor, or the services giving rise to such account
receivable have not been performed;



     (xii) such account receivable does not comply with all requirements of Applicable Law
such that its enforceability is not assured;



     (xiii) such account receivable is subject to any adverse security deposit, progress
payment or other similar advance made by or for the benefit of the applicable account
debtor;



     (xiv) such account receivable is not subject to a valid and perfected First Priority
Lien in favor of Collateral Agent or does not otherwise conform to the representations and
warranties contained in the Loan Documents; or



     (xv) such account receivable is not evidenced by an invoice issued to the applicable
account debtor.



     “Eligible Assignee” means:



     (i) any Lender, any Affiliate of any Lender and any Approved Fund of any Lender; and



     (ii) (a) a commercial bank, insurance company or other financial institution organized
under the laws of the United States or any state thereof, or under the laws of Canada; (b) a
savings and loan association or savings bank organized under the laws of the United States
or any state thereof; (c) a treasury branch or other financial institution carrying on
substantially the same business as a bank and organized under the laws of a Province of
Canada, or (d) a commercial bank organized under the laws of any other country or a
political subdivision thereof,


provided that, in any case, unless an Eligible Assignee has become an assignee of Loans at
a time when an Event of Default has occurred and is continuing, Company shall have no obligation
under Section 2.6A to gross-up for Taxes withheld or paid solely because such Eligible Assignee is
a non-resident of Canada within the meaning of the Income Tax Act unless Company otherwise agrees
in writing to do so.




(First Amended and Restated Credit Agreement)




- 14 -









 





          “Environmental Claim” means any investigation, notice, notice of violation, claim, action,
suit, proceeding, demand, designation, finding, abatement order or other order or directive
(conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant
to or in connection with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.




          “Environmental Laws” means any common law relating to environmental matters and all current or
future statutes, ordinances, orders, rules, regulations, by-laws, judgments, Governmental
Authorizations, or any other binding requirements of any Governmental Authority relating to (i)
environmental matters, including those relating to any Hazardous Materials Activity, (ii) the
generation, use, storage, transportation, recycling or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the protection of the environment,
natural resources or human, plant or animal health, safety or welfare, in any manner applicable to
Company or any of its Subsidiaries or any Facility.




          “Equity Issuance” means the issuance by the Company of the New Preferred Stock on or before
the Original Closing Date.




          “Equity Issuance Documentation” means the definitive documentation relating to the Equity
Issuance in the form delivered to Administrative Agent on or about the Original Closing Date.




          “Event of Default” means each of the events set forth in Section 10.




          “Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.




          “Existing Letters of Credit” means the letters of credit described on Schedule 1.2.




          “Facilities” means any and all real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by
Company or any of its Subsidiaries or any of their respective predecessors or Affiliates.




          “Finance Co.” means NACG Finance LLC, a Delaware limited liability company, as the same may be
continued as an Alberta corporation.




          “Financial Plan” has the meaning assigned to that term in subsection 8.1(ix).




          “First Lien Exposure” means, at any time, the sum of (i) the Total Utilization of the
Revolving Loan Commitments plus (ii) the total liabilities of the Company and its
Subsidiaries under all Lender Hedge Agreements determined on a “mark to market” basis, provided
that for the purpose of calculating First Lien Exposure, the amount of such liabilities under this
clause (ii) shall not be less than zero.




(First Amended and Restated Credit Agreement)




- 15 -









 





          “First Priority” means, with respect to any Lien purported to be created in any Collateral
pursuant to any Collateral Document, that (a) such Lien is perfected and has priority over any
other Lien on, or adverse claim against, such Collateral, other than (for all purposes
herein except the definition of “Eligible Accounts Receivable”) Liens created by the Company and
its Subsidiaries as permitted by subsections 9.2A(i),(ii), and (iv), and (b) such Lien is the only
Lien (other than Liens permitted pursuant to subsection 9.2A) to which such Collateral is subject.




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




          “Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on March 31 of each
calendar year. For purposes of this Agreement, any particular Fiscal Year may be designated by
reference to the calendar year in which such Fiscal Year ends.




          “Fronting Bank” means, in respect of the issuance of Letters of Credit, BNP PARIBAS (Canada)
and any successor Fronting Bank appointed pursuant to subsection 11.5C.




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




          “Funded Debt”, as applied to any Person, means all Indebtedness of that Person (including any
current portions thereof) which by its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from, or is directly renewable or extendable at the
option of that Person to a date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend credit over a
period of one year or more from), the date of the creation thereof.




          “Funding and Payment Office” means:





     (i) in the case of the Administrative Agent (a) the office of BNP PARIBAS (Canada) as
Administrative Agent located at 1981 McGill College Avenue, Montreal, Quebec H3A 2W8 Canada,
as advised by BNP PARIBAS (Canada) to Company and Lenders in writing or (b) such other
office of Administrative Agent as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent to Company and each Lender, and




     (ii) in the case of the Swing Line Lender (a) the office of BNP PARIBAS (Canada) as
Swing Line Lender located at 1981 McGill College Avenue, Montreal, Quebec H3A 2W8 Canada, as
advised by BNP PARIBAS (Canada) to Company and Lenders in writing or (b) such other office
of Swing Line Lender as may from time to time hereafter be designated as such in a written
notice delivered by Swing Line Lender to Company and each Lender.



          “Funding Date” means the date of the funding of a Loan, or the issuance of any Letter of
Credit.




(First Amended and Restated Credit Agreement)




- 16 -









 





          “GAAP” has the meaning assigned to that term in subsection 1.2.




          “Global Consent and Confirmation” means the Global Consent and Confirmation executed and
delivered by each of the Loan Parties on the Restatement Date, substantially in the form of
Exhibit XIII annexed hereto.




          “Governing Body” means the board of directors or other body having the power to direct or
cause the direction of the management and policies of a Person that is a corporation, partnership,
trust or limited liability company.




          “Governmental Authority” means:





     (i) any government, parliament or legislature, any municipal council or authority, or
any government regulatory or administrative authority, agency, commission or board and any
other statute, rule, regulation or bylaw making entity in each case having jurisdiction in
the relevant circumstances;




     (ii) any Person acting under the authority of any of the foregoing or under a statute,
rule, regulation or bylaw thereof; and




     (iii) any judicial, administrative or arbitral court, authority, tribunal or commission
having jurisdiction in the relevant circumstances.



          “Governmental Authorization” means any approval, certificate, franchise, permit, license,
registration, authorization, plan, directive, consent, order or consent decree of or from, or
notice to, any Governmental Authority.




          “Guarantees” means the Holdings Guarantee and the Subsidiary Guarantee.




          “Hazardous Materials” means (i) any chemical, material or substance at any time defined as or
included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”,
“hazardous recyclables”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive
waste”, “biohazardous waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous
waste”, “infectious waste”, “toxic substances”, or any other term or expression intended to define,
list or classify substances by reason of properties harmful to the environment, natural resources,
or human, plant or animal health safety or welfare (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or words of
similar import under any applicable Environmental Laws); (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v) any radioactive materials;
(vi) any asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (ix)
pesticides; and (x) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any Governmental Authority or which may or could pose a hazard to the
environment, natural resources or human,




(First Amended and Restated Credit Agreement)




- 17 -









 




plant or animal health, safety or welfare or to the health
and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.




          “Hazardous Materials Activity” means any past, current, proposed or threatened activity, event
or occurrence involving any Hazardous Materials, whether intentional or unintentional, including
the use, manufacture, possession, storage, holding, presence, existence, location, Release,
threatened Release, discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, recycling, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect to any of the
foregoing.




          “Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement designed to hedge
against fluctuations in interest rates or currency values, respectively.




          “Holdings” means NACG Preferred Corp., a Canadian corporation, as the same may be continued as
an Alberta corporation.




          “Holdings Certificate of Designations” means the provisions of Holdings’ Articles of
Incorporation relating to the Holdings Preferred Stock, in the form delivered to Administrative
Agent and Lenders prior to their execution of this Agreement and as such provisions may be amended
from time to time thereafter to the extent permitted under subsection 9.11.




          “Holdings Guarantee” means the limited recourse Guarantee executed and delivered by Holdings
on the Original Closing Date substantially in the form of Exhibit XII annexed to the
Original Credit Agreement, as such Holdings Guarantee may thereafter be amended, supplemented or
otherwise modified from time to time in accordance herewith.




          “Holdings Pledge Agreement” means the Securities Pledge Agreement executed and delivered by
Holdings on the Original Closing Date, substantially in the form of Exhibit XVII annexed to
the Original Credit Agreement, as such Holdings Pledge Agreement may thereafter be amended,
supplemented or otherwise modified from time to time in accordance herewith.




          “Holdings Preferred Stock” means 35,000 shares of 8% Series A Preferred Stock of Holdings with
a liquidation preference of $1000 per share and with the other terms set forth in the Holdings
Certificate of Designations.




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




          “Indebtedness”, as applied to any Person, means:





     (i) all indebtedness for borrowed money,



(First Amended and Restated Credit Agreement)




- 18 -









 









     (ii) that portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity with GAAP,




     (iii) notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money,




     (iv) any obligation owed for all or any part of the deferred purchase price of property
or services which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar written
instrument,




     (v) Synthetic Lease Obligations, and




     (vi) all indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person.


Obligations under Interest Rate Agreements and Currency Agreements constitute (1) in the case of
Hedge Agreements, Contingent Obligations, and (2) in all other cases, Investments, and in neither
case constitute Indebtedness. For the avoidance of doubt, obligations in respect of the Holdings
Preferred Stock and the New Preferred Stock do not constitute Indebtedness.




          “Indemnified Liabilities” has the meaning assigned to that term in subsection 12.3.




          “Indemnitee” has the meaning assigned to that term in subsection 12.3.




          “Intellectual Property” means all patents, trademarks, tradenames, copyrights, technology,
software, know-how and processes used in or necessary for the conduct of the business of Company
and its Subsidiaries.




          “Intercreditor Agreement” means that certain Intercreditor Agreement dated as of May 19, 2005
by and between the Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, and Wells Fargo
Bank, N.A. and Computershare Trust Company of Canada, collectively as the second lien collateral
agent on behalf of the holders of the Senior Second Lien Secured Notes, in form and substance
satisfactory to the Collateral Agent, the Agents and the Lenders.




          “Interest Payment Date” means with respect to any Prime Rate Loan, the first Business Day of
each month, commencing on the first such date to occur after the Restatement Date.




          “Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement or other similar agreement or arrangement to which Company or any of
its Subsidiaries is a party.




          “Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.




(First Amended and Restated Credit Agreement)






- 19 -









 








          “Investment” means:





     (i) any direct or indirect purchase or other acquisition by Company or any of its
Subsidiaries of, or of a beneficial interest in, any Securities of any other Person
(including any Subsidiary of Company),




     (ii) any direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Company from any Person other than Company or any of its
Subsidiaries, of any equity Securities of such Subsidiary,




     (iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business) or capital contribution by Company or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales or services to that other
Person in the ordinary course of business, or




     (iv) Interest Rate Agreements or Currency Agreements not constituting Hedge Agreements.


Except for Investments specified in subclause (iv) above, which such Investments shall be valued at
their mark-to-market value at the time of any such valuation, the amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment (other than adjustments for the repayment of, or the refund of capital
with respect to, the original principal amount of any such Investment).




          “IP Collateral” means, collectively, the Intellectual Property that constitutes Collateral
under the Debenture.




          “Issuing Lender”, with respect to any Letter of Credit, means the Revolving Lender that agrees
or is otherwise obligated to issue such Letter of Credit, determined as provided in subsection
4.1B(ii).




          “Joint Venture” means a joint venture, partnership or other similar arrangement, whether in
corporate, partnership or other legal form.




          “Lender” and “Lenders” means the Persons identified as “Lenders” and listed on the signature
pages of this Agreement, together with their successors and permitted assigns pursuant to
subsection 12.1B, and the term “Lenders” shall include Swing Line Lender unless the context
otherwise requires, provided that the term “Lenders”, when used in the context of a
commitment or subcommitment, shall mean Lenders having that commitment or subcomittment.




          “Lender Hedge Agreements” means the Hedge Agreements described on Schedule 1.1 attached
hereto.




(First Amended and Restated Credit Agreement)





- 20 -









 








          “Letter of Credit” or “Letters of Credit” means Canadian Dollar standby letters of credit
issued or to be issued by Issuing Lenders for the account of Company pursuant to subsection 4.1,
for the purpose of supporting:





     (i) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue
or development bonds or financings,




     (ii) workers’ compensation liabilities of Company or any of its Subsidiaries,




     (iii) the obligations to insurers of Company or any of its Subsidiaries,




     (iv) obligations with respect to Capital Leases or Operating Leases of Company or any
of its Subsidiaries, and




     (v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries (including under the Bonding Program), in any case in the ordinary course of
the Loan Parties’ business.



          “Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum
aggregate amount which is available for drawing under all Letters of Credit then outstanding
plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans pursuant to
subsection 4.3B or otherwise reimbursed by Company.




          “Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance
of any kind (including any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.




          “Loan” or “Loans” means one or more Revolving Loans and for certainty includes extensions of
credit made by way of Bankers’ Acceptances.




          “Loan Documents” means this Agreement, Bankers’ Acceptances, BA Discount Notes, Letters of
Credit (and any applications for, or reimbursement agreements or other documents executed by
Company in favor of an Issuing Lender relating to, the Letters of Credit), the Guarantees, the
Intercreditor Agreement, the Collateral Documents and the Global Consent and Confirmation.




          “Loan Party” means each of Holdings, Company and any of Company’s Subsidiaries from time to
time executing a Loan Document, and “Loan Parties” means all such Persons, collectively.




          “Management Fees” means fees payable pursuant to the Advisory Services Agreement.




          “Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors
of the United States Federal Reserve System as in effect from time to time.




(First Amended and Restated Credit Agreement)





- 21 -









 








          “Material Adverse Effect” means any of (i) a material adverse effect upon the business,
operations, properties, assets, condition (financial or otherwise) or prospects of Company and its
Subsidiaries taken as a whole, or (ii) the impairment of the ability of the Loan Parties, taken as
a whole, to perform the Obligations in any material way, or (iii) the impairment of the ability of
Administrative Agent, the Collateral Agent or Lenders to enforce the Obligations.




          “Material Contract” means any contract or other arrangement to which Company or any of its
Subsidiaries is a party (other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew, as at the date of determination, could reasonably be expected to
have a Material Adverse Effect.




          “Mortgage” means:





     (i) each Debenture,




     (ii) any other security document (whether designated as a debenture, a deed of trust, a
mortgage, a security agreement or any similar title) executed and delivered by any Loan
Party in such form as may be approved by Collateral Agent in its sole discretion, in each
case with such changes thereto as may be recommended by Administrative Agent’s local counsel
based on local laws or customary local mortgage or deed of trust practices, or




     (iii) at option of Collateral Agent, in the case of After-Acquired Property, an
amendment or supplement to an existing Mortgage, in form satisfactory to Collateral Agent,
adding such After-Acquired Property to any existing Mortgage in order to specifically
describe it within the fixed charges thereof, in either case as such security instrument or
amendment may be amended, supplemented or otherwise modified from time to time.



          “NACG” means North American Construction Group Inc., a Canadian corporation.




          “NAEL” means North American Equipment Ltd., an Alberta corporation.




          “Net Asset Sale Proceeds”, with respect to any Asset Sale, means Cash payments (including any
Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from such Asset Sale, net of any bona fide
direct costs (including professional fees and costs) incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable within two years of the date
of such Asset Sale as a result of any gain recognized in connection with such Asset Sale and (ii)
payment of the outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question
and that is required to be repaid under the terms thereof as a result of such Asset Sale.




(First Amended and Restated Credit Agreement)






- 22 -









 








          “Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds received by Company
or any of its Subsidiaries (i) under any business interruption or casualty insurance policy in
respect of a covered loss thereunder or (ii) as a result of the taking of any assets of Company or
any of its Subsidiaries by any Person pursuant to the power of eminent domain, expropriation,
condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power
under threat of such a taking, in each case net of any actual and reasonable documented costs
incurred by Company or any of its Subsidiaries in connection with the adjustment or settlement of
any claims of Company or such Subsidiary in respect thereof.




          “Net Securities Proceeds” means the cash proceeds (net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses) from the (i) issuance of Capital Stock of or incurrence of Indebtedness by
Holdings, Company or any of its Subsidiaries and (ii) capital contributions made by a holder of
Capital Stock of Holdings or Company.




          “New Preferred Stock” means the Series A New Preferred Stock and the Series B Preferred Stock,
collectively.




          “Non-Acceptance Lender” means (i) a Lender which ceases to accept Bankers’ Acceptances in the
ordinary course of its business or (ii) in respect of Lenders which are not Canadian chartered
banks or Schedule III Lenders, a Lender who, by notice in writing to Administrative Agent and
Company, elects thereafter to make BA Equivalent Advances in lieu of accepting Bankers’
Acceptances.




          “Non-Consenting Lender” has the meaning assigned to that term in subsection 2.8.




          “Notice of Borrowing” means an irrevocable notice substantially in the form of Exhibit
I annexed hereto.




          “Notice of Conversion/Rollover” means an irrevocable notice substantially in the form of
Exhibit II annexed hereto.




          “Obligations” means all obligations of every nature of each Loan Party from time to time owed
to Administrative Agent, Collateral Agent, Lenders or any of them under the Loan Documents, whether
for principal (including BA Equivalent Advances, reimbursement of amounts paid under Bankers’
Acceptances, and reimbursement of drawings under Letters of Credit), interest, fees, expenses,
indemnification or otherwise.




          “Officer” means the president, chief executive officer, a vice president, chief financial
officer, treasurer, general partner (if an individual), managing member (if an individual) or other
individual appointed by the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity as the foregoing.




(First Amended and Restated Credit Agreement)





- 23 -









 








          “Officer’s Certificate”, as applied to any Person that is a corporation, partnership or, trust
or limited liability company, means a certificate executed on behalf of such Person by one or more
Officers of such Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or limited liability
company.




          “Old System Issuer” means a Lender, other than a Non-Acceptance Lender, who elects not to
accept Bankers’ Acceptances as depository bills under the DBNA.




          “Operating Lease”, as applied to any Person, means any lease (including leases that may be
terminated by the lessee at any time) of any property (whether real or personal) that is not a
Capital Lease other than any such lease under which that Person is the lessor.




          “Organizational Documents” means the documents (including bylaws, if applicable) pursuant to
which a Person that is a corporation, partnership, trust or limited liability company is organized.




          “Original Credit Agreement” is defined in the recitals hereto.




          “Original Closing Date” shall mean May 19, 2005.




          “Parent” means NACG Holdings Inc., a Canadian corporation, as the same may be continued as an
Alberta corporation.




          “Parent Common Stock” means the common stock of Parent.




          “Participant” means a purchaser of a participation in the rights and obligations under this
Agreement pursuant to subsection 12.1C.




          “Permitted Encumbrances” means the following types of Liens:





     (i) Liens for taxes, assessments or governmental charges or claims the payment of which
is not, at the time, required by subsection 8.3;




     (ii) Liens imposed by law, such as statutory liens and deemed trusts, carriers’ liens,
builders’ liens, warehousemen’s liens, mechanics’ liens, materialmen’s liens and other
liens, privileges or other charges of a similar nature in each case incurred in the ordinary
course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of 10 days) are being
contested in good faith by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with respect to any portion of the
Collateral, such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral on account of such Lien;




     (iii) Liens constituted by the delivery of bonds issued under the Bonding Program, or
letters of credit, in any case provided in the ordinary course of business to



(First Amended and Restated Credit Agreement)






- 24 -









 







secure the
performance of bids, trade contracts, leases, government contracts, statutory obligations,
and other similar obligations (exclusive of obligations for the payment of borrowed money),
and Liens securing indemnity or reimbursement obligations in respect of the Bonding Program;





     (iv) Liens provided in connection with workers’ compensation, unemployment insurance
and other types of social security in the ordinary course of business, so long as no
foreclosure, sale or similar proceedings have been commenced with respect thereto;




     (v) Liens constituted by the delivery of an appeal bond posted with a court in
connection with litigation to which the Company or a Subsidiary is subject, so long as no
other Liens are provided except as permitted under subsections 9.2 (i), (ii) and
(iv);




     (vi) any attachment or judgment Lien not constituting an Event of Default under
subsection 10.8;




     (vii) Liens reserved in or exercisable under any real property lease for rent or
otherwise to effect compliance with the terms of such lease, in respect of which the rent or
other obligations (a) are not yet overdue or (b) for amounts that are overdue and that (in
the case of any such amounts overdue for a period in excess of 10 days) are being contested
in good faith by appropriate proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any such contested
amounts, and (2) in the case of a Lien with respect to any portion of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the Collateral
on account of such Lien;




     (viii) Liens in favour of a public utility or any municipality or governmental or other
public authority when required by such utility, municipality or authority in connection with
the operations of Company or Subsidiary, provided that all such Liens only secure
(a) amounts not yet overdue or (b) amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 10 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any such contested amounts, and
(2) in the case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the Collateral on
account of such Lien;




     (ix) Liens granted pursuant to the Collateral Documents;




     (x) Liens in favour of the Company or a Subsidiary Guarantor on assets of any
Subsidiary of the Company;




     (xi) any interest or title of a lessor under any Capital Lease, provided that
such Liens do not extend to any property or assets which are not leased property subject to
such Capital Lease; and



(First Amended and Restated Credit Agreement)





- 25 -









 









     (xii) Liens incidental to current operations which have not at such time been filed
pursuant to Applicable Law against the Company’s or a Subsidiary Guarantor’s assets, or
which relate to obligations not due or delinquent.



          “Permitted Holders” means The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic
Capital Inc., Stephens Group, Inc., and their respective Affiliates (in each case, other than
portfolio companies thereof).




          “Permitted Joint Venture Investment” means a Joint Venture in the same or substantially the
same business line of the Company in which Company or a Subsidiary Guarantor (a) owns at least 30%
of the ownership interests, and (b) has the right to receive a percentage of the profits or
distributions at least equal to the percentage of its ownership interest.




          “Person” means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subclauses thereof) and agencies or
other administrative or regulatory bodies thereof.




          “Pledge Agreement” means the Holdings Pledge Agreement, the Company Pledge Agreement,
Subsidiary Pledge Agreement, and any other share pledge agreement in substantially similar form
executed and delivered from time to time under this Agreement.




          “Pledged Collateral” means, collectively, the “Pledged Collateral” as defined in the Holdings
Pledge Agreement, the Company Pledge Agreement, and the Subsidiary Pledge Agreements.




          “Potential Event of Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.




          “Prime Rate” means, for any day, the greater of:





     (i) the rate of interest per annum established from time to time by Administrative
Agent as the reference rate of interest for the determination of interest rates that
Administrative Agent will charge to commercial customers in Canada for Cdn. dollar demand
loans in Canada; and




     (ii) the rate of interest per annum equal to the average annual yield rate for one
month Cdn. dollar Bankers’ Acceptances (expressed for such purpose as a yearly rate per
annum ) which rate is shown on the display referred to as the “CDOR Page” (or any display
substituted therefor) of Reuters Monitor Money Rates Service at 10:00 a.m. (Toronto time) on
such day or, if such day is not a Business Day, on the immediately preceding Business Day,
plus 1.0% per annum.



(First Amended and Restated Credit Agreement)





- 26 -










 







          “Prime Rate Loans” means Loans in Canadian Dollars bearing interest at rates determined by
reference to the Prime Rate as provided in subsection 2.2A.




          “Prior Claims” means all Liens created by applicable law (in contrast with Liens voluntarily
granted) which rank or are capable of ranking prior to or pari passu with Collateral Agent’s Liens
against all or part of the Collateral, including for amounts owing for employee source deductions,
goods and services taxes, sales taxes, employer health taxes, municipal taxes, withholding taxes,
vacation pay, workers’ compensation, pension fund obligations and overdue rents.




          “Proceedings” means any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration.




          “Pro Rata Share” means with respect to all payments, computations and other matters relating
to the Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit
issued or participations therein deemed purchased by any Lender or any assignments of any Swing
Line Loans deemed purchased by any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 12.1. The initial Pro Rata Share of each Lender for purposes of the
preceding sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.




          “Qualifying IPO” means the issuance by the Qualifying IPO Issuer of its common Capital Stock
in an underwritten primary public offering (other than a public offering pursuant to a registration
statement on Form S-8) pursuant to an effective registration statement filed with the Securities
and Exchange Commission in accordance with the Securities Act of 1933 and/or the filing of a
prospectus in one or more provinces or territories in Canada (whether alone or in connection with a
secondary public offering), the proceeds of which are used to repurchase or redeem the Senior
Second Lien Secured Notes and/or the New Preferred Stock or are otherwise used for general business
purposes of the Company and its Subsidiaries (including payment of the Advisory Services
Termination Payment) and, if at least 75% of the original principal amount of the Senior Second
Lien Secured Notes have been repaid, repurchased or redeemed, the Holdings Preferred Stock.




          “Qualifying IPO Issuer” means Company following the Amalgamation.




          “Refunded Swing Line Loans” has the meaning assigned to that term in subsection 2.1A(ii)(d).




          “Register” has the meaning assigned to that term in subsection 2.1D.




          “Reimbursement Date” has the meaning assigned to that term in subsection 4.3B.




(First Amended and Restated Credit Agreement)




- 27 -









 





          “Related Documents” means, collectively, the Acquisition Agreement, the Advisory Services
Agreement, the Holdings Certificate of Designations, the Senior Note Indenture, the Senior Second
Lien Secured Note Indenture, the Second Lien Collateral Documents and the Equity Issuance
Documentation.




          “Release” means any intentional or unintentional release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Materials into the indoor or outdoor environment (including the abandonment
or disposal of any barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air, soil, surface water
or groundwater.




          “Request for Issuance” means a request for the issuance of a Letter of Credit substantially in
the form of Exhibit III annexed hereto.




          “Requisite Lenders” means Lenders having or holding more than 50% of the sum of the aggregate
Revolving Loan Exposure of all Lenders.




          “Restatement Date” means the date on which all conditions set forth in Section 6.1 are
satisfied or waived, which satisfaction or waiver shall be evidenced in a letter by the
Administrative Agent to the Company.




          “Restricted Junior Payment” means:





     (i) any dividend or other distribution, direct or indirect, on account of any shares of
any class of stock of Company or its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that class,




     (ii) any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock of Company or
its Subsidiaries now or hereafter outstanding,




     (iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of Company or its
Subsidiaries now or hereafter outstanding, and




     (iv) any voluntary or optional payment or prepayment of principal of, premium, if any,
or voluntary or optional redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment of Indebtedness by the
Company or its Subsidiaries unless it is with respect to (I) the Obligations, or
(II) Indebtedness that is permitted by subclauses 9.1(ii), (iii), (v) and (viii),


other than in any case those made to the Company or a Subsidiary Guarantor. For certainty,
(A) the issuance of any exchange notes containing substantially identical terms (except that such




(First Amended and Restated Credit Agreement)





- 28 -









 







exchange notes will not contain terms with respect to transfer restrictions or the accrual of
liquidated damages) to the Senior Second Lien Secured Notes exchanged for such exchange notes, as
contemplated by the Senior Second Lien Secured Note Indenture, and (B) the acquisition and/or
retirement of such Senior Second Lien Secured Notes or Senior Notes in connection with any such
exchange (and not involving any payment in cash), shall not constitute a Restricted Junior Payment.




          “Revolving Lender” means a Lender that has a Revolving Loan Exposure.




          “Revolving Loan Commitment” means (i) the commitment of a Revolving Lender to make Revolving
Loans to Company pursuant to subsection 2.1A(i), and in the case of the Swing Line Lender, to make
Swing Line Loans pursuant to subsection 2.1A(ii), and in the case of each other Revolving Lender,
to purchase assignments of Swing Line Loans pursuant to subsection 2.1A(ii), (ii) the commitment of
Revolving Lenders to accept Bankers’ Acceptances pursuant to subsection 3.1A, and (iii) the
commitment of Revolving Lenders to issue (or participate in) Letters of Credit pursuant to
subsection 4.1, and “Revolving Loan Commitments” means such commitments of all Revolving Lenders in
the aggregate.




          “Revolving Loan Commitment Termination Date” means March 1, 2010.




          “Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of any date of
determination:





     (i) prior to the termination of the Revolving Loan Commitments, that Lender’s Revolving
Loan Commitment, and




     (ii) after the termination of the Revolving Loan Commitments, the sum of:




     (a) the aggregate outstanding principal amount of the Revolving Loans of that
Lender, including the aggregate face amount of all outstanding Bankers’ Acceptances
accepted by that Lender, and the aggregate face amount of all outstanding BA
Equivalent Advances, in each case made by that Lender under the Revolving Loan
Commitment, plus




     (b) in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in each case
net of any participations purchased by other Lenders in such Letters of Credit or in
any unreimbursed drawings thereunder), plus




     (c) the aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit, plus




     (d) in the case of Swing Line Lender, the aggregate outstanding principal
amount of all Swing Line Loans (net of any assignments thereof purchased by other
Revolving Lenders), plus



(First Amended and Restated Credit Agreement)




- 29 -









 






     (e) the aggregate amount of all assignments purchased by that Lender in any
outstanding Swing Line Loans.



          “Revolving Loans” means the Loans made by Revolving Lenders to Company pursuant to subsection
2.1A(i), by Swing Line Lender pursuant to subsection 2.1A(ii), and by Revolving Lenders in
connection with Refunded Swing Line Loans pursuant to subsection 2.1A(ii).




          “Rollover” means, with respect to Bankers’ Acceptances, the issuance of new Bankers’
Acceptances or the making of new BA Equivalent Advances (subject to the provisions hereof) in
respect of all or any portion of Bankers’ Acceptances (or BA Equivalent Advances made in lieu
thereof) maturing at the end of the BA Interest Period applicable thereto, all in accordance with
Section 2.2C and Section 3.




          “Schedule I Lender” means a Lender which is a Canadian chartered bank listed on Schedule I to
the Bank Act (Canada).




          “Schedule II Lender” means a Lender which is a Canadian chartered bank listed on Schedule II
to the Bank Act (Canada).




          “Schedule II Reference Lenders” means up to two Schedule II Lenders or Schedule III Lenders
which are designated as such by Administrative Agent and Company from time to time (it being agreed
that Administrative Agent and Company may at any time terminate the designation of a Lender as a
Schedule II Reference Lender and designate another Schedule II Lender or Schedule III Lender as a
Schedule II Reference Lender in its place by delivery to the Lenders of a written notification to
such effect executed by Administrative Agent), provided that if a Person ceases to be a
Lender hereunder, then such Person shall thereupon cease to be a Schedule II Reference Lender
without further action.




          “Schedule III Lender” means a Lender which is an authorized foreign bank listed on Schedule
III to the Bank Act (Canada).




          “Second Lien Collateral Documents” means each of the guarantees and security documents entered
into by the Loan Parties in connection with the Senior Second Lien Secured Notes.




          “Second Priority” means with respect to any Lien on the Collateral, Liens subordinated
pursuant to the Intercreditor Agreement to the Liens thereon in favor of the Collateral Agent for
the benefit of the Agents and the Lenders securing the Obligations and the Secured Swap
Obligations.




          “Secured Swap Obligations” means all indebtedness, obligations and liabilities of Company or
any Subsidiary Guarantor under the Lender Hedge Agreements.




          “Securities” means any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or




(First Amended and Restated Credit Agreement)




- 30 -









 




arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated, certificated or uncertificated, or otherwise, or
in general any instruments commonly known as “securities” or any certificates of interest, shares
or participations in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.




          “Securities Act” means the United States Securities Act of 1933, as amended from time to time,
and any successor statute.




          “Sellers” means Norama, Ltd. an Alberta corporation, and NAEL.




          “Senior Note Indenture” means the indenture dated November 26, 2003 pursuant to which the
Senior Notes are issued, as such indenture may be amended from time to time to the extent permitted
under subsection 9.11.




          “Senior Notes” means the U.S.$200,000,000 in initial aggregate principal amount of Senior
Notes due 2011 of Company issued pursuant to the Senior Note Indenture, and any exchange notes
containing substantially identical terms issued as contemplated in the Senior Note Indenture
(except that such exchange notes will not contain terms with respect to transfer restrictions or
the accrual of liquidated damages).




          “Senior Second Lien Secured Note Indenture” means the indenture dated May 19, 2005 pursuant to
which the Senior Second Lien Secured Notes are issued, as such indenture may be amended from time
to time to the extent permitted under subsection 9.11.




          “Senior Second Lien Secured Notes” means the U.S.$60,481,000 in initial aggregate principal
amount of Second Priority Senior Second Lien Secured Notes due 2010 of Company issued pursuant to
the Senior Second Lien Secured Note Indenture, and any exchange notes containing substantially
identical terms issued as contemplated in the Senior Second Lien Secured Note Indenture (except
that such exchange notes will not contain terms with respect to transfer restrictions or the
accrual of liquidated damages).




          “Series A New Preferred Stock” means the non-voting Series A preferred stock issued by the
Company on the Original Closing Date pursuant to the Equity Issuance Documentation.




          “Series B New Preferred Stock” means the non-voting Series B preferred stock issued by the
Company on the Original Closing Date pursuant to the Equity Issuance Documentation.




          “Solvent”, with respect to any Person, means that as of the date of determination both:





     (i) (a) the then fair saleable value of the property of such Person is (1) greater than
the total amount of liabilities (including contingent liabilities) of such Person and (2)
not less than the amount that will be required to pay the probable liabilities on such



(First Amended and Restated Credit Agreement)




- 31 -









 









Person’s then existing debts as they become absolute and due considering all financing
alternatives and potential asset sales reasonably available to such Person, (b) such
Person’s capital is not unreasonably small in relation to its business or any contemplated
or undertaken transaction, and (c) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to pay such debts
as they become due; and




     (ii) such Person is “solvent” within the meaning given that term and similar terms
under Applicable Laws (if any) relating to fraudulent transfers and conveyances.


For purposes of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or matured liability.




          “Sterling” means The Sterling Group, L.P., a Texas limited partnership.




          “St. Paul Priority Agreement” means that certain Priority Agreement dated on or about the
Original Closing Date among Administrative Agent, Collateral Agent, the trustee for the Senior
Second Lien Secured Notes, St. Paul Guarantee Insurance Company, Computershare Trust Company of
Canada, Parent and its Subsidiaries.




          “Subject Lender” has the meaning assigned to that term in subsection 2.7A.




          “Subsidiary”, with respect to any Person, means any corporation, partnership, trust, limited
liability company, association, Joint Venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the members of the Governing Body is
at the time owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof. Unless the context indicates otherwise,
“Subsidiary” means a Subsidiary of Company.




          “Subsidiary Guarantee” means the Subsidiary Guarantee executed and delivered by Subsidiaries
of Company on the Original Closing Date, and to be joined by additional Subsidiaries of Company
from time to time thereafter in accordance with subsection 8.9, substantially in the form of
Exhibit XI annexed to the Original Credit Agreement, as such Subsidiary Guarantee may
hereafter be amended, supplemented or otherwise modified from time to time.




          “Subsidiary Guarantor” means, on the date hereof, NACG, Finance Co., North American
Construction Ltd., North American Caisson Ltd., North American Engineering Inc., North American
Enterprises Ltd., North American Industries Inc., North American Maintenance Ltd., North American
Mining Inc., North American Pipeline Inc., North American Road Inc., North American Services Inc.,
North American Site Services Inc., Griffiths Pile Driving Inc., North American Site Development
Ltd.; and any other Subsidiary of Company that executes and delivers a counterpart of, or joinder
agreement in respect of, the Subsidiary Guarantee on the




(First Amended and Restated Credit Agreement)





- 32 -









 







Original Closing Date, the Restatement Date or from time to time thereafter pursuant to
subsection 8.9.




          “Subsidiary Pledge Agreements” means the Securities Pledge Agreements executed and delivered
by any Subsidiary Guarantor on or after the Original Closing Date, substantially in the form of
Exhibit XVI annexed to the Original Credit Agreement, as such Subsidiary Pledge Agreements
may thereafter be amended, supplemented or otherwise modified from time to time in accordance
herewith.




          “Supplemental Collateral Agent” has the meaning assigned to that term in subsection 11.1B.




          “Swap Lender” means any party to a Lender Hedge Agreement (other than any Loan Party or their
Affiliates).




          “Swing Line Account” has the meaning assigned to that term in subclause 2.1A(ii)(b).




          “Swing Line Lender” means BNP PARIBAS (Canada), or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.




          “Swing Line Loan Subcommitment” means the commitment of Swing Line Lender to make Swing Line
Loans to Company pursuant to subsection 2.1A(ii).




          “Swing Line Loans” means the Prime Rate Loans made by Swing Line Lender to Company pursuant to
subsection 2.1A(ii).




          “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called
synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such Person but which,
for both clause (a) and (b) above, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness for borrowed money or Capital Leases of such Person (without
regard to accounting treatment). For greater certainty, the obligations under any operating lease
of equipment (as so characterized under GAAP) shall not be considered a “Synthetic Lease
Obligation”.




          “Taxes” means all taxes, levies, imposts, stamp taxes, duties, fees, deductions, withholdings,
charges, compulsory loans or restrictions or conditions resulting in a charge which are imposed,
levied, collected, withheld or assessed by any country or political subdivision or taxing authority
thereof now or at any time in the future, together with interest thereon and penalties, charges or
other amounts with respect thereto, if any, and “Tax” and “Taxation” shall be construed
accordingly.




          “Total Utilization of Revolving Loan Commitments” means, as at any date of determination, the
aggregate principal amount of all outstanding Revolving Loans including, for




(First Amended and Restated Credit Agreement)





- 33 -









 







certainty, the face amount of all outstanding Bankers’ Acceptances and BA Discount Notes made
under the Revolving Loan Commitment, Swing Line Loans and the Letter of Credit Usage.




          “Unasserted Obligations” means, at any time, Obligations for taxes, costs, indemnifications,
reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and
fees relating to, any Indebtedness and (ii) contingent reimbursement obligations in respect of
amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for
payment has been made (or, in the case of Obligations for indemnification, no notice for
indemnification has been issued by the Indemnitee) at such time.




          “U.S. Dollars” and the sign “U.S.$” mean the lawful money of the United States of America.





	 	1.2	 	Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.





     A. GAAP. Wherever in this Agreement reference is made to “generally accepted accounting
principles” or “GAAP”, such reference shall be deemed to be to the recommendations at the relevant
time of the Canadian Institute of Chartered Accountants, or any successor institute, applicable on
a consolidated basis (unless otherwise specifically provided or contemplated herein to be
applicable on an unconsolidated basis) as at the date on which such calculation is made or required
to be made in accordance with such principles. Where the character or amount of any asset or
liability or item of revenue or expense or amount of equity is required to be determined, or any
consolidation or other accounting computation is required to be made for the purpose of this
Agreement or any other Loan Document, such determination or calculation shall, to the extent
applicable and except as otherwise specified herein or as otherwise agreed in writing by the
parties, be made in accordance with generally accepted accounting principles applied on a
consistent basis.



     B. Consequential. Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in conformity with
GAAP. Financial statements and other information required to be delivered by Company to
Administrative Agent pursuant to clauses 8.1(ii), 8.1(iii) and 8.1(ix) shall be prepared in
accordance with GAAP as in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 8.1(v)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize GAAP as in effect on
the date of determination, applied in a manner consistent with that used in preparing the financial
statements referred to in subsection 7.3. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document, and Company,
Administrative Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and
Company shall negotiate in good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of Requisite Lenders),
provided that, until so amended, such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and Company shall provide to Administrative Agent
reconciliation statements provided for in subsection 8.1(v).



(First Amended and Restated Credit Agreement)





- 34 -









 









	 	1.3	 	Other Definitional Provisions and Rules of Construction.





     A. Plural. Any of the terms defined herein may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference.



     B. Section References. References to “Sections” and “subsections” shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically provided. Section and
subsection headings in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or be given any substantive
effect.



     C. Including. The use in any of the Loan Documents of the word “include” or “including”, when
following any general statement, term or matter, shall not be construed to limit such statement,
term or matter to the specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but
not limited to” or words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest possible scope of such
general statement, term or matter.



     D. Miscellaneous. Unless the context requires otherwise (a) any definition of or reference to
any Applicable Law, agreement, instrument or other document herein shall be construed as referring
to such Applicable Law, agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and permitted assigns, and (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof.




	 	1.4	 	Amendment and Restatement.





     This Agreement is and shall for all purposes be deemed to be an amendment and a restatement of
the provisions of the Original Credit Agreement. This Agreement shall supersede the Original
Credit Agreement insofar as it constitutes the entire agreement between the parties concerning the
subject matter of this Agreement, but does not constitute a novation of the Original Credit
Agreement or any of the Indebtedness, liabilities or obligations of the Company thereunder. All
Loans and Letters of Credit pursuant to the Original Credit Agreement shall be deemed to be Loans
and Letters of Credit under this Agreement, and all Obligations (as defined in the Original Credit
Agreement) shall be deemed to be Obligations under this Agreement.


Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS





	 	2.1	 	Revolving Loan Commitments; Making of Loans; the Register.





     A. Revolving Loan Commitments. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein and in the other Loan Documents
set forth, (A) each Lender having a Revolving Loan Commitment hereby



(First Amended and Restated Credit Agreement)





- 35 -









 







severally agrees to make the Loans as described in subsection 2.1A(i), (B) Swing Line Lender
hereby agrees to make the Swing Line Loans as described in subsection 2.1A(ii), and (C) each Lender
having a Revolving Loan Commitment hereby severally agrees to make the Refunded Swing Line Loans as
described in subsection 2.1A(ii)(d).





     (i) Revolving Loans. Each Revolving Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving Loans permitted
to be outstanding from time to time, to lend to Company from time to time during the period
from the Restatement Date to but excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving
Loan Commitments to be used for the purposes identified in subsection 2.5 and to be
available by way of Prime Rate Loans and Bankers’ Acceptances. The original amount of each
Revolving Lender’s Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Revolving Loan Commitments
is Cdn.$55,000,000, provided that the Revolving Loan Commitments of Revolving
Lenders shall be adjusted among Revolving Lenders to give effect to any assignments of the
Revolving Loan Commitments pursuant to subsection 12.1B, and shall be reduced from time to
time by the amount of any reductions thereto made pursuant to subsection 2.4. Each
Revolving Lender’s Revolving Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed hereunder with respect
to the Revolving Loans and the Revolving Loan Commitments, shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(i) may be repaid and reborrowed
to but excluding the Revolving Loan Commitment Termination Date.




          Anything contained in this Agreement to the contrary notwithstanding, the Revolving
Loans and the Revolving Loan Commitments shall be subject to the limitation that (i) in no
event shall the Total Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect and (ii) in no event shall the First Lien Exposure
exceed the Borrowing Base then in effect.




     (ii) Swing Line Loans.




     (a) General Provisions. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of Swing Line
Loans permitted to be outstanding from time to time, to make a portion of the
Revolving Loan Commitments available to Company from time to time during the period
from the Restatement Date to but excluding the Revolving Loan Commitment Termination
Date by making Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Subcommitment to be used for the purposes identified
in subsection 2.5, notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender’s outstanding Revolving Loans and Swing Line
Lender’s Pro Rata Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender’s Revolving Loan Commitment. The original amount of the Swing
Line



(First Amended and Restated Credit Agreement)




- 36 -









 









Loan Subcommitment is Cdn.$5,000,000, provided that any reduction of
the Revolving Loan Commitments made pursuant to subsection 2.4 that reduces the
aggregate Revolving Loan Commitments to an amount less than the then current amount
of the Swing Line Loan Subcommitment shall result in an automatic corresponding
reduction of the Swing Line Loan Subcommitment to the amount of the aggregate
Revolving Loan Commitments, as so reduced, without any further action on the part of
Company, Administrative Agent or Swing Line Lender. The Swing Line Loan
Subcommitment shall expire on the Revolving Loan Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line
Loans shall be paid in full no later than that date. Amounts borrowed under this
subsection 2.1A(ii) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.




          Anything contained in this Agreement to the contrary notwithstanding, the Swing Line
Loans and the Swing Line Loan Subcommitment shall be subject to the limitation that (i) in
no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect and (ii) in no event shall the First Lien Exposure
exceed the Borrowing Base then in effect.




     (b) Swing Line Account. Swing Line Lender will establish at its Funding
Branch of Account a Cdn. Dollar account of Company, referred to herein as a “Swing
Line Account”. The Swing Line Account shall record the day to day banking business
of Company conducted through the Swing Line Lender. If, at the end of any Business
Day, the balance in the Swing Line Account:




     (1) is a credit in excess of Cdn.$100,000, Swing Line Lender may apply
the amount of the credit or any part thereof rounded down to the nearest
Cdn.$50,000, as applicable, as a repayment of any Prime Rate Loans owing to
the Swing Line Lender under the Swing Line; or




     (2) is a debit, the Swing Line Lender shall make available a Swing Line
Loan (to the extent that such Advance would not, when added to the
outstanding Swing Line Loans, exceed the Swing Line Loan Subcommitment), in
an amount rounded up to the nearest Cdn. $50,000, as the case may be, to
place Company in a minimum net credit position of zero.




     (c) Swing Line Loans by Request. In addition to the automatic advance
of Swing Line Loans pursuant to clause 2.1A(ii)(b)(2) above, Swing Line Lender also
agrees to make Swing Line Loans available pursuant to a Notice of Borrowing
delivered as provided herein.




     (d) Swing Line Loan Prepayment with Proceeds of Other Revolving Loans.
With respect to any Swing Line Loans that have not been voluntarily prepaid by
Company pursuant to subsection 2.4A(i), Swing Line Lender shall, on



(First Amended and Restated Credit Agreement)




- 37 -









 









the first Business Day of each week, and at any other time in its sole and
absolute discretion, deliver a notice to the Lenders holding the Revolving Loan
Commitments requiring Revolving Lenders to make Revolving Loans that are Prime Rate
Loans on such Funding Date in an amount equal to the amount of such Swing Line Loans
(the “Refunded Swing Line Loans”) outstanding on the date such notice is given.
Company hereby authorizes the giving of any such notice and the making of any such
Revolving Loans. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by Revolving Lenders
other than Swing Line Lender shall be immediately delivered by Administrative Agent
to Swing Line Lender (and not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans by depositing such proceeds in the Swing
Line Account, and (2) on the day such Revolving Loans are made, Swing Line Lender’s
Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the
proceeds of a Revolving Loan made by Swing Line Lender, and such portion of the
Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line
Loans of Swing Line Lender but shall instead constitute part of Swing Line Lender’s
outstanding Revolving Loans. If any portion of any such amount paid (or deemed to
be paid) to Swing Line Lender should be recovered by or on behalf of Company from
Swing Line Lender in any bankruptcy proceeding, in any assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 12.5.




     (e) Swing Line Loan Assignments. If for any reason (1) Revolving Loans
are not made upon the request of Swing Line Lender as provided in the immediately
preceding paragraph in an amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans or (2) the Revolving Loan
Commitments are terminated at a time when any Swing Line Loans are outstanding, each
Revolving Lender shall be deemed to, and hereby agrees to, have purchased an
assignment of such outstanding Swing Line Loans in an amount equal to its Pro Rata
Share (calculated, in the case of the foregoing clause (2), immediately prior to
such termination of the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon. Upon one Business Day’s
notice from Swing Line Lender, each Revolving Lender shall deliver to Swing Line
Lender an amount equal to its respective assignment in same day funds at the Funding
and Payment Office. In order to further evidence such assignment (and without
prejudice to the effectiveness of the assignment provisions set forth above), each
Revolving Lender agrees to enter into an Assignment Agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Revolving Lender fails to make available to Swing Line
Lender the amount of such Revolving Lender’s assignment as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on demand from
such Revolving Lender together with interest thereon at the rate customarily used by



(First Amended and Restated Credit Agreement)




- 38 -









 









Swing Line Lender for the correction of errors among banks for three Business
Days and thereafter at the Prime Rate. In the event Swing Line Lender receives a
payment of any amount in which other Revolving Lenders have purchased assignments as
provided in this paragraph, Swing Line Lender shall promptly distribute to each such
other Revolving Lender its Pro Rata Share of such payment.




     (f) Revolving Lenders’ Obligations. Anything contained herein to the
contrary notwithstanding, each Revolving Lender’s obligation to make Revolving Loans
for the purpose of repaying any Refunded Swing Line Loans pursuant to subsection
2.1A(ii)(d) and each Revolving Lender’s obligation to purchase an assignment of any
unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance, including
(1) any set-off, counterclaim, recoupment, defense or other right which such
Revolving Lender may have against Swing Line Lender, Company or any other Person for
any reason whatsoever; (2) the occurrence or continuance of an Event of Default or a
Potential Event of Default; (3) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company or
any of its Subsidiaries; (4) any breach of this Agreement or any other Loan Document
by any party thereto; or (5) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that, unless Requisite
Lenders agree otherwise, Swing Line Lender shall not make a Swing Line Loan if at
the time of the request for a Swing Line Loan the Swing Line Lender has received
written notice from Company or a Lender that a Potential Event of Default or an
Event of Default has occurred and is continuing (unless and until it has been
confirmed that no Potential Event of Default or Event of Default has occurred and is
continuing).




     (g) Indemnification. Each Revolving Lender agrees to indemnify Swing
Line Lender (to the extent not reimbursed by Company), rateably according to its Pro
Rata Share from and against any and all losses and claims of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Swing Line
Lender in any way relating to or arising out of any Swing Line Loans,
provided that no Lender shall be liable for any portion of such losses or
claims resulting from the Swing Line Lender’s gross negligence or willful
misconduct.



     B. Borrowing Mechanics. Revolving Loans made on any Funding Date by way of Prime Rate Loans
(other than Swing Line Loans) or Bankers’ Acceptances (other than Revolving Loans made pursuant to
a request by Swing Line Lender pursuant to subsection 2.1A(ii)(d), or Revolving Loans made pursuant
to subsection 4.3C) shall be in an aggregate minimum amount of Cdn.$1,000,000 and multiples of
Cdn.$100,000 in excess of that amount.



          Swing Line Loans made on any Funding Date pursuant to a Notice of Borrowing shall be in an
aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount.
Swing Line Loans made pursuant to subclause 2.1A(ii)(b) do not require




(First Amended and Restated Credit Agreement)




- 39 -









 







a notice of Borrowing, and are not subject to minimum amounts except as set out in that
subclause.




          Prime Rate Loans made by Revolving Lenders weekly (or at the request of Swing Line Lender)
pursuant to subclause 2.1A(ii)(d) shall be in minimum amounts of Cdn.$500,000 and multiples of
Cdn.$100,000 in excess thereof.




          Whenever Company desires that Lenders make Revolving Loans by way of Prime Rate Loans (other
than Swing Line Loans), it shall deliver to Administrative Agent a duly executed Notice of
Borrowing no later than 11:00 a.m. (Toronto time) at least one Business Day in advance of the
proposed Funding Date.




          Whenever Company desires that Lenders make Revolving Loans by way of Bankers’ Acceptances, it
shall deliver to Administrative Agent a duly executed Notice of Borrowing no later than 11:00 a.m.
(Toronto time) at least three Business Days in advance of the proposed Funding Date.




          Whenever Company desires that Swing Line Lender make a Swing Line Loan pursuant to clause
2.1A(ii)(c), it shall deliver to Swing Line Lender, with a copy to Administrative Agent, a duly
executed Notice of Borrowing no later than 11:00 a.m. (Toronto time) on the proposed Funding Date
(which for greater certainty may be delivered by facsimile transmission).




          Company shall notify Administrative Agent prior to the funding of any Loans requested by
Company in the event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the applicable Funding Date. The
acceptance by Company of the proceeds of any Loans (including Swing Line Loans) shall constitute a
re-certification by Company, as of the applicable Funding Date, as to the matters to which Company
is required to certify in any Notice of Borrowing.




          Except as set out in subsection 2.6C, a Notice of Borrowing for, or a Notice of
Conversion/Rollover for Conversion to, or Rollover of, Bankers’ Acceptances shall be irrevocable,
and Company shall be bound to make a borrowing or to effect a Conversion or Rollover in accordance
therewith.




     C. Disbursement of Funds. All Revolving Loans (other than Swing Line Loans made by Swing Line
Lender) shall be made by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that neither Administrative Agent nor any Lender shall be responsible
for any default by any other Lender in that other Lender’s obligation to make a Loan requested
hereunder nor shall the Revolving Loan Commitment of any Lender to make the particular type of Loan
requested be increased or decreased as a result of a default by any other Lender in that other
Lender’s obligation to make a Loan requested hereunder.



          Promptly after receipt by Administrative Agent of a Notice of Borrowing by way of Prime Rate
Loans (other than Swing Line Loans) pursuant to subsection 2.1B, Administrative Agent shall notify
each Lender for the type of Loan of the proposed borrowing. Each such




(First Amended and Restated Credit Agreement)





- 40 -










 






Lender shall make the amount of its Loan available to Administrative Agent not later than
12:00 noon (Toronto time) on the applicable Funding Date in same day funds at the Funding and
Payment Office. Except as provided in subsection 2.1A(ii) with respect
to Revolving Loans used to repay Refunded Swing Line Loans, or subsection 4.3B
with respect to Revolving Loans used to reimburse any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 6.1 (in the case of Loans made on
the Restatement Date) and 6.2 (in the case of all Loans),
Administrative Agent shall make the proceeds of such Loans available to Company on the applicable
Funding Date by causing an amount of same day funds equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to an account of Company maintained by
Company with Administrative Agent at the Funding and Payment Office by 12:00 noon on the Funding
Date, or as otherwise instructed by Company in writing and acceptable to Administrative Agent.




          After receipt by Swing Line Lender of a Notice of Borrowing by way of Swing Line Loans
pursuant to subsection 2.1A(ii)(c), Swing Line Lender shall make the amount
of its Swing Line Loan available to Company not later than 12:00 noon (Toronto time) on the
applicable Funding Date, in each case in same day funds to be credited to an account of Company
maintained by Company with Swing Line Lender at the Funding and Payment Office of Swing Line
Lender.




          Unless Administrative Agent shall have been notified by any Lender prior to a Funding Date for
any Loans that such Lender does not intend to make available to Administrative Agent the amount of
such Lender’s Prime Rate Loan requested on such Funding Date, Administrative Agent may assume that
such Lender has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on such Funding Date. If such corresponding amount is not in fact
made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with interest thereon, for
each day from such Funding Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Prime Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Funding Date until the date such amount is
paid to Administrative Agent, at the rate payable under this Agreement for Prime Rate Loans.
Nothing in this subsection 2.1C shall be deemed to relieve any Lender from its obligation to fulfill
its Revolving Loan Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.




     D. The Register. Administrative Agent shall maintain at its address referred to in subsection
12.8 a register for the recordation of, and shall record, the names
and addresses of Lenders and the Revolving Loan Commitment, Swing Line Loan Subcommitment,
Revolving Loans and Swing Line Loans of each Lender from time to time (the “Register”). Company,



(First Amended and Restated Credit Agreement)




- 41 -









 




Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the corresponding Revolving
Loan Commitments and Loans listed therein for all purposes hereof; all amounts owed with respect to
any Revolving Loan Commitment or Loan shall be owed to the Lender listed in the Register as the
owner thereof; and any request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent is listed in the Register as a Lender, shall be
conclusive and binding on any subsequent holder, assignee or transferee of the corresponding
Revolving Loan Commitments or Loans. Each Lender shall record on its internal records the amount
of its Loans and Revolving Loan Commitments and each payment in respect hereof, and any such
recordation shall be prima facie evidence of the contents thereof, absent manifest error, subject
to the entries in the Register, which shall, absent manifest error, govern in the event of any
inconsistency with any Lender’s records. Failure to make any recordation in the Register or in any
Lender’s records, or any error in such recordation, shall not affect any Loans or Revolving Loan
Commitments or any Obligations in respect of any Loans.




     2.2 Interest on the Loans.



     A. Rate of Interest. Subject to the provisions of subsection 2.6, each Prime Rate Loan shall bear interest on the unpaid principal amount thereof from the
date made through maturity (whether by acceleration or otherwise) at a rate determined by reference
to the Prime Rate.



          Subject to the provisions of subsection 2.6, each Swing Line
Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at a rate determined by reference to the Prime Rate.




          The applicable basis for determining the rate of interest with respect to any Revolving Loan
shall be selected by Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Revolving Loan may be changed from time to time pursuant to
subsection 2.2C. If on any day a Revolving Loan is outstanding with respect to which notice has not
been delivered to Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Prime Rate.





     (i) Subject to the provisions of subsections 2.2D, 2.2I and 2.6, the Revolving Loans shall bear interest or accrue fees through maturity as follows:




     (a) if a Prime Rate Loan (other than a Swing Line Loan), then interest at the
sum of the Prime Rate plus 2.0% per annum;




     (b) if a Swing Line Loan, then interest at the sum of the Prime Rate
plus 1.5% per annum, for the sole account of Swing Line Lender; and




     (c) if a Bankers’ Acceptance, then interest and fees as provided in Section 3.



(First Amended and Restated Credit Agreement)





- 42 -









 









     (d) if a Letter of Credit, then fees and interest as provided in Section 4.



     B. Interest Payments. Subject to the provisions of subsection 2.2D, interest on each Prime Rate
Loan (including Swing Line Loans) shall be payable monthly in arrears on each Interest Payment Date
in respect of the immediately preceding calendar month based on the actual number of days in such
month, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid), and at
maturity (including final maturity), provided that in the event any Revolving Loans that
are Prime Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on such Loans through
the date of such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Prime Rate Loans (or, if earlier, at final maturity).



     C. Conversion or Rollover. Subject to the provisions of Section 3,
Company shall have the option:




     (i) to convert at any time all or any part of its outstanding Revolving Loans (other
than Swing Line Loans) equal to Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of
that amount from Prime Rate Loans to an issue of Bankers’ Acceptances, or from Bankers’
Acceptances to Prime Rate Loans;




     (ii) upon the expiration of a BA Interest Period applicable to Bankers’ Acceptances, to
rollover all or any portion of such Loan equal to Cdn.$1,000,000 and multiples of
Cdn.$100,000 in excess of that amount as a new issue of Bankers’ Acceptances;


provided that an issue of Bankers’ Acceptances may only be converted into a Prime Rate Loan
on the expiration date of the BA Interest Period applicable thereto.




          Company shall deliver a duly executed Notice of Conversion/Rollover to Administrative Agent no
later than 11:00 a.m. (Toronto time) at least one Business Day in advance of the proposed
Conversion date (in the case of a Conversion to a Prime Rate Loan) and at least three Business Days
in advance of the proposed Conversion/Rollover date (in the case of a Conversion to, or a Rollover
of, Bankers’ Acceptances). Administrative Agent shall notify each Lender of any Loan subject to a
Notice of Conversion/Rollover. A Conversion or Rollover shall not be subject to the conditions to
making a Loan set out in subsection 6.2.




     D. Default Rate. Upon the occurrence and during the continuance of any Event of Default, the
outstanding principal amount of all Loans and, to the extent permitted by Applicable
Law, any interest payments thereon not paid when due and any fees and other amounts then due
and payable hereunder, shall thereafter bear interest (including post-petition interest in any
proceeding under any Bankruptcy Laws) payable upon demand at a rate that is 2% per annum in excess
of the interest rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of
the interest rate otherwise payable under this Agreement for Prime Rate Loans), provided
that (i) in the case of Bankers’ Acceptances, upon the expiration of the BA Interest Period in
effect at the time any such increase in interest rate is effective such Bankers’



(First Amended and Restated Credit Agreement)




- 43 -









 




Acceptances shall
thereupon become Prime Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for
Prime Rate Loans, and (ii) subclause 4.3D(i) shall apply in respect of
fees payable in respect of Letters of Credit, and not this subclause 2.2D. Payment or acceptance of
the increased rates of interest provided for in this subsection 2.2D is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of Administrative Agent or any Lender.




     E. Computation of Interest. Interest on the Loans shall be computed on the basis of a 365-day
year, in each case for the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or, with respect to a Prime
Rate Loan being converted from Bankers’ Acceptances, the date of Conversion to such Prime Rate
Loan, as the case may be, shall be included, and the date of payment of such Loan or, with respect
to a Prime Rate Loan being converted to Bankers’ Acceptances, the date of Conversion of such Prime
Rate Loan, as the case may be, shall be excluded, provided that if a Loan is repaid on the
same day on which it is made, one day’s interest shall be paid on that Loan.



     F. Prima Facie Evidence. Each determination by Administrative Agent (or by the Issuing Lender
as applicable) of the amount of interest, fees or other amounts due from Company hereunder shall be
prima facie evidence of the accuracy of such determination.



     G. Accrual. All interest, fees and other amounts payable by Company hereunder shall accrue
daily, be computed as described herein, and be payable both before and after demand, maturity,
default and judgment.



     H. No Merger. To the extent permitted by Applicable Law, the covenant of Company to pay
interest at the rates provided herein shall not merge in any judgment relating to any obligation of
Company to the Lenders or Administrative Agent and any provision of the Interest Act (Canada) or
Judgment Interest Act (Alberta) which restricts any rate of interest set forth herein shall be
inapplicable to this Agreement and to the extent permitted by Applicable Law is hereby waived by
Company.



     I. Maximum Rate. No interest or fee to be paid hereunder or under the other Loan Documents
shall be paid at a rate exceeding the maximum rate permitted by Applicable Law. In the event that
such interest or fee exceeds such maximum rate, such interest or fees shall be credited to Company
for application to any other Obligations then due and owing (or if no other
Obligations are then due and owing, refunded to Company), so as to be payable at the highest
rate recoverable under Applicable Law. For the purposes of the application of the Criminal Code
(Canada), the effective annual rate of interest shall be determined in accordance with generally
accepted actuarial practices and principles and in the event of any dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by Administrative Agent shall be conclusive
for the purpose of such determination.



     J. Interest Act Rate Conversion. Whenever a rate of interest hereunder is calculated on the
basis of a year (the “deemed year”) which contains fewer days than the actual



(First Amended and Restated Credit Agreement)





- 44 -









 







number of days in the
calendar year of calculation, such rate of interest shall be expressed as a yearly rate for
purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of
days in the calendar year of calculation and dividing it by the number of days in the deemed year.




     K. No Deemed Reinvestment. The principle of deemed reinvestment of interest shall not apply
to any interest calculation under this Agreement; all interest payments to be made hereunder shall
be paid without allowance or deduction for deemed reinvestment, before and after maturity, default
and judgment. The rates of interest specified in this Agreement are intended to be nominal rates
and not effective rates. Interest calculated hereunder shall be calculated using the nominal rate
method and not the effective rate method of calculation.



     2.3 Fees.



     A. Commitment Fees. Company agrees to pay to Administrative Agent, for distribution to each
Revolving Lender in proportion to that Lender’s Pro Rata Share, commitment fees for the period from
and including the Original Closing Date to and excluding the Revolving Loan Commitment Termination
Date equal to the average of the daily excess of the Revolving Loan Commitments over the sum of (i)
the aggregate principal amount of outstanding Revolving Loans including for certainty, the face
amount of all Bankers’ Acceptances and BA Discount Notes outstanding under the Revolving Loan
Commitment (but excluding any outstanding Swing Line Loans) plus (ii) the Letter of Credit
Usage, multiplied by .50% per annum, such commitment fees to be calculated on the basis of
a 365-day year and the actual number of days elapsed and to be calculated quarterly in arrears for
the three month periods ending on March 31, June 30, September 30 and December 31 of each year, and
payable on the first Business Day of the month immediately following each such quarter, commencing
on the first such Business Day to occur after the Restatement Date, and on the Revolving Loan
Commitment Termination Date.



     B. Other Fees. Company agrees to pay to Agents such fees in the amounts and at the times
separately agreed upon between Company and Agents.



     2.4 Repayments; Voluntary and Mandatory Prepayments; Application of Proceeds.



     A. Repayments and Prepayments; Reductions in Revolving Loan Commitments.




     (i) Voluntary Repayments and Prepayments. Company may, upon written notice to
Administrative Agent on or prior to 12:00 noon (Toronto time) on the date of repayment, at
any time and from time to time, repay without premium or penalty any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount.




          Company may, upon not less than one Business Day’s prior written notice to
Administrative Agent by 12:00 noon (Toronto time) on the date required who will promptly
notify each Lender whose Loans are to be prepaid of such prepayment, at any



(First Amended and Restated Credit Agreement)




- 45 -









 










time and from time to time prepay without premium or penalty any Revolving Loans that are Prime Rate Loans
(other than Swing Line Loans) on any Business Day in whole or in part in an aggregate
minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount.




          Company may, upon not less than three Business Days’ prior written notice to
Administrative Agent by 12:00 noon (Toronto time) on the date required who will promptly
notify each Lender whose Loans are to be prepaid of such prepayment, at any time and from
time to time prepay, without premium or penalty, any Revolving Loans that are Bankers’
Acceptances on any Business Day in whole or in part in an aggregate minimum amount of
Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount, provided that
Bankers’ Acceptances may only be prepaid on the expiration of the BA Interest Period.




          Notice of repayment or prepayment having been given as aforesaid, the principal amount
of the Loans specified in such notice shall become due and payable on the date specified for
payment therein. Any such voluntary payment shall be applied as specified in subsection
2.4A(iv).




     (ii) Voluntary Reduction of Revolving Loan Commitments. Company may, upon not
less than three Business Days’ prior written or upon such lesser number of days’ prior
written notice, as determined by Administrative Agent in its sole discretion, at any time
and from time to time, terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by which the Revolving
Loan Commitments exceed the Total Utilization of Revolving Loan Commitments at the time of
such proposed termination or reduction, provided that any such partial reduction of
the Revolving Loan Commitments shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount. Company’s notice to Administrative
Agent (who will promptly notify each Revolving Lender of such notice) shall designate the
date (which shall be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan Commitments shall
be effective on the date specified in Company’s notice and shall reduce the Revolving Loan
Commitment of each Revolving Lender proportionately to its Pro Rata Share.




     (iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid and the Revolving Loan Commitments shall
be permanently reduced, in the amounts and under the circumstances set forth below, all
such prepayments and reductions to be applied as set forth below or as more specifically
provided in subsection 2.4A(iv) and subsection 2.4F:




     (a) Prepayments and Reductions From Net Asset Sale Proceeds. Promptly,
but not later than 5 Business Days after the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale,
Company shall either:



(First Amended and Restated Credit Agreement)




- 46 -









 






     (1) prepay the Loans and collateralize Bankers’ Acceptances, and the
Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to such Net Asset Sale Proceeds, or




     (2) so long as no Potential Event of Default or Event of Default shall
have occurred and be continuing, deliver to Administrative Agent an
Officer’s Certificate setting forth (x) that portion of such Net Asset Sale
Proceeds that Company or such Subsidiary intends to reinvest in equipment or
other productive assets of the general type used in the business of Company
and its Subsidiaries within 170 days of such date of receipt and (y) the
proposed use of such portion of the Net Asset Sale Proceeds and such other
information with respect to such reinvestment as Administrative Agent may
reasonably request, and Company shall, or shall cause one or more of its
Subsidiaries to, diligently apply such portion to such reinvestment
purposes, provided that, pending such reinvestment, such portion of
the Net Asset Sale Proceeds shall be applied to prepay outstanding Revolving
Loans (without a reduction in Revolving Loan Commitments) to the full extent
thereof. In addition, Company shall, no later than 170 days after receipt
of such Net Asset Sale Proceeds that have not theretofore been applied to
the Obligations or that have not been so reinvested as provided above, make
an additional prepayment of the Loans and the Revolving Loan Commitments
shall be permanently reduced in the full amount of all such Net Asset Sale
Proceeds not so applied or not so reinvested.




     (b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied as a prepayment
pursuant to the provisions of subsection 8.4C, Company
shall prepay the Loans and collateralize Bankers’ Acceptances, and the Revolving
Loan Commitments shall be permanently reduced, as provided in subsection 2.4A(iv)
and subsection 2.4F, as
applicable, in an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds.




     (c) Prepayments and Reductions Due to Issuance of Equity Securities.
On the date of receipt of the Net Securities Proceeds from the issuance of any
Capital Stock (i) of Holdings or from any capital contribution to Holdings by any
holder of Capital Stock thereof after the Restatement Date, in excess of $1,000,000
in any Fiscal Year, or (ii) of Company or any of its Subsidiaries (except in the
case of (i) or (ii), with respect to Net Securities Proceeds from a Qualifying IPO),
Company shall prepay the Loans and collateralize Bankers’ Acceptances in an
aggregate amount equal to the amount of such Net Securities Proceeds (without
reduction of the Revolving Loan Commitments), all as provided in subsection 2.4A(iv)
and subsection 2.4F, as
applicable.



(First Amended and Restated Credit Agreement)





- 47 -










 








     (d) Prepayments and Reductions Due to Issuance of Indebtedness. On the
date of receipt of the Net Securities Proceeds from the issuance of any Indebtedness
of Company or any of its Subsidiaries after the Restatement Date, other than
Indebtedness permitted pursuant to subsection 9.1, Company shall prepay the Loans,
and collateralize Bankers’ Acceptances, and the Revolving Loan Commitments shall be
permanently reduced, in an aggregate amount equal to the amount of such Net
Securities Proceeds, all as provided in subsection 2.4A(iv) and subsection 2.4F, as
applicable.




     (e) Calculations of Net Proceeds Amounts; Additional Prepayments and
Reductions Based on Subsequent Calculations. Concurrently with any prepayment
of the Loans, and collateralization of Bankers’ Acceptances, and/or reduction of the
Revolving Loan Commitments pursuant to subsections 2.4A(iii)(a)-(d), Company shall
deliver to Administrative Agent an Officer’s Certificate demonstrating the
calculation of the amount of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds or Net Securities Proceeds, as the case may be, that
gave rise to such prepayment, collateralization and/or reduction. In the event that
Company shall subsequently determine that the actual amount was greater than the
amount set forth in such Officer’s Certificate, Company shall promptly make an
additional prepayment of the Loans, or collateralization of Bankers’ Acceptances, in
an amount equal to the amount of such excess, and shall reduce the Revolving Loan
Commitments accordingly, all as provided in subsection 2.4A(iv) and subsection 2.4F,
as applicable, and Company shall concurrently therewith deliver to Administrative
Agent an Officer’s Certificate demonstrating the derivation of the additional amount
resulting in such excess.




     (f) Prepayments Due to Reductions of Revolving Loan Commitments or Due to
Insufficient Borrowing Base. Company shall immediately prepay first the
Swing Line Loans, second the other Revolving Loans (including
collateralization of Bankers’ Acceptances), and third, collateralize Letters
of Credit, to the extent necessary so that (A) the Total Utilization of Revolving
Loan Commitments shall not at any time exceed the Revolving Loan Commitments then in
effect, and (B) the First Lien Exposure shall not at any time exceed the Borrowing
Base then in effect.




     (iv) Application of Prepayments; Reduction of Revolving Loan Commitments.




     (a) Application of Voluntary Prepayments by Type of Loans and Order of
Maturity. Any voluntary prepayments pursuant to subsection 2.4A(i) shall be
applied as specified by Company in the applicable notice of prepayment,
provided that in the event Company fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be applied:




     (1) first, to repay outstanding Swing Line Loans to the full
extent thereof, without reduction of Revolving Loan Commitments,



(First Amended and Restated Credit Agreement)




 - 48 -









 









     (2) second, to repay other outstanding Revolving Loans to the
full extent thereof, including cash collateralizing any outstanding Bankers’
Acceptances issued under the Revolving Loan Commitments, without reduction
of Revolving Loan Commitments, and




     (3) third, to collateralize Letters of Credit.




     (b) Application of Mandatory Prepayments by Type of Loans. Except as
provided in subsection 2.4F, any amount required to be applied as a mandatory
prepayment of the Loans, collateralization of Bankers’ Acceptances or Letters of
Credit, and a reduction of the Revolving Loan Commitments, in any case pursuant to
subsections 2.4A(iii)(a)-(f), shall be applied:




     (1) first, to prepay the Swing Line Loans to the full extent
thereof and, to the extent required by the applicable provision of
subsection 2.4A(iii), to permanently reduce the Revolving Loan Commitments
by the amount of such prepayment,




     (2) second, to the extent of any remaining portion of such
amount, to prepay other Prime Rate Loans to the full extent thereof and, to
the extent required by the applicable provision of subsection 2.4A(iii), to
further permanently reduce the Revolving Loan Commitments by the amount of
such prepayment, and




     (3) third, to the extent of any remaining portion of such
amount, to collateralize Bankers’ Acceptances under the Revolving Loan
Facility to the full extent thereof and, to the extent required by the
applicable provision of subsection 2.4A(iii), to further permanently reduce
the Revolving Loan Commitments by the amount so collateralized, effective
the date of maturity of the Bankers’ Acceptances so collateralized.




Any mandatory reduction of Revolving Loan Commitments pursuant to this subsection
2.4 shall be in proportion to each Revolving Lender’s Pro Rata Share.




     (c) Application of Prepayments to Prime Rate Loans and Bankers’
Acceptances. Any prepayment of Revolving Loans shall be applied first to Prime
Rate Loans to the full extent thereof before application to collateralization of
Bankers’ Acceptances or Letters of Credit, provided that Company shall
first deposit the remainder of such prepayments not applied to prepay Prime Rate
Loans in the Collateral Account pursuant to subsection 2.4D to be applied thereafter
to prepay Bankers’ Acceptances having BA Interest Periods expiring on a date or
dates nearest the date of deposit in accordance with this subsection 2.4A(iv), upon
expiration of such BA Interest Periods, and second (if required) to the Collateral
Account pursuant to subsection 2.4E to be applied thereafter to reimburse the
Issuing Lender for drawing on Letters of Credit expiring on a date


(First Amended and Restated Credit Agreement)




 - 49 -









 







or dates nearest the date of deposit in accordance with this subsection
2.4A(iv), upon expiration of such Letters of Credit.



     B. General Provisions Regarding Payments.




     (i) Manner and Time of Payment. All payments by Company of principal,
interest, fees and other Obligations shall be made in Canadian Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction or condition, and delivered
to Administrative Agent not later than 12:00 noon (Toronto time) on the date due at the
Funding and Payment Office for the account of Lenders; funds received by Administrative
Agent after that time on such due date shall be deemed to have been paid by Company on the
next succeeding Business Day. Notwithstanding the foregoing, payments of amounts deposited
in the Collateral Account pursuant to the proviso to subsection 2.4A(iv)(c) shall be deemed
to have been paid by Company on the applicable date or dates such amounts are applied to
prepay Bankers’ Acceptances or to reimburse drawings under Letters of Credit. Company
hereby authorizes Administrative Agent to charge its accounts with Administrative Agent in
order to cause timely payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being available in its accounts
for that purpose).




     (ii) Application of Payments to Principal and Interest. Except as provided in
subsection 2.2B, all payments in respect of the principal amount of any Prime Rate Loan
shall include payment of accrued interest on the principal amount being repaid or prepaid,
and all such payments shall be applied to the payment of interest before application to
principal.




     (iii) Apportionment of Payments. Aggregate payments of principal and interest
shall be apportioned among all outstanding Loans to which such payments relate, in each case
proportionately to Lenders’ respective Pro Rata Shares. Administrative Agent shall promptly
distribute to each Lender, at the account specified in the payment instructions set forth
below its name on the appropriate signature page hereof or at such other account as such
Lender may request in subsequent payment instructions delivered to Administrative Agent by
such Lender, its Pro Rata Share of all such payments received by Administrative Agent and
the commitment fees and letter of credit fees of such Lender, if any, when received by
Administrative Agent pursuant to subsection 2.3 and subsection 4.2.




     (iv) Payments on Business Days. Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, such payment shall be made on
the next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment fees hereunder, as the
case may be.



     C. Authorized Debit. Company authorizes and directs Administrative Agent to automatically
debit the Company’s bank accounts for all amounts payable by Company under this Agreement,
including the repayment of principal and the payment of interest and fees and all


 (First Amended and Restated Credit Agreement)




 - 50 -









 







charges agreed to by Company for the maintaining of the Company’s accounts. Administrative
Agent shall, as soon as is practical after making any such debit, inform Company of the amount
thereof and provide reasonable details of the calculation thereof.



     D. Collateralization of Bankers’ Acceptances. With respect to the prepayment or cash
collateralization of unmatured Bankers’ Acceptances to the extent required hereunder (it being
acknowledged that any requirement to pay or prepay Bankers’ Acceptances prior to their maturity
shall be construed as a requirement to provide cash collateral under this provision), Company shall
provide for the funding of such unmatured Bankers’ Acceptances by paying to and depositing with
Administrative Agent cash collateral for each such unmatured Bankers’ Acceptances; such cash
collateral deposited by Company shall be held by Administrative Agent in the Collateral Account
with interest to be credited to Company at rates prevailing at the time of deposit for similar
accounts with Administrative Agent. Such Collateral Account shall be held as security for the
obligations of Company in relation to such Bankers’ Acceptances and the security of Administrative
Agent thereby created shall rank in priority to all other Liens and adverse claims against such
cash collateral. Such cash collateral shall be applied to satisfy pro tanto the obligations of
Company for such Bankers’ Acceptances as they mature and Administrative Agent is hereby irrevocably
directed by Company to apply any such cash collateral to such maturing Bankers’ Acceptances.
Amounts held in such Collateral Account may not be withdrawn by Company; however, interest on such
deposited amounts shall be for the account of Company and may be withdrawn by Company so long as no
Potential Event of Default or Event of Default is then continuing. If after maturity of the
Bankers’ Acceptances for which such funds are held and application by Administrative Agent of the
amounts in such Collateral Accounts to satisfy the obligations of Company hereunder with respect to
the Bankers’ Acceptances being repaid, any excess remains, such excess shall be promptly paid by
Administrative Agent to Company so long as no Potential Event of Default or Event of Default is
then continuing.



     E. Collateralization of Letters of Credit. With respect to funding the cash collateralization
of unexpired Letters of Credit to the extent required hereunder (it being acknowledged that any
requirement to pay or prepay or collateralize Letters of Credit prior to their expiry date shall be
construed as a requirement to provide cash collateral under this provision), it is agreed that
Company shall provide for the funding of such unexpired Letters of Credit by paying to and
depositing with the Administrative Agent for the benefit of the Issuing Lender cash collateral for
each such unexpired Letter of Credit; such cash collateral deposited by Company shall be held by
the Administrative Agent for the benefit of the Issuing Lender in the Collateral Account with
interest to be credited to Company at rates prevailing at the time of deposit for similar accounts
with the Administrative Agent. Such Collateral Account shall be held as security for the
obligations of Company in relation to such Letters of Credit and the security of the Administrative
Agent and Issuing Lender thereby created in such cash collateral shall rank in priority to all
other Liens and adverse claims against such cash collateral. Such cash collateral shall be applied
to satisfy the obligations of Company for such Letters of Credit as payments are made thereunder
and the Issuing Lender is hereby irrevocably directed by Company to so apply any such cash
collateral. Amounts held in such Collateral Account may not be withdrawn by Company; however,
interest on such deposited amounts shall be for the


 (First Amended and Restated Credit Agreement)




 - 51 -









 







account of Company and may be withdrawn by Company so long as no Potential Event of Default or
Event of Default is then continuing. If after expiry of the Letters of Credit for which such funds
are held and application by the Administrative Agent and Issuing Lender of the amounts in such
Collateral Account to satisfy the obligations of Company hereunder with respect to the Letters of
Credit being repaid, any excess remains, such excess shall be promptly paid by Administrative Agent
to Company so long as no Potential Event of Default or Event of Default is then continuing.



     F. Application of Proceeds after Event of Default. Upon the occurrence and during the
continuance of an Event of Default, if requested by Requisite Lenders (a) all payments received on
account of the Obligations, whether from Company, from any Subsidiary Guarantor or otherwise, shall
be applied by Administrative Agent against the Obligations and (b) all proceeds received by
Collateral Agent in respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral under any Collateral Document may, in the discretion of Administrative
Agent, be held by Collateral Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Administrative Agent against, the applicable Obligations and Secured
Swap Obligations, in each case in the following order of priority:




     (i) to the payment of all costs and expenses of such sale, collection or other
realization, all other expenses, liabilities and advances made or incurred by Agents in
connection therewith, and all amounts for which Agents are entitled to compensation
(including the fees described in subsection 2.3), reimbursement and indemnification under
any Loan Document and all advances made by Administrative Agent thereunder for the account
of the applicable Loan Party, and to the payment of all costs and expenses paid or incurred
by Agents in connection with the Loan Documents, all in accordance with subsections 11.4,
12.2 and 12.3 and the other terms of this Agreement and the Loan Documents;




     (ii) thereafter, to the payment of all other Obligations (including the cash
collateralization of outstanding Letters of Credit) and the obligations under Secured Swap
Obligations for the ratable benefit of the holders thereof (subject, in the case of amounts
to be applied to the Obligations, to the provisions of subsection 2.4B(ii) hereof); and




     (iii) thereafter, to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.



     2.5 Use of Proceeds.



     The proceeds of any Revolving Loans shall be applied by Company for working capital and other
general corporate purposes, which may include the making of intercompany loans to and equity
Investments in any of Company’s wholly-owned Subsidiaries, in each case in accordance with
subsection 9.3, for their own general corporate purposes.



     2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality.


 (First Amended and Restated Credit Agreement)




 - 52 -









 





     A. Taxes. Company shall make all payments required hereunder, whether by way of principal,
interest or otherwise, without regard to any defense, counterclaim or right of set-off available to
Company and without withholding any Taxes (for the purposes of this subclause 2.6A, “Taxes” shall
not include Taxes on such Lender’s overall income, and franchise taxes). If Company is required by
Applicable Law to deduct any withholding Taxes from or in respect of any amounts payable under this
Agreement (i) the amounts payable by Company hereunder will be increased by the amount necessary so
that after making all required deductions (including deductions applicable to additional sums
payable under this Section 2.6A) Administrative Agent and the Lenders will receive an amount equal
to the sum they would have received had no such deductions been made, (ii) Company will make such
deductions, and (iii) Company will pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with Applicable Law. Notwithstanding the foregoing,
unless a Person becomes a Lender as a result of an assignment of Loans at a time when an Event of
Default has occurred and is continuing, Company shall have no obligation to gross-up for Taxes
withheld or paid solely because such Lender is a non-resident of Canada within the meaning of the
Income Tax Act, unless Company otherwise agrees in writing to do so.



     B. Capital Adequacy Adjustment. If any Lender shall have determined, acting reasonably, that
the adoption, effectiveness, phase-in or applicability after the date hereof of any law, rule or
regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any guideline, request
or directive regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as a consequence of, or with reference
to, such Lender’s Loans or Revolving Loan Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a
level below that which such Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration
the policies of such Lender or such controlling corporation with regard to capital adequacy), then
from time to time, within 10 Business Days after receipt by Company from such Lender of the
statement referred to in Section 2.7A, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an after-tax basis for
such reduction.



     C. Market for Bankers’ Acceptances. In the event that at any time subsequent to the giving of
a Notice of Borrowing or Notice of Conversion/Rollover to Administrative Agent by Company with
regard to any requested Bankers’ Acceptances, but before the date of the borrowing, Rollover or
Conversion, as the case may be, the Administrative Agent makes a determination, which shall be
conclusive and binding upon Company, absent manifest error, that there no longer exists an active
market for Bankers’ Acceptances then:




     (i) the right of Company to request Bankers’ Acceptances or BA Equivalent Advances from
any Lender shall be suspended until Administrative Agent determines that the circumstances
causing such suspension no longer exist, and so notifies Company;


 (First Amended and Restated Credit Agreement)




 - 53 -









 






     (ii) any outstanding Notice of Borrowing requesting a Loan by way of Bankers’
Acceptances or BA Equivalent Advances shall (unless revoked by Company before the Funding
Date) be deemed to be a Notice of Borrowing requesting a Loan by way of Prime Rate Loans in
the amount specified in the original Notice of Borrowing;




     (iii) any outstanding Notice of Conversion/Rollover requesting a Conversion of a Prime
Rate Loan into Bankers’ Acceptances or BA Equivalent Advances shall be deemed to be revoked;
and




     (iv) any outstanding Notice of Conversion/Rollover requesting a Rollover of Bankers’
Acceptances or BA Equivalent Advances shall (unless revoked by Company before the Funding
Date) be deemed to be a Notice of Conversion/Rollover requesting a Conversion of such Loans
into Prime Rate Loans.


The Agent shall promptly notify Company and the Lenders of any suspension of Company’s right to
request Bankers’ Acceptances or BA Equivalent Advances and of any termination of any such
suspension.




     D. Change in Law. If, after the date hereof, the adoption of any Applicable Law, regulation,
treaty or official directive (whether or not having the force of law) or any change therein or in
the interpretation or application thereof by any court or by any Governmental Authority or any
other entity charged with the interpretation or administration thereof or compliance by a Lender
with any request or direction (whether or not having the force of law) of any such authority or
entity hereafter:




     (i) subjects such Lender to, or causes the withdrawal or termination of a previously
granted exemption with respect to, any Taxes (for the purposes of this subclause 2.6D,
“Taxes” shall not include Taxes on such Lender’s overall income, and franchise taxes), or
changes the basis of taxation of payments due to such Lender, or increases any existing
Taxes on payments of principal, interest or other amounts payable by Company to such Lender
under this Agreement;




     (ii) imposes, modifies or deems applicable any reserve, liquidity, special deposit,
regulatory or similar requirement against assets or liabilities held by, or deposits in or
for the account of, or loans by such Lender, or any acquisition of funds for loans or
commitments to fund loans or obligations in respect of undrawn, committed lines of credit or
in respect of Bankers’ Acceptances accepted by such Lender;




     (iii) imposes on such Lender or requires there to be maintained by such Lender any
capital adequacy or additional capital requirements (including a requirement which affects
such Lender’s allocation of capital resources to its obligations) in respect of any Loan,
Letter of Credit or obligation of such Lender hereunder, or any other condition with respect
to this Agreement; or




     (iv) directly or indirectly affects the cost to such Lender of making available,
funding or maintaining any Loan, or issuing or participating in any Letter of Credit or


 (First Amended and Restated Credit Agreement)




 - 54 -









 







otherwise imposes on such Lender any other condition or requirement affecting this
Agreement or any Loan or any obligation of such Lender hereunder;


and the result of (i), (ii), (iii) or (iv) above, in the sole determination of such Lender acting
in good faith, is:





(a) to increase the cost to such Lender of performing its obligations
hereunder with respect to any Loan or Letter of Credit;




(b) to reduce any amount received or receivable by such Lender hereunder or
its effective return hereunder or on its capital in respect of any Loan,
Letter of Credit or any Revolving Loan Commitment; or




(c) to cause such Lender to make any payment with respect to or to forego
any return on or calculated by reference to, any amount received or
receivable by such Lender hereunder with respect to any Loan, Letter of
Credit or any Revolving Loan Commitment;


such Lender shall determine that amount of money which shall compensate the Lender for such
increase in cost, payments to be made or reduction in income or return or interest foregone (herein
referred to as “Additional Compensation”). Upon a Lender having determined that it is entitled to
Additional Compensation in accordance with the provisions of this Section, the Lender shall
promptly so notify Company and Administrative Agent. The relevant Lender shall provide Company and
Administrative Agent with a photocopy of the relevant law, rule, guideline, regulation, treaty or
official directive (or, if it is impracticable to provide a photocopy, a written summary of the
same) and a certificate of a duly authorized officer of such Lender setting forth the Additional
Compensation and the basis of calculation therefor, which shall be conclusive evidence of such
Additional Compensation in the absence of manifest error. Company shall pay to such Lender within
10 Business Days of the giving of such notice such Lender’s Additional Compensation. Each of the
Lenders shall be entitled to be paid such Additional Compensation from time to time to the extent
that the provisions of this Section are then applicable notwithstanding that any Lender has
previously been paid any Additional Compensation.




     2.7 Statement of Lenders; Obligation of Lenders to Mitigate.



     A. Statements. Each Lender, Issuing Lender or Agent claiming compensation or reimbursement
pursuant to subsection 2.6 or 2.7B shall deliver to Company (with a copy to Administrative Agent) a
written statement, setting forth in reasonable detail the basis of the calculation of such
compensation or reimbursement, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.



     B. Mitigation. Each Lender, Issuing Lender and Agent agrees that, as promptly as practicable
after the officer of such Person responsible for administering the Loans or Letters of Credit of
such Person, as the case may be, becomes aware of the occurrence of an event or the existence of a
condition that would entitle such Person to receive payments under subsections 2.6


 (First Amended and Restated Credit Agreement)




 - 55 -









 







or 2.9, use reasonable efforts to make, issue, fund or maintain the Commitments, Loans or
Letters of Credit, as applicable, of such Person through another lending or letter of credit office
of such Person, if (i) as a result thereof the additional amounts which would otherwise be required
to be paid to such Person pursuant to subsection 2.6 or 2.9 would be materially reduced, and (ii)
as determined by Person, acting reasonably, such action would not otherwise be disadvantageous to
such Person; provided that such Person will not be obligated to utilize such other lending
or letter of credit office pursuant to this subclause 2.7B unless Company agrees to pay all
incremental expenses incurred by such Person as a result of utilizing such other lending or letter
of credit office in connection with such Loans or Letters of Credit as described above.



     2.8 Replacement of a Lender.



          If Company receives a statement of amounts due pursuant to subsection 2.7A from a Lender, a
Revolving Lender defaults in its obligations to fund a Revolving Loan pursuant to this Agreement, a
Lender (a “Non-Consenting Lender”) refuses to consent to an amendment, modification or waiver of
this Agreement that, pursuant to subsection 12.6, requires consent of 100% of the Lenders or 100%
of the Lenders with Obligations directly affected, or a Lender has, pursuant to subsection 2.9,
declared its obligations under this Agreement with respect to certain Loans to be terminated (any
such Lender, a “Subject Lender”), so long as (i) no Potential Event of Default or Event of Default
shall have occurred and be continuing and Company has obtained a commitment from another Lender or
an Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the Subject Lender’s
Revolving Loan Commitments and all other obligations of the Subject Lender hereunder, (ii) such
Lender is not an Issuing Lender with respect to any Letters of Credit outstanding (unless all such
Letters of Credit are terminated or arrangements acceptable to such Issuing Lender (such as a
“back-to-back” letter of credit) are made) and (iii), if applicable, the Subject Lender is
unwilling to withdraw the notice delivered to Company pursuant to subsection 2.7 and/or is
unwilling to remedy its default upon 10 days prior written notice to the Subject Lender and
Administrative Agent and/or is unwilling to approve the applicable amendment, modification or
waiver upon 5 days prior written notice to the Subject Lender and Administrative Agent, Company may
require the Subject Lender to assign all of its Loans and Revolving Loan Commitments to such other
Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection
12.1B, provided that, prior to or concurrently with such replacement, (1) the Subject
Lender shall have received payment in full of all principal, interest, fees and other amounts
(including all amounts under subsections 2.6 and/or 2.7B (if applicable)) owed to it through such
date of replacement and a release from its obligations under the Loan Documents, (2) the processing
fee required to be paid by subsection 12.1B(i) shall have been paid to Administrative Agent, (3)
all of the requirements for such assignment contained in subsection 12.1B including the consent of
Administrative Agent (if required) and the receipt by Administrative Agent of an executed
Assignment Agreement and other supporting documents, have been fulfilled, and (4) in the event such
Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the time of such
assignment, to each matter in respect of which such Subject Lender was a Non-Consenting Lender and
Company also requires each other Subject Lender that is a Non-Consenting Lender to assign its Loans
and Revolving Loan Commitments.




     2.9 Illegality.



(First Amended and Restated Credit Agreement)




 - 56 -









 





          If a Lender determines, in good faith, that the adoption of any Applicable Law, regulation,
treaty or official directive (whether or not having the force of law) or any change therein or in
the interpretation or application thereof by any court or by any Governmental Authority or any
other entity charged with the interpretation or administration thereof or compliance by a Lender
with any request or direction (whether or not having the force of law) of any such authority or
entity, now or hereafter makes it unlawful or impossible for any Lender to make, fund or maintain a
Loan, issue a Letter of Credit or maintain a Revolving Loan Commitment, or to give effect to its
obligations in respect of such a Loan, Revolving Loan Commitment or a Letter of Credit, such Lender
may, by written notice thereof to Company and to Administrative Agent (which shall include in
reasonable detail an explanation of its determination) declare its obligations under this Agreement
in respect of such Loan, Letter of Credit or Revolving Loan Commitment to be terminated whereupon
the same shall, subject to subsection 2.7B, forthwith terminate, and Company shall, subject to
subsection 2.7B, within the time required by such law (or at the end of such longer period as such
Lender at its discretion has agreed), either effect a Conversion of such Loan in accordance with
the provisions hereof (if such Conversion would resolve the unlawfulness or impossibility) or
prepay the principal of such Loan, and collateralize such Letter of Credit, and pay accrued
interest, such Additional Compensation as may be applicable with respect to such Loan to the date
of such payment. If any such change shall only affect a portion of such Lender’s obligations under
this Agreement which is, in the opinion of such Lender and Administrative Agent, severable from the
remainder of this Agreement so that the remainder of this Agreement may be continued in full force
and effect without otherwise affecting any of the obligations of Administrative Agent, the other
Lenders or Company hereunder, such Lender shall only declare its obligations under that portion so
terminated.




Section 3. BANKERS’ ACCEPTANCES




     3.1 Acceptance of Bankers’ Acceptances; Form and Execution.



     A. Bankers’ Acceptances. Pursuant to subsection 2.1A, Company may request, in accordance with
the provisions of this subsection 3.1, from time to time during the period from the Restatement
Date to but excluding the 30th day prior to the Revolving Loan Commitment Termination
Date that the Lenders accept Bankers’ Acceptances issued by Company or make BA Equivalent Advances
to Company. Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Company herein set forth, such Lenders shall accept such Bankers’
Acceptances, or make BA Equivalent Advances in lieu thereof, in accordance with the provisions of
this subsection 3.1, provided that Company shall not request that any Lender having a
Revolving Loan Commitment accept such Bankers’ Acceptances, or make BA Equivalent Advances (and no
Lender shall do so) if, after giving effect to such issuance a Bankers’ Acceptance or BA Equivalent
Advance would have a term ending later than the Revolving Loan Commitment Termination Date.



     B. Applicable Provisions. The following provisions shall apply to each Bankers’ Acceptance
hereunder:


 (First Amended and Restated Credit Agreement)




 - 57 -









 






     (i) the face amount at maturity of each draft drawn by Company to be accepted as a
Bankers’ Acceptance shall be Cdn. $100,000 and integral multiples thereof;




     (ii) each draft drawn by Company and presented for acceptance by a Lender shall be
drawn on the standard form of such Lender in effect at the time, specifying the BA Interest
Period, provided that Administrative Agent may require the Lenders to use a generic
form of Bankers’ Acceptance, in a form satisfactory to each Lender, acting reasonably,
provided by Administrative Agent for such purpose in place of the Lenders’ own forms;




     (iii) subject to subparagraph 3.1B(iv), Bankers’ Acceptances shall be signed by duly
authorized officers of Company or, in the alternative, the signatures of such officers may
be mechanically reproduced in facsimile thereon and Bankers’ Acceptances bearing such
facsimile signatures shall be binding on Company as if they had been manually executed and
delivered by such officers on behalf of Company. Notwithstanding that any person whose
manual or facsimile signature appears on any Bankers’ Acceptance may no longer be an
authorized signatory for Company on the date of issuance of a Bankers’ Acceptance, such
signature shall nevertheless be valid and sufficient for all purposes as if such authority
had remained in force at the time of such issuance and any such Bankers’ Acceptance shall be
binding on Company; and




     (iv) in lieu of Company signing Bankers’ Acceptances in accordance with subparagraph
3.1B(iii), and, for so long as the power of attorney in subparagraph 3.2A is in force with
respect to a given Lender, such Lender shall execute and deliver Bankers’ Acceptances on
behalf of Company in accordance with the provisions thereof and, for certainty, all
references herein to drafts drawn by Company, Bankers’ Acceptances executed by Company or
similar expressions shall be deemed to include Bankers’ Acceptances executed in accordance
with a power of attorney, unless the context otherwise requires.



          If and for so long as the power of attorney referred to in subsection 3.2A is in force with
respect to each Lender, it is intended that pursuant to the DBNA, all Bankers’ Acceptances accepted
by the Lenders (other than Old System Issuers) under this Agreement will be issued in the form of a
“depository bill” (as defined in the DBNA), and deposited with a Clearing House. In order to give
effect to the foregoing, Administrative Agent will, subject to the approval of Company and the
Lenders (other than Old System Issuers), establish and notify Company and the Lenders of any
additional procedures, consistent with the terms of this Agreement and the DBNA, as are reasonably
necessary to accomplish such intention, including:




     (a) any instrument held by Administrative Agent for the purposes of Bankers’
Acceptances will have marked prominently and legibly on its face and within its
text, at or before the time of issue, the words “This is a depository bill subject
to the Depository Bills and Notes Act (Canada)”;




     (b) any reference to the authentication of the Bankers’ Acceptance will be
removed; and


 (First Amended and Restated Credit Agreement)




 - 58 -









 






     (c) any reference to the “bearer” will be removed and such Bankers’ Acceptances
will not be marked with any words prohibiting negotiation, transfer or assignment of
it or of an interest in it.



     3.2 Power of Attorney; Provision of Bankers’ Acceptances to Lenders.



     A. Power of Attorney. As a condition precedent to each Lender’s obligation to accept Bankers’
Acceptances hereunder, Company hereby appoints each Lender, acting by any authorized signatory of
the Lender in question, the attorney of Company:




     (i) to sign for and on behalf and in the name of Company as drawer, drafts in such
Lender’s standard form which are depository bills as defined in the DBNA, payable to a
Clearing House ;




     (ii) for drafts which are not depository bills, to sign for and on behalf and in the
name of Company as drawer and to endorse on its behalf, Bankers’ Acceptances drawn on the
Lender payable to the order of such Lender;




     (iii) for BA Discount Notes, to sign for and on behalf and in the name of Company as
drawer and to endorse on its behalf BA Discount Notes payable to the order of such Lender;




     (iv) to fill in the amount, date and maturity date of such Bankers’ Acceptances (or BA
Discount Notes as applicable); and




     (v) to deposit and/or deliver such Bankers’ Acceptances which have been accepted by
such Lender or such BA Discount Notes which are payable to the order of such Lender,


provided that such acts in each case are to be undertaken by the Lender in question
strictly in accordance with instructions given to such Lender by Company as provided in this
Section. For certainty, signatures of any authorized signatory of a Lender may be mechanically
reproduced in facsimile on Bankers’ Acceptances (or BA Discount Notes as applicable) in accordance
herewith and such facsimile signatures shall be binding and effective as if they had been manually
executed by such authorized signatory of such Lender.




          Instructions from Company to a Lender relating to the execution, completion, endorsement,
deposit and/or delivery by that Lender on behalf of Company of Bankers’ Acceptances (or BA Discount
Notes as applicable) which Company wishes to submit to the Lender for acceptance by the Lender
shall be communicated by Company in writing to Administrative Agent by delivery to Administrative
Agent of Notices of Borrowing and Notices of Conversion/ Rollover, as the case may be, in
accordance with this Agreement which, in turn, shall be communicated by Administrative Agent, on
behalf of Company, to the Lender.




          The communication in writing by Company, or on behalf of Company by Administrative Agent, to
the Lender of the instructions set out in the Notices of Borrowing and



 (First Amended and Restated Credit Agreement)




 - 59 -









 







Notice of Conversion/Rollover Notices referred to above shall constitute (a) the authorization
and instruction of Company to the Lender to sign for and on behalf and in the name of Company as
drawer the requested Bankers’ Acceptances (or BA Discount Notes as applicable) and to complete
and/or endorse Bankers’ Acceptances (or BA Discount Notes as applicable) in accordance with such
information as set out above, and (b) the request of Company to the Lender to accept such Bankers’
Acceptances and deposit the same with a Clearing House or deliver the same, as the case may be, in
each case in accordance with this Agreement and such instructions. Company acknowledges that a
Lender shall not be obligated to accept any such Bankers’ Acceptances except in accordance with the
provisions of this Agreement.




          A Lender shall be and it is hereby authorized to act on behalf of Company upon and in
compliance with instructions communicated to that Lender as provided herein if the Lender
reasonably believes such instructions to be genuine. If a Lender accepts Bankers’ Acceptances
pursuant to any such instructions, that Lender shall confirm particulars of such instructions and
advise Administrative Agent that it has complied therewith by notice in writing to Administrative
Agent in accordance with the provisions hereof. A Lender’s actions in compliance with such
instructions, confirmed and advised to Administrative Agent by such notice, shall be prima facie
evidence of having been in accordance with the instructions of Company.




     B. Revocation. The power of attorney in subsection 3.2A may be revoked by Company with
respect to any particular Lender at any time upon not less than 5 Business Days’ prior written
notice served upon the Lender in question and Administrative Agent, provided that no such
revocation shall reduce, limit or otherwise affect the obligations of Company in respect of any
Bankers’ Acceptance (or BA Discount Note as applicable) executed, completed, endorsed, deposited
and/or delivered in accordance herewith prior to the time at which such revocation becomes
effective. If the power of attorney is so revoked with respect to any Lender, Company shall, from
time to time as required by the applicable Lenders, provide to Administrative Agent for delivery to
each such Lender drafts drawn in blank by Company (pre-endorsed and otherwise in fully negotiable
form, if applicable) in quantities sufficient for each such Lender to fulfill its obligations
hereunder. Any such pre-signed drafts which are delivered by Company to Administrative Agent or a
Lender shall be held in safekeeping by Administrative Agent or such Lender, as the case may be,
with the same degree of care as if they were Administrative Agent’s or such Lender’s property, and
shall only be dealt with by the Lenders and Administrative Agent in accordance herewith. No Lender
shall be responsible or liable for its failure to make its share of any Bankers’ Acceptances
required hereunder if the cause of such failure is, in whole or in part, due to the failure of
Company to provide such pre-signed drafts to Administrative Agent (for delivery to such Lender) on
a timely basis.



     C. Delivery of Drafts. By 11:00 a.m. (Toronto time) on the applicable Funding Date,
Conversion or Rollover date, Company shall (i) either deliver to each Lender in Toronto, or, if
previously delivered, be deemed to have authorized each Lender to complete and accept, or (ii)
where the power of attorney in Section 3.2A is in force with respect to a Lender, be deemed to have
authorized each such Lender to sign on behalf of Company, complete and accept, drafts drawn by
Company on such Lender in a principal amount at maturity equal to such Lender’s share of the
Bankers’ Acceptances specified by Company in the relevant Notice of Borrowing or


 (First Amended and Restated Credit Agreement)




 - 60 -









 







Notice of Conversion/Rollover, as the case may be, as notified to the Lenders by
Administrative Agent.



     3.3 Mechanics of Issuance.



     A. Apportionment. Upon receipt by Administrative Agent of a Notice of Borrowing or Notice of
Conversion/Rollover from Company requesting the issuance of Bankers’ Acceptances, Administrative
Agent shall promptly notify the Lenders thereof and advise each Lender of the aggregate face amount
of Bankers’ Acceptances to be accepted and purchased by such Lender, the date of issue and the BA
Interest Period for such Loan; the apportionment among the Lenders of the face amounts of Bankers’
Acceptances to be accepted by each Lender shall be determined by Administrative Agent by reference
and in proportion to the respective applicable Revolving Loan Commitments of each Lender,
provided that, when such apportionment cannot be evenly made, Administrative Agent shall
round allocations amongst such Lenders consistent with Administrative Agent’s normal money market
practices.



     B. Rate Determination. On each date for borrowing, Rollover or Conversion involving the
issuance of Bankers’ Acceptances:




     (i) on or about 11:00 a.m. (Toronto time) on such date, Administrative Agent shall
determine the CDOR Rate and shall obtain quotations from the Schedule II Reference Lenders
in order to determine the BA Discount Rate then applicable to Bankers’ Acceptances accepted
by such Schedule II Lender and Schedule III Lender in respect of an issue of Bankers’
Acceptances in a comparable amount and with comparable maturity to the Bankers’ Acceptances
proposed to be issued on such date;




     (ii) on or about 11:00 a.m. (Toronto time) on such date, Administrative Agent shall
determine the BA Discount Rate applicable to each Lender and shall advise each Lender of the
BA Discount Rate applicable to it;




     (iii) each Lender shall complete and accept, in accordance with the Notice of Borrowing
or Notice of Conversion/Rollover delivered by Company and advised by Administrative Agent in
connection with such issue, its share of the Bankers’ Acceptances to be issued on such date
and shall purchase such Bankers’ Acceptances for its own account at a purchase price which
reflects the BA Discount Rate applicable to such issue; and




     (iv) in the case of a borrowing, each Lender shall, for same day value on the Funding
Date, remit the BA Discount Proceeds or advance the BA Equivalent Advance, as the case may
be, payable by such Lender (net of the stamping fee payable to such Lender pursuant to
Section 3.9) to Administrative Agent for the account of Company; Administrative Agent shall
make such funds available to Company for same day value on such date.


 (First Amended and Restated Credit Agreement)




 - 61 -









 





     C. Resale. Each Lender may at any time and from time to time hold, sell, rediscount or
otherwise dispose of any or all Bankers’ Acceptances accepted and purchased by it for its own
account.



     3.4 Rollover of Bankers’ Acceptances.



          In order to satisfy the liability of Company to a Lender for the face amount of maturing
Bankers’ Acceptances accepted by such Lender, such Lender shall receive and retain for its own
account the BA Discount Proceeds of new Bankers’ Acceptances issued on a Rollover, and Company
shall on the maturity date of the Bankers’ Acceptances being rolled over pay to Administrative
Agent for the account of the Lenders an amount equal to the difference between the face amount of
the maturing Bankers’ Acceptances and the BA Discount Proceeds from the new Bankers’ Acceptances,
together with the stamping fees to which the Lenders are entitled pursuant to Section 3.9.




     3.5 Conversion into Bankers’ Acceptances.



          In respect of Conversions into Bankers’ Acceptances, in order to satisfy the liability of
Company to the Lenders for the amount of the converted Loan, each Lender shall receive and retain
for its own account the BA Discount Proceeds of the Bankers’ Acceptances issued upon such
Conversion, and Company shall on the date for Conversion pay to Administrative Agent for the
account of the Lenders an amount equal to the difference between the principal amount of the
converted Loan and the aggregate BA Discount Proceeds from the Bankers’ Acceptances issued on such
Conversion, together with the stamping fees to which the Lenders are entitled pursuant to Section
3.9.




     3.6 Conversion from Bankers’ Acceptances.



          In order to satisfy the liability of Company to the Lenders for an amount equal to the
aggregate face amount of the maturing Bankers’ Acceptances converted to another type of Loan,
Administrative Agent shall record the obligation of Company to the Lenders as a Loan of the type
into which such continuing liability has been converted.




     3.7 BA Equivalent Advances.



          Notwithstanding the foregoing provisions of this Article, a Non-Acceptance Lender shall, in
lieu of accepting Bankers’ Acceptances, make a BA Equivalent Advance. The amount of each BA
Equivalent Advance shall be equal to the BA Discount Proceeds which would be realized from a
hypothetical sale of those Bankers’ Acceptances which, but for this Section, such Lender would
otherwise be required to accept as part of such a borrowing, Conversion or Rollover of Bankers’
Acceptances. To determine the amount of such BA Discount Proceeds, the hypothetical sale shall be
deemed to take place at the BA Discount Rate for such Loan. Any BA Equivalent Advance shall be made
on the relevant Funding Date, or Rollover or Conversion date as the case may be and shall remain
outstanding for the term of the relevant Bankers’ Acceptances. Concurrent with the making of a BA
Equivalent Advance, a Non-Acceptance Lender shall be entitled to deduct therefrom an amount equal
to the stamping fee
 (First Amended and Restated Credit Agreement)




 - 62 -









 








which, but for this Section, such Lender would otherwise be entitled to receive as part of
such Loan. Upon the maturity date for such Bankers’ Acceptances, Company shall pay to each
Non-Acceptance Lender an amount equal to the face amount of the Bankers’ Acceptances which such
Lender would have accepted as part of such Loan if it was not a Non-Acceptance Lender.




          All references herein to “Loans” and “Bankers’ Acceptances” shall, unless otherwise expressly
provided herein or unless the context otherwise requires, be deemed to include BA Equivalent
Advances made by a Non-Acceptance Lender as part of a borrowing, Conversion or Rollover of Bankers’
Acceptances.




     3.8 Termination of Bankers’ Acceptances.



          If at any time a Lender ceases to accept Bankers’ Acceptances in the ordinary course of its
business, such Lender shall be deemed to be a Non-Acceptance Lender and shall make BA Equivalent
Advances in lieu of accepting Bankers’ Acceptances under this Agreement.




     3.9 Stamping Fees.



          Upon the acceptance by a Lender of a Bankers’ Acceptance, Company shall pay to Administrative
Agent for the account of such Lender a stamping fee in Cdn. Dollars equal to 3.0% per annum
calculated on the principal amount at maturity of such Bankers’ Acceptance and BA Equivalent
Advances and for the period of time from and including the date of acceptance or advance to but
excluding the maturity date of such Bankers’ Acceptance or BA Equivalent Advance and calculated on
the basis of the number of days elapsed in a year of 365 days.




     3.10 No Issuance, Conversion or Rollover during Default.



          Notwithstanding the foregoing provisions of this Section 3, no Bankers’ Acceptance may be
accepted, no BA Equivalent Advances may be made, no Prime Rate Loan may be subject to a Conversion
into a Bankers’ Acceptance or BA Equivalent Advance and no Banker’s Acceptance or BA Equivalent
Advance shall be subject to a Rollover after the occurrence and during the continuation of a
Potential Event of Default or an Event of Default. After the occurrence and during the
continuation of an Event of Default, outstanding Bankers’ Acceptances and BA Equivalent Advances
shall convert to Prime Rate Loans at the end of the BA Interest Period applicable thereto.




Section 4. LETTERS OF CREDIT




     4.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.



     A. Letters of Credit. In addition to Company requesting that Lenders make Loans by way of
Prime Rate Loans and Bankers’ Acceptances pursuant to subsection 2.1A, Company may request, in
accordance with the provisions of this subsection 4.1, from time to time during the period from the
Restatement Date to but excluding the 30th day prior to the Revolving Loan Commitment
Termination Date, that a Revolving Lender issue Letters of Credit for the account


 (First Amended and Restated Credit Agreement)




 - 63 -









 







of Company for the purposes specified in the definition of Letters of Credit. Subject to the
terms and conditions of this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any Lender may, but (except as provided in subsection 4.1B(ii) in respect
of the Fronting Bank) shall not be obligated to, issue such Letters of Credit in accordance with
the provisions of this subsection 4.1, provided that Company shall not request that any
Revolving Lender issue (and no Revolving Lender shall issue):




     (i) any Letter of Credit having an expiration date later than the earlier of (a) 10
days prior to the Revolving Loan Commitment Termination Date and (b) the date which is one
year from the date of issuance of such Letter of Credit, provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a
Letter of Credit will automatically be extended for one or more successive periods not to
exceed one year each unless such Issuing Lender elects not to extend for any such additional
period; and provided further that such Issuing Lender shall not extend such
Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing
(and has not been waived in accordance with subsection 12.6) at the time such Issuing Lender
must elect whether or not to allow such extension; or




     (ii) any Letter of Credit issued for the purpose of supporting trade payables or
indebtedness for borrowed money.



     For the avoidance of doubt, as of the Restatement Date, each of the Existing Letters of Credit
shall be deemed to be a Letter of Credit issued and outstanding under this Agreement.



     B. Mechanics of Issuance.




     (i) Request for Issuance. Whenever Company desires the issuance of a Letter of
Credit, it shall deliver to Administrative Agent and the Fronting Bank a Request for
Issuance no later than 12:00 noon (Toronto time) at least three Business Days, or such
shorter period as may be agreed to by the Issuing Lender in any particular instance, in
advance of the proposed date of issuance. The Issuing Lender, in its reasonable discretion,
may require changes in the text of the proposed Letter of Credit or any documents described
in or attached to the Request for Issuance, and may require an application and/or indemnity
of Company in such Issuing Lender’s customary form. In furtherance of the provisions of
subsection 12.8, and not in limitation thereof, Company may submit Requests for Issuance by
telefacsimile, and Administrative Agent and Issuing Lenders may rely and act upon any such
Request for Issuance without receiving an original signed copy thereof. Unless the Issuing
Lender otherwise agrees, no Letter of Credit shall require payment against a conforming
demand for payment to be made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such demand for payment is
required to be presented is located) that such demand for payment is presented if such
presentation is made after 1:00 p.m. (in the time zone of such office of the Issuing Lender)
on such business day.


 (First Amended and Restated Credit Agreement)




 - 64 -









 






          Company shall notify the applicable Issuing Lender (and Administrative Agent, if
Administrative Agent is not such Issuing Lender) prior to the issuance of any Letter of
Credit in the event that any of the matters to which Company is required to certify in the
applicable Request for Issuance is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter of Credit, Company
shall be deemed to have re-certified, as of the date of such issuance, as to the matters to
which Company is required to certify in the applicable Request for Issuance.




     (ii) Determination of Issuing Lender. Upon receipt by Administrative Agent of
a Request for Issuance pursuant to subsection 4.1B(i) requesting the issuance of a Letter of
Credit, in the event Fronting Bank elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Fronting Bank shall be the Issuing Lender with
respect thereto. In the event that Fronting Bank, in its sole discretion, elects not to
issue such Letter of Credit, Fronting Bank shall promptly so notify Company and
Administrative Agent, whereupon Company may request any other Revolving Lender to issue such
Letter of Credit by delivering to such Revolving Lender a copy of the applicable Request for
Issuance. Any Revolving Lender so requested to issue such Letter of Credit shall promptly
notify Company, Fronting Bank and Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any such Revolving Lender
that so elects to issue such Letter of Credit shall be the Issuing Lender with respect
thereto, provided that if more than one Revolving Lender so elects to issue such
Letter of Credit, Company shall determine which Revolving Lender shall be the Issuing
Lender.




          In the event that all other Revolving Lenders shall have declined to issue such Letter
of Credit, notwithstanding the prior election of Fronting Bank not to issue such Letter of
Credit, Fronting Bank shall be obligated to issue such Letter of Credit and shall be the
Issuing Lender with respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other Letters of Credit
issued by Fronting Bank, when aggregated with Fronting Bank’s outstanding Revolving Loans,
may exceed Fronting Bank’s Revolving Loan Commitment then in effect. If Fronting Bank has
resigned as provided in subclause 11.5C and no successor Fronting Bank has been appointed at
the time of a Request for Issuance, then, unless prior to the issuance the Company withdraws
its Request for Issuance, each Revolving Lender shall issue or cause to be issued a Letter
of Credit as to its own Pro Rata Share of each requested Letter of Credit, all of which
taken together would aggregate the amount requested in the Request for Issuance.




     (iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance
with subsection 12.6) of the conditions set forth in subsection 6.3, the Issuing Lender
shall issue the requested Letter of Credit in accordance with the Issuing Lender’s standard
operating procedures.




     (iv) Notification to Revolving Lenders. Upon the issuance of or amendment to
any Letter of Credit, the applicable Issuing Lender shall promptly notify Administrative


 (First Amended and Restated Credit Agreement)




 - 65 -









 







Agent and Company of such issuance or amendment in writing and such notice shall be
accompanied by a copy of such Letter of Credit or amendment. Upon receipt of such notice
(or, if Administrative Agent is the Issuing Lender, together with such notice),
Administrative Agent shall notify each Revolving Lender in writing of such issuance or
amendment and the amount of such Revolving Lender’s respective participation in such Letter
of Credit or amendment, and, if so requested by a Revolving Lender, Administrative Agent
shall provide such Lender with a copy of such Letter of Credit or amendment.



     C. Revolving Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the
issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees to,
have irrevocably purchased from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Revolving Lender’s Pro Rata Share of the
maximum amount that is or at any time may become available to be drawn thereunder.



     4.2 Letter of Credit Fees.



          Company agrees to pay the following amounts with respect to Letters of Credit issued
hereunder:





     (i) with respect to each Letter of Credit, (a) a fronting fee, payable directly to the
applicable Issuing Lender for its own account, equal to the greater of (X) Cdn.$500 and (Y)
0.25% per annum of the daily amount available to be drawn under such Letter of Credit and
(b) a letter of credit fee, payable to Administrative Agent for the account of Revolving
Lenders, equal to 3.0% per annum plus, upon the occurrence and during the
continuance of an Event of Default, 2% per annum, multiplied by the daily amount
available to be drawn under such Letter of Credit, each such fronting fee or letter of
credit fee to be payable quarterly in arrears up to and including each March 31, June 30,
September 30 and December 31 of each year and computed on the basis of a 365-day year for
the actual number of days elapsed, and payable on the first Business Day of the month
immediately following each such quarter;




     (ii) with respect to the issuance, administration, amendment or transfer of each Letter
of Credit and each payment of a drawing made thereunder (without duplication of the fees
payable under clauses (i) and (ii) above), documentary and processing charges payable
directly to the applicable Issuing Lender for its own account in accordance with such
Issuing Lender’s standard schedule for such charges in effect at the time.


For purposes of calculating any fees payable under clauses (i) and (ii) of this subsection 4.2, the
daily amount available to be drawn under any Letter of Credit shall be determined as of the close
of business on any date of determination.




     4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit


 (First Amended and Restated Credit Agreement)




 - 66 -









 





     A. Responsibility of Issuing Lender With Respect to Drawings. In determining whether to honor
any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be
responsible only to examine the documents delivered under such Letter of Credit with reasonable
care so as to ascertain whether they appear on their face to be in accordance with the terms and
conditions of such Letter of Credit.



     B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the event an Issuing
Lender has determined to honor a drawing under a Letter of Credit issued by it, such Issuing Lender
shall immediately notify Company and Administrative Agent, and Company shall reimburse such Issuing
Lender on or before the Business Day immediately following the date on which such drawing is
honored (the “Reimbursement Date”) in an amount in Cdn. Dollars and in same day funds equal to the
amount of such payment, provided that, anything contained in this Agreement to the contrary
notwithstanding, unless Company shall have notified Administrative Agent and such Issuing Lender
prior to 11:00 a.m. (Toronto time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such payment with funds other than the proceeds of
Revolving Loans:




     (i) Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Revolving Lenders to make Revolving Loans that are Prime
Rate Loans on the Reimbursement Date in an amount equal to the amount of such payment, and




     (ii) subject to satisfaction or waiver of the conditions specified in subsection 6.2
(other than 6.2A), Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Prime Rate Loans in the amount of such payment, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for the amount of
such payment;


and provided, further that if for any reason proceeds of Revolving Loans are not
received by such Issuing Lender on the Reimbursement Date in an amount equal to the amount of such
payment, Company shall reimburse such Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such payment by Issuing Lender over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection 4.3B shall be
deemed to relieve any Revolving Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Company shall retain any and all rights it may have
against any Revolving Lender resulting from the failure of such Revolving Lender to make such
Revolving Loans under this subsection 4.3B.




     C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.




     (i) Payment by Revolving Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 4.3B in an amount equal to
the amount of any payment by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall promptly notify Administrative Agent, who shall promptly notify each
Revolving Lender of the unreimbursed amount of such honored


 (First Amended and Restated Credit Agreement)




 - 67 -









 







drawing and of such other Revolving Lender’s respective participation therein based on
such Revolving Lender’s Pro Rata Share. Each Revolving Lender (other than such Issuing
Lender) shall make available to Administrative Agent an amount equal to its respective
participation, in Cdn. Dollars, in same day funds, at the Funding and Payment Office, not
later than 12:00 noon (Toronto time) on the first Business Day after the date notified by
Administrative Agent, and Administrative Agent shall make available to such Issuing Lender
in Cdn. Dollars, in same day funds, at the office of such Issuing Lender on such Business
Day the aggregate amount of the payments so received by Administrative Agent. In the event
that any Revolving Lender fails to make available to Administrative Agent on such Business
Day the amount of such Revolving Lender’s participation in such Letter of Credit as provided
in this subsection 4.3C, such Issuing Lender shall be entitled to recover such amount on
demand from such Revolving Lender together with interest thereon at the rate customarily
used by such Issuing Lender for the correction of errors among banks for three Business Days
and thereafter at the Prime Rate. Nothing in this subsection 4.3C shall be deemed to
prejudice the right of Administrative Agent to recover, for the benefit of Revolving
Lenders, from any Issuing Lender any amounts made available to such Issuing Lender pursuant
to this subsection 4.3C in the event that it is determined by the final judgment of a court
of competent jurisdiction that the payment with respect to a Letter of Credit by such
Issuing Lender in respect of which payments were made by Revolving Lenders constituted gross
negligence or willful misconduct on the part of such Issuing Lender.




     (ii) Distribution to Lenders of Reimbursements Received From Company. In the
event any Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to
subsection 4.3C for all or any portion of any payment by such Issuing Lender under a Letter
of Credit issued by it, and Administrative Agent or such Issuing Lender thereafter receives
any payments from Company in reimbursement of such payment under the Letter of Credit, to
the extent any such payment is received by such Issuing Lender, it shall distribute such
payment to Administrative Agent, and Administrative Agent shall distribute to each other
Revolving Lender that has paid all amounts payable by it under subsection 4.3C with respect
to such payment such Revolving Lender’s Pro Rata Share of all payments subsequently received
by Administrative Agent or by such Issuing Lender from Company. Any such distribution shall
be made to a Revolving Lender at the account specified in subsection 2.4B(iii).



     D. Interest on Amounts Paid Under Letters of Credit.




     (i) Payment of Interest by Company. Company agrees to pay to Administrative
Agent, with respect to payments under any Letters of Credit issued by any Issuing Lender,
interest on the amount paid by such Issuing Lender in respect of each such payment from the
date a drawing is honored to but excluding the date such amount is reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 4.3B) at a rate equal to (a) for the period from the date such drawing is honored
to but excluding the Reimbursement Date, the rate then in effect under this Agreement with
respect to Revolving Loans that are Prime Rate Loans, and (b) thereafter, a rate which is 2%
per annum in excess of the rate of interest


 (First Amended and Restated Credit Agreement)




 - 68 -









 







otherwise payable under this Agreement with respect to Revolving Loans that are Prime
Rate Loans. Interest payable pursuant to this subsection 4.3D(i) shall be computed on the
basis of a 365-day year for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.




     (ii) Distribution of Interest Payments by Administrative Agent. Promptly upon
receipt by Administrative Agent of any payment of interest pursuant to subsection 4.3D(i)
with respect to a payment under a Letter of Credit,




(a) Administrative Agent shall distribute to (x) each Revolving Lender
(including the Revolving Lender that paid such drawing) out of the interest
received by Administrative Agent in respect of the period from the date such
drawing is honored to but excluding the date on which the applicable Issuing
Lender is reimbursed for the amount of such payment (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
4.3B), the amount that such Revolving Lender would have been entitled to
receive in respect of the letter of credit fee that would have been payable
in respect of such Letter of Credit for such period pursuant to subsection
4.2 if no drawing had been honored under such Letter of Credit, and (y) such
Issuing Lender the amount, if any, remaining after payment of the amounts
applied pursuant to clause (x), and




(b) in the event such Issuing Lender shall have been reimbursed by other
Revolving Lenders pursuant to subsection 4.3C(i) for all or any portion of
such payment, Administrative Agent shall distribute to each Revolving Lender
(including such Issuing Lender) that has paid all amounts payable by it
under subsection 4.3C(i) with respect to such payment such Revolving
Lender’s Pro Rata Share of any interest received by Administrative Agent in
respect of that portion of such payment so made by Revolving Lenders for the
period from the date on which such Issuing Lender was so reimbursed to but
excluding the date on which such portion of such payment is reimbursed by
Company.


Any such distribution shall be made to a Revolving Lender at the account specified in subsection
2.4B(iii).




     4.4 Obligations Absolute.



          The obligation of Company to reimburse each Issuing Lender for payments under the Letters of
Credit issued by it and to repay any Revolving Loans made by Revolving Lenders pursuant to
subsection 4.3B and the obligations of Revolving Lenders under subsection 4.3C(i) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:



 (First Amended and Restated Credit Agreement)




 - 69 -









 









     (i) any lack of validity or enforceability of any Letter of Credit;




     (ii) the existence of any claim, set-off, defense or other right which Company or any
Lender may have at any time against a beneficiary or any transferee of any Letter of Credit
(or any Persons for whom any such transferee may be acting), any Issuing Lender or other
Revolving Lender or any other Person or, in the case of a Revolving Lender, against Company,
whether in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Company or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);




     (iii) any draft or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;




     (iv) payment by the applicable Issuing Lender under any Letter of Credit against
presentation of a draft or other document which does not substantially comply with the terms
of such Letter of Credit;




     (v) any adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries;




     (vi) any breach of this Agreement or any other Loan Document by any party thereto;




     (vii) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or




     (viii) the fact that an Event of Default or a Potential Event of Default shall have
occurred and be continuing;


provided, in each case, that payment by the applicable Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful misconduct of such Issuing
Lender under the circumstances in question (as determined by a final judgment of a court of
competent jurisdiction).




     4.5 Nature of Issuing Lenders’ Duties.



          As between Company and any Issuing Lender, Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing,
such Issuing Lender shall not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to transfer or assign any



 (First Amended and Restated Credit Agreement)




 - 70 -









 







such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in order to draw upon
such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such Letter of Credit or of
the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of
the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including any act or omission by a Governmental
Authority, and none of the above shall affect or impair, or prevent the vesting of, any of such
Issuing Lender’s rights or powers hereunder.




          In furtherance and extension and not in limitation of the specific provisions set forth in the
first paragraph of this subsection 4.5, any action taken or omitted by any Issuing Lender under or
in connection with the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.




          Notwithstanding anything to the contrary contained in this subsection 4.5, Company shall
retain any and all rights it may have against any Issuing Lender for any liability arising solely
out of the gross negligence or willful misconduct of such Issuing Lender, as determined by a final
judgment of a court of competent jurisdiction.




Section 5. SECURITY




     5.1 Collateral Documents.



          As continuing collateral security for the Obligations and the Secured Swap Obligations,
Company delivered to Administrative Agent on behalf of Lenders, Swap Lenders and Agents (with
copies to Collateral Agent) the following Loan Documents on or before the Original Closing Date
(unless expressly indicated otherwise):





   (i) the Holdings Guarantee executed by Holdings;




   (ii) the Subsidiary Guarantee executed by each Subsidiary Guarantor;




   (iii) a Debenture issued by Company and by each Subsidiary Guarantor, together with a
Deposit Instrument in respect of each;




   (iv) the Holdings Pledge Agreement in respect of all issued and outstanding stock of
Company;




   (v) the Company Pledge Agreement in respect of all issued and outstanding stock of NACG
and Finance Co.;


 (First Amended and Restated Credit Agreement)




 - 71 -









 






     (vi) a Subsidiary Pledge Agreement executed by NACG in respect of all issued and
outstanding stock of its directly held Subsidiaries; and




     (vii) a guarantee by Company of Secured Swap Obligations of Subsidiary Guarantors.



     Following the Restatement Date, from time to time, Company shall deliver all other Collateral
Documents hereafter provided as collateral security for the Obligations and the Secured Swap
Obligations in accordance with the provisions of this Agreement, including pursuant to subsection
8.9.



     5.2 Registration.



          Company shall, at its expense, and upon consultation with Administrative Agent and Collateral
Agent, register, file or record, or confirm the registration, filing or recording of, the
Collateral Documents (which requirement to register, file or record may be satisfied by the
Collateral Agent) in all offices where such registration, filing or recording is necessary or of
advantage to the creation, perfection and preservation of the security applicable to it,
provided that:





     (i) registration against specific real property interests need only be effected against
those parcels identified in Schedule 7.5B, and




     (ii) registration against specific vehicles or other equipment (security in respect of
which can be registered in a personal property registry by way of serial number) need only
be effected against those items identified in Schedule 7.5C;


until Administrative Agent, at the direction of the Requisite Lenders otherwise requests, which
they may do at any time and from time to time.




          Company shall, in consultation with Administrative Agent and Collateral Agent, amend and renew
such registrations, filings and recordings from time to time as and when required to keep them in
full force and effect or to preserve the priority established by any prior registration, filing or
recording thereof.




          To facilitate such ongoing perfection of the Collateral Documents, Company shall provide the
Administrative Agent and Collateral Agent with 30 days (or such shorter period of time agree to by
the Administrative Agent and Collateral Agent) prior written notice of any name change of any Loan
Party and shall promptly notify Administrative Agent and Collateral Agent of:





(a) any change in the location of any Loan Party’s chief executive office,




(b) any acquisition (whether by purchase, lease or otherwise) of any
property or assets which are intended to be used or kept outside of Alberta,
British Columbia, Saskatchewan and Ontario by Company or any



 (First Amended and Restated Credit Agreement)




 - 72 -









 








Subsidiary Guarantor or any relocation of existing assets outside said
jurisdictions, and




(c) any of Company or Subsidiary Guarantor acquiring (whether by purchase,
lease or otherwise, and including the purchase of previously leased
equipment from the lessor thereof) an interest in individual real
properties, or in vehicles or other equipment, security in respect of which
can be registered in a personal property registry by way of serial number,
and where any such asset has a cost or book value in excess of Cdn.$500,000,
in the case of real property interests, or in excess of Cdn.$1,250,000, in
the case of such vehicles or other equipment,



     and shall comply with the additional covenants set forth in the Collateral Documents with
respect to the foregoing.



          Company shall, at its expense, register, file or record the Collateral Documents (which
requirement to register, file or record may be satisfied by the Collateral Agent) in all offices
where such registration, filing or recording is necessary or of advantage to the creation,
perfection and preserving of the security applicable to any interests that are the subject of
clauses (c) and (d) above.




     5.3 Sharing Collateral Documents.



          Company and the Lenders agree and acknowledge that the Collateral Documents are being held by
Collateral Agent to secure the Obligations and the Secured Swap Obligations on a pari passu basis.
For purposes of the above sentence, pari passu basis means:





     (i) with respect to the Lenders (other than the Issuing Lender), proportional between
(a) the Obligations owed to Lenders having Revolving Loan Exposure, and (b) the aggregate of
the Obligations plus the Secured Swap Obligations;




     (ii) with respect to each Issuing Lender, proportional between (a) the Obligations owed
to it on account of Letter of Credit Usage, and (b) the aggregate of the Obligations plus
the Secured Swap Obligations; and




     (iii) with respect to the Swap Lenders, proportional between (a) the Secured Swap
Obligations and (b) the aggregate of the Obligations plus the Secured Swap Obligations.



          The Swap Lenders, as amongst themselves, will share their pro rata allocation of the
Collateral Documents, as determined in paragraph (iii) above, based on a pro rata allocation of the
aggregate outstanding Secured Swap Obligations (determined, if netting is legally available to a
Swap Lender, on a net basis) owing to each Swap Lender.




          If requested by any of Administrative Agent, Collateral Agent, the Requisite Lenders, an
Issuing Lender or any Swap Lender, then each of Collateral Agent, Administrative




(First Amended and Restated Credit Agreement)






 - 73 -









 







Agent and the Swap Lenders will enter into such further intercreditor agreements and
assurances as may be reasonably requested to further evidence the sharing provisions of this
subsection. The parties hereto agree, and such further agreements shall confirm, that Swap Lenders
shall be entitled to share in the proceeds of realization as aforesaid, but shall have no vote in
respect of amounts owed to them, and shall not have the right to initiate the enforcement of, or
participate in any decisions in respect of the enforcement of, any of the Loan Documents unless and
until there is no Revolving Loan Exposure, and this Agreement has been terminated.




     5.4 Form of Collateral Documents.



          If Collateral Agent, acting reasonably, determines at any time and from time to time that the
form and nature of the then existing Collateral Documents is deficient in any way or does not fully
provide Agents and the Lenders and the Swap Lenders with the security and priority to which each is
entitled hereunder, Company will forthwith execute and deliver or cause to be executed and
delivered to Administrative Agent and Collateral Agent, at Company’s expense, such amendments to
the Collateral Documents or provide such new security as Administrative Agent or Collateral Agent
may reasonably request.




          The forms of Collateral Documents shall have been or be prepared based upon the laws of
Alberta and other Applicable Laws in effect at the date hereof. Collateral Agent shall have the
right to require that:





     (i) any such Collateral Documents be amended to reflect any changes in such laws,
whether arising as a result of statutory amendments, court decisions or otherwise, in order
to confer upon Collateral Agent the rights and remedies intended to be created thereby, and




     (ii) Company and the Subsidiary Guarantors execute and deliver to Administrative Agent
and Collateral Agent such other and further debentures, mortgages, trust deeds, assignments
and security agreements as may be reasonably required to ensure Collateral Agent has and
holds First Priority Liens on and against all of the property and assets of Company and the
Subsidiary Guarantors for the benefit of the Agents, Lenders and the Swap Lenders.



     5.5 After-Acquired Property.



          All property acquired by or on behalf of Company or a Subsidiary Guarantor after the date of
execution of the Collateral Documents (hereinafter collectively referred to as “After-Acquired
Property”), will be subject to the charges and security interests of the Debentures, without any
further conveyance, mortgage, pledge, charge, assignment or other act on the part of such parties.
Without limiting the effect of the preceding sentence, Company will from time to time, at the
request of the Collateral Agent, acting reasonably, execute and deliver, or cause to be executed
and delivered, and in consultation with Collateral Agent will cause to be registered (which
requirement to register may be satisfied by the Collateral Agent), all at Company’s expense, such
instruments supplemental to the Collateral Documents, in form and substance satisfactory to
Collateral Agent, acting reasonably, as may be necessary or desirable to ensure




(First Amended and Restated Credit Agreement)




 - 74 -









 







that the Collateral Documents as amended and supplemented constitute in favour of Collateral
Agent for the benefit of the Agents, the Lenders and the Swap Lenders a valid First Priority Lien
over such After-Acquired Property as required hereunder.




     5.6 Continuing Collateral Documents.



          Each item or part of the Collateral Documents shall for all purposes be treated as a separate
and continuing collateral security and shall be deemed to have been given in addition to and not in
place of any other item or part of the Collateral Documents or any other security now held or
hereafter acquired by Administrative Agent, Collateral Agent or the Lenders. No item or part of the
Collateral Documents shall be merged or be deemed to have been merged in or by this Agreement or
any documents, instruments or acknowledgements delivered hereunder, or any simple contract debt or
any judgment, and any realization of or steps taken under or pursuant to any security, instrument
or agreement shall be independent of and not create a merger with any other right available to the
Lenders, the Collateral Agent or Administrative Agent under any security, instruments or agreements
held by it or at law or in equity.




     5.7 Dealing with Collateral Documents.



          Administrative Agent, with the consent of Requisite Lenders to the extent required by
subsection 12.6, may grant extensions of time or other indulgences, accept compositions, and
otherwise deal with Company and other parties as Administrative Agent may see fit, and may, subject
to Section 5.3, during the existence of an Event of Default, apply all amounts received from
Company or others or from securities (including the Collateral Documents or any part thereof) upon
such part of the liabilities of Company hereunder or under any of the Collateral Documents as
Administrative Agent may think best, without prejudice to or in any way limiting the liability of
Company and its Subsidiaries under this Agreement or under any of the Collateral Documents or any
other collateral security.




     5.8 Effectiveness.



          The Collateral Documents shall be effective, and the undertakings as to the Collateral
Documents herein or in any other Loan Document shall be continuing, whether any Loans or Letters of
Credit are then outstanding or any amounts thereby secured or any part thereof shall be owing
before or after, or at the same time as, the creation of such Collateral Documents or before or
after or upon the date of execution of any amendments to this Agreement.




     5.9 Release and Discharge of Collateral Documents.



          Except to the extent set forth in Section 11.6 and 12.14, 12.15, the Loan Parties shall not be
discharged from the Collateral Documents or any part thereof except by a written release and
discharge signed by Collateral Agent with the prior written consent of all Lenders and Swap
Lenders. If all of the Obligations and Secured Swap Obligations have been repaid, paid, satisfied
and discharged, as the case may be, in full and the credit facilities established hereby have been
fully cancelled, then the Collateral Documents shall be released and discharged




(First Amended and Restated Credit Agreement)




 - 75 -









 







by Collateral Agent, the Lenders and the Swap Lenders. Collateral Agent, at the cost and
expense of Company, shall from time to time do, execute and deliver, or cause to be done, executed
and delivered, all such agreements, instruments, certificates, financing statements, notices and
other documents and all acts, matters and things as may be reasonably requested by Company to give
effect to, establish, evidence or record the foregoing release and discharge.




     5.10 Transfer of Collateral Documents.



          If BNP PARIBAS (Canada), in its capacity as Collateral Agent, or any successor thereto, in its
capacity as Collateral Agent ceases to be Collateral Agent, such departing agent shall transfer and
assign all of the Collateral Documents to the replacement agent.




Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT




          The effectiveness of this Agreement and the obligations of Lenders to make Loans and to issue
Letters of Credit hereunder, are subject to the satisfaction of the following conditions.




     6.1 Conditions to the Restatement.



          The effectiveness of this Agreement and the obligations of Lenders to make Loans and to issue
Letters of Credit on the Restatement Date are, in addition to the conditions precedent specified in
subsection 6.2, subject to prior or concurrent satisfaction of the following conditions:




     A. Loan Party Documents. On or before the Restatement Date, Company shall, and shall cause
each other Loan Party to, deliver to Administrative Agent (with sufficient originally executed
copies, where appropriate, for each Lender and the Collateral Agent) the following with respect to
Company or such Loan Party, as the case may be, each, unless otherwise noted, dated the Restatement
Date:




     (i) copies of the Organizational Documents of such Person, certified by the secretary
or similar officer of the applicable Loan Party (or a certification that such Organizational
Documents have not changed from the terms thereof delivered in connection with the Original
Credit Agreement), together with a good standing certificate issued by the applicable
governmental official for its jurisdiction of organization and each other jurisdiction in
which such Person is qualified to do business, each dated a recent date prior to the
Restatement Date;




     (ii) resolutions of the Governing Body of such Person approving and authorizing the
execution, delivery and performance of the Loan Documents to which it is a party and which
are entered into on the Restatement Date, certified as of the Restatement Date by the
secretary or similar officer of such Person as being in full force and effect without
modification or amendment;



(First Amended and Restated Credit Agreement)




 - 76 -









 









     (iii) signature and incumbency certificates of the officers of such Person executing
the Loan Documents to which it is a party and which are entered into on the Restatement
Date;




     (iv) executed originals of the Collateral Documents and each other Loan Document to
which such Person is a party and which are entered into on the Restatement Date; and




     (v) such other documents as Administrative Agent or Collateral Agent may reasonably
request.



     B. Fees. Company shall have paid to Administrative Agent, for distribution (as appropriate)
to Administrative Agent, Collateral Agent and Lenders, the fees and expenses payable on the
Restatement Date referred to in subsection 2.3B.



     C. Corporate and Capital Structure; Ownership.




     (i) Corporate Structure. The corporate organizational structure of Holdings
and its Subsidiaries shall be as set forth on Schedule 7.1 annexed hereto.




     (ii) Capital Structure and Ownership. The capital structure and ownership of
Holdings and its Subsidiaries shall be as set forth on Schedule 7.1 annexed hereto.



     D. Representations and Warranties; Performance of Agreements. Company shall have delivered to
Administrative Agent an Officer’s Certificate, in form and substance satisfactory to Administrative
Agent, to the effect that the representations and warranties in Section 7 are true, correct and
complete in all material respects on and as of the Restatement Date to the same extent as though
made on and as of that date (or, to the extent such representations and warranties specifically
relate to an earlier date, that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date) and that Company shall have performed and
satisfied all conditions which this Agreement provides shall be performed or satisfied by it on or
before the Restatement Date except as otherwise disclosed to and agreed to in writing by Agents,
provided that, if a representation and warranty, covenant or condition is qualified as to
materiality, with respect to such representation and warranty, covenant or condition the applicable
materiality qualifier set forth above shall be disregarded for purposes of this condition.



     E. Financial Statements; Pro Forma Balance Sheet. On or before the Restatement Date, Lenders
shall have received from Company (i) audited restated financial statements of Company and its
Subsidiaries for the Fiscal Year ended March 31, 2005, consisting of balance sheets and the related
consolidated statements of income and cash flows for such Fiscal Year, audited by independent
public accountants of recognized national standing and prepared in conformity with Canadian GAAP
(with reconciliation to U.S. GAAP), together with such accountants’ report thereon, (ii) unaudited
financial statements of Company and its Subsidiaries for the fiscal quarters ended June 30, 2005,
September 30, 2005 and December 31, 2005 (restated in the case of the statements for the fiscal
quarter ended June 30, 2005), consisting of a



(First Amended and Restated Credit Agreement)




 - 77 -









 







balance sheet and the related consolidated statements of income and cash flows for such
periods, all in reasonable detail and certified by the chief financial officer of Company that they
fairly present the financial condition of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, (iii) unaudited interim financial
statements of the Company and its Subsidiaries for the fiscal periods most recently ended more than
45 days prior to the Restatement Date (including without limitation unaudited monthly financial
statements of Company and its Subsidiaries for any such period ended more than 45 days prior to the
Restatement Date), and (iv) projected consolidated financial statements (including balance sheets
and statements of income and cash flows) of the Loan Parties for the five year period after the
Restatement Date.




     F. Opinions of Counsel to Loan Parties. Lenders shall have received originally executed
copies of one or more favorable written opinions of Borden Ladner Gervais LLP and Bracewell &
Giuliani LLP, counsel for Loan Parties, in form and substance reasonably satisfactory to Agents and
their counsel, dated as of the Restatement Date and setting forth substantially the matters in the
opinions designated in Exhibit XI and Exhibit XII annexed hereto, respectively, and
as to such other matters as Agents acting on behalf of Lenders may reasonably request (this Credit
Agreement constituting a written request by Company to such counsel to deliver such opinions to
Lenders).



     G. Insurance. Company shall have in effect insurance policies conforming to the requirement
in subsection 8.4.



     H. Necessary Governmental Authorizations and Consents; Expiration of Waiting Periods, Etc.
Company shall have obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the transactions contemplated by the
Loan Documents and the continued operation of the business conducted by Company and its
Subsidiaries in substantially the same manner as conducted prior to the Restatement Date, except in
a case where the failure to obtain or maintain a Governmental Authorization or consent, either
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Each such Governmental Authorization and consent shall be in full force and effect, except
in a case where the failure to obtain or maintain a Governmental Authorization or consent, either
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. All applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise impose materially
adverse conditions on the transactions contemplated by the Loan Documents. No action, request for
stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable Governmental Authority to take action
to set aside its consent on its own motion shall have expired.



     I. Security Interests. Administrative Agent shall have received evidence satisfactory to it
that Holdings, Company and Subsidiary Guarantors shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such filings and



(First Amended and Restated Credit Agreement)




 - 78 -









 







recordings (other than the filing or recording of items described in clauses (ii), (iii) and
(iv) below) that may be necessary or, in the opinion of Administrative Agent, desirable in order to
create or continue in favor of Collateral Agent, for the benefit of the Agents and Lenders, a valid
and (upon such filing and recording) perfected First Priority Lien in all present and
after-acquired personal property Collateral. Such actions (which, if completed in connection with
the Closing Date and continue to be in place or effective, need not be repeated) shall include the
following:





     (i) Stock Certificates and Instruments. Delivery, or satisfactory arrangements
for delivery, to Collateral Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Collateral Agent) representing all Capital Stock
pledged pursuant to the Holdings Pledge Agreement, the Company Pledge Agreement and the
Subsidiary Pledge Agreements (if applicable), and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to Collateral Agent)
evidencing any Collateral;




     (ii) Lien Searches and Financing Change. Delivery to Administrative Agent of:




(a) the results of a recent search, by a Person satisfactory to Agents, of
all effective financing statements and fixture filings and all judgment lien
filings which may have been made with respect to any property of any Loan
Party, together with copies of all such filings disclosed by such search,
and




(b) financing change statements duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement), or undertakings in respect of the foregoing executed by
applicable Persons and acceptable to Administrative Agent; and




     (iii) Financing Statements. Delivery to Administrative Agent of confirmation
of the filing of all financing statements or financing change statements in respect of each
applicable Loan Party (if required) with respect to all Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of Administrative Agent,
desirable to perfect the security interests created in such Collateral pursuant to the
Collateral Documents, including the specific equipment referred to subsection 5.2.



     J. Notice of Change of Caveator. Administrative Agent shall have received from Company and
each applicable Subsidiary Guarantor Notices of Change of Caveator or Transfer of Mortgage in favor
of the Collateral Agent in all jurisdictions where registrations have been made against real
property of any Loan Party pursuant to the Collateral Documents.



(First Amended and Restated Credit Agreement)




 - 79 -









 








     K. Borrowing Base Certificate. Collateral Agent shall have received a completed Borrowing
Base Certificate of Company prepared as of a recent date prior to the Restatement Date.



     L. Replacement of GE as Lender and Collateral Agent. GE shall have (i) assigned to BNP
PARIBAS (Canada) all of its loans and commitments under the Original Credit Agreement to BNP
PARIBAS (Canada) at par, pursuant to an assignment agreement satisfactory to BNP PARIBAS (Canada),
and (ii) resigned as Collateral Agent under the Original Credit Agreement and the other Loan
Documents and shall have executed and delivered all such documents, instruments and acknowledgments
necessary to transfer and assign all of the Collateral Documents to the Collateral Agent hereunder.



     M. Appointment of BNP PARIBAS (Canada) as Collateral Agent. BNP PARIBAS (Canada) shall have
been appointed as the successor Collateral Agent under the Original Credit Agreement.



     N. Related Documents. Administrative Agent shall have received a fully executed or conformed
copy of each Related Document (except the Acquisition Agreement) and any documents executed in
connection therewith, each satisfactory in form and substance to Administrative Agent, or, in the
case of Related Documents delivered to the lenders pursuant to the Original Credit Agreement, an
Officer’s Certificate certifying that such Related Documents as delivered are in full force and
effect, and no provision thereof has been modified or waived in any respect since the Original
Closing Date.



     O. Completion of Proceedings. All corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably request.



     6.2 Conditions to All Loans.



          The obligations of Lenders to make Loans (including the acceptance of Bankers’ Acceptances) on
each Funding Date are subject to the following further conditions precedent:




     A. Notice of Borrowing. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, a Notice of Borrowing, in each case signed by a
duly authorized Officer of Company.



     B. Officer’s Certificate. Administrative Agent shall have received on each Funding Date, an
Officer’s Certificate certifying (i) a written calculation of the Canadian Dollar equivalent amount
of the outstanding principal amount of the Senior Second Lien Secured Notes as of such day based on
the Bank of Canada nominal noon exchange rate for the immediately prior day, and (ii) that the
requested Loan is permitted to be incurred as “Permitted Indebtedness” under the Senior Note
Indenture and the Senior Second Lien Secured Note



(First Amended and Restated Credit Agreement)




 - 80 -









 







Indenture and that the Liens securing the same constitute “Permitted Liens” thereunder, and
demonstrating in a manner reasonably satisfactory to the Administrative Agent, the calculations
supporting such conclusions.




     C. Funding Condition. As of that Funding Date:




     (i) after giving effect to the Revolving Loans and/or Letters of Credit requested on
such Funding Date, (1) the Total Utilization of Revolving Loan Commitments shall not exceed
the Revolving Loan Commitments then in effect, and (2) the First Lien Exposure shall not
exceed the Borrowing Base then in effect;




     (ii) the representations and warranties contained herein and in the other Loan
Documents shall be true, correct and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in which case
such representations and warranties shall have been true, correct and complete in all
material respects on and as of such earlier date, provided, that, if a
representation and warranty is qualified as to materiality, with respect to such
representation and warranty, the materiality qualifier set forth above shall be disregarded
for purposes of this condition;




     (iii) no event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by such Notice of Borrowing that would constitute
an Event of Default or a Potential Event of Default;




     (iv) each Loan Party shall have performed in all material respects all agreements and
satisfied all conditions (other than those already satisfied or waived under subsection 6.1)
which this Agreement provides shall be performed or satisfied by it on or before that
Funding Date; and




     (v) no order, judgment or decree of any arbitrator or Governmental Authority shall
purport to enjoin or restrain any Lender from making the Loans or issuing any Letter of
Credit to be made by it on that Funding Date.



     6.3 Conditions to Letters of Credit.



          The issuance of any Letter of Credit hereunder (whether or not the applicable Issuing Lender
is obligated to issue such Letter of Credit) is subject to the following conditions precedent:




     A. Restatement Date. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the Restatement Date shall have occurred.



     B. Request for Issuance. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of subsection 4.1B(i),
an originally executed Request for Issuance (or a facsimile copy thereof) in each case



(First Amended and Restated Credit Agreement)




 - 81 -









 







signed by a duly authorized Officer of Company, together with all other information specified
in subsection 4.1B(i) and such other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of Credit.




     C. Funding Conditions. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsections 6.2A, 6.2B (assuming such Letter of Credit was a Loan) and 6.2C
shall be satisfied.



     6.4 Waiver.



          The conditions set forth in Sections 6.1, 6.2 and 6.3 are inserted for the sole benefit of the
Lenders and Administrative Agent and may be waived by the Requisite Lenders (in the case of Section
6.2 and 6.3) and by all of the Lenders (in the case of Section 6.1), in whole or in part (with or
without terms or conditions) without prejudicing the right of the Lenders or Administrative Agent
at any time to assert such waived conditions in respect of the making of any subsequent Loan or
Letter of Credit to the extent that it applies thereto.




Section 7. COMPANY’S REPRESENTATIONS AND WARRANTIES




          In order to induce Lenders to enter into this Agreement and to make the Loans, to induce
Issuing Lenders to issue Letters of Credit and to induce Revolving Lenders to purchase
participations therein, Company represents and warrants to Administrative Agent, Collateral Agent
and each Lender:




     7.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.



     A. Organization and Powers. Each of Holdings and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization as specified in
Schedule 7.1 annexed hereto (or in such other jurisdictions as are permitted hereby). Each
of Holdings and its Subsidiaries has all requisite corporate or partnership power and authority to
own and operate its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.



     B. Qualification and Good Standing. Each of Holdings and its Subsidiaries is qualified to do
business and is in good standing in every jurisdiction in which the location of its assets or the
conduct of its business require it to be so qualified and in good standing, except in
jurisdictions where the failure to be so qualified or in good standing has not had and could not
reasonably be expected to result in a Material Adverse Effect.



     C. Conduct of Business. Holdings and its Subsidiaries are engaged only in the businesses
permitted to be engaged in pursuant to subsections 9.10, 10.13 and 10.14.



     D. Subsidiaries. All of the Subsidiaries of Company as of the Restatement Date and their
jurisdictions of organization are identified in Schedule 7.1 annexed hereto, as said



(First Amended and Restated Credit Agreement)




 - 82 -









 







Schedule 7.1 may be supplemented from time to time pursuant to the provisions of
subsection 8.1(xii). The Capital Stock of each of the Subsidiaries of Company identified in
Schedule 7.1 annexed hereto (as so supplemented), is duly authorized, validly issued, fully
paid and nonassessable (in each case to the extent such legal concept is applicable to such type of
Capital Stock) and none of such Capital Stock constitutes Margin Stock. Schedule 7.1
annexed hereto (as so supplemented) correctly sets forth the ownership interest of Company and each
of its Subsidiaries in each of the Subsidiaries of Company identified therein.




     7.2 Authorization of Borrowing, etc.



     A. Authorization of Borrowing. The execution, delivery and performance of the Loan Documents
have been duly authorized by all necessary action on the part of each Loan Party that is a party
thereto.



     B. No Conflict. The execution, delivery and performance by Loan Parties of the Loan Documents
and the Related Documents (except the Acquisition Agreement) to which they are parties and the
consummation of the transactions contemplated by the Loan Documents and the Related Documents
(except the Acquisition Agreement) do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its Subsidiaries, the
Organizational Documents of Holdings or any of its Subsidiaries or any order, judgment or decree of
any court or other Governmental Authority binding on Holdings or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a
default under any material Contractual Obligation of Holdings or any of its Subsidiaries including,
without limitation, the existing Senior Note Indenture, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of Collateral Agent on
behalf of Lenders, Swap Lenders and Agents), or (iv) require any approval of stockholders or any
approval or consent of any Person under any material Contractual Obligation of Holdings or any of
its Subsidiaries, except for such approvals or consents which will be obtained on or before the
Restatement Date and disclosed in writing to Lenders.



     C. Governmental Consents. The execution, delivery and performance by Loan Parties of the Loan
Documents to which they are parties and the consummation of the transactions contemplated by the
Loan Documents do not and will not require any Governmental Authorization, except as have been
obtained, or are being obtained and listed in Schedule 7.2, or are registrations of the
Collateral Documents being made pursuant to Section 5.2.



     D. Binding Obligation. Each of the Loan Documents has been duly executed and delivered by
each Loan Party that is a party thereto and is the legally valid and binding obligation of such
Person, enforceable against such Person in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors’ rights generally or by equitable principles relating to enforceability.




	7.3	 	Financial Condition.





(First Amended and Restated Credit Agreement)




 - 83 -









 








          Company has heretofore delivered to Administrative Agent, at Lenders’ request, the financial
statements and information described in subsection 6.1E. All such statements other than pro forma
financial statements were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position (on a consolidated basis) of the entities described in such
financial statements as at the respective dates thereof and the results of operations and cash
flows (on a consolidated basis) of the entities described therein for each of the periods then
ended, subject, in the case of any such unaudited financial statements, to changes resulting from
audit, absence of footnotes and normal year-end adjustments. As of the Restatement Date, neither
Company nor any of its Subsidiaries has (and immediately following the funding of the initial Loans
will not have) any Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and, as of any Funding Date subsequent to the Restatement Date, is
not reflected in the most recent financial statements delivered to Administrative Agent pursuant to
subsection 8.1 or the notes thereto and that, in any such case, is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries (except to the extent incurred after the period covered by such
financial statements and such incurrence is permitted by this Agreement and except for any such
matter that need not, in accordance with GAAP, be reflected in such financial statements and which
has been otherwise expressly disclosed to Administrative Agent in writing).




     7.4 No Material Adverse Change; No Restricted Junior Payments.



          Since March 31, 2005, no event or change has occurred that has resulted in or evidences,
either in any case or in the aggregate, a Material Adverse Effect that is continuing. Neither
Company nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or
set apart any sum or property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 9.5. Company and its Subsidiaries are in compliance with all laws and
regulations applicable to it where failure to be in compliance could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.




     7.5 Title to Properties; Liens; Real Property; Intellectual Property.



     A. Title to Properties; Liens. Company and its Subsidiaries have (i) good, sufficient and
legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in
(in the case of leasehold interests in real or personal property), or (iii) good title to (in the
case of all other personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 7.3 or in the most recent financial statements
delivered pursuant to subsection 8.1, in each case except (A) for assets disposed of since
the date of such financial statements in the ordinary course of business, (B) as otherwise
permitted under subsection 9.7, or (C) where failure to have such title could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.



     B. Real Property. As of the Restatement Date, Schedule 7.5B annexed hereto contains a
true, accurate and complete list of (i) all fee interests in any real property, and (ii) all



(First Amended and Restated Credit Agreement)





 - 84 -










 







leases, subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) in real property, regardless of whether a Loan
Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under
such lease, sublease or assignment. Except as specified in Schedule 7.5B annexed hereto,
as of the Restatement Date each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and no defaults by any Loan Party currently exist thereunder,
and Company does not have knowledge of any defaults by any third party currently existing
thereunder, in any case where any such defaults could reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. Each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or
by equitable principles.




     C. Material Serial Number Equipment. As of the Restatement Date, Schedule 7.5C
annexed hereto contains a true, accurate and complete list of (i) all interests of any Loan
Party in any vehicles or other equipment that can be registered in a personal property registry by
way of serial number, regardless of whether the Loan Party is an owner or lessee thereof, and which
vehicle or other equipment individually has a cost or book value of Cdn.$1,250,000 or more, and
(ii) the serial numbers of such vehicles or other equipment. As of the Restatement Date each lease
agreement in respect of any vehicle or other equipment listed in Schedule 7.5C is in full
force and effect and no defaults by any Loan Party currently exist thereunder, and Company does not
have knowledge of any defaults by any third party currently existing thereunder, in any case where
any such defaults could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Each such agreement constitutes the legally valid and binding obligation
of each applicable Loan Party, enforceable against such Loan Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors’ rights generally or by equitable principles.



     D. Intellectual Property. As of the Restatement Date, Company and its Subsidiaries own or
have the right to use all Intellectual Property used in the conduct of their business,
except where the failure to own or have such right to use in the aggregate could not
reasonably be expected to result in a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does Company know of any valid
basis for any such claim, except for such claims that in the aggregate could not reasonably
be expected to result in a Material Adverse Effect. The use of such Intellectual Property by
Company and its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All applicable registrations of and applications for Intellectual
Property, and all unregistered Intellectual Property, that are owned or licensed by Company or any
of its Subsidiaries on the Restatement Date and that are material to their respective operations
are described on Schedule 7.5D annexed hereto.



     7.6 Litigation; Adverse Facts.


(First Amended and Restated Credit Agreement)



- 85 -









 





          There are no Proceedings (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) before or by any court or other Governmental Authority (including any Environmental
Claims) that are, to the knowledge of Company, threatened or pending against or by Holdings or any
of its Subsidiaries or any property or operations of Holdings or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither Company, Holdings nor any of its Subsidiaries (i) is in violation of any
Applicable Laws (including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or (ii) is subject to or in default
with respect to any final judgments, writs, injunctions or decrees of any court or other
Governmental Authority that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.




     7.7 Payment of Taxes.



          Except to the extent permitted by subsection 8.3, all tax returns and reports of Holdings and
its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on
such tax returns to be due and payable and all assessments, fees and other governmental charges
upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses
and franchises that are due and payable have been paid when due and payable, except where
failure to do so could not reasonably be expected to have a Material Adverse Effect. Company knows
of no proposed tax assessment against Holdings or any of its Subsidiaries that is not being
contested by Holdings or such Subsidiary in good faith and by appropriate proceedings,
provided that such reserves or other appropriate provisions, if any, as shall be required
in conformity with GAAP shall have been made or provided therefor.




     7.8 Performance of Agreements; Material Contracts.



     A. Neither Company nor any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except in either case where the consequences, direct or indirect,
of such default or defaults, if any, could not reasonably be expected to result in a Material
Adverse Effect.



     B. Schedule 7.8 contains a true, correct and complete list of all the Material
Contracts in effect on the Restatement Date.



     C. All Material Contracts are in full force and effect and no material defaults by any Loan
Party currently exist thereunder, and Company does not have knowledge of any material defaults by
any third party currently existing thereunder.



     7.9 Benefit Plans.



          Company and its Subsidiaries have made full payment when due of all required contributions to
any Benefit Plan except where failure to do so individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.




(First Amended and Restated Credit Agreement)



- 86 -









 








     7.10 Certain Fees.



          Except as provided in the Advisory Services Agreement, no broker’s or finder’s fee or
commission will be payable by any Loan Party with respect to this Agreement or any of the
transactions contemplated hereby, and Company hereby indemnifies Lenders against, and agrees that
it will hold Lenders harmless from, any claim, demand or liability for any such broker’s or
finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in connection with any
such claim, demand or liability.




     7.11 Environmental Protection.




     (i) Neither Company nor any of its Subsidiaries nor any of their respective Facilities
or operations are subject to any outstanding written order, consent decree or settlement
agreement with any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.




     (ii) There are and, to Company’s knowledge, have been no conditions, occurrences, or
Hazardous Materials Activities that could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.




     (iii) All Governmental Authorizations required by Environmental Law for Hazardous
Materials Activities of the Company or any of its Subsidiaries have been obtained by the
Company or its Subsidiaries, as the case may be, and to the knowledge of the Company, are in
full force and effect and the Company and its Subsidiaries have not committed a breach or
default of any terms and conditions of such Governmental Authorizations that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.




     (iv) Neither Company nor, to Company’s knowledge, any of its Subsidiaries, is aware of
any event or circumstances which are reasonably expected to result in any Governmental
Authorizations for any Hazardous Materials Activities not being renewed, extended or
replaced in the ordinary course by a Governmental Authority over the expiry of such
Governmental Authorizations, in any case where, individually or in the aggregate, such
non-renewal could reasonably be expected to result in a Material Adverse Effect.




     (v) Compliance with all current or reasonably foreseeable future requirements pursuant
to or under Environmental Laws would not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect.



          Except where any obligations or liabilities resulting therefrom, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither




(First Amended and Restated Credit Agreement)



- 87 -









 







Company’s nor any of its Subsidiaries nor, to Company’s knowledge, any predecessor of Company
or any of its Subsidiaries’ operations or Facilities involves or involved the generation,
transportation, treatment, storage or disposal of Hazardous Materials over any limits or quantities
or in concentrations in excess of limits, quantities or concentrations prescribed by Environmental
Laws or any applicable Governmental Authorizations.




     7.12 Employee Matters.



          There is no strike or work stoppage in existence or threatened involving Company or any of its
Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.




     7.13 Solvency.



          As of the Restatement Date (after giving effect to the transactions contemplated hereby on
such date), Company is, and Company and its Subsidiaries taken as a whole are, Solvent. As of each
Funding Date, upon the incurrence of any Loans by, or the issuance of Letters of Credit for the
account of, any Loan Party on such date, Company is, and Company and its Subsidiaries taken as a
whole are, Solvent.




     7.14 Matters Relating to Collateral.



     A. Creation, Perfection and Priority of Liens. The execution and delivery of the Collateral
Documents by the Loan Parties, together with (i) the actions that have been taken, and (ii) the
delivery to Collateral Agent of any Pledged Collateral in accordance herewith, are effective to
create in favor of Collateral Agent for the benefit of the Agents and Lenders, as security for the
Obligations and the Secured Swap Obligations, a valid First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain the perfection and
First Priority status of such Liens have been duly made or taken and remain in full force and
effect.



     B. Governmental Authorizations. No authorization, approval or other action by, and no notice
to or filing with, any Governmental Authority is required on the part of or in respect of any Loan
Party for either (i) the pledge or grant by any Loan Party of the Liens purported to be created in
favor of Collateral Agent pursuant to any of the Collateral Documents or (ii) the exercise by
Collateral Agent of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or provided for by
Applicable Law), except for filings or recordings contemplated by subsection 7.14A.



     C. Absence of Third-Party Filings. Except such as may have been filed in favor of Collateral
Agent as contemplated by subsections 5.2 and 7.14A and to evidence permitted lease obligations and
other Liens permitted pursuant to subsection 9.2A, (i) no effective financing statement, fixture
filing, caveat, encumbrance or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office, and (ii) no effective filing



(First Amended and Restated Credit Agreement)



- 88 -









 







covering all or any part of the IP Collateral is on file in any Canadian registry allowing or
contemplating such filings.



     D. Information Regarding Collateral. All information supplied to Administrative Agent and
Collateral Agent by or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and complete in all
material respects.



     7.15 Disclosure.



          As of the Restatement Date, no representation or warranty of Holdings or any of its
Subsidiaries contained in any Loan Document, Related Document (except the Acquisition Agreement) or
in any other document, certificate or written statement furnished to Lenders by or on behalf of
Holdings or any of its Subsidiaries for use in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to state a material fact
(known to Company, in the case of any document not furnished by it and not otherwise expressly
disclosed in any other of the above-described documents) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such materials are based
upon good faith estimates and assumptions believed by Company to be reasonable at the time made, it
being recognized by Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect and that have not been disclosed herein or in other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated hereby.




     7.16 Related Documents.



          As of the date hereof, there has been no change to any of the Related Documents previously
provided by the Company to the Administrative Agent.




     7.17 Accounts.



          Except as disclosed in the written information provided to Administrative Agent, Collateral
Agent and Lenders by Company, Administrative Agent and Collateral Agent may rely in all material
respects upon all statements, warranties, or representations made in any Borrowing Base Certificate
or other written report regarding accounts receivable delivered hereunder by Company in determining
which items of Collateral are to be deemed Eligible Accounts Receivable.




(First Amended and Restated Credit Agreement)



- 89 -









 








     7.18 Compliance with Existing Senior Notes and Senior Second Lien Secured
Notes.



          As of each Funding Date, the Obligations in respect of the Loans to be made, and/or the
Letters of Credit to be issued on such Funding Date are permitted to be incurred and the Liens
securing the same are “Permitted Liens” under each of the Senior Note Indenture and the Senior
Second Lien Secured Note Indenture.




     7.19 Deemed Repetition.



     On each Funding Date:




     (i) Representations True: each of the representations and warranties contained
herein and in the other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier date
(provided that if a representation and warranty is qualified as to materiality, with
respect to such representation and warranty, the materiality qualifier set forth above shall
be disregarded for purposes of this representation), and Company shall so confirm in the
applicable Notice of Borrowing; and




     (ii) No Default: Company shall be deemed to have represented to Administrative
Agent and the Lenders that, except as has otherwise been notified to Administrative Agent in
writing and has been waived in accordance herewith, no Potential Event of Default or Event
of Default has occurred and is continuing nor will any such event occur as a result of the
aforementioned borrowing.



Section 8. COMPANY’S AFFIRMATIVE COVENANTS




          Company covenants and agrees that, so long as any of the Revolving Loan Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other Obligations (other
than Unasserted Obligations), the satisfaction of all Bankers’ Acceptances and the cancellation or
expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants
in this Section 8.




     8.1 Financial Statements and Other Reports.



     Company will maintain, and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to permit preparation of
financial statements in conformity with GAAP. Company will deliver to Administrative Agent, in
sufficient copies for delivery to all Lenders:


(First Amended and Restated Credit Agreement)



- 90 -









 






     (i) Events of Default, Filings, etc.: promptly (and in any event within five
days) upon any Officer of Company obtaining knowledge:




     (a) of any condition or event that constitutes an Event of Default or Potential
Event of Default, or becoming aware that any Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect to a claimed Event
of Default or Potential Event of Default,




     (b) that any Person has given any notice to Company or any of its Subsidiaries
or taken any other action with respect to a claimed default or event or condition of
the type referred to in subsection 10.2,




     (c) of any condition or event that would be required to be disclosed in a
material change report filed by Company with the Alberta Securities Commission if
Company were required to file such reports under the Securities Act (Alberta),




     (d) of any default or claimed default under any lease of real property that has
an aggregate value in excess of Cdn. $2,000,000 or any lease of vehicles or other
equipment that has an aggregate value in excess of Cdn. $1,250,000, in either case
that would entitle the lessor to terminate any lease in respect of such assets,




     (e) the registration of a financing statement or other registration of a filing
or recordation document which has the effect of perfecting any Liens securing the
Bonding Program or the commencement of any enforcement action in respect of any such
Liens; or




     (f) of the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect,




an Officer’s Certificate specifying the nature and period of existence of such condition,
event or change, or specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to take with respect
thereto;




     (ii) Monthly and Quarterly Financials: monthly financial statements for the
first two months of each Fiscal Quarter delivered as soon as available and in any event
within 30 days after the end of the first two months of each Fiscal Quarter, and quarterly
financial statements for the first three Fiscal Quarters of each Fiscal Year delivered
within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year,




     (a) the consolidated balance sheet of Company and its Subsidiaries as at the
end of such fiscal period and the related consolidated statements of income,
stockholders’ equity and cash flows of Company and its Subsidiaries for such fiscal
period and for the period from the beginning of the then current Fiscal Year



(First Amended and Restated Credit Agreement)



- 91 -









 







to the end of such fiscal period, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current Fiscal
Year, to the extent prepared for such fiscal period, all in reasonable detail and
certified by the chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments,




     (b) a narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management for such
fiscal period and for the period from the beginning of the then current Fiscal Year
to the end of such fiscal period, and




     (c) a listing of all Material Contracts entered into by a Loan Party in such
fiscal period, together with a copy of each such Material Contract which is
reasonably expected to generate gross revenue to the Loan Parties in excess of
Cdn.$50,000,000 over the term of the contract and any expected renewals thereof.




     (iii) Year-End Financials: as soon as available and in any event within 90
days after the end of each Fiscal Year:




     (a) the consolidated balance sheets of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statements of income,
stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the corresponding figures for
the previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated,




     (b) a narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management for such
Fiscal Year, and




     (c) in the case of such consolidated financial statements, a report thereon of
one of the “Big 4” accounting firms or other independent chartered accountants of
recognized national standing selected by Company and satisfactory to Administrative
Agent, which report shall be unqualified, shall express no doubts, assumptions or
qualifications concerning the ability of Company and its Subsidiaries to continue as
a going concern, and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of Company
and its Subsidiaries as at the dates indicated and



(First Amended and Restated Credit Agreement)



- 92 -









 







the results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;




     (iv) Compliance Certificates: together with each delivery of financial
statements pursuant to subclauses (ii) and (iii) above,




     (a) an Officer’s Certificate of Company stating that the signers have reviewed
the terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or at the end
of such accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officer’s Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of existence
thereof and what action Company has taken, is taking and proposes to take with
respect thereto; and




     (b) a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with those covenants and
restrictions contained in Section 9 set forth on the form of Compliance Certificate
attached hereto;




     (v) Reconciliation Statements: if, as a result of any change in accounting
principles and policies from those used in the preparation of the audited financial
statements referred to in subsection 7.3, the consolidated financial statements of Company
and its Subsidiaries delivered pursuant to subclauses (ii), (iii) or (xii) of this
subsection 8.1 will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subclauses had no such change in
accounting principles and policies been made, then




     (a) together with the first delivery of financial statements pursuant to
subclause (ii), (iii) or (xii) of this subsection 8.1 following such change,
consolidated financial statements of Company and its Subsidiaries for (y) the
current Fiscal Year to the effective date of such change and (z) either (i) the two
full Fiscal Years immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such change had been in
effect during such periods or (ii) a written description, in form and with detail
reasonably satisfactory to Administrative Agent, of the impact such change would
have had on the previous two full Fiscal Years if such change had been in effect
during such periods, and


(First Amended and Restated Credit Agreement)



- 93 -









 






     (b) together with each delivery of financial statements pursuant to subclause
(ii), (iii) or (xii) of this subsection 8.1 following such change, if required
pursuant to subsection 1.2, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences (including any
differences that would affect any calculations relating to the financial covenants
set forth in subsection 9.6) which would have resulted if such financial statements
had been prepared without giving effect to such change;




     (vi) Accountants’ Reports: promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all reports submitted to Company by
independent chartered accountants in connection with each annual, interim or special audit
of the financial statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in connection with
their annual audit;




     (vii) Securities Filings and Press Releases: promptly upon their becoming
available, copies of:




     (a) all regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by Company or
any of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission, the Alberta Securities Commission or any other governmental or
private regulatory authority, and




     (b) all press releases, notices of material changes, and other statements that
the Company or any of its Subsidiaries would be required, if they were reporting
issuers, to make available generally concerning material developments in the
business of Company or any of its Subsidiaries.




     (viii) Litigation or Other Proceedings: promptly upon any Officer of Company
obtaining knowledge of (1) the institution of any Proceeding against Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed
in writing by Company to Lenders, (2) the Release of Hazardous Materials in violation of
Environmental Laws or (3) any material development in any Proceeding that, in any case:




     (a) has a reasonable possibility of giving rise to a Material Adverse Effect;
or




     (b) seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby;




written notice thereof together with such other information as may be reasonably available
to Company to enable Lenders and their counsel to evaluate such matters


(First Amended and Restated Credit Agreement)



- 94 -









 






     (ix) Financial Plans: as soon as practicable and in any event no later than 30
days prior to the beginning of each Fiscal Year, a consolidated plan and financial forecast
for such Fiscal Year (the “Financial Plan” for such Fiscal Year), including (a) a forecasted
consolidated balance sheet and forecasted consolidated statements of income and cash flows
of Company and its Subsidiaries for such Fiscal Year, and an explanation of the assumptions
on which such forecasts are based, (b) forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for each month of such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based, and (c) such other
information and projections as Administrative Agent may reasonably request;




     (x) Insurance: as soon as practicable after any material change in insurance
coverage maintained by or for Company and its Subsidiaries notice thereof to Administrative
Agent specifying the changes and reasons therefor;




     (xi) Governing Body: with reasonable promptness, written notice of any change
in the Governing Body of Holdings or Company;




     (xii) New Subsidiaries: promptly upon any Person becoming a Subsidiary of
Company, a written notice setting forth with respect to such Person (a) the date on which
such Person became a Subsidiary of Company and (b) all of the data required to be set forth
in Schedule 7.1 annexed hereto with respect to all Subsidiaries of Company (it being
understood that such written notice shall be deemed to supplement Schedule 7.1
annexed hereto for all purposes of this Agreement from and after the date delivery of such
notice);




     (xiii) Material Contracts: promptly, and in any event within five Business Days
after any Officer of the Company becomes aware that any Material Contract is terminated,
will not be renewed, or is amended in a manner materially adverse to the Company and its
Subsidiaries taken as a whole, a written statement describing such event with copies of such
amendments (if applicable);




     (xiv) Borrowing Base Certificates: with a copy to Collateral Agent, as soon as
available and in any event within 10 Business Days after the last Business Day of each month
ending after the Restatement Date, a Borrowing Base Certificate dated as of the last
Business Day of such month, together with any additional schedules and other information as
Administrative Agent and Collateral Agent may reasonably request, provided that if
and for so long as the First Lien Exposure exceeds the Borrowing Base then in effect, then
Company shall prepare and provide Borrowing Base Certificates and related information on a
weekly basis until Requisite Lenders otherwise direct. In addition to such monthly
Borrowing Base Certificates, Company may from time to time deliver to Administrative Agent,
Collateral Agent and Lenders on any Business Day after the Restatement Date a Borrowing Base
Certificate dated as of such Business Day, together with any additional schedules and other
information as Administrative Agent or Collateral Agent may reasonably request, and the most
recent Borrowing Base Certificate



(First Amended and Restated Credit Agreement)



- 95 -









 







described in this clause that is delivered to Administrative Agent and Collateral Agent
shall be used in calculating the Borrowing Base as of any date of determination;




     (xv) Hedge Exposure: concurrently with the delivery of each Borrowing Base
Certificate, a written calculation of the mark to market liabilities of Company and its
Subsidiaries under all Hedge Agreements in a form satisfactory to Administrative Agent; and




     (xvi) Other Information: with reasonable promptness, such other information
and data with respect to Company or any of its Subsidiaries as from time to time may be
reasonably requested by Administrative Agent.



     8.2 Existence, etc.



          Except as permitted under subsection 9.7 and the permitted continuance of Finance Co. into
Alberta, Company will, and will cause each of its Subsidiaries to at all times preserve and keep in
full force and effect (i) its existence as a corporation in the jurisdiction of organization
specified on Schedule 7.1, and (ii) all rights and franchises material to its business,
provided that neither Company nor any of its Subsidiaries shall be required to preserve any
such right or franchise if the Governing Body of Company or such Subsidiary shall determine that
the preservation thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material
respect to Company, such Subsidiary or Lenders.




     8.3 Payment of Taxes and Claims; Tax.



     A. Payment of Taxes. Except where failure to do so could reasonably be expected to have a
Material Adverse Effect, Company will, and will cause each of its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums that have become due
and payable and that by Applicable Law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with respect thereto,
provided that in the case of a tax, assessment, charge or claim that has or may become a
Lien against any of the Collateral, Company shall either pay the same, or shall be contesting the
same in good faith by appropriate proceedings promptly instituted and diligently conducted, and in
that regard shall have established such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP and (ii) such proceedings shall be operating to stay the sale of
any portion of the Collateral to satisfy such charge or claim.



     B. Consolidated Returns. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any Person (other than
Holdings or any of its Subsidiaries).



     8.4 Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.



(First Amended and Restated Credit Agreement)


- 96 -









 







     A. Maintenance of Properties. Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of Company and its
Subsidiaries (including all Intellectual Property) and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.



     B. Insurance. Company will maintain or cause to be maintained, with financially sound and
reputable insurers, such public liability insurance, third party property damage insurance,
environmental insurance and casualty insurance with respect to liabilities, losses or damage in
respect of the assets, properties and businesses of Company and its Subsidiaries as may customarily
be carried or maintained under similar circumstances by corporations of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions as shall be
customary for corporations similarly situated in the industry. Without limiting the generality of
the foregoing, Company will maintain or cause to be maintained replacement value casualty insurance
on the Collateral under such policies of insurance, with such insurance companies, in such amounts,
with such deductibles, and covering such risks as are at all times satisfactory to Administrative
Agent in its commercially reasonable judgment. Each such policy of insurance shall (a) name
Collateral Agent for the benefit of the Agents and Lenders as an additional insured thereunder as
its interests may appear and (b) in the case of each casualty insurance policy, contain a loss
payable clause or endorsement, satisfactory in form and substance to Collateral Agent, that names
Collateral Agent for the benefit of Lenders as the loss payee thereunder for any covered loss in
excess of Cdn.$15,000,000 and provides for at least 30 days prior written notice to Collateral
Agent of any modification or cancellation of such policy.



     C. Application of Net Insurance/Condemnation Proceeds.




     (i) Business Interruption Insurance. Upon receipt by Company or any of its
Subsidiaries of any business interruption insurance proceeds constituting Net
Insurance/Condemnation Proceeds, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company or such Subsidiary may retain and
apply such Net Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
Event of Default or Potential Event of Default shall have occurred and be continuing,
Company shall apply an amount equal to such Net Insurance/Condemnation Proceeds to prepay
the Loans and/or collateralize Letters of Credit (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4A;




     (ii) Net Insurance/Condemnation Proceeds Received by Company. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds other than
from business interruption insurance,




(a) so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing, Company shall, or shall cause one or more of its
Subsidiaries to, promptly and diligently apply such Net
Insurance/Condemnation Proceeds to pay or reimburse the costs of



			
	 
	 	(First Amended and Restated Credit Agreement)






 - 97 -









 







repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the extent not so
applied, to prepay the Loans, including collateralizing Bankers’ Acceptances
(and/or Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4A, and




(b) if an Event of Default or Potential Event of Default shall have occurred
and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans, including
collateralizing Bankers’ Acceptances (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4A.




     (iii) Net Insurance/Condemnation Proceeds Received by Collateral Agent. Upon
receipt by Collateral Agent of any Net Insurance/Condemnation Proceeds as loss payee,




(a) if and to the extent Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to prepay
the Loans, collateralize Bankers’ Acceptances and reduce the Revolving Loan
Commitments, Collateral Agent shall deliver such Net Insurance/Condemnation
Proceeds to Administrative Agent, and Administrative Agent shall, and
Company hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans and, collateralize
Bankers’ Acceptances (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4A, and




(b) to the extent the foregoing clause (a) does not apply, and (1) the
aggregate amount of such Net Insurance/Condemnation Proceeds received (and
reasonably expected to be received) by Collateral Agent in respect of any
covered loss does not exceed Cdn.$15,000,000, Collateral Agent shall deliver
such Net Insurance/Condemnation Proceeds to Company, and Company shall, or
shall cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received, and (2) if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected to be
received) by Collateral Agent in respect of any covered loss exceeds
Cdn.$15,000,000, Collateral Agent shall hold such Net Insurance/Condemnation
Proceeds in the Collateral Account pursuant to the terms of the Debenture
and, so long as Company or any of its Subsidiaries proceeds diligently to
repair, restore or replace the assets of Company or such Subsidiary in
respect of which such Net Insurance/Condemnation Proceeds were received,
Collateral Agent shall from time to time disburse to Company or such
Subsidiary from the Collateral Account, to the extent of any such Net
Insurance/Condemnation




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 98 -










 







Proceeds remaining therein in respect of the applicable covered loss,
amounts necessary to pay the cost of such repair, restoration or replacement
after the receipt by Collateral Agent of invoices or other documentation
reasonably satisfactory to Collateral Agent relating to the amount of costs
so incurred and the work performed (including, if required by Collateral
Agent, lien releases and architects’ certificates), provided that if
at any time Collateral Agent reasonably determines (A) that Company or such
Subsidiary is not proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement cannot be
completed with the Net Insurance/Condemnation Proceeds then held by
Collateral Agent for such purpose, together with funds otherwise available
to Company for such purpose, or that such repair, restoration or replacement
cannot be completed within 170 days after the receipt by Collateral Agent of
such Net Insurance/Condemnation Proceeds, Collateral Agent shall deliver
such Net Insurance/Condemnation Proceeds to Administrative Agent, and
Administrative Agent shall, and Company hereby authorizes Administrative
Agent to, apply such Net Insurance/ Condemnation Proceeds to prepay the
Loans, including collateralizing Bankers’ Acceptances (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4A.



     8.5 Inspection Rights; Lender Meeting.



          Inspection Rights. Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by Administrative Agent and Collateral Agent to visit and
inspect any of the properties of Company or of any of its Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public accountants;
provided that Company may, if it so chooses, be present at or participate in any such
discussion.




     A. Lender Meeting. Company will, upon the request of any Agent or Requisite Lenders,
participate in a meeting of Agents and Lenders once during each Fiscal Year to be held at Company’s
principal offices (or at such other location as may be agreed to by Company and Agents) at such
time as may be agreed to by Company and Agents.



     8.6 Compliance with Laws, etc.



          Company shall comply, and shall cause each of its Subsidiaries to comply, with the
requirements of all Applicable Laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws), noncompliance with which could reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect.




     8.7 Environmental Matters.




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 99 -









 





     A. Environmental Disclosure. Company will deliver to Administrative Agent and Lenders:




     (i) Environmental Audits and Reports. As soon as practicable following receipt
thereof, copies of all environmental audits, assessments, studies, investigations, analyses
and reports of any kind or character, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect or with
respect to any Environmental Claims that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect;




     (ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon the
occurrence thereof, written notice describing in reasonable detail (a) any Release required
to be reported to any Governmental Authority or Person under any applicable Environmental
Laws the existence of which could reasonably be expected to result in one or more
Environmental Claims having, individually or in the aggregate, a Material Adverse Effect,
and (b) any remedial action taken by Company or any other Person required by Environmental
Law or in response to (1) any Hazardous Materials Activities the existence of which could
reasonably be expected to result in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.




     (iii) Written Communications Regarding Environmental Claims, Releases, Etc. As
soon as practicable following the sending or receipt thereof by Company or any of its
Subsidiaries, a copy of any and all written communications to or from any Governmental
Authority or Person with respect to (a) any Environmental Claims that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect, (b) any
Release required to be reported to any Governmental Authority or Person that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect,
and (c) any request for information from any Governmental Authority investigating whether
Company or any of its Subsidiaries may be potentially responsible for any Hazardous
Materials Activity or violation of Environmental Laws that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.




     (iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt
written notice describing in reasonable detail (a) any proposed acquisition of stock,
assets, or property by Company or any of its Subsidiaries that could reasonably be expected
to (1) expose Company or any of its Subsidiaries to, or result in, Environmental Claims that
could reasonably be expected to result in, individually or in the aggregate, a Material
Adverse Effect, or (2) affect the ability of Company or any of its Subsidiaries to maintain
in full force and effect all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed action to be taken
by Company or any of its Subsidiaries to modify current operations in a manner




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 100 -









 







that could reasonably be expected to subject Company or any of its Subsidiaries to any
additional obligations or requirements under any Environmental Laws that could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse Effect.



     B. Company’s Actions Regarding Hazardous Materials Activities, Environmental Claims and
Violations of Environmental Laws.




     (i) Remedial Actions Relating to Hazardous Materials Activities. Company
shall, in compliance with all applicable Environmental Laws and Governmental Authorizations,
promptly undertake, and shall cause each of its Subsidiaries promptly to undertake, any and
all investigations, studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean up or abate any Hazardous
Materials or Hazardous Materials Activity on, under or about any Facility or which
originated from any Facility that is in violation of any Environmental Laws or Governmental
Authorizations, and for which Company or any of its Subsidiaries is responsible under
Applicable Law, or that presents a risk of giving rise to an Environmental Claim against
Company or any of its Subsidiaries, in any case where individually or in the aggregate
failure to do so could reasonably be expected to result in a Material Adverse Effect.




     (ii) Actions with Respect to Environmental Claims and Violations of Environmental
Laws. Company shall promptly take, and shall cause each of its Subsidiaries promptly to
take, any and all actions necessary to (i) cure any violation of applicable Environmental
Laws or Governmental Authorizations by Company or its Subsidiaries that could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse Effect and (ii)
make an appropriate response to any Environmental Claim against Company or any of its
Subsidiaries and discharge any obligations it may have to any Person thereunder in any case
where individually or in the aggregate failure to do so could reasonably be expected to
result in a Material Adverse Effect.



     8.8 First Priority Liens.




     Company shall ensure that:




     (i) subject only to subsection 8.9, all of its and its Subsidiaries’ present and after
acquired property, both real and personal, is at all times subject to the Liens constituted
by the Collateral Documents, and




     (ii) such Liens at all times constitute First Priority Liens with respect to all such
property, other than (A) property that is, in the opinion of the Administrative Agent and
Collateral Agent, acting reasonably, immaterial, both individually and in the aggregate, in
terms of its value and its use in the operations of Company and its Subsidiaries or (B)
equipment which has been purchased or leased by Company or a Subsidiary of Company but which
equipment has not yet entered the jurisdiction where




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 101 -









 







the equipment will be used in the business of Company or such Subsidiary, so long as
Company or such Subsidiary intends to bring such equipment into a jurisdiction where the
Collateral Agent would have a First Priority Lien in such equipment, and Company or such
Subsidiary does so as soon as practicable following such acquisition by purchase or lease.




	 	8.9	 	Execution of Subsidiary Guarantee; Collateral Documents After the
Restatement Date; Further Assurances.





     A. Execution of Subsidiary Guarantee and Personal Property Collateral Documents. In the event
that any Person becomes a Subsidiary of Company after the date hereof, Company will promptly notify
Administrative Agent of that fact and cause such new Subsidiary to execute and deliver to
Administrative Agent a counterpart of, or joinder agreement in respect of, the Subsidiary
Guarantee, and to issue a new Debenture and to take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments comparable to those
described in subsection 6.1J) as may be necessary or, in the opinion of Administrative Agent,
desirable to create in favor of Collateral Agent, for the benefit of Agents and Lenders, a valid
and perfected First Priority Lien on all of the personal property and assets of such Subsidiary.
In addition, (a) if the Capital Stock of such new Subsidiary is not owned directly by the Company
or by a Subsidiary that has previously provided a Subsidiary Pledge Agreement that remains in
effect, the Company shall cause the Subsidiary that owns the Capital Stock of such new Subsidiary,
to execute and deliver to Administrative Agent a Subsidiary Pledge Agreement, (b) the Company shall
deliver, or cause the Subsidiary that owns the Capital Stock of the new Subsidiary to deliver, to
Collateral Agent all certificates representing the Capital Stock of such new Subsidiary
(accompanied by irrevocable undated stock powers, duly endorsed in blank), and (c) the Company
shall cause the new Subsidiary to become a party to the Company Pledge Agreement or Subsidiary
Pledge Agreement, as applicable (in its capacity as the entity whose securities are the subject of
such Pledge Agreement), either by executing any new Pledge Agreement or an addition agreement to
any existing Pledge Agreement.



     B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company shall deliver to
Administrative Agent, together with the Loan Documents provided under subsection 8.9A,




     (i) certified copies of such Subsidiary’s Organizational Documents, together with a
good standing certificate from the appropriate governmental official of the jurisdiction of
its organization and each other jurisdiction in which such Person is qualified to do
business, each to be dated a recent date prior to their delivery to Administrative Agent,




     (ii) a certificate executed by the secretary or similar officer of such Subsidiary as
to (a) the fact that the attached resolutions of the Governing Body of such Subsidiary
approving and authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and



			
	 
	 	(First Amended and Restated Credit Agreement)






 - 102 -









 






(b) the incumbency and signatures of the officers of such Subsidiary executing such
Loan Documents,




     (iii) a favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent, acting reasonably, as to (a) the due organization and
good standing of such Subsidiary, (b) the due authorization, execution and delivery by such
Subsidiary of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary and (d) such other matters (including matters relating to the creation and
perfection of Liens in any Collateral pursuant to such Loan Documents) as Administrative
Agent may reasonably request.



     C. Further Assurances. In the event that any Loan Party delivers for the benefit of the
holders of the Senior Second Lien Notes or the trustee thereof any landlord, lessor or bailee
waiver, consent, or estoppel letter with respect to any real or personal property of the Company or
any of its Subsidiaries, or takes any similar actions related to the Collateral for the benefit of
the holders of the Senior Second Lien Notes, Company will promptly notify Administrative Agent of
that fact and shall deliver to Administrative Agent the equivalent waiver, consent or estoppel
letter with respect to such Collateral in favor of the Lenders, Agents and Swap Lenders.




	 	8.10	 	Post Restatement Date Covenants.





     Not later than 30 days after the Restatement Date, Company shall deliver to Administrative
Agent copies of the policies evidencing the insurance maintained by the Company and its
Subsidiaries, and evidencing that Collateral Agent has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 8.4, and shall have also have received a
certificate from Company confirming that such insurance is in compliance with the requirements in
subsection 8.4.



Section 9. COMPANY’S NEGATIVE COVENANTS




          Company covenants and agrees that, so long as any of the Revolving Loan Commitments hereunder
shall remain in effect and until payment in full of all of the Loans, the satisfaction of all
Bankers’ Acceptances and other Obligations (other than Unasserted Obligations) and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants
in this Section 9.




     9.1 Indebtedness.



          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or guarantee, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:





     (i) Company may become and remain liable with respect to the Obligations;




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 103 -









 






     (ii) (a) Company and its Domestic Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 9.4 (excluding Section 9.4(vi))
and, (b) upon any matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;




     (iii) Company and its Domestic Subsidiaries may become and remain liable with respect
to Indebtedness in respect of Capital Leases aggregating not in excess of Cdn. $20,000,000
at any one time;




     (iv) Company may become and remain liable with respect to Indebtedness to any
Subsidiary Guarantor, and any wholly-owned Domestic Subsidiary of Company and Finance Co.
may become and remain liable with respect to Indebtedness to Company or any Subsidiary
Guarantor, provided that (a) a Lien on all such intercompany Indebtedness shall have
been granted to Collateral Agent for the benefit of Agents and Lenders, and (b) if such
intercompany Indebtedness is evidenced by a promissory note or other instrument, such
promissory note or instrument shall have been pledged to Collateral Agent pursuant to a
Debenture;




     (v) Company and its Subsidiaries, as applicable, may remain liable with respect to
Indebtedness described in Schedule 9.1 annexed hereto;




     (vi) Company may remain liable with respect to Indebtedness evidenced by the Senior
Notes in an aggregate principal amount not to exceed U.S. $200,000,000;




     (vii) Company and its Subsidiaries may remain liable with respect to Indebtedness
evidenced by the Senior Second Lien Secured Notes in an aggregate principal amount not to
exceed U.S. $60,481,000; and




     (viii) Company and its Domestic Subsidiaries may become and remain liable with respect
to other Indebtedness in an aggregate principal amount not to exceed Cdn. $5,000,000 at any
time outstanding.




	 	9.2	 	Liens and Related Matters.





     A. Prohibition on Liens. Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or hereafter acquired, or any
income or profits therefrom, except:




     (i) Permitted Encumbrances, provided that nothing in this Agreement shall be
construed as postponing or subordinating the Liens of the Collateral Documents to any such
Permitted Encumbrance;




     (ii) Liens described in Schedule 9.2 annexed hereto;




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 104 -









 






     (iii) other Liens securing obligations in an aggregate amount not to exceed
Cdn.$5,000,000 at any time outstanding; and




     (iv) Second Priority Liens on the Collateral securing Indebtedness permitted under
subsection 9.1(vii) which Liens are subordinated pursuant to the Intercreditor Agreement.



          Company shall not, and shall not permit any of its Subsidiaries to, permit to remain in effect
for more than 30 days after it becomes aware of the same, any financing statement or other similar
registration with respect to any property, asset, income or profits of any Loan Party under any
security recording or notice statute, except for Liens permitted by this subsection 9.2,
and filings or registrations in respect of interests that do not relate to Liens.




     B. Equitable Lien in Favor of Lenders. If Company or any of its Subsidiaries shall create or
assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired,
other than Liens excepted by the provisions of subsection 9.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured, provided that notwithstanding the foregoing, this covenant shall not be construed
as a consent by Requisite Lenders to the creation or assumption of any such Lien not permitted by
the provisions of subsection 9.2A.



     C. No Further Negative Pledges. Neither Company nor any of its Subsidiaries shall enter into
any agreement (other than the Senior Note Indenture, the Senior Second Lien Secured Note Indenture,
or any agreement prohibiting only the creation of Liens securing Indebtedness subordinated in right
of payment to the Obligations) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired to secure Indebtedness under any
senior credit facility, including this Agreement, except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to an Asset Sale.



     D. No Restrictions on Subsidiary Distributions to Company or Other Subsidiaries. Company will
not, and will not permit any of its wholly-owned Subsidiaries to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such
Subsidiary’s Capital Stock owned by Company or any other Subsidiary of Company, (ii) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of Company,
(iii) make loans or advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company, except (a) as
provided in this Agreement, (b) as may be provided in an agreement with respect to an Asset Sale,
and (c) as provided in the Senior Note Indenture or the Senior Second Lien Secured Note Indenture.




	 	9.3	 	Investments; Acquisitions.






			
	 
	 	(First Amended and Restated Credit Agreement)






 - 105 -









 











          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
make or own any Investment in any Person, including any Joint Venture, or acquire, by purchase or
otherwise, all or substantially all the business, property or fixed assets of, or Capital Stock or
other ownership interest of any Person, or any division or line of business of any Person
except:





     (i) Company and its Subsidiaries may make and own Investments in Cash and Cash
Equivalents;




     (ii) Company and its wholly-owned Domestic Subsidiaries may make and own additional
equity Investments in their respective wholly-owned Domestic Subsidiaries and Finance Co.;




     (iii) Company and its Subsidiaries may make intercompany loans to the extent permitted
under subsection 9.1(iv);




     (iv) Company and its Subsidiaries may make Consolidated Capital Expenditures;




     (v) Company and its Subsidiaries may continue to own the Investments owned by them and
described in Schedule 9.3 annexed hereto;




     (vi) Company may acquire and hold obligations of one or more officers or other
employees of Company or its Subsidiaries in connection with such officers’ or employees’
acquisition of shares of Holdings’ common stock (or after the occurrence of a Qualifying
IPO, common stock of the Qualifying IPO Issuer), so long as no cash is actually advanced by
Company or any of its Subsidiaries to such officers or employees in connection with the
acquisition of any such obligations;




     (vii) Company and its Subsidiaries may receive and hold promissory notes and other
non-cash consideration received in connection with any Asset Sale permitted by subsection
9.7;




     (viii) Company and its Subsidiaries may, in the ordinary course of business, exchange
accounts receivable that are excluded from Eligible Accounts Receivable under clause (vi)
thereof, for Investments;




     (ix) so long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or shall be caused thereby, Company and its Domestic Subsidiaries may make
and own Permitted Joint Venture Investments in an aggregate amount not to exceed at any time
Cdn.$10,000,000; provided that, for greater certainty, upon and during the occurrence and
continuation of an Event of Default or Potential Event of Default, Company and its Domestic
Subsidiaries may own all Permitted Joint Venture Investments then owned by it and them; and




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 106 -









 






     (x) so long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or shall be caused thereby, Company and its Domestic Subsidiaries may make
and own other Investments in an aggregate amount not to exceed at any time Cdn.$15,000,000;
provided that, for greater certainty, upon and during the occurrence and continuation of an
Event of Default or Potential Event of Default, Company and its Domestic Subsidiaries may
own all Investments then owned by it and them.



          For certainty, neither the acquisition nor the retirement of Senior Second Lien Secured Notes
in connection with any exchange of exchange notes therefor (containing substantially identical
terms (except that such exchange notes will not contain terms with respect to transfer restrictions
or the accrual of liquidated damages) to the Senior Second Lien Secured Notes), as contemplated by
the Senior Second Lien Secured Note Indenture shall constitute an Investment.





	 	9.4	 	Contingent Obligations.





          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
create or become or remain liable with respect to any Contingent Obligation, except:





     (i) Subsidiaries of Company may become and remain liable with respect to Contingent
Obligations in respect of the Subsidiary Guarantee;




     (ii) Company may become and remain liable with respect to Contingent Obligations in
respect of Letters of Credit, and Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of other letters of credit in an aggregate
amount not to exceed at any time Cdn.$10,000,000;




     (iii) Company may become and remain liable with respect to Contingent Obligations under
Currency Agreements with respect to Indebtedness under the Senior Second Lien Secured Notes
and the Senior Notes;




     (iv) Company may become and remain liable with respect to Contingent Obligations under
the Lender Hedge Agreements, and Company may become and remain liable with respect to
Contingent Obligations in respect of other Hedge Agreements in an amount not to exceed
Cdn.$5,000,000;




     (v) Company and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of customary indemnification and purchase price adjustment
obligations incurred in connection with Asset Sales or other sales of assets;




     (vi) Company and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of any obligations of Company or any Subsidiary Guarantors
permitted by subsection 9.1 (excluding Section 9.1(ii)(a));




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 107 -









 






     (vii) Company and its Subsidiaries, as applicable, may remain liable with respect to
Contingent Obligations described in Schedule 9.4 annexed hereto;




     (viii) Subsidiary Guarantors may remain liable with respect to Contingent Obligations
arising under their guarantees of the Senior Notes;




     (ix) Subsidiary Guarantors may remain liable with respect to Contingent Obligations
arising under their guarantees of the Senior Second Lien Secured Notes;




     (x) Company and its Subsidiaries may become and remain liable for Contingent
Obligations under the Bonding Program;




     (xi) Company and Subsidiary Guarantors may become and remain liable with respect to any
obligation of Company or another Subsidiary Guarantor incurred in the ordinary course of its
business (the “Direct Obligation”)(for certainty, excluding obligations that are dealt with
in the preceding clauses (i) through (x) of this Section 9.4) if the primary purpose or
intent of the Company or Subsidiary Guarantor incurring the Contingent Obligation is to
provide assurance to the obligee of the Direct Obligation that the Direct Obligation will be
paid or discharged, or that any agreements relating thereto will be complied with, or that
the holders of such Direct Obligation will be protected (in whole or part) against loss in
respect thereof;




     (xii) Company and its Domestic Subsidiaries may become and remain liable with respect
to other Contingent Obligations, provided that the maximum aggregate liability,
contingent or otherwise, of Company and its Domestic Subsidiaries in respect of all such
other Contingent Obligations shall at no time exceed Cdn. $10,000,000; and




     (xiii) Company and its Subsidiaries may become and remain liable with respect to
Contingent Obligations relating to obligations under operating leases entered into in the
ordinary course of business by Company or any Subsidiary of Company.




	 	9.5	 	Restricted Junior Payments.





          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
declare, order, pay, make or set apart any sum for any Restricted Junior Payment, provided
that Company may make Restricted Junior Payments:





     (i) to Holdings in an aggregate amount not to exceed Cdn. $1,000,000 in any Fiscal
Year, to the extent necessary to permit Holdings to pay general administrative costs and
expenses,




     (ii) to Holdings so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing or shall be caused thereby, in an aggregate amount not to
exceed Cdn.$2,000,000 in any Fiscal Year, or Cdn. $10,000,000 during the term of this
Agreement, for distribution to Parent to the extent necessary to permit Parent to repurchase
shares of Parent Common Stock (or options or warrants to acquire Parent




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 108 -









 







Common Stock) from employees of Company pursuant to the terms of the existing employee
stock ownership plans as such plans may be modified, supplemented or replaced as approved by
Agents, acting reasonably;




     (iii) to Holdings so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing or shall be caused thereby, to the extent necessary to
permit Holdings to discharge its tax liabilities, so long as Holdings applies the amount of
any such Restricted Junior Payment for such purpose;




     (iv) to purchase, repurchase, repay or redeem the Senior Second Lien Secured Notes, the
New Preferred Stock or, if at least 75% of the original principal amount of the Senior
Second Lien Secured Notes have been repaid, repurchased or redeemed, the Holdings Preferred
Stock, in each case with Net Securities Proceeds from a Qualifying IPO;




     (v) Company may purchase, repurchase, redeem or otherwise retire the Series A Preferred
Stock;




     (vi) the Series B Preferred Stock may be canceled in connection with the consummation
of the transactions under the Contribution Agreement, and the holders of the Series B
Preferred Stock may receive common shares of the Company (as amalgamated) in exchange
therefor;




     (vii) Company may, on or after the Amalgamation, convert the Holdings Preferred Stock
to common shares of the Company; and




     (viii) by way of an exchange of shares or options to effect the Amalgamation.




	 	9.6	 	Financial Covenants.





     A. Minimum Interest Coverage Ratio. Company shall not permit the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Cash Interest Expense for any four-Fiscal Quarter period ending during
any of the periods set forth below to be less than the correlative ratio indicated:



	 	 	 
	 	 	Minimum Interest
	Period	 	Coverage Ratio
	July 1, 2006 - September 30, 2006
	 	1.95:1.00
	October 1, 2006 - December 31, 2006
	 	1.95:1.00
	January 1, 2007 - March 31, 2007
	 	2.05:1.00
	April 1, 2007 - June 30, 2007
	 	2.25:1.00
	July 1, 2007 - September 30, 2007
	 	2.25:1.00
	October 1, 2007 - December 31, 2007
	 	2.40:1.00
	January 1, 2008 - March 31, 2008
	 	2.40:1.00
	April 1, 2008 - June 30, 2008
	 	2.40:1.00






			
	 
	 	(First Amended and Restated Credit Agreement)






 - 109 -









 






	 	 	 
	 	 	Minimum Interest
	Period	 	Coverage Ratio
	July 1, 2008 - September 30, 2008
	 	2.55:1.00
	October 1, 2008 – December 31, 2008
	 	2.55:1:00
	January 1, 2009 - March 31, 2009
	 	2.70:1.00
	April 1, 2009 - June 30, 2009
	 	2.70:1.00
	July 1, 2009 - September 30, 2009
	 	2.90:1.00
	October 1, 2009 – December 31, 2009
	 	2.90:1:00
	January 1, 2009 – Maturity
	 	2.90:1:00






     B. Maximum Leverage Ratio. Company shall not permit the Consolidated Leverage Ratio as of the
last day of the most recently ended Fiscal Quarter ending during any of the periods set forth below
to exceed the correlative ratio indicated:



	 	 	 
	Period	 	Maximum Leverage Ratio
	July 1, 2006 - September 30, 2006
	 	5.25:1.00
	October 1, 2006 - December 31, 2006
	 	5.25:1.00
	January 1, 2007 - March 31, 2007
	 	5.00:1.00
	April 1, 2007 - June 30, 2007
	 	4.50:1.00
	July 1, 2007 - September 30, 2007
	 	4.50:1.00
	October 1, 2007 - December 31, 2007
	 	4.25:1.00
	January 1, 2008 - March 31, 2008
	 	4.25:1.00
	April 1, 2008 - June 30, 2008
	 	4.25:1.00
	July 1, 2008 - September 30, 2008
	 	4.00:1.00
	October 1, 2008 – December 31, 2008
	 	4.00:1:00
	January 1, 2009 - March 31, 2009
	 	3.75:1.00
	April 1, 2009 - June 30, 2009
	 	3.75:1.00
	July 1, 2009 - September 30, 2009
	 	3.50:1.00
	October 1, 2009 – December 31, 2009
	 	3.50:1:00
	January 1, 2009 – Maturity
	 	3.50:1:00






     C. Minimum Consolidated EBITDA. Company shall not permit Consolidated EBITDA for any
four-Fiscal Quarter period ending during any of the periods set forth below to be less than the
correlative amount indicated:



	 	 	 
	 	 	Minimum
	Period	 	Consolidated EBITDA
	July 1, 2006 - September 30, 2006
	 	$65,500,000
	October 1, 2006 - December 31, 2006
	 	$65,500,000
	January 1, 2007 - March 31, 2007
	 	$68,500,000
	April 1, 2007 - June 30, 2007
	 	$76,000,000
	July 1, 2007 - September 30, 2007
	 	$76,000,000






			
	 
	 	(First Amended and Restated Credit Agreement)






 - 110 -









 






	 	 	 
	 	 	Minimum
	Period	 	Consolidated EBITDA
	October 1, 2007 - December 31, 2007
	 	$81,000,000
	January 1, 2008 - March 31, 2008
	 	$81,000,000
	April 1, 2008 - June 30, 2008
	 	$81,000,000
	July 1, 2008 - September 30, 2008
	 	$86,000,000
	October 1, 2008 – December 31, 2008
	 	$86,000,000
	January 1, 2009 - March 31, 2009
	 	$91,500,000
	April 1, 2009 - June 30, 2009
	 	$91,500,000
	July 1, 2009 - September 30, 2009
	 	$98,500,000
	October 1, 2009 – December 31, 2009
	 	$98,500,000
	January 1, 2009 – Maturity
	 	$98,500,000







	 	9.7	 	Restriction on Fundamental Changes; Asset Sales.





          Company shall not, and shall not permit any of its Subsidiaries to, alter the corporate,
capital or legal structure of Company or any of its Subsidiaries, or enter into any transaction of
amalgamation, merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), transfer
or otherwise dispose of, in one transaction or a series of transactions, all or any part of its
business, property or assets (including its notes or receivables or Capital Stock of a Subsidiary,
whether newly issued or outstanding), whether now owned or hereafter acquired, except:





     (i) any Subsidiary of Company may be amalgamated or merged with or into Company or any
wholly-owned Subsidiary Guarantor, or be liquidated, wound up or dissolved, provided
that in such case Company or such wholly-owned Subsidiary Guarantor shall be the continuing
or surviving Person; or all or any part of the business, property or assets of any
Subsidiary of Company may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Company or any wholly-owned Subsidiary
Guarantor;




     (ii) Company and its Subsidiaries may sell or otherwise dispose of assets in
transactions that do not constitute Asset Sales;




     (iii) Company and its Subsidiaries may dispose of obsolete, worn out or surplus
property in the ordinary course of business;




     (iv) Company and its Subsidiaries may make Asset Sales of assets having a fair market
value not in excess of $15,000,000 in the aggregate in any Fiscal Year, provided
that (a) the consideration received for such assets shall be in an amount at least equal to
the fair market value thereof, (b) at least 75% of the consideration received shall be cash,
and (c) the proceeds of such Asset Sales shall be applied as required by subsection
2.4A(iii)(a) or subsection 2.4F;




			
	 
	 	(First Amended and Restated Credit Agreement)






 - 111 -









 








     (v) in order to resolve disputes (or to settle with non-paying account debtors) that
occur in the ordinary course of business, Company and its Subsidiaries may discount or
otherwise compromise for less than the face value thereof, notes or accounts receivable;




     (vi) Company or a Subsidiary may sell or dispose of shares of Capital Stock of any of
its Subsidiaries in order to qualify members of the Governing Body of the Subsidiary if and
to the extent required by Applicable Law;




     (vii) except for clause (i) above and clause (viii) below, any Person may be merged
with or into Company or any Subsidiary of Company, and Company and/or Subsidiary of Company
may amalgamate with any such Person, if the acquisition of the Capital Stock of such Person
by Company or such Subsidiary would have been permitted pursuant to subsection 9.3,
provided that:




     (a) in the case of a merger with or into Company, Company shall be the
continuing or surviving Person;




     (b) in the case of any other merger, if a Subsidiary is not the surviving or
continuing Person, the surviving Person becomes a Subsidiary of Company and complies
with the provisions of subsection 9.8, and




     (c) no Potential Event of Default or Event of Default shall have occurred or be
continuing immediately after giving effect thereto;




     (viii) the Amalgamation may be consummated so long as no Potential Event of Default or
Event of Default shall have occurred or be continuing immediately after giving effect
thereto and the resulting corporation has granted the Collateral Agent a First Priority Lien
in all of its present and after-acquired property;




     (ix) Holdings may purchase common Capital Stock of the Company and the Company may
cancel the Series B Preferred Stock, in each case, pursuant to the Contribution Agreement;
and




     (x) the Company may split its common Capital Stock.



     9.8 Transactions with Shareholders and Affiliates.



          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of
any property or the rendering of any service) with any holder of 5% or more of any class of equity
Securities of Parent or Holdings or with any Affiliate of Company or Holdings or of any such
holder:





     (i) in the case of any agreement or arrangement pursuant to which any Loan Party is
obligated to pay any amounts to Permitted Holders or any of their respective Affiliates,
without the prior written consent of Administrative Agent, and



(First Amended and Restated Credit Agreement)




- 112 -









 






     (ii) in all other cases, on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the time from Persons
who are not such a holder or Affiliate,



provided that the foregoing restriction shall not apply:





     (a) to any transaction between Company and any of its wholly-owned Subsidiaries
or between any of its wholly-owned Subsidiaries,




     (b) to reasonable and customary fees paid to members of the Governing Bodies of
Company and its Subsidiaries,




     (c) so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, (i) to the payment of the
Advisory Services Termination Payment and (ii) until such time as the Advisory
Services Termination Payment is made, to payments of Management Fees in accordance
with the Advisory Services Agreement and reimbursement of expenses of Permitted
Holders as provided therein, in each case so long as such payment is permitted under
subsection 9.5,




     (d) to indemnification payments to officers or directors of Loan Parties, and
customary board of directors fees and expenses, and




     (e) to the extent the same would otherwise be prohibited by this Section 9.8,
for certainty, to the provision of subcontracting services to Noramac for which the
applicable Loan Party is paid an amount equal to the amount Noramac is paid by the
counterparty to its contract taking into consideration the percentage of such work
performed for Noramac by such Loan Party less any fees paid to the joint venture
partner in Noramac.



     9.9 Sales and Lease-Backs.



          Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any property (whether real or personal), whether
now owned or hereafter acquired,





     (i) that Company or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than Company or any of its Subsidiaries); or




     (ii) that Company or any of its Subsidiaries intends to use for substantially the same
purpose as any other property that has been or is to be sold or transferred by Company or
any of its Subsidiaries to any Person (other than Company or any of its Subsidiaries) in
connection with such lease;


provided that Company and its Subsidiaries may become and remain liable as lessee,
guarantor or other surety with respect to any such lease if and to the extent that Company or any
of its




(First Amended and Restated Credit Agreement)




- 113 -









 







Subsidiaries would be permitted to enter into, and remain liable under, such lease to the extent
that the transaction would be permitted under subsection 9.1, assuming the sale and lease back
transaction constituted Indebtedness in a principal amount equal to the gross proceeds of the sale.




     9.10 Conduct of Business.



          From and after the Restatement Date, Company shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than (i) the businesses engaged in by Company
and its Subsidiaries on the Restatement Date and similar or related businesses and (ii) such other
lines of business as may be consented to by Requisite Lenders.




     9.11 Amendments or Waivers of Certain Agreements.



     A. Amendments or Waivers of Related Agreements. Neither Company nor any of its Subsidiaries
will agree to any material amendment to, or waive any of its material rights under, any Related
Document (except the Acquisition Agreement) after the Restatement Date without in each case
obtaining the prior written consent of Requisite Lenders. Without limiting the foregoing, the
Company will not, without obtaining the prior written consent of Requisite Lenders, amend the
Equity Issuance Documentation to contain any mandatory put, redemption, repayment, sinking fund or
other required cash payment (other than a liquidation preference) prior to the date that is 91 days
after the Revolving Loan Commitment Termination Date or any covenant or event of default (other
than any covenant restricting payments by the Company with respect to the common stock of the
Company in violation of the liquidation preference of the Equity Issuance). For greater certainty,
nothing herein shall prevent the assignment, after the Restatement Date, of Series B New Preferred
Stock to Persons who are common shareholders of the Parent or to an Affiliate of any such Person.



     B. Amendments or Waivers with Respect to Senior Second Lien Secured Notes. Company shall not,
nor shall it permit Holdings or any of its Subsidiaries to, amend, supplement or otherwise change
the terms of the Intercreditor Agreement, the Senior Second Lien Secured Note Indenture, the Second
Lien Collateral Documents or the Senior Second Lien Secured Notes or any related document, or make
any payment consistent with an amendment thereof or change thereto, if the effect of such
amendment, supplement or change is to increase the interest rate on the Senior Second Lien Secured
Notes, change (to earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with respect thereto
(other than to eliminate any such event of default or increase any grace period related thereto),
change any covenant to make such covenant more restrictive, change the redemption, prepayment or
defeasance provisions thereof, add to the collateral securing the Senior Second Lien Secured Notes,
or otherwise if the effect of such amendment or change is to increase the obligations of or
restrictions applicable to Company, Holdings or any of its Subsidiaries or to confer any additional
rights on the holders of the Senior Second Lien Secured Notes (or the trustee under the Senior
Second Lien Secured Note Indenture or other representative on their behalf).



     9.12  Fiscal Year.



(First Amended and Restated Credit Agreement)




- 114 -









 





          Company shall not change its Fiscal Year end from March 31.




Section 10. EVENTS OF DEFAULT




          If any of the following conditions or events (“Events of Default”) shall occur:




     10.1  Failure to Make Payments When Due.



          Failure by Company to pay principal of any Loan when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; failure by
Company to pay when due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; failure by Company to collateralize any Bankers’ Acceptance or Letter of
Credit when required hereunder; or failure by Company to pay any interest on any Loan or any fee or
any other amount due under this Agreement, on the date due; or




     10.2 Default in Other Agreements.




     (i) Failure of Company or any of its Subsidiaries to pay when due any principal of or
interest on one or more items of Indebtedness (other than Indebtedness referred to in
subsection 10.1) or Contingent Obligations in an individual principal amount of
Cdn.$5,000,000 or more or with an aggregate principal amount of Cdn.$7,500,000 or more, in
each case beyond the end of any grace period provided therefor; or




     (ii) breach or default by Company or any of its Subsidiaries with respect to any other
term of (a) one or more items of Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above, or (b) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such failure, breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated maturity or the
stated maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or




     (iii) breach or default by Company or any of its Subsidiaries with respect to any
financial covenant in its equipment leases with Wajax Finance Ltd. (and the expiration of
any applicable grace or cure period) if the effect of such breach or default is to cause,
or to permit lessor to cause, obligation(s) under such lease(s) to become or be declared due
and payable prior to their stated payment dates therefor or such leases to be terminated
prior to their stated termination dates.



     10.3 Breach of Certain Covenants.



(First Amended and Restated Credit Agreement)




- 115 -









 








          Failure of Company to perform or comply with any term or condition contained in subsection 2.5
or 8.2(i) or Section 9 of this Agreement; or




     10.4 Breach of Warranty.



          Any representation, warranty, certification or other statement made by Holdings, Company or
any of its Subsidiaries in any Loan Document or in any statement or certificate at any time given
by Holdings, Company or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the date as of which
made or deemed made (provided that if a representation and warranty is qualified as to
materiality, with respect to such representation and warranty, the materiality qualifier set forth
above shall be disregarded for purposes of this Section 10.4), provided that, if such false
representation, warranty, certification or statement is capable of being corrected, and the
applicable Loan Party causes such representation, warranty, certification or statement to be
corrected by no later than 30 days after it is made or deemed made, the falseness of such
representation, warranty, certification or statement shall not constitute an Event of Default; or




     10.5 Other Defaults Under Loan Documents.



          Any Loan Party shall default in the performance of or compliance with any term contained in
this Agreement or any of the other Loan Documents, other than any such term referred to in any
other subsection of this Section 10, and such default shall not have been remedied or waived within
30 days after the earlier of (i) an Officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from Administrative Agent or any
Lender of such default; or




     10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.



          If any case, proceeding or other action shall be instituted in any court of competent
jurisdiction, against Holdings, Company or any Subsidiary seeking in respect of such Person an
adjudication in bankruptcy, reorganization of its indebtedness, dissolution, winding up,
liquidation, a composition, proposal or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, receiver and manager, interim receiver, custodian, liquidator
or any Person with similar powers with respect to such Person or of all or any substantial part of
its assets, or any other like relief in respect of such Person under a Bankruptcy Law, the
Partnership Act (Alberta) or any other bankruptcy, insolvency or analogous law and:





     (i) such case, proceeding or other action results in an entry of an order for relief or
any such adjudication or appointment; or




     (ii) if such case, proceeding or other action is being contested in good faith and by
appropriate proceedings, the same shall continue undismissed, or unstayed and in effect, for
any period of 45 days past the commencement of such case, proceeding or action; or



     10.7 Voluntary Insolvency.



(First Amended and Restated Credit Agreement)





- 116 -









 








          If Company, Holdings or any Subsidiary:





     (i) makes any assignment in bankruptcy or makes any other assignment for the benefit of
creditors;




     (ii) makes any proposal or seeks relief under a Bankruptcy Law or any comparable law,
seeks relief under any other bankruptcy, insolvency or analogous law, or files a petition or
proposal to take advantage of any act of insolvency;




     (iii) consents to or acquiesces in the appointment of a trustee in bankruptcy,
receiver, receiver and manager, interim receiver, custodian, sequestrator or other person
with similar powers of itself or of all or any portion of its assets which is, in the
opinion of the Requisite Lenders, material;




     (iv) files a petition or otherwise commences any proceeding seeking any reorganization,
arrangement, composition, administration or readjustment under any applicable bankruptcy,
insolvency, moratorium, reorganization or other similar law affecting creditors’ rights;




     (v) commits an act of bankruptcy under a Bankruptcy Law;




     (vi) is adjudicated insolvent under a Bankruptcy Law, or admits in writing its
inability to pay its debts as they become due; or




     (vii) consents to, or acquiesces in, the filing of such assignment, proposal, relief,
petition, proposal, appointment or proceeding set out in this Section 10.7 (excluding clause
(iii)) or takes any action to authorize or effect any of the foregoing; or



     10.8 Judgments and Attachments.



          Any money judgment, writ or warrant of attachment or similar process involving (i) in any
individual case an amount in excess of Cdn. $5,000,000 or (ii) in the aggregate at any time an
amount in excess of Cdn. $7,500,000 (in either case not adequately covered by insurance of a
solvent unaffiliated insurance company that has not denied coverage in writing) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any event later than
five days prior to the date of any proposed sale thereunder); or




     10.9 Dissolution.



          Any order, judgment or decree of a court of competent jurisdiction shall be entered against
Holdings, Company or any of its Subsidiaries decreeing the dissolution or split up of Holdings,
Company or that Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 60 days; or




     10.10 Seizure.



(First Amended and Restated Credit Agreement)





- 117 -









 








     If property and assets of Company or any Subsidiary having an aggregate fair market value in
excess of Cdn.$5,000,000 is seized or otherwise attached by anyone pursuant to any legal process or
other means, including distress, execution or any other step or proceeding with similar effect and
such attachment, step or other proceeding shall continue in effect and not be released, discharged,
bonded or stayed within 60 days; or



     10.11 Change in Control.



          A Change in Control shall have occurred; or




     10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations.



          At any time after the execution and delivery thereof:





     (i) any Loan Document or any provision thereof, for any reason other than the
satisfaction in full of all Obligations, shall cease to be in full force and effect (other
than in accordance with its terms),




     (ii) any Loan Document or any provision thereof shall be declared by a court of
competent jurisdiction to be null and void,




     (iii) Collateral Agent shall not have or shall cease to have a valid and perfected
First Priority Lien in Collateral purported to be covered by the Collateral Documents which
has a fair market value, individually or in the aggregate, exceeding Cdn.$5,000,000, or




     (iv) any Loan Party shall contest the validity or enforceability of any Loan Document
or any provision thereof in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document or any
provision thereof to which it is a party;


unless, in the case of clause (i) above, such unenforceability is capable of remedy and the
applicable Loan Party remedies such unenforceability within 30 days of it being determined, or in
the case of clause (ii) above such Loan Party appeals such declaration and has it finally
overturned within 30 days of such declaration having been made, in which case the unenforceability,
declaration or failure shall not constitute an Event of Default.




     10.13 Conduct of Business By Holdings.



          Holdings shall (i) engage in any business other than entering into and performing its
obligations under and in accordance with the Loan Documents and Related Documents (except the
Acquisition Agreement) to which it is a party, and its obligations to bonding companies referred to
in subclause (iii) below, (ii) own any assets other than (a) the Capital Stock of Company, and (b)
Cash and Cash Equivalents in an amount not exceeding the amounts theretofore permitted to be
distributed to Holdings under subsection 9.5 plus the aggregate amount of Net Securities Proceeds
from the issuance of Capital Stock of Holdings or from any




(First Amended and Restated Credit Agreement)





- 118 -









 







capital contribution to Holdings by any holder of the Capital Stock thereof not required to be
applied to prepay the Loans pursuant to subsection 2.4A, or (iii) have any Indebtedness or other
liability other than its obligations under the Holdings Guarantee or the Holdings Preferred Stock,
or liabilities to bonding companies in respect of any Bonding Program; or




     10.14 Conduct of Business by Finance Co.



          Finance Co. shall (i) engage in any business other than entering into and performing its
obligations under, in accordance with, and as contemplated in, the Loan Documents, the Senior
Notes, the Senior Second Lien Secured Notes, any guarantee related to the Senior Second Lien
Secured Notes or the Senior Notes, and Related Documents to which it is a party, or (ii) own any
assets other than Loans made to a Loan Party, and any notes evidencing the same.




     10.15 Amendment of Certain Documents of Holdings.



          Holdings shall agree to any material amendment to, or waive any of its material rights under,
or otherwise change any material terms of, the Holdings Certificate of Designations, as in effect
on the Restatement Date, in a manner adverse to Holdings or any of its Subsidiaries or to Lenders
without the prior written consent of Administrative Agent and Requisite Lenders:




then:





Administrative Agent shall, upon the written request or with the written consent of
Requisite Lenders, by written notice to Company, declare each of (a) the unpaid principal
amount of and accrued interest on the Loans, (b) an amount equal to the aggregate face
amount of all Bankers’ Acceptances and the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary under any such
Letter of Credit shall have presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under such Letter of Credit), and
(c) all other Obligations to be immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly waived by
Company to the extent permitted by Applicable Law, and the obligation of each Lender to make
any Loan, the obligation of Fronting Bank to issue any Letter of Credit and the right of any
Lender to issue any Letter of Credit hereunder shall thereupon terminate, provided
that the foregoing shall not affect in any way the obligations of Revolving Lenders under
subsection 4.3C(i) or the obligations of Revolving Lenders to purchase assignments of any
unpaid Swing Line Loans as provided in subsection 2.1A(ii).



          Any amounts described in clause (b) above, when received by Administrative Agent, shall be
held by Administrative Agent pursuant to the terms of this Agreement and shall be applied as
provided in subsection 2.4F.




Section 11. ADMINISTRATIVE AGENT AND COLLATERAL AGENT




(First Amended and Restated Credit Agreement)





- 119 -









 








     11.1  Appointment.



     A. Appointment of Administrative Agent. BNP PARIBAS (Canada) is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Administrative Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and
11.6, the provisions of this Section 11 are solely for the benefit of Administrative Agent,
Collateral Agent and Lenders and no Loan Party shall have rights as a third party beneficiary of
any of the provisions thereof. In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust with or for
Company or any other Loan Party.



     B. Appointment of Collateral Agent. BNP PARIBAS (Canada) is hereby appointed Collateral Agent
hereunder and under the other Loan Documents. Each Lender hereby authorizes Collateral Agent to
act as its agent in accordance with the terms of this Agreement and the other Loan Documents.
Collateral Agent agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and 11.6, the provisions
of this Section 11 are solely for the benefit of Administrative Agent, Collateral Agent and Lenders
and no Loan Party shall have rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this Agreement, Collateral Agent shall act solely as
an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for Company or any other Loan Party.



     C. Appointment of Supplemental Collateral Agents. It is the purpose of this Agreement and the
other Loan Documents that there shall be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact business as agent or
trustee in such jurisdiction. It is recognized that in case of litigation under this Agreement or
any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan
Documents, or in case Collateral Agent deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of
the other Loan Documents or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Collateral Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a “Supplemental
Collateral Agent” and collectively as “Supplemental Collateral Agents”).



          In the event that Collateral Agent appoints a Supplemental Collateral Agent with respect to
any Collateral, (i) each and every right, power, privilege or duty, and each obligation, expressed
or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or
conveyed to Collateral Agent, or to which Collateral Agent is subject, with respect to such
Collateral shall be exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral as if such



(First Amended and Restated Credit Agreement)





- 120 -









 







Supplemental Collateral Agent were the Collateral Agent, and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the Loan Documents and
necessary to the exercise or performance thereof by and against such Supplemental Collateral Agent
shall run to and be enforceable by and against either Collateral Agent or such Supplemental
Collateral Agent, and (ii) the provisions of this Section 11 and of subsections 12.2 and 12.3 that
refer to Collateral Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Collateral Agent shall be deemed to be references to Collateral Agent and/or
such Supplemental Collateral Agent, as the context may require.




          Should any instrument in writing from Company or any other Loan Party be required by any
Supplemental Collateral Agent so appointed by Collateral Agent for more fully and certainly vesting
in and confirming to him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Collateral Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such Supplemental Collateral Agent, to the extent permitted by Applicable
Law, shall vest in and be exercised by Collateral Agent until the appointment of a new Supplemental
Collateral Agent.




     D. Control. Each Lender and Collateral Agent hereby appoint each other Lender as agent for
the purpose of perfecting Administrative Agent’s security interest in assets that, in accordance
with any governing legislation, can be perfected by possession or control.



     11.2 Powers and Duties; General Immunity.



     A. Powers; Duties Specified. Each Lender irrevocably authorizes Administrative Agent to take
such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and
under the other Loan Documents as are specifically delegated or granted to Administrative Agent by
the terms hereof and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Administrative Agent shall have only those duties and responsibilities that
are expressly specified in this Agreement and the other Loan Documents together with such powers,
rights and remedies as are reasonably incidental thereto. Administrative Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the other Loan
Documents, a fiduciary relationship in respect of any Lender or Company; and nothing in this
Agreement or any of the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Administrative Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth herein or therein.



     Each Lender irrevocably authorizes Collateral Agent to take such action on such Lender’s
behalf and to exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to Collateral Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably incidental thereto.
Collateral Agent shall have only those duties and responsibilities that are expressly specified in
this Agreement and the other Loan Documents together with such powers, rights and remedies as



(First Amended and Restated Credit Agreement)




- 121 -









 







are reasonably incidental thereto. Collateral Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. Collateral Agent shall not have, by
reason of this Agreement or any of the other Loan Documents, a fiduciary relationship in respect of
any Lender or Company; and nothing in this Agreement or any of the other Loan Documents, expressed
or implied, is intended to or shall be so construed as to impose upon Collateral Agent any
obligations in respect of this Agreement or any of the other Loan Documents except as expressly set
forth herein or therein.




     B. No Responsibility for Certain Matters. No Agent shall be responsible to any Lender for the
execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of
this Agreement or any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or in any financial or
other statements, instruments, reports or certificates or any other documents furnished or made by
such Agent to Lenders or by or on behalf of Company to such Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the financial condition or
business affairs of Company or any other Person liable for the payment of any Obligations, nor
shall such Agent be required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents
or as to the use of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative Agent shall not have
any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit
Usage or the component amounts thereof.



     C. Exculpatory Provisions. No Agent or any of its officers, directors, employees or agents
shall be liable to Lenders for any action taken or omitted by such Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent’s gross negligence or
willful misconduct. An Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or any of the other
Loan Documents or from the exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such instructions under
subsection 12.6) and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against an Agent as a result of such Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents in



(First Amended and Restated Credit Agreement)




- 122 -









 







accordance with the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 12.6).




     D. Agents Entitled to Act as Lender. The agency hereby created shall in no way impair or
affect any of the rights and powers of, or impose any duties or obligations upon, an Agent in its
individual capacity as a Lender hereunder. With respect to its participation in the Loans and the
Letters of Credit, an Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions delegated to it
hereunder, and the term “Lender” or “Lenders” or any similar term shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. An Agent and its Affiliates
may accept deposits from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or other business with
Company or any of its Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.



     11.3 Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness.



          Each Lender agrees that it has made its own independent investigation of the financial
condition and affairs of Company and its Subsidiaries in connection with the making of the Loans
and the issuance of Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of the Loans or issuance
of any Letter of Credit or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any information provided to
Lenders.




     11.4 Right to Indemnity.



          Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent and
its officers, directors, employees, agents, attorneys, professional advisors and Affiliates to the
extent that any such Person shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements on a solicitor and his own client basis, and fees and
disbursements of any financial advisor engaged by Agents) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against an Agent or and other such
Persons in exercising the powers, rights and remedies of an Agent or performing duties of an Agent
hereunder or under the other Loan Documents or otherwise in its capacity as Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of an Agent resulting solely
from such Agent’s gross negligence or willful misconduct as determined by a




(First Amended and Restated Credit Agreement)




- 123 -









 







final judgment of a court of competent jurisdiction. If any indemnity furnished to an Agent
or any other such Person for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.




     11.5 Successor Agents and Swing Line Lender.



     A. Successor Agents. Any Administrative Agent may resign at any time by giving 30 days’ prior
written notice thereof to Collateral Agent, Lenders and Company. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to
appoint a successor Administrative Agent, which must be a Lender, subject (if no Event of Default
exists) to the approval of Company. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent. Whether or not a successor is appointed, the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement upon its resignation
becoming effective in accordance with its notice of resignation. After any retiring Administrative
Agent’s resignation hereunder as an Administrative Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Agreement.



     Any Collateral Agent may resign at any time by giving 30 days’ prior written notice thereof to
Administrative Agent, Lenders and Company. Upon any such notice of resignation, Requisite Lenders
shall have the right, upon five Business Days’ notice to Company, to appoint a successor Collateral
Agent, subject (if no Event of Default exists) to the approval of Company. Upon the acceptance of
any appointment as Collateral Agent hereunder by a successor Collateral Agent, that successor
Collateral Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent. Whether or not a successor is appointed,
the retiring Collateral Agent shall be discharged from its duties and obligations under this
Agreement upon its resignation becoming effective in accordance with its notice of resignation.
After any retiring Collateral Agent’s resignation hereunder as the Collateral Agent, the provisions
of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Collateral Agent under this Agreement.



     B. Successor Swing Line Lender. Any resignation of Administrative Agent pursuant to
subsection 11.5A shall also constitute the resignation of it or its successor as Swing Line Lender,
and any successor Administrative Agent appointed pursuant to subsection 11.5A shall, upon its
acceptance of such appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event Company shall prepay any outstanding Swing Line Loans made by the retiring or removed
Administrative Agent in its capacity as Swing Line Lender.



     C. Successor Fronting Bank. The Fronting Bank may resign at any time by giving 30 days’ prior
written notice thereof to Lenders and Company. Upon any such notice of resignation, Requisite
Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor
Fronting Bank, which must be a Lender, subject (if no Event of Default exists) to the approval of
Company. Upon the acceptance of any appointment as Fronting Bank



(First Amended and Restated Credit Agreement)




- 124 -









 







hereunder by a successor Fronting Bank, that successor Fronting Bank shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the retiring Fronting
Bank and the retiring Fronting Bank shall be discharged from its duties and obligations under this
Agreement. Whether or not a successor is appointed, the retiring Fronting Bank shall be discharged
from its duties and obligations under this Agreement upon its resignation becoming effective in
accordance with its notice of resignation. After any retiring Fronting Bank’s resignation
hereunder as Fronting Bank, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was a Fronting Bank under this Agreement.




     11.6 Collateral Documents and Guarantees.



     A. Each Lender hereby further authorizes Administrative Agent, on behalf of and for the
benefit of Lenders, to be the agent for and representative of Lenders under any Loan Document
(other than this Agreement and the Collateral Documents) and each Lender agrees to be bound by the
terms of each such Loan Document, provided that Administrative Agent shall not enter into
or consent to any material amendment, modification, termination or waiver of any provision
contained in any such Loan Document, except in compliance with subsection 12.6, and
provided further that, without further written consent or authorization from
Lenders, Administrative Agent may execute any documents or instruments necessary to release any
Subsidiary Guarantor from the Subsidiary Guarantee if all of the Capital Stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of Company) pursuant to a sale or other
disposition permitted hereunder or to which Requisite Lenders have otherwise consented so long as,
in the case of a sale of such item of Collateral or Capital Stock referred to above, the
requirements of subsections 12.14 and 12.15 are satisfied. In addition, each Lender (and by
accepting the benefits thereof, each Swap Lender) hereby further authorizes Administrative Agent to
execute the St. Paul Priority Agreement as agent for and representative of the Lenders, and each
Lender (and by accepting the benefits thereof, each Swap Lender) agrees to be bound thereby.
Anything contained in any of the Loan Documents to the contrary notwithstanding, Company,
Administrative Agent and each Lender hereby agree that no Lender shall have any right individually
to enforce any Guarantee, it being understood and agreed that all powers, rights and remedies under
the Guarantees may be exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof.



     B. Each Lender (and by accepting the benefits thereof, each Swap Lender) hereby further
authorizes Collateral Agent, on behalf of and for the benefit of Lenders, without further
authorization or consent of the Lenders, to enter into the Intercreditor Agreement, the St. Paul
Priority Agreement and each Collateral Document as secured party, and each Lender agrees to be
bound by the terms of each such Collateral Document, provided that Collateral Agent shall
not:




     (i) enter into or consent to any material amendment, modification, termination or
waiver of any provision contained in any such Collateral Document or the Intercreditor
Agreement, or




     (ii) release any Collateral,



(First Amended and Restated Credit Agreement)





- 125 -









 







except in compliance with subsection 12.6, and provided further that, without
further written consent or authorization from Lenders, Collateral Agent may execute any documents
or instruments necessary to:





     (a) release any Lien encumbering any item of Collateral that is the subject of
a sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented, or




     (b) subordinate the Liens of Collateral Agent, on behalf of Lenders, Swap
Lenders and Agents, to any Liens permitted by subsections 9.2A(i), (ii) and (iv);


so long as, in the case of a sale of such item of Collateral referred to in subclause (a), the
requirements of subsections 12.14 and 12.15 are satisfied. Anything contained in any of the
Collateral Documents to the contrary notwithstanding, Company, Collateral Agent and each Lender
hereby agree that:





     (1) no Lender shall have any right individually to realize upon any of
the Collateral under any Collateral Document, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent for the benefit of Lenders in
accordance with the terms thereof, and




     (2) in the event of a foreclosure by Collateral Agent on any of the
Collateral pursuant to a public or private sale, Collateral Agent,
Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.



     11.7 Duties of Other Agents.



          To the extent that any Lender is identified in this Agreement as a “co-agent,” documentation
agent or syndication agent, such Lender shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender.




     11.8 Administrative Agent May File Proofs of Claim.



          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to




(First Amended and Restated Credit Agreement)





- 126 -










 






Holdings, Company or any of the Subsidiaries of Holdings or Company, Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall
have made any demand on Company) shall be entitled and empowered, by intervention in such
proceeding or otherwise:





     (i) to file and prove a claim for the whole amount of principal and interest owing and
unpaid in respect of the Loans or Letters of Credit and any other Obligations that are owing
and unpaid and to file such other papers or documents as may be necessary or advisable in
order to have the claims of Lenders and Agents (including any claim for the reasonable
compensation, expenses, disbursements and advances of Lenders and Agents and their agents
and counsel and all other amounts due Lenders and Agents under subsections 2.3 and 12.2)
allowed in such judicial proceeding, and




     (ii) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to
Administrative Agent and, in the event that Administrative Agent shall consent to the making of
such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents and counsel, and any
other amounts due Agents under subsections 2.3 and 12.2.




          Nothing herein contained shall be deemed to authorize Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lenders or to authorize
Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.




     11.9 Borrowing Base.



     Administrative Agent, Swing Line Lender and Issuing Lender shall have no liability to the
Lenders for Loans made (including Swing Line Loans) or Letters of Credit issued (and Lenders shall
be responsible for their Pro Rata shares of such Loans or Letters of Credit pursuant to Sections
2.1A(i), 2.1A(ii)(d), 2.1A(ii)(e) and 4.1C) in good faith based on the Company’s most recent
Borrowing Base Certificate.



Section 12. MISCELLANEOUS




     12.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit.



     A. General. This Agreement shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and the



(First Amended and Restated Credit Agreement)




- 127 -









 







successors and assigns of Lenders (it being understood that Lenders’ rights of assignment are
subject to the further provisions of this subsection 12.1). Neither Company’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by Company without the
prior written consent of all Lenders (and any attempted assignment or transfer by Company without
such consent shall be null and void). No sale, assignment or transfer or participation of any
Letter of Credit or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan Commitment and the
Revolving Loans of the Revolving Lender effecting such sale, assignment, transfer or participation.
Anything contained herein to the contrary notwithstanding, except as provided in subsection
2.1A(ii) and subsection 12.5, the Swing Line Loan Subcommitment and the Swing Line Loans of Swing
Line Lender may not be sold, assigned or transferred as described below to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated by subsection 11.5.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby and, to
the extent expressly contemplated hereby, the Affiliates of each Agent and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




     B. Assignments.




     (i) Amounts and Terms of Assignments. Any Lender may assign to one or more
Eligible Assignees all or any portion of its rights and obligations under this Agreement,
provided that:




     (a) except (1) in the case of an assignment of the entire remaining amount of
the assigning Lender’s rights and obligations under this Agreement or (2) in the
case of an assignment to a Lender or an Affiliate of a Lender or Agent or an
Approved Fund of a Lender, the aggregate amount of the Revolving Loan Exposure of
the assigning Lender and the assignee subject to each such assignment shall not be
less than Cdn. $1,000,000 in the case of any assignment of a Revolving Loan or
Revolving Loan Commitment, unless each of Administrative Agent and, so long as no
Event of Default has occurred and is continuing, Company otherwise consents (each
such consent not to be unreasonably withheld or delayed),




     (b) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loan or the Revolving Loan Commitment assigned,




     (c) the assignor and the assignee under each assignment shall execute and
deliver to Administrative Agent an Assignment Agreement, together with a processing
and recordation fee of $3,500 (unless the assignee is an Affiliate or an Approved
Fund of the assignor, in which case no fee shall be required), and the Eligible
Assignee, if it shall not be a Lender, shall deliver to Administrative Agent
information reasonably requested by Administrative Agent), and



(First Amended and Restated Credit Agreement)




- 128 -









 









     (d) except in the case of an assignment to another Lender, an Affiliate of a
Lender or Agent or an Approved Fund of a Lender, Agents, if no Event of Default has
occurred and is continuing, Company, shall have consented thereto (each of which
consents shall not be unreasonably withheld and in the case of Collateral Agent such
consent may only be withheld if in Collateral Agent’s reasonable judgment such
assignment would likely result in additional liability, cost or administrative
burden for the Collateral Agent), and shall evidence such consent in writing on
request by any party to the Assignment Agreement. Collateral Agent’s consent to any
assignment shall be deemed given 5 Business Days after written request therefor by
Administrative Agent or Company if, by such time Collateral Agent has not consented
(or denied consent).




Upon such execution, delivery and consent, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (z)
the assigning Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under subsection 12.9B) and
be released from its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto,
provided that, anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is an Issuing Lender such Lender shall continue to have all
rights and obligations of an Issuing Lender until the cancellation or expiration of any
Letters of Credit issued by it and the reimbursement of any amounts drawn thereunder). Other
than as provided in subsection 2.1A(ii) and subsection 12.5, any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this
subsection 12.1B shall be treated for purposes of this Agreement as a sale by such Lender of
a participation in such rights and obligations in accordance with subsection 12.1C.




     (ii) Acceptance by Administrative Agent; Recordation in Register. Upon its
receipt of an Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the processing and recordation
fee referred to in subsection 12.1B(i), Administrative Agent shall, if Administrative Agent
and Company have consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 12.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such assignment), (b) record the
information contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment Agreement delivered
to and accepted by it as provided in this subsection 12.1B(ii).



(First Amended and Restated Credit Agreement)




- 129 -









 









     (iii) Deemed Consent by Company. If the consent of Company to an assignment or
to an Eligible Assignee is required hereunder (including a consent to an assignment which
does not meet the minimum assignment thresholds specified in subsection 12.1B(i), but
excluding any consent of Company required for the sale of a participation set forth in
subsection 12.1C), Company shall be deemed to have given its consent five Business Days
after the date notice thereof has been delivered by the assigning Lender (through
Administrative Agent) unless such consent is expressly refused by Company on or prior to
such fifth Business Day.



     C. Participations. Any Lender may, without the consent of, or notice to, Company or
Administrative Agent, sell participations to one or more Persons (other than a natural Person or
Company or any of its Affiliates) in all or a portion of such Lender’s rights and/or obligations
under this Agreement, provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Company, Administrative Agent and Lenders
shall continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement,
provided that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver directly affecting
(a) the extension of the regularly scheduled maturity of any portion of the principal amount of or
interest on any Loan allocated to such participation (other than interest imposed by subsection
2.2D for a period not to exceed 60 days) or (b) a reduction of the principal amount of or the rate
of interest payable on any Loan allocated to such participation (other than interest imposed by
subsection 2.2D for a period not to exceed 60 days). Subject to the further provisions of this
subsection 12.1C, Company agrees that each Participant shall be entitled to the benefits of
subsection 2.6 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection 12.1B. To the extent permitted by Applicable Law, each
Participant also shall be entitled to the benefits of subsection 12.4 as though it were a Lender,
provided such Participant agrees to be subject to subsection 12.5 and 12.20 as though it
were a Lender. A Participant shall not be entitled to receive any greater payment under subsection
2.6 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant unless the sale of the participation to such Participant is
made with Company’s prior written consent.



          Where payments to a Participant are subject to withholding tax pursuant to Part XIII of the
Income Tax Act, a Participant shall not be entitled to the benefits of subsection 2.6 unless
Company is notified of the participation sold to such Participant and Company agrees to comply with
subsection 2.6 as though such Participant were a Lender.




     D. Pledges and Assignments. Any Lender may at any time pledge or assign a security interest
in all or any portion of its Loans, and the other Obligations owed to such Lender, to any banking
or finance Governmental Authority to secure obligations of such Lender, including any pledge or
assignment to secure obligations to any Federal Reserve Bank, provided that (i) no Lender
shall be relieved of any of its obligations hereunder as a result of any such



(First Amended and Restated Credit Agreement)




- 130 -









 







assignment or pledge and (ii) in no event shall any assignee or pledgee be considered to be a
“Lender” or be entitled to require the assigning Lender to take or omit to take any action
hereunder.




     E. Information. Each Lender may furnish any information concerning Company and its
Subsidiaries in the possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection 12.20.



     F. Agreements of Lenders. Each Lender listed on the signature pages hereof hereby agrees, and
each Lender that becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree, (i) that it is an Eligible Assignee described in clause (ii) of the definition thereof; (ii)
that it has experience and expertise in the making of or purchasing loans such as the Loans; and
(iii) that it will make or purchase Loans for its own account in the ordinary course of its
business and without a view to distribution of such Loans within the meaning of the Securities Act
or the Exchange Act or other securities laws (it being understood that, subject to the provisions
of this subsection 12.1, the disposition of such Loans or any interests therein shall at all times
remain within its exclusive control).



     12.2 Expenses.



    Whether or not the transactions contemplated hereby shall be consummated, Company agrees to
pay promptly:





       (i) all reasonable costs and expenses of the Agents incurred in connection with the
negotiation, preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto;




       (ii) all costs and expenses of furnishing all opinions by counsel for Company
(including any opinions requested by Agents or Lenders as to any legal matters arising
hereunder) and of Company’s performance of and compliance with all agreements and conditions
on its part to be performed or complied with under this Agreement and the other Loan
Documents including with respect to confirming compliance with environmental, insurance and
solvency requirements;




       (iii) all reasonable fees, expenses and disbursements of counsel to Administrative
Agent on a solicitor and his own client basis (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications thereto and
any other documents or matters requested by Company;




       (iv) all costs and expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Lenders, Swap Lenders and Agents pursuant to any Collateral Document,
including filing and recording fees, expenses and taxes, stamp or documentary taxes, search
fees and reasonable fees, expenses and disbursements of counsel to Administrative Agent and
Collateral Agent and of counsel providing any



(First Amended and Restated Credit Agreement)




- 131 -









 









opinions that Administrative Agent, Collateral Agent or Requisite Lenders may request
in respect of the Collateral Documents or the Liens created pursuant thereto;




     (v) all costs and expenses (including the reasonable fees, expenses and disbursements
of any auditors, accountants or appraisers and any environmental, engineering or other
consultants, advisors and agents employed or retained by Administrative Agent, Collateral
Agent or its counsel) of obtaining and reviewing any appraisals or any environmental audits
or reports provided for under this Agreement, provided that Administrative Agent and
Collateral Agent shall advise Company of Lenders’ intent to obtain such information,
although failure to do so will not affect Company’s obligations under this subsection 12.2;




     (vi) all costs and expenses incurred by Collateral Agent in connection with the custody
or preservation of any of the Collateral;




     (vii) all other costs and expenses incurred by Agents in connection with the
syndication of the Revolving Loan Commitments;




     (viii) all costs and expenses, including reasonable legal fees on a solicitor and his
own client basis (including allocated costs of internal counsel) and fees, costs and
expenses of accountants, advisors and consultants, incurred by Administrative Agent and
Collateral Agent and its counsel relating to efforts to (a) evaluate or assess any Loan
Party, its business or financial condition and (b) protect, evaluate, assess or dispose of
any of the Collateral; and




     (ix) all costs and expenses, including reasonable attorneys’ fees (including allocated
costs of internal counsel), fees, costs and expenses of accountants, advisors and
consultants and costs of settlement, incurred by Administrative Agent, Collateral Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the enforcement of the
Loan Documents) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any
insolvency or bankruptcy proceedings.



     12.3 Indemnity.



             In addition to the payment of expenses pursuant to subsection 12.2, whether or not the
transactions contemplated hereby shall be consummated, Company agrees to defend, indemnify, pay and
hold harmless Agents and Lenders (including Issuing Lenders), and the officers, directors,
employees, agents and Affiliates of Agents and Lenders (collectively called the “Indemnitees”),
from and against any and all Indemnified Liabilities (as hereinafter defined), provided
that (i) an Indemnitee shall always be entitled to select its own counsel, and (ii) Company shall
not have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to
the extent such Indemnified Liabilities arise solely from the gross




(First Amended and Restated Credit Agreement)




- 132 -









 







negligence or willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.




          As used herein, “Indemnified Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties, actions, judgments,
suits, claims (including Environmental Claims), costs (including the costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials or Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto, and any fees or
expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or
arising out of:





     (i) this Agreement, the other Loan Documents or the Related Documents or the
transactions contemplated hereby or thereby (including Lenders’ agreement to make the Loans
hereunder or the use or intended use of the proceeds thereof or the issuance of Letters of
Credit hereunder or the use or intended use of any thereof, the failure of an Issuing Lender
to honor a drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental Authority or
any enforcement of any of the Loan Documents (including any sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Guarantees)), and
further including:




     (a) any cost or expense incurred by reason of the liquidation or re-deployment
in whole or in part of deposits or other funds required by any Lender to fund any
Bankers’ Acceptance or to fund or maintain any Loan as a result of Company’s failure
to complete a borrowing or to make any payment, repayment or prepayment on the date
required hereunder or specified by it in any notice given hereunder;




     (b) subject to permitted or deemed Rollovers and Conversions, Company’s failure
to provide for the payment to Administrative Agent for the account of the Lenders of
the full principal amount of each Bankers’ Acceptance on its maturity date;




     (c) Company’s failure to pay any other amount, including any interest or fee,
due hereunder on its due date after the expiration of any applicable grace or notice
periods (subject, however, to the interest obligations of Company hereunder for
overdue amounts);



(First Amended and Restated Credit Agreement)




- 133 -









 









     (d) the prepayment of any outstanding Bankers’ Acceptance otherwise than on the
last day of its BA Interest Period;




     (e) Company’s failure to give any notice required to be given by it to
Administrative Agent or the Lenders hereunder;




     (f) the failure of Company to make any other payment due hereunder;




     (g) any inaccuracy or incompleteness of Company’s representations and
warranties contained herein;




     (h) any failure of Company to observe or fulfill its covenants contained
herein;




     (i) any failure of Company to observe or fulfill any other Obligation not
specifically referred to above; or




     (j) the occurrence of any Default or Event of Default in respect of Company; or




     (ii) any Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land ownership, or
practice of Company or any of its Subsidiaries.



          To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in
this subsection 12.3 may be unenforceable in whole or in part because they are violative of any law
or public policy, Company shall contribute the maximum portion that it is permitted to pay and
satisfy under Applicable Law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.




     12.4 Set-Off; Security Interest in Deposit Accounts.



          In addition to any rights now or hereafter granted under Applicable Law and not by way of
limitation of any such rights, during the existence of any Event of Default (and with the approval
of the Requisite Lenders prior to any Loans becoming or being declared to be due under Section 10),
each Lender is hereby authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or demand, provisional or
final, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or owing by that
Lender or any Affiliate of that Lender to or for the credit or the account of Company and each
other Loan Party against and on account of the Obligations of Company or any other Loan Party to
that Lender (or any Affiliate of that Lender) or to any other Lender (or any Affiliate of any other
Lender) under this Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and




(First Amended and Restated Credit Agreement)




- 134 -









 







participations therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have
become due and payable pursuant to Section 10 and although said obligations and liabilities, or any
of them, may be contingent or unmatured. Company hereby further grants to Collateral Agent and
each Lender a security interest in all deposits and accounts maintained with Administrative Agent,
Collateral Agent or such Lender as security for the Obligations.




     12.5 Ratable Sharing.



          Lenders hereby agree among themselves that if any of them shall, whether by voluntary payment
(other than a voluntary prepayment of Loans made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of set-off or banker’s
lien, by counterclaim or cross action or by the enforcement of any right under the Loan Documents
or otherwise, or as adequate protection of a deposit treated as cash collateral under a Bankruptcy
Law, receive payment or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to
such Lender) that is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase assignments (which it shall be deemed to have
purchased from each seller of an assignment simultaneously upon the receipt by such seller of its
portion of such payment) of the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them, provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy,
receivership or reorganization of a Loan Party or otherwise, those purchases shall be rescinded and
the purchase prices paid for such assignments shall be returned to such purchasing Lender ratably
to the extent of such recovery, but without interest. Company expressly consents to the foregoing
arrangement and agrees that any purchaser of an assignment so purchased may exercise any and all
rights of a Lender as to such assignment as fully as if that Lender had complied with the
provisions of subsection 12.1B with respect to such assignment. In order to further evidence such
assignment (and without prejudice to the effectiveness of the assignment provisions set forth
above), each purchasing Lender and each selling Lender agree to enter into an assignment agreement
at the request of a selling Lender or a purchasing Lender, as the case may be, in form and
substance reasonably satisfactory to each such Lender.




     12.6 Amendments and Waivers.



          No amendment, modification, termination or waiver of any provision of this Agreement, and no
consent to any departure by Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders, provided that no such amendment, modification,
termination, waiver or consent shall:




(First Amended and Restated Credit Agreement)




- 135 -









 









     (i) without the additional consent of each Lender with Obligations directly affected:




(a) reduce the principal amount payable on account of any Loan,




(b) increase the maximum aggregate amount of Letters of Credit available,




(c) postpone any installment date or the final maturity date of any Loan,




(d) postpone the date on which any interest or any fees are payable, other
than interest imposed by subsection 2.2D for a period not to exceed 60 days,




(e) decrease the interest rate or stamping fee borne by any Loan or the
amount of any fees payable hereunder, other than interest imposed by
subsection 2.2D for a period not to exceed 60 days,




(f) reduce the amount or postpone the due date of any amount payable in
respect of any Letter of Credit,




(g) extend the expiration date of any Letter of Credit beyond the Revolving
Loan Commitment Termination Date,




(h) change in any manner the obligations of Revolving Lenders relating to
the purchase of participations in Letters of Credit, or




(i) increase such Lender’s Revolving Loan Commitment;




     (ii) without the consent of all Lenders:




(a) change in any manner the definition of “Pro Rata Share” or the
definition of “Requisite Lenders” (except for any changes resulting solely
from an increase in Revolving Loan Commitments approved by Requisite
Lenders),




(b) change in any manner any provision of this Agreement that, by its terms,
expressly requires the approval or concurrence of all Lenders,




(c) increase the maximum duration of BA Interest Periods permitted
hereunder,




(d) release any Lien granted in favor of Collateral Agent with respect to
the Collateral, or release Holdings from its obligations under the Holdings
Guarantee, or release any of the Subsidiary Guarantors from their
obligations under the Subsidiary Guarantee, in each case other than in
accordance with the terms of this Agreement and the other Loan Documents,
including subsections 12.14 and 12.15, or



(First Amended and Restated Credit Agreement)




- 136 -









 









(e) change in any manner or waive the provisions contained in subsection
10.1 or this subsection 12.6.




     In addition:




     (1) no amendment, modification, termination or waiver of any provision
of subsection 2.1A(ii) or of any other provision of this Agreement relating
to the Swing Line Loan Subcommitment or the Swing Line Loans shall be
effective without the written concurrence of Swing Line Lender,




     (2) no amendment, modification, termination or waiver of any provision
of Section 4 shall be effective without the written concurrence of Fronting
Bank (if any) and, with respect to Letters of Credit, without the written
concurrence of each Issuing Lender that has issued an outstanding Letter of
Credit or has not been reimbursed for a payment under a Letter of Credit,




     (3) no amendment, modification, termination or waiver of any provision
of Section 11 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of Administrative
Agent or Collateral Agent shall be effective without the written concurrence
of Administrative Agent or Collateral Agent, as applicable; and




     (4) no amendment, modification, termination or waiver of Section 2.4F
affecting the rights thereunder of any Swap Lender shall be effective
without the written concurrence of such Swap Lender.



          Either Administrative Agent or Collateral Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that
Lender. If Administrative Agent or Collateral Agent expressly executes any such amendment,
modification, waiver or consent on behalf of any Lender or Lenders, Company may rely on such
execution as conclusive evidence that the written concurrence of the Lender or Lenders on whose
behalf such Agent has executed has been obtained.




          Any waiver or consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case shall entitle
Company to any other or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this subsection 12.6 shall
be binding upon each Lender at the time outstanding, each future Lender and, if signed by Company,
on Company and each Subsidiary Guarantor.




     12.7 Independence of Covenants.



(First Amended and Restated Credit Agreement)




- 137 -









 








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




     12.8 Notices; Effectiveness of Signatures.



          Unless otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally served, or sent by
telefacsimile or Canadian mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile in complete and legible
form, or three Business Days after depositing it in the Canadian mail with postage prepaid and
properly addressed, provided that notices to Administrative Agent, Collateral Agent, Swing
Line Lender and any Issuing Lender shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as set forth under such party’s name on the signature
pages hereof or (i) as to Company, Collateral Agent and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other parties hereto and
(ii) as to each other party, such other address as shall be designated by such party in a written
notice delivered to Administrative Agent, Collateral Agent and Company. Electronic mail and
Internet and intranet websites may be used to distribute routine communications, such as financial
statements and other information, provided that no signature with respect to any notice,
request, agreement, waiver, amendment or other document or any notice that is intended to have
binding effect may be sent by electronic mail.




          Loan Documents and notices under the Loan Documents may be transmitted and/or signed by
telefacsimile. The effectiveness of any such documents and signatures shall, subject to Applicable
Law, have the same force and effect as an original copy with manual signatures and shall be binding
on all Loan Parties, Agents and Lenders. Agents may also require that any such documents and
signature be confirmed by a manually-signed copy thereof, provided that the failure to
request or deliver any such manually-signed copy shall not affect the effectiveness of any
facsimile document or signature.




     12.9 Survival of Representations, Warranties and Agreements.



     A. Survive Execution. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans and the issuance
of the Letters of Credit hereunder.



     B. Survive Termination. Notwithstanding anything in this Agreement or implied by Applicable
Law to the contrary, the agreements of Company set forth in subsections 2.6, 12.2, 12.3, 12.18 and
12.19 and the agreements of Lenders set forth in subsections 11.2C, 11.4, 12.5, 12.19 and 12.20
shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and
the reimbursement of any amounts drawn thereunder, and the termination of this Agreement.



(First Amended and Restated Credit Agreement)




- 138 -









 








     12.10 Failure or Indulgence Not Waiver; Remedies Cumulative.



          No failure or delay on the part of an Agent or any Lender in the exercise of any power, right
or privilege hereunder or under any other Loan Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other power, right or privilege. All rights and remedies existing under this Agreement
and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.




     12.11 Marshalling; Payments Set Aside.



          Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor
of Company or any other party or against or in payment of any or all of the Obligations. To the
extent that Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, receiver or any similar
official in respect of a Loan Party under any Bankruptcy Law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related
thereto, shall be revived and continued in full force and effect as if such payment or payments had
not been made or such enforcement or setoff had not occurred.




     12.12 Severability.



          In case any provision in or obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.




     12.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.



          The obligations of Lenders hereunder are several and no Lender shall be responsible for the
obligations or Revolving Loan Commitments of any other Lender hereunder. Nothing contained herein
or in any other Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall be
deemed to constitute Lenders, or Lenders and Company, as a partnership, an association, a Joint
Venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.




(First Amended and Restated Credit Agreement)




- 139 -









 








          To the extent permitted by Applicable Law, Company shall not assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as
a result of this Agreement (including subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds thereof.




     12.14 Release of Subsidiary Guarantee.



          Upon the sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor to
any Person (other than to an Affiliate of Company, unless such sale or other disposition is
permitted under subclause 9.7(i)) permitted by this Agreement, or termination of the existence of a
Subsidiary Guarantor in a transaction permitted by subclause 9.7(i), or to which Requisite Lenders
have otherwise consented, for which a Loan Party desires to obtain a release of the Subsidiary
Guarantor from the Subsidiary Guarantee, such Loan Party shall deliver an Officer’s Certificate:





     (i) specifying the Capital Stock being sold or otherwise disposed of in the proposed
transaction,




     (ii) stating that the Capital Stock subject to such disposition is being sold or
otherwise disposed of in compliance with the terms hereof, and




     (iii) certifying that no Event of Default or Potential Event of Default exists;


and upon the receipt of such Officer’s Certificate, Administrative Agent shall, at such Loan
Party’s expense (so long as Administrative Agent does not have actual knowledge, without
independent inquiry, that the facts stated in such Officer’s Certificate are not true and correct)
execute and deliver a release of the Subsidiary Guarantor from the Subsidiary Guarantee, as may be
reasonably requested by such Loan Party.




     12.15 Release of Security Interest on Asset Disposition.



             Upon the sale or other disposition of any Collateral that is permitted by this Agreement or to
which Requisite Lenders have otherwise consented and for which a Loan Party desires to obtain a
security interest release, such Loan Party shall deliver an Officer’s Certificate:





     (i) specifying the Collateral being sold or otherwise disposed of in the proposed
transaction,




     (ii) stating that the Collateral subject to such disposition is being sold or otherwise
disposed of in compliance with the terms hereof,




     (iii) stating whether the sale or other disposition of such item of Collateral
constitutes an Asset Sale, and




     (iv) certifying that no Event of Default or Potential Event of Default exists.



(First Amended and Restated Credit Agreement)




- 140 -









 







Upon the receipt of such Officer’s Certificate, Collateral Agent shall, at such Loan Party’s
expense (so long as Collateral Agent does not have actual knowledge, without independent inquiry,
that the facts stated in such Officer’s Certificate are not true and correct, and if the sale or
other disposition of such item of Collateral or Capital Stock constitutes an Asset Sale, Collateral
Agent shall have received evidence satisfactory to it in its sole discretion that satisfactory
arrangements or undertakings have been made for delivery of the Net Asset Sale Proceeds if and as
required by subsection 2.4) execute and deliver such releases of the security interests created by
the Collateral Documents in the Collateral which is the subject of such sale, as may be reasonably
requested by such Loan Party.




     12.16 Applicable Law.



          This Agreement and the rights and obligations of the Parties hereunder shall be governed by,
and shall be construed and enforced in accordance with, the laws of the Province of Alberta,
without regard to conflicts of laws principles that would require application of another law.




     12.17 Construction of Agreement; Nature of Relationship.



          Each of the parties hereto acknowledges that (i) it has been represented by counsel in the
negotiation and documentation of the terms of this Agreement, (ii) it has had full and fair
opportunity to review and revise the terms of this Agreement, (iii) this Agreement has been drafted
jointly by all of the parties hereto, and (iv) neither Administrative Agent nor any Lender or other
Agent has any fiduciary relationship with or duty to Company arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between Administrative
Agent, the other Agents and Lenders, on one hand, and Company, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor. Accordingly, each of the parties
hereto acknowledges and agrees that the terms of this Agreement shall not be construed against or
in favor of another party.




     12.18 Consent to Jurisdiction and Service of Process.



          All judicial proceedings brought against Company arising out of or relating to this Agreement
or any other Loan Document, or any obligations thereunder, may be brought in any court of competent
jurisdiction in the Province of Alberta. By executing and delivering this Agreement, Company, for
itself and in connection with its properties, irrevocably





     (i) accepts generally and unconditionally the nonexclusive jurisdiction and venue of
such courts;




     (ii) waives any defense of forum non conveniens;




     (iii) agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Company at its address
provided in accordance with subsection 12.8;



(First Amended and Restated Credit Agreement)




- 141 -









 









     (iv) agrees that service as provided in clause (iii) above is sufficient to confer
personal jurisdiction over Company in any such proceeding in any such court, and otherwise
constitutes effective and binding service in every respect; and




     (v) agrees that Lenders retain the right to serve process in any other manner permitted
by Applicable Law or to bring proceedings against Company in the courts of any other
jurisdiction.



     12.19 Waiver of Jury Trial.



          Each of the Parties to this Agreement hereby agrees to waive its respective rights to a jury
trial of any claim or cause of action based upon or arising out of this agreement or any of the
other loan documents or any dealings between them relating to the subject matter of this loan
transaction or the lender/borrower relationship that is being established. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business relationship, that
each has already relied on this waiver in entering into this agreement, and that each will continue
to rely on this waiver in their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is
irrevocable, meaning that it may not be modified either orally or in writing (other than by a
mutual written waiver specifically referring to this subsection 12.19 and executed by each of the
parties hereto), and this waiver shall apply to any subsequent amendments, renewals, supplements or
modifications to this Agreement or any of the other Loan Documents or to any other documents or
agreements relating to the Loans made or Letters of Credit issued hereunder.




     12.20 Confidentiality.



          Each Agent and Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement that has been identified in writing as confidential by Company in
accordance with such Agent’s or Lender’s customary procedures for handling confidential information
of this nature, it being understood and agreed by Company that in any event a Lender may make
disclosures:





    (i) to its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such information and
instructed to keep such information confidential),




    (ii) to the extent requested by any Governmental Authority,




    (iii) in connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,



(First Amended and Restated Credit Agreement)





- 142 -










 








     (iv) to the extent required by Applicable Law or by any subpoena or similar legal
process,




     (v) to any other party to this Agreement,




     (vi) to the trustee under the Senior Second Lien Secured Note Indenture in accordance
with the terms of the Intercreditor Agreement,




     (vii) subject to an agreement containing provisions substantially the same as those of
this subsection 12.20, to any Eligible Assignee of or participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under this
Agreement,




     (viii) with the consent of Company,




     (ix) to the extent such information (i) becomes publicly available other than as a
result of a breach of this subsection 12.20 or (ii) becomes available to any Agent or any
Lender on a nonconfidential basis from a source other than Company, or




     (x) to the National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to information
about an Agent’s or a Lender’s or their Affiliates’ investment portfolio in connection with
ratings issued with respect to such Agent, Lender or Affiliates,


provided that, unless specifically prohibited by Applicable Law or court order, each Agent
or Lender, applicable, shall notify Company of any request by any Governmental Authority or
representative thereof (other than any such request in connection with any examination of the
financial condition of such Agent or Lender by such Governmental Authority) for disclosure of any
such non-public information prior to disclosure of such information; and provided,
further that in no event shall any Agent or Lender be obligated or required to return any
materials furnished by Company or any of its Subsidiaries. In addition, any Agent and any Lender
may disclose the existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service providers to Agents and
Lenders.




          Notwithstanding anything herein to the contrary, information required to be treated as
confidential by reason of the foregoing shall not include, and any Agent and each Lender may
disclose to any and all Persons, without limitation of any kind, any information with respect to
income tax treatment and income tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are provided to such Agent or
such Lender relating to such tax treatment and tax structure.




     12.21 Paramountcy; Superseding Effect.



(First Amended and Restated Credit Agreement)




 - 143 -









 





          If there is any conflict or inconsistency between any provision of this Agreement and any
provision of any other Loan Document, the provisions of this Agreement shall, to the extent
necessary to resolve such conflict, govern.




     12.22 Counterparts; Effectiveness.



          This Agreement and any amendments, waivers, consents or supplements hereto or in connection
herewith may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument; signature pages may be
detached from multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties hereto and the delivery
of a letter by the Administrative Agent to the Company stating that the conditions set forth in
Section 6.1 have been satisfied or waived.




[Remainder of page intentionally left blank]



(First Amended and Restated Credit Agreement)




 - 144 -









 





          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date first written
above.




	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	NORTH AMERICAN ENERGY PARTNERS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Vincent Gallant	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Vice President, Corporate	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Notice Address:	 	 
	 
	 	 	 	 	 	 
	 	 	North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5G7

Facsimile: (780) 960-7103

Attention: Vincent Gallant	 	 





(First Amended and Restated Credit Agreement)




 









 





	 	 	 	 	 	 	 
	 	 	BNP PARIBAS (CANADA),

as Administrative Agent, Collateral Agent and Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ James Goodall	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: James Goodall

Title:   Managing Director

            Leveraged Finance and

            Real Estate Finance	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Eric Borromeo	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Eric Borromeo

Title:   Vice President

            Leveraged
Finance	 	 
	 
	 	 	 	 	 	 
	 	 	Notice Address:	 	 
	 
	 	 	 	 	 	 
	 	 	(Funding, Conversions, Rollovers and other payment
related notices)	 	 
	 
	 	 	 	 	 	 
	 	 	Ms. Paule Fortin

BNP PARIBAS (Canada)

1981 McGill College Avenue,

Montreal, Quebec H3A 2W8 Canada

Phone: (514) 285-6127

Fax: (514) 285-2944
	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	Eric Borromeo

Vice-President

BNP PARIBAS (Canada)

77 King Street West, Suite 4100, P.O. Box 31

Royal Trust Tower, T-D Centre,

Toronto, Ontario, M5K 1N8 Canada

Phone: (416) 365-6719

Fax: (416) 947-9995	 	 
	 
	 	 	 	 	 	 
	 	 	(All other notices)

Anthony Wilson

Merchant Banking Group

BNP Paribas

One Front Street, 23rd Floor

San Francisco CA, USA 94111

Phone: (415) 772-1526

Fax: (415) 398-4240	 	 





(First Amended and Restated Credit Agreement)




 









 






	 	 	 	 	 	 	 
	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	Eric Borromeo

Vice-President

BNP PARIBAS (Canada)

77 King Street West, Suite 4100, P.O. Box 31

Royal Trust Tower, T-D Centre,

Toronto, Ontario, M5K 1N8 Canada

Phone: (416) 365-6719

Fax: (416)947-9995	 	 






(First Amended and Restated Credit Agreement)