**Exhibit10.1**

 

 

CREDITAGREEMENT

 

Dated as of July 19,2005

 

among

 

SAFETYPRODUCTS HOLDINGS, INC.,as a Guarantor,

 

SPHACQUISITION LLC(The Rights and Obligations of whichHereunder are to be Assumed byNORCROSS SAFETY PRODUCTS L.L.C.,NORTH SAFETY PRODUCTS INC.andMORNING PRIDE MANUFACTURING L.L.C.,as U.S. Borrowers),

 

NORTH SAFETYPRODUCTS LTD.,which shall become a party heretoas Canadian Borrower,

 

The SeveralLendersfrom Time to Time Parties Hereto

 

CREDIT SUISSE,as Administrative Agent,

 

BANK OFAMERICA, N.A.,as Syndication Agent,

 

GMACCOMMERCIAL FINANCE LLC

 

LASALLE BANKNATIONAL ASSOCIATION

 

and

 

US BANK NATIONALASSOCIATION,as Documentation Agents,

 

and

 

CREDIT SUISSE,TORONTO BRANCH,as Canadian Agent

 

 

 

CREDIT SUISSE,as Sole Lead Arranger and Sole Bookrunner

 

----

 

TABLE OF CONTENTS

 
| SECTION 1                  |
|---------------------------------|
|                            |
| DEFINITIONS                     |
|                            |   |   |   |
| 1.1                             |   | Defined  Terms |   |
| 1.2                             |   | Other Definitional Provisions |   |
| 1.3                             |   | Related Lender |   |
|                            |   |   |   |
| SECTION 2                  |
|                            |   |   |   |
| AMOUNT AND TERMS OF COMMITMENTS |
|                            |   |   |   |
| 2.1                             |   | Term Commitments; Procedure for Term Loan Borrowing |   |
| 2.2                             |   | Repayment of Term Loans |   |
| 2.3                             |   | Revolving Commitments |   |
| 2.4                             |   | Procedure for Revolving Loan Borrowing |   |
| 2.5                             |   | U.S. Swingline Commitment; Procedure for  U.S. Swingline Borrowing; Refunding of U.S. Swingline Loans |   |
| 2.6                             |   | Commitment Fees, etc. |   |
| 2.7                             |   | Termination or Reduction of Revolving  Commitments |   |
| 2.8                             |   | Optional Prepayments |   |
| 2.9                             |   | Mandatory Prepayments and Commitment  Reductions |   |
| 2.10                            |   | Conversion and Continuation Options |   |
| 2.11                            |   | Limitations on Eurodollar Tranches |   |
| 2.12                            |   | Interest Rates and Payment Dates |   |
| 2.13                            |   | Computation of Interest and Fees |   |
| 2.14                            |   | Inability to Determine Interest Rate |   |
| 2.15                            |   | Pro Rata Treatment and Payments |   |
| 2.16                            |   | Requirements of Law |   |
| 2.17                            |   | Taxes |   |
| 2.18                            |   | Indemnity |   |
| 2.19                            |   | Change of Lending Office |   |
| 2.20                            |   | Replacement of Lenders under Certain  Circumstances |   |
| 2.21                            |   | Bankers’ Acceptances Under the Canadian Subfacility |   |
| 2.22                            |   | Repayment, Rollover and Conversion of  Bankers’ Acceptances and C$ Prime Loans |   |
| 2.23                            |   | Power of Attorney for the Execution of  Bankers’ Acceptances |   |
| 2.24                            |   | Circumstances Making Bankers’ Acceptances  Unavailable |   |
| 2.25                            |   | Increases of the Facilities |   |
| 2.26                            |   | B/A Equivalent Loans |   |
| 2.27                            |   | Collection Allocation Mechanism |   |
| 2.28                            |   | Special Provisions Relating to Currencies  Other Than Dollars |   |
| 2.29                            |   | Dollar Equivalent Calculations |   |
| 2.30                            |   | Parent Borrower as Agent |   |

 

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| SECTION 3                 |
|--------------------------------|
|                           |   |   |   |
| LETTERS OF CREDIT              |
|                           |   |   |   |
| 3.1                            |   | U.S. L/C Commitment |   |
| 3.2                            |   | Procedure for Issuance of U.S. Letter of  Credit |   |
| 3.3                            |   | Fees and Other Charges |   |
| 3.4                            |   | U.S. L/C Participations |   |
| 3.5                            |   | Reimbursement Obligations of U.S. Borrowers |   |
| 3.6                            |   | Obligations Absolute |   |
| 3.7                            |   | U.S. Letter of Credit Payments |   |
| 3.8                            |   | Applications |   |
| 3.9                            |   | Canadian L/C Commitment |   |
|                           |   |   |   |
| SECTION 4                 |
|                           |   |   |   |
| REPRESENTATIONS AND WARRANTIES |
|                           |   |   |   |
| 4.1                            |   | Financial Condition |   |
| 4.2                            |   | No Change |   |
| 4.3                            |   | Existence; Compliance with Law |   |
| 4.4                            |   | Power; Authorization; Enforceable  Obligations |   |
| 4.5                            |   | No Legal Bar |   |
| 4.6                            |   | No Material Litigation |   |
| 4.7                            |   | No Default |   |
| 4.8                            |   | Ownership of Property; Liens |   |
| 4.9                            |   | Intellectual Property |   |
| 4.10                           |   | Taxes |   |
| 4.11                           |   | Federal Regulations |   |
| 4.12                           |   | Labor Matters |   |
| 4.13                           |   | ERISA, Canadian Pension and Benefit Plans and Foreign Plans |   |
| 4.14                           |   | Investment Company Act; Public Utility  Holding Company Act; Other Regulations |   |
| 4.15                           |   | Subsidiaries |   |
| 4.16                           |   | Use of Proceeds |   |
| 4.17                           |   | Environmental Matters |   |
| 4.18                           |   | Accuracy of Information, etc. |   |
| 4.19                           |   | Security Documents |   |
| 4.20                           |   | Solvency |   |
| 4.21                           |   | Senior Indebtedness. |   |
| 4.22                           |   | Regulation H |   |
| 4.23                           |   | Certain Documents |   |
| 4.24                           |   | Capital Structure |   |
| 4.25                           |   | Mortgaged Properties |   |
| 4.26                           |   | Acquisition Documents; Representations and  Warranties in Acquisition Agreement |   |
| 4.27                           |   | Anti-Terrorism Law |   |
| 4.28                           |   | Casualty Event |   |

 

ii

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| SECTION 5        |
|-----------------------|
|                  |   |   |   |
| CONDITIONS PRECEDENT  |
|                  |   |   |   |
| 5.1                   |   | Conditions to Initial Extension of Credit |   |
| 5.2                   |   | Conditions to Each Extension of Credit |   |
|                  |   |   |   |
| SECTION 6        |
|                  |   |   |   |
| AFFIRMATIVE COVENANTS |
|                  |   |   |   |
| 6.1                   |   | Financial Statements |   |
| 6.2                   |   | Certificates; Other Information |   |
| 6.3                   |   | Payment of Obligations |   |
| 6.4                   |   | Maintenance of Existence; Compliance |   |
| 6.5                   |   | Maintenance of Property; Insurance |   |
| 6.6                   |   | Inspection of Property; Books and Records;  Discussions |   |
| 6.7                   |   | Notices |   |
| 6.8                   |   | Environmental Laws |   |
| 6.9                   |   | Additional Collateral, etc. |   |
| 6.10                  |   | Real Estate Documentation |   |
| 6.11                  |   | Maintenance of Ratings |   |
| 6.12                  |   | Post-Closing Collateral Matters |   |
|                  |   |   |   |
| SECTION 7        |
|                  |   |   |   |
| NEGATIVE COVENANTS    |
|                  |   |   |   |
| 7.1                   |   | Financial Condition Covenants |   |
| 7.2                   |   | Indebtedness |   |
| 7.3                   |   | Liens |   |
| 7.4                   |   | Fundamental Changes |   |
| 7.5                   |   | Disposition of Property |   |
| 7.6                   |   | Restricted Payments |   |
| 7.7                   |   | Capital Expenditures |   |
| 7.8                   |   | Investments |   |
| 7.9                   |   | Optional Payments and Modifications of  Certain Debt Instruments |   |
| 7.10                  |   | Transactions with Affiliates |   |
| 7.11                  |   | Sales and Leasebacks |   |
| 7.12                  |   | Changes in Fiscal Periods |   |
| 7.13                  |   | Negative Pledge Clauses |   |
| 7.14                  |   | Clauses Restricting Subsidiary Distributions |   |
| 7.15                  |   | Lines of Business |   |
| 7.16                  |   | Limitation on Lease Expense |   |
| 7.17                  |   | Change of Name |   |
| 7.18                  |   | Anti-Terrorism Law; Anti-Money Laundering |   |
| 7.19                  |   | Embargoed Person |   |
| 7.20                  |   | Limitation on Capital and Holdco Capital |   |
| 7.21                  |   | Limitation on Holdco |   |

 

iii

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| SECTION 8    |
|-------------------|
|              |   |   |   |
| EVENTS OF DEFAULT |
|              |   |   |   |
| 8.1               |   | Events of Default |   |
|              |   |   |   |
| SECTION 9    |
|              |   |   |   |
| THE AGENTS        |
|              |   |   |   |
| 9.1               |   | Appointment |   |
| 9.2               |   | Delegation of Duties |   |
| 9.3               |   | Exculpatory Provisions |   |
| 9.4               |   | Reliance by Administrative Agent and the  Canadian Agent |   |
| 9.5               |   | Notice of Default |   |
| 9.6               |   | Non-Reliance on Agents and Other U.S.  Lenders |   |
| 9.7               |   | Indemnification |   |
| 9.8               |   | Agent in Its Individual Capacity |   |
| 9.9               |   | Successor Administrative Agent |   |
| 9.10              |   | Authorization to Release Guarantees and  Liens |   |
| 9.11              |   | Documentation Agents |   |
|              |   |   |   |
| SECTION 10   |
|              |   |   |   |
| MISCELLANEOUS     |
|              |   |   |   |
| 10.1              |   | Amendments and Waivers |   |
| 10.2              |   | Notices |   |
| 10.3              |   | No Waiver; Cumulative Remedies |   |
| 10.4              |   | Survival of Representations and Warranties |   |
| 10.5              |   | Payment of Expenses and Taxes |   |
| 10.6              |   | Successors and Assigns; Participations and  Assignments |   |
| 10.7              |   | Adjustments; Set-off |   |
| 10.8              |   | Counterparts |   |
| 10.9              |   | Severability |   |
| 10.10             |   | Integration |   |
| 10.11             |   | GOVERNING LAW |   |
| 10.12             |   | Submission to Jurisdiction; Waivers |   |
| 10.13             |   | Acknowledgements |   |
| 10.14             |   | Confidentiality |   |
| 10.15             |   | Joint and Several Obligations |   |
| 10.16             |   | WAIVERS OF JURY TRIAL |   |
| 10.17             |   | Canadian Amendments and Waivers |   |
| 10.18             |   | Judgment Currency |   |
| 10.19             |   | USA PATRIOT Act Notice |   |

 

iv

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| ANNEX:  A    | Pricing  Grid                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------|
|         |                                                                                                           |
| SCHEDULES:   |                                                                                                           |
|         |                                                                                                           |
| 1.1(A)       | Commitments                                                                                                    |
| 1.1(B)       | Mortgaged  Property                                                                                            |
| 1.1(C)       | Individual  Investors                                                                                          |
| 1.1(D)       | Refinancings                                                                                                   |
| 1.1(E)       | Existing  Letters of Credit                                                                                    |
| 1.1(F)       | Excluded  Foreign Subsidiaries                                                                                 |
| 4.4          | Consents,  Authorizations, Filings and Notices                                                                 |
| 4.6          | Material  Litigation                                                                                           |
| 4.8          | Real  Property                                                                                                 |
| 4.13         | ERISA  Matters                                                                                                 |
| 4.15         | Subsidiaries                                                                                                   |
| 4.19(a)      | UCC Filing  Jurisdictions                                                                                      |
| 4.19(b)      | Mortgage  Filing Jurisdictions                                                                                 |
| 4.19(c)      | Canadian  Filing Jurisdictions                                                                                 |
| 4.24(b)      | Capital  Structure                                                                                             |
| 4.26         | Acquisition  Documents                                                                                         |
| 5.1(e)       | Local  Counsel                                                                                                 |
| 5.1(h)       | Fair Market  Value                                                                                             |
| 5.1(h)(viii) | U.S.  Mortgaged Property                                                                                       |
| 6.12(a)      | Leasehold  Properties                                                                                          |
| 6.12(b)      | Owned  Properties                                                                                              |
| 7.2(e)       | Existing  Indebtedness                                                                                         |
| 7.3(f)       | Existing  Liens                                                                                                |
| 7.8(o)       | Permitted  Investments                                                                                         |
|         |                                                                                                           |
| EXHIBITS:    |                                                                                                           |
|         |                                                                                                           |
| A            | Form of  Guarantee and Collateral Agreement                                                               |
| B            | Form of  Compliance Certificate                                                                           |
| C            | Form of  Closing Certificate                                                                              |
| D-1          | Form of  Fee Mortgage                                                                                     |
| D-2          | Form of  Leasehold Mortgage                                                                               |
| E            | Form of  Assignment and Acceptance                                                                        |
| F-1          | Form of  Legal Opinion of Dechert LLP                                                                     |
| F-2          | Form of  Legal Opinion of Sternthal Katznelson Montigny, L.L.P.                                           |
| F-3          | Form of  Legal Opinion of Local Counsel                                                                   |
| G            | Form of  Prepayment Option Notice                                                                         |
| H            | Form of  Exemption Certificate                                                                            |
| I            | Form of  Notice of Canadian Loan Utilization by way of Bankers’ Acceptances or B/A Equivalent  Loans |
| J-1          | Form of  Quebec Security Documents                                                                        |
| J-2          | Form of  Ontario Leasehold Mortgage                                                                       |
| J-3          | Form of  General Security Agreement                                                                       |
| K            | Form of  Canadian L/C Agreement                                                                           |
| L            | Form of  Assumption Agreement                                                                             |
| M            | Form of  Joinder Agreement                                                                                |

 

v

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| N | Form of  Borrowing Request                    |
|---|----------------------------------------------------|
| O | Form of  Notice of Conversion or Continuation |

 

vi

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CREDITAGREEMENT, dated as of July 19, 2005, among SAFETY PRODUCTS HOLDINGS,INC., a Delaware corporation (“Holdco”), as a Guarantor, SPH ACQUISITIONLLC, a Delaware limited liability company (the “Acquisition Corp.” and,together with any successor by merger to Acquisition Corp.’s rights andobligations hereunder as provided herein, the “Parent Borrower”), the U.S.Subsidiary Borrowers (as hereinafter defined) (the U.S. Subsidiary Borrowerstogether with the Parent Borrower being collectively referred to as the “U.S.Borrowers”), the Canadian Borrower (as hereinafter defined) (the CanadianBorrower, together with the U.S. Borrowers, being collectively referred to as the“Borrowers”), the several banks and other financial institutions orentities from time to time parties to this Agreement which extend a Commitmentto the U.S. Borrowers (the “U.S. Lenders”), the several banks and otherfinancial institutions or entities from time to time parties to this Agreementwhich extend a Commitment to the Canadian Borrower (the “Canadian Lenders”and, together with the U.S. Lenders, the “Lenders”), GMAC COMMERCIALFINANCE LLC, LASALLE BANK NATIONAL ASSOCIATION and US BANK NATIONAL ASSOCIATION,as documentation agents (in such capacity, the “Documentation Agents”), BANKOF AMERICA, N.A., as syndication agent (in such capacity, the “SyndicationAgent”), CREDIT SUISSE, as administrative agent (in such capacity, the “AdministrativeAgent”) and CREDIT SUISSE, TORONTO BRANCH, as Canadian agent (in suchcapacity, the “Canadian Agent”).

 

WITNESSETH:

 

WHEREAS, Holdcoand Acquisition Corp., Holdco’s direct U.S. Wholly Owned Subsidiary, are eachnewly formed companies organized by Odyssey Investment Partners, LLC and certainother investors;

 

WHEREAS, Holdcohas entered into a purchase and sale agreement, dated as of May 20, 2005(as amended, supplemented or otherwise modified from time to time in accordancewith the provisions hereof and thereof, the “Acquisition Agreement”),with NSP Holdings L.L.C. (“Seller”), a Delaware limited liabilitycompany, and Norcross Safety Products L.L.C. (“NSP”), a Delaware limitedliability company, pursuant to which Holdco will acquire (the “Acquisition”)certain equity interests and stock of NSP and NSP Holdings Capital Corp., aDelaware corporation (“Holdco Capital”).

 

WHEREAS, simultaneouslywith the Acquisition, Acquisition Corp. will be merged with and into NSP (the “Merger”),with NSP surviving the merger.

 

WHEREAS,following the Acquisition, Holdings Capital will be merged with and into Holdco(the “Holdco Merger”), with Holdco surviving the merger.

 

WHEREAS, theEquity Financing (as defined below) shall be consummated simultaneouslyherewith.

 

WHEREAS,immediately upon consummation of the Acquisition and Merger described above,and on the Closing Date, Acquisition Corp. will assign to NSP, North SafetyProducts Inc., a Delaware corporation (“North Safety”) and Morning PrideManufacturing L.L.C., a Delaware limited liability company (“Morning Pride,”and, together with North Safety, the “U.S. Subsidiary Borrowers”) andNSP and the U.S. Subsidiary Borrowers will assume from Acquisition Corp. (the “Assumption”)all of the rights and obligations of Acquisition Corp. in respect of the U.S.Loans and the U.S. Commitments (as defined below), as successor in interest toAcquisition Corp.  under this Agreementand other Loan Documents, pursuant to the Assumption Agreement (as definedbelow), NSP shall assume the obligations of Acquisition Corp. by operation oflaw upon consummation of the Merger, whereupon NSP shall be the Parent Borrowerhereunder for all purposes hereof, and North Safety Products Ltd., a companyorganized

 

----

 

and existing under the laws of Canada (the “CanadianBorrower”) shall, pursuant to the Joinder Agreement (as defined below), becomea party to this agreement.

 

WHEREAS,immediately upon consummation of the Acquisition described above, and on theClosing Date, Seller shall assign to Holdco, and Holdco shall assume fromSeller, all of the rights and obligations of Seller in respect of Seller’sexisting 11.75% Senior Pay-in-Kind Notes due 2012 (the “Initial Holdco Notes”)and Holdco shall issue up to $25.0 million aggregate principal amount (prior toany applicable original issue discount) of additional Senior Pay-in-Kind Noteson substantially the same terms as the Initial Holdco Notes (the “AdditionalHoldco Notes” and, together with the Initial Holdco Notes and additionalSenior Pay-in-Kind Notes on the same terms as the Initial Holdco Notes and theAdditional Holdco Notes issued as interest on the Initial Holdco Notes and theAdditional Holdco Notes, the “Holdco Notes”).

 

WHEREAS, inorder to (i) finance a portion of the purchase price of the Acquisition, (ii) refinancecertain outstanding indebtedness of the Borrowers, (iii) pay certain feesand expenses related to the Transactions (as defined below) and (iv) financethe working capital and other business requirements of the Parent Borrower andits Subsidiaries following the consummation of the Acquisition and the relatedtransactions, Acquisition Corp. has requested that the Lenders make the Loansand issue and participate in the Letters of Credit provided for herein.

 

NOW,THEREFORE, in consideration of the premises and the mutual agreements containedherein, the parties hereto agree as follows:

 

# SECTION 1

#  

# DEFINITIONS

#  

## 1.1           DefinedTerms.  As used in this Agreement,the terms listed in this Section 1.1 shall have the respective meaningsset forth in this Section 1.1.

 

“ABR”:  for any day, a rate per annum (roundedupwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) thePrime Rate in effect on such day and (b) the Federal Funds Effective Ratein effect on such day plus 1⁄2 of 1%. For purposes hereof:  PrimeRate shall mean the rate of interest per annum announced from time to timeby the Administrative Agent as its prime rate in effect at its principal officein New York City (the Prime Rate not being intended to be the lowest rate ofinterest charged by the Administrative Agent in connection with extensions ofcredit to debtors); the effective date of any change in the Prime Rate shall bethe date of announcement of such change. Any change in the ABR due to a change in the Prime Rate or the FederalFunds Effective Rate shall be effective as of the opening of business on theeffective day of such change in the Prime Rate or the Federal Funds EffectiveRate, respectively.

 

“ABR Loans”:  U.S. Loans the rate of interest applicable towhich is based upon the ABR.

 

“AcceptanceFee”:  the fee payable in C$ to theCanadian Lenders in respect of Bankers’ Acceptances computed in accordance withSection 2.21.

 

“Acquisition”:  as defined in the preamble hereto.

 

2

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“AcquisitionAgreement”:  as defined in thepreamble hereto.

 

“AcquisitionCorp.”:  as defined in the preamblehereto.

 

“AcquisitionDocuments”:  the collective referenceto the Acquisition Agreement and the other documents listed on Schedule 4.26.

 

“AdditionalHoldco Notes”:  as defined in thepreamble hereto.

 

“AdjustmentDate”:  as defined in the PricingGrid.

 

“AdministrativeAgent”:  as defined in the preamblehereto.

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Administrative Agent or the Canadian Agent, as appropriate.

 

“Affiliate”:  as to any Person, any other Person that,directly or indirectly, is in control of, is controlled by, or is under commoncontrol with, such Person.  For purposesof this definition, control of a Person means the power, directly orindirectly, to direct or cause the direction of the management and policies ofsuch Person, whether by contract or otherwise.

 

“Agents”:  the collective reference to the SyndicationAgent, the Documentation Agent, the Canadian Agent and the AdministrativeAgent.

 

“AggregateExposure”:  with respect to any U.S.Lender at any time, an amount equal to the sum of (i) the aggregate thenunpaid principal amount of such Lender’s Term Loans and (ii) the amount ofsuch Lender’s U.S. Revolving Commitment then in effect or, if the U.S.Revolving Commitments have been terminated, the amount of such Lender’s U.S.Revolving Extensions of Credit then outstanding.

 

“AggregateExposure Percentage”:  with respectto any U.S. Lender at any time, the ratio (expressed as a percentage) of suchLender’s Aggregate Exposure at such time to the Aggregate Exposure of all U.S.Lenders at such time.

 

“Agreement”:  this Credit Agreement, as amended,supplemented or otherwise modified from time to time.

 

“AlternateCurrency”:  Euros.

 

“AlternateCurrency Equivalent”:  as to anyamount denominated in Dollars as of any date of determination, the amount ofAlternate Currency that could be purchased with such amount of Dollars basedupon the Spot Selling Rate.

 

“AlternateCurrency Letter of Credit”:  anyLetter of Credit to the extent denominated in an Alternate Currency.

 

“AlternateCurrency Revolving Loan”:  eachRevolving Loan denominated in an Alternate Currency.

 

“AmendedHypothec”: as defined in Section 6.12(c)

 

“Anti-TerrorismLaws”:  as defined in Section 4.27.

 

3

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“ApplicableMargin”:  for each Type of Loan, therate per annum set forth under the relevant column heading below:

 

| ** **                              | ** ** | **ABR Loans and  C$Prime Loans** | ** ** | **Eurodollar Loans  and Bankers’  Acceptances** | ** ** |
|-----------------------------------------|------------|----------------------------------|------------|------------------------------------------------------|------------|
| U.S. Revolving Loans and Canadian Loans |       | 1.25                             | %          | 2.25                                                 | %          |
|                                    |       |                             |       |                                                 |       |
| Term Loans                              |       | 1.00                             | %          | 2.00                                                 | %          |

 

providedthat on and after each Adjustment Date to occur after the completion of onefull fiscal quarter of the Parent Borrower following the Closing Date, theApplicable Margin with respect to U.S. Revolving Loans, U.S. Swingline Loansand Canadian Loans will be determined pursuant to the Pricing Grid.

 

“Application”:  an application, in such form as the U.S.Issuing Lender may specify from time to time, requesting the U.S. IssuingLender to open a U.S. Letter of Credit.

 

“ApprovedCurrency”:  each of Dollars andAlternate Currency.

 

“ApprovedFund”:  any Person (other than anatural person) that is engaged in making, purchasing, holding or investing inbank loans and similar extensions of credit in the ordinary course of itsbusiness and that is administered or managed by (a) a Lender, (b) anAffiliate of a Lender or (c) an entity or an Affiliate of an entity thatadministers or manages a Lender.

 

“Asset Sale”:  any Disposition of property or series ofrelated Dispositions of property (excluding any such Disposition permitted byclauses (a) through (g) of Section 7.5) that yields grossproceeds to the Parent Borrower or any of its Subsidiaries (valued at theinitial principal amount thereof in the case of non-cash proceeds consisting ofnotes or other debt securities and valued at fair market value in the case ofother non-cash proceeds) in excess of $1,000,000.

 

“Assignee”:  as defined in Section 10.6(c).

 

“Assignmentand Acceptance”:  an Assignment andAcceptance, substantially in the form of Exhibit E.

 

“Assignor”:  as defined in Section 10.6(c).

 

“Assumption”:  as defined in the preamble hereto.

 

“AssumptionAgreement”: the Assignment and Assumption Agreement among Acquisition Corp.and the Lenders in substantially the form attached hereto as Exhibit L, asamended, supplemented or otherwise modified from time to time.

 

“AvailableCanadian Commitment”: as to any Canadian Lender at any time, an amountequal to the excess, if any, of (a) such Lender’s Canadian Commitment thenin effect minus (b) such Lender’s Canadian Extensions of Creditthen outstanding.

 

“AvailableU.S. Revolving Commitment”:  as toany U.S. Revolving Lender at any time, an amount equal to the excess, if any,of (a) such Lender’s U.S. Revolving Commitment then in effect minus(b) such Lender’s U.S. Revolving Extensions of Credit then outstanding; providedthat, in calculating

 

4

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any Lender’s U.S. Revolving Extensions ofCredit for the purpose of determining such Lender’s Available U.S. Revolving Commitmentpursuant to the definition of “Commitment Fee Rate” and Section 2.6(a),the aggregate principal amount of U.S. Swingline Loans then outstanding shallbe deemed to be zero.

 

“Bankers’Acceptance”:  a Draft denominated inC$ drawn by the Canadian Borrower and accepted by a Canadian Lender inaccordance with the provisions of Section 2.21 hereof.

 

“B/AEquivalent Loan”:  as defined in Section 2.26.

 

“BenefitedLender”:  as defined in Section 10.7(a).

 

“Board”:  the Board of Governors of the Federal ReserveSystem of the United States (or any successor).

 

“Borrowers”:  as defined in the preamble hereto.

 

“BorrowingDate”:  with respect to the U.S.Loans, any Business Day specified by the Parent Borrower as a date on which theParent Borrower requests the relevant Lenders to make Loans hereunder and withrespect to the Canadian Loans, any day on which the Canadian Borrower requeststhe relevant Canadian Lenders to make C$ Loans hereunder.

 

“Business”:  as defined in Section 4.17(b).

 

“BusinessDay”:  a day other than a Saturday,Sunday or other day on which commercial banks in New York City are authorizedor required by law to close, provided that with respect to notices anddeterminations in connection with, and payments of principal and interest on, (a) EurodollarLoans, such day is also a day for trading by and between banks in Dollardeposits in the London interbank eurodollar market, and (b) an AlternateCurrency Revolving Loan denominated in Euros, the term “Business Day” shallalso exclude any day on which the Trans-European Real-time Gross SettlementOperating System (or any successor operating system) is not operating (asdetermined in good faith by the Administrative Agent), and provided, further,that with respect to notices and determinations in connection with, andpayments of principal and interest on, a Canadian Loan, a day on which Canadianchartered banks are open for business in Toronto, Canada, but excludingSaturday, Sunday and any other day on which Canadian chartered banks are authorizedor required by law to close in Toronto, Canada.

 

“CDOR Rate”:  the per annum rate of interest which is therate based on the rate applicable to bankers’ acceptances for a term of 30 days(in the case of the definition of C$ Prime Rate) or for a term equivalent tothe term of, and for amounts comparable to the amount of, the relevant Bankers’Acceptances (in the case of the definition of Discount Rate appearing on theReuters Screen CDOR Page (as defined in the International Swap DealerAssociation, Inc. definitions, as modified and amended from time to time)for acceptances of Schedule I banks under the Bank Act (Canada) as of10:00 A.M., Toronto time, on such date, or if such date is not a BusinessDay, then on the immediately preceding Business Day; provided, however,that if no such rate appears on the Reuters Screen CDOR Page as contemplated,then the CDOR Rate on any date shall be calculated as the arithmetic mean ofthe rates for the term and amount referred to above applicable to  bankers’ acceptances quoted by the Canadian Agentas of 10:00 A.M., Toronto time, on such date or, if such date is not aBusiness Day, then on the immediately preceding Business Day.

 

“CAM”:the mechanism for the allocation and exchange of interests in the Loans, participationsin Letters of Credit and collections thereunder established pursuant to Section 2.27.

 

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“CAMExchange”: the exchange of the Lenders’ interests provided for in Section 2.27.

 

“CAM ExchangeDate”: the first date after the Closing Date on whichthere shall occur (a) any Event of Default under clause (e) or (f) ofSection 8.1 with respect to Holdco or a Borrower or (b) an accelerationof Loans pursuant to Section 8.1.

 

“CAMPercentage”: as to each Lender, a fraction, expressed as a decimal, ofwhich (a) the numerator shall be the sum, without duplication, of (i) theaggregate outstanding principal amounts of Term Loans, if any, owed to suchLender, (ii) the Canadian Revolving Credit Exposure, if any, of such Lender,(iii) the Aggregate Exposure, if any, of such Lender and (iv) theaggregate amount of any other Obligations otherwise owed to such Lenderpursuant to the Loan Documents, in each case immediately prior to the CAMExchange Date, and (b) the denominator shall be the sum of (i) theaggregate outstanding principal amounts of Term Loans owed to all the Lenders, (ii) theAggregate Exposure of all the Lenders, (iii) the aggregate CanadianRevolving Credit Exposure of all Lenders and (iv) the aggregate amount ofany other Obligations otherwise owed to any of the Lenders pursuant to the LoanDocuments, in each case immediately prior to the CAM Exchange Date.

 

“CanadianAgent”:  as defined in the preamblehereto.

 

“CanadianBorrower”:  as defined in the preamblehereto.

 

“CanadianCommitment”: as to any Canadian Lender, the obligation of such Lender, ifany, to make extensions of credit to the Canadian Borrower pursuant to Sections2.3(c) and 3.9 hereof and the Canadian Loan Documents in an aggregateprincipal and/or face amount not to exceed the amount set forth under theheading “Canadian Commitment” opposite such Lender’s name on Schedule 1.1Aor in the Assignment and Acceptance pursuant to which such Lender became aparty hereto, as the same may be changed from time to time pursuant to theterms hereof.  The amount of the TotalCanadian Commitments is an amount denominated in C$ having a Dollar Equivalentof $25,000,000, or such lesser amount at any time equal to an amountdenominated in C$ having a Dollar Equivalent of $25,000,000 minus theamount at such time outstanding under the U.S. Revolving Extensions of Creditin excess of $25,000,000.  Upon suchadjustment of the Total Canadian Commitments, the Canadian Commitment as to anyCanadian Lender shall be adjusted pro rata in accordance with such Lender’sCanadian Revolving Percentage.

 

“CanadianCommitment Period”:  the period from butexcluding the Closing Date to the Revolving Termination Date.

 

“CanadianDollars” and “C$”:  dollars inlawful currency of Canada.

 

“C$ PrimeLoans”:  Canadian Loans at such timeas they bear interest at a rate based upon the C$ Prime Rate.

 

“C$ PrimeRate”:  the greater of (a) theannual rate of interest announced from time to time by the Canadian Agent asits reference rate then in effect for determining interest rates on C$ denominatedcommercial loans in Canada and (b) the annual rate of interest equal tothe sum of (i) the CDOR Rate and (ii) 0.50% per annum.

 

“CanadianExposure”: with respect to any Canadian Lender at any time, the outstandingamount of Canadian Loans of such Lender plus such Lender’s pro rata share ofthe outstanding amount of Canadian L/C Obligations with respect to CanadianLetters of Credit.

 

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“CanadianExtensions of Credit”:  as to anyCanadian Lender at any time, an amount equal to the sum of (a) theaggregate principal amount of all Canadian Loans held by such Lender outstandingand (b) such Lender’s Canadian Revolving Percentage of the Canadian L/CObligations then outstanding.

 

“CanadianIssuing Lender”:  any Canadian Lenderdesignated as the Canadian Issuing Lender in a written notice from the CanadianAgent and the Canadian Borrower to the Canadian Lenders.

 

“CanadianL/C Agreements”:  the various agreementsregarding applications for letters of credit and indemnification agreements tobe entered into among the Canadian Issuing Lender and the Canadian Borrower insubstantially the forms attached hereto as Exhibit K, which formsare generally used by the Canadian Issuing Lender in connection with the issueby it of letters of credit or guarantees on behalf of its customers, as suchagreements are amended, supplemented or otherwise modified from time to time.

 

“CanadianL/C Commitment”:  an amount denominatedin C$ having a Dollar Equivalent of $1,000,000.

 

“CanadianL/C Obligations”:  at any time, anamount equal to the sum of (a) the aggregate then undrawn and unexpiredamount of the then outstanding Canadian Letters of Credit and (b) theaggregate amount of drawings under Canadian Letters of Credit that have notthen been reimbursed pursuant to the Canadian L/C Agreements.

 

“CanadianLenders”:  as defined in the preamblehereto.

 

“CanadianLending Office”:  as to any CanadianLender, the applicable branch or office of such Canadian Lender designated bysuch Canadian Lender to make Loans to the Canadian Borrower and to accept andpurchase or arrange for the purchase of Bankers’ Acceptances and B/A EquivalentLoans of the Canadian Borrower; provided that any such branch or officeshall be (a) of a Schedule I Lender or Schedule II Lender or (b) abranch or office either (i) of a financial institution or other entitythat is a resident in Canada for the purposes of the Income Tax Act (Canada) or(ii) of a financial institution that is an “authorized foreign bank” asdefined in section 2 of the Bank Act (Canada) and in section 248(1) ofthe Income Tax Act (Canada), and which holds the Loan as part of its “Canadianbanking business” as defined in section 248(1) of the Income Tax Act(Canada).

 

“CanadianLetters of Credit”:  letters ofcredit issued by the Canadian Issuing Lender at the request of the CanadianBorrower or any of them pursuant to the provisions hereof.

 

“CanadianLoan Documents”:  the Canadian L/C Agreements,the Canadian Security Documents and any and all other agreements or instrumentsexecuted after the Closing Date from time to time by the Canadian Borrower withor in favor of the Canadian Lenders in connection with this Agreement.

 

“CanadianLoans”:  as defined in Section 2.3(c).

 

“CanadianReimbursement Obligation”:  theobligation of the Canadian Borrower to reimburse the Canadian Issuing Lenderpursuant to the Canadian L/C Agreements for amounts drawn under CanadianLetters of Credit.

 

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“CanadianRequired Lenders”: at any time, the holders of more than 50% of the TotalCanadian Commitments then in effect or, if the Canadian Commitments have beenterminated, the Total Canadian Extensions of Credit then outstanding.

 

“CanadianRequired Prepayment Lenders”:  theRequisite Lenders in respect of the Canadian Subfacility.

 

“CanadianRevolving Credit Exposure”: with respect to any Canadian Lender at anytime, the outstanding amount of such Lender’s Canadian Loans plus such Lender’spro rata share of the outstanding amount of L/C Obligations with respect toCanadian Letters of Credit plus such Lender’s pro rata share of the outstandingamount of Bankers’ Acceptances and B/A Equivalent Loans.

 

“CanadianRevolving Percentage”: as to any Canadian Lender at any time, thepercentage which such Lender’s Canadian Commitment then constitutes of theTotal Canadian Commitments (or, at any time after the Canadian Commitmentsshall have expired or terminated, the percentage which the aggregate principalamount of such Lender’s Canadian Loans then outstanding constitutes theaggregate principal amount of the Canadian Loans then outstanding).

 

“CanadianSecured Parties”: the Canadian Agent and the Canadian Lenders.

 

“CanadianSecurity Documents”:  the QuebecSecurity Documents, the Ontario Leasehold Mortgage and the General SecurityAgreement to be granted by the Canadian Borrower in favor of the Canadian Agentfor the benefit of the Canadian Lenders in substantially the forms attachedhereto as Exhibits J-1, J-2, and J-3 respectively, as amended, supplemented orotherwise modified from time to time, and the Mortgages and all other securitydocuments heretofore and hereafter delivered to the Canadian Agent granting aLien on any property of the Canadian Borrower or any Subsidiary thereof tosecure the obligations and liabilities of the Canadian Borrower or anySubsidiary thereof to the Canadian Agent and the Canadian Lenders.

 

“CanadianSubfacility”:  as defined in the definitionof “Facility”.

 

“CanadianSubsidiary”:  each Subsidiary of theCanadian Borrower that is organized under the laws of Canada or any province orterritory thereof.

 

“CanadianSubsidiary Guarantor”:  each CanadianSubsidiary.

 

“CanadianWholly Owned Subsidiary”:  as to anyPerson, any Canadian Subsidiary all of the Capital Stock of which (other thandirectors’ qualifying shares required by law) is owned by such Person directlyand/or through other Canadian Wholly Owned Subsidiaries.

 

“CanadianWholly Owned Subsidiary Guarantor”: any Canadian Subsidiary Guarantor that is a Wholly Owned Subsidiary ofthe Canadian Borrower.

 

“Capital”  Norcross Capital Corp., a Delawarecorporation.

 

“CapitalExpenditures”:  for any period, withrespect to any Person, the aggregate, without duplication, of all expendituresby such Person and its Subsidiaries for the acquisition or leasing (pursuant toa capital lease) of fixed or capital assets or additions to equipment(including replacements, capitalized repairs and improvements during suchperiod) that should be capitalized under GAAP on a consolidated balance sheetof such Person and its Subsidiaries (excluding (i) any such asset acquiredin connection with normal replacement and maintenance programs properly chargedto current operations, (ii)

 

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expenditures made with the proceeds ofinsurance and awards of condemnation and (iii) Permitted Acquisitions).

 

“CapitalLease Obligations”:  as to anyPerson, the obligations of such Person to pay rent or other amounts under anylease of (or other arrangement conveying the right to use) real or personalproperty, or a combination thereof, which obligations are required to be classifiedand accounted for as capital leases on a balance sheet of such Person underGAAP and, for the purposes of this Agreement, the amount of such obligations atany time shall be the capitalized amount thereof at such time determined inaccordance with GAAP.

 

“CapitalStock”:  any and all shares, interests,participations or other equivalents (however designated) of capital stock of acorporation, any and all equivalent ownership interests in a Person (other thana corporation) and any and all warrants, rights or options to purchase any ofthe foregoing.

 

“CashEquivalents”:  (a) marketabledirect obligations issued by, or unconditionally guaranteed by, the UnitedStates Government (or in the case of any Foreign Subsidiary, the government ofthe country where such Foreign Subsidiary is organized) or issued by any agencythereof and backed by the full faith and credit of the United States (or in thecase of any Foreign Subsidiary, the country where such Foreign Subsidiary isorganized), in each case maturing within one year from the date of acquisition;(b) certificates of deposit, time deposits, eurodollar time deposits orovernight bank deposits having maturities of six months or less from the dateof acquisition issued by any Lender or by any commercial bank organized underthe laws of (i) the United States or any state thereof or (ii) in thecase of any Foreign Subsidiary, the country where such Foreign Subsidiary isorganized, having combined capital and surplus of not less than $500,000,000,or, in the case of a Foreign Subsidiary, the equivalent thereof; (c) commercialpaper of an issuer rated at least A-1 by Standard & Poor’s RatingsServices (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”),or carrying an equivalent rating by a nationally recognized rating agency, ifboth of the two named rating agencies cease publishing ratings of commercialpaper issuers generally, and maturing within six months from the date ofacquisition; (d) repurchase obligations of any Lender or of any commercialbank satisfying the requirements of clause (b) of this definition, havinga term of not more than 90 days, with respect to securities issued or fullyguaranteed or insured by the United States government; (e) securities withmaturities of one year or less from the date of acquisition issued or fullyguaranteed by any state, commonwealth or territory of the United States, by anypolitical subdivision or taxing authority of any such state, commonwealth orterritory or by any foreign government, the securities of which state,commonwealth, territory, political subdivision, taxing authority or foreigngovernment (as the case may be) are rated at least A by S&P or A by Moody’s;(f) securities with maturities of six months or less from the date ofacquisition backed by standby letters of credit issued by any Lender or anycommercial bank satisfying the requirements of clause (b) of thisdefinition; or (g) shares of money market mutual or similar funds whichinvest exclusively in assets satisfying the requirements of clauses (a) through(f) of this definition.

 

“CasualtyEvent”: any loss of title or any loss of or damage to or destruction of, orany condemnation or other taking (including by any Governmental Authority) of,any property of the Parent Borrower or any of its Subsidiaries.  “Casualty Event” shall include but not belimited to any taking of all or any part of any Real Property of any person orany part thereof, in or by condemnation or other eminent domain orexpropriation proceedings pursuant to any law, or by reason of the temporaryrequisition of the use or occupancy of all or any part of any Real Property ofany person or any part thereof by any Governmental Authority, civil ormilitary.

 

“ClosingDate”:  the date on which theconditions precedent set forth in Section 5.1 shall have been satisfied.

 

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“Code”:  the Internal Revenue Code of 1986, as amendedfrom time to time.

 

“Collateral”:  all property of the Loan Parties, now ownedor hereafter acquired, upon which a Lien is purported to be created by any SecurityDocument.

 

“CollateralMortgage Bond”:  the Bond issued orto be issued by the Canadian Borrower in favor of the Canadian Agent.

 

“CominarHypothec”: as defined in Section 6.12(c)

 

“CominarPriority Agreement”: as defined in Section 6.12(c).

 

“CommitmentFee Rate”:  0.50%; providedthat on and after each Adjustment Date to occur after the completion of onefull fiscal quarter of the Parent Borrower following the Closing Date, theCommitment Fee Rate will be determined pursuant to the Pricing Grid.

 

“Commitments”:  the collective reference to the U.S.Commitments and the Canadian Commitments.

 

“CommonlyControlled Entity”:  an entity,whether or not incorporated, that is under common control with the Parent Borrowerwithin the meaning of Section 4001 of ERISA or is part of a group thatincludes the Parent Borrower and that is treated as a single employer under Section 414of the Code.

 

“ComplianceCertificate”:  a certificate dulyexecuted by a Responsible Officer substantially in the form of Exhibit B.

 

“ConsolidatedCurrent Assets”:  at any date, allamounts (other than cash and Cash Equivalents) that would, in conformity withGAAP, be set forth opposite the caption “total current assets” (or any likecaption) on a consolidated balance sheet of Parent Borrower and itsSubsidiaries at such date.

 

“ConsolidatedCurrent Liabilities”:  at any date, all amounts that would, inconformity with GAAP, be set forth opposite the caption “total currentliabilities” (or any like caption) on a consolidated balance sheet of ParentBorrower and its Subsidiaries at such date, but excluding (a) the currentportion of any Funded Debt of Parent Borrower and its Subsidiaries, (b) withoutduplication of clause (a) above, all Indebtedness consisting of U.S.Revolving Loans, U.S. Swingline Loans or Canadian Loans to the extent otherwiseincluded therein and (c) tax reserves.

 

“ConsolidatedEBITDA”:  for any period,Consolidated Net Income for such period plus, without duplication and tothe extent reflected as a charge in the statement of such Consolidated NetIncome for such period, the sum of (a) provision for income tax expense(including any franchise taxes imposed in lieu of income taxes and any incometaxes that would be payable if the entity were to become a taxable entity forpurposes of Federal, state or local income taxes), (b) interest expense,amortization or writeoff of debt discount and debt issuance costs andcommissions, discounts and other fees and charges associated with Indebtedness(including the Loans and Letters of Credit) and Hedge Agreements, (c) amortizationor writeoff of deferred financing fees, debt discount and debt issuance costsand commissions, discounts and other fees and charges associated withIndebtedness (including the Loans and the Letters of Credit) and HedgeAgreements, (d) depreciation and amortization expense, (e) amortizationof intangibles (including, but not limited to, goodwill) and organizationcosts, (f) any extraordinary, unusual or non-recurring expenses or losses(including, whether or not otherwise includable as a separate item in thestatement of such Consolidated Net Income for such period, losses on sales ofassets outside of the ordinary

 

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course of business), provided that theamounts referred to in this clause (f) shall not, in the aggregate, exceed(A) $3,000,000 for any fiscal year of Parent Borrower in the case ofextraordinary, unusual or non-recurring cash expenses or losses (including cashlosses on sales of assets outside of the ordinary course of business butexcluding those described in clause (B) immediately following) or (B) $5,000,000for any fiscal year of Parent Borrower in the case of extraordinary, unusual ornon-recurring restructuring charges arising out of Permitted Acquisitions(including severance and other employee termination costs); provided,that up to $5,000,000 of any amount referred to above in this clause B, ifnot so charged in the initial fiscal year for which it is permitted, may becarried over to the next immediately succeeding fiscal year, but not to anysubsequent fiscal years, (g) to the extent actually reimbursed, expensesincurred to the extent covered by indemnification provisions in any agreementin connection with any Permitted Acquisition, (h) extraordinary, unusualor non-recurring costs or expenses in connection with the relocation and/orconsolidation of facilities, merger integration costs and costs associated withthe opening and permanent closing of facilities (including the closure of thefacility located in Addison, Illinois and the transfer of certain of the operationsconducted therein to the facility located in Charleston, South Carolina) in anamount not to exceed $1,000,000 in the aggregate, (i) any other non-cashcharges or losses, (j) management, monitoring, consulting and advisoryfees and related expenses and any other fees and expenses (or any accrualsrelating to such fees and related expenses) paid in accordance with Section 7.10(e),(k) to the extent covered by insurance proceeds actually received, expenseswith respect to liability or Casualty Events or business interruption,(l) extraordinary, unusual or non-recurring expenses incurred inconnection with the Transactions, not to exceed $27,000,000, includingmanagement compensation, (m) any non-cash write-off of up to $10,000,000of losses on the Disposition of North Safety Products (Africa)(Pty) Ltd., (n)with respect to any Event of Default under any covenant set forth in Section 7.1,the Net Cash Proceeds of any equity issuance to the Permitted Holders and theIndividual Investors, in each case solely to the extent that such Net CashProceeds (A) are actually received by the Parent Borrower no later thanten (10) days after the delivery of a Notice of Intent to Cure and (B) donot exceed the aggregate amount necessary to cure such Event of Default under Section 7.1for any applicable period (each, a “Permitted Cure Issuance”), it beingunderstood that this clause (n) may not be relied on for purposes ofcalculating any financial ratios other than as applicable to Section 7.1;provided that (A) no more than two Permitted Cure Issuances may be made inany four fiscal quarter period and (B) in each eight fiscal quarter periodthere shall be a period of at least four consecutive fiscal quarters duringwhich no Permitted Cure Issuance is made; provided, further that to the extentthe receipt of any Net Cash Proceeds of any Permitted Cure Issuance is aneffective addition to Consolidated EBITDA as contemplated by, and in accordancewith, the foregoing and, as a result thereof, any Event of Default of thecovenants set forth in Section 7.1 shall have been cured for any applicableperiod, such cure shall be deemed to be effective as of the last day of suchapplicable period and such addition to Consolidated EBITDA shall apply to anyperiod of four (4) consecutive fiscal quarters that includes the fiscalquarter in respect of which such addition was made and minus, to theextent included in the statement of such Consolidated Net Income for suchperiod, the sum of (a) interest income, (b) any extraordinary,unusual or non-recurring income or gains (including, whether or not otherwiseincludable as a separate item in the statement of such Consolidated Net Incomefor such period, gains on the sales of assets outside of the ordinary course ofbusiness) and (c) any other non-cash income or gains, all as determined ona consolidated basis.  For the purposesof calculating Consolidated EBITDA for any period of four consecutive fiscalquarters (each a “Reference Period”) pursuant to any determination ofthe Consolidated Total Leverage Ratio or the Consolidated Senior LeverageRatio, (i) if at any time during such Reference Period the Parent Borroweror any Subsidiary shall have made any Material Disposition, the ConsolidatedEBITDA for such Reference Period shall be reduced by an amount equal to the ConsolidatedEBITDA (if positive) attributable to the property that is the subject of suchMaterial Disposition for such Reference Period or increased by an amount equalto the Consolidated EBITDA (if negative) attributable thereto for suchReference Period and (ii) if during such Reference Period the ParentBorrower or any Subsidiary shall have made a Material Acquisition, ConsolidatedEBITDA for such Reference Period shall be calculated after giving proformaeffect thereto as if such Material Acquisition occurred on the first day ofsuch Reference Period.  As used in thisdefinition,

 

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“Material Acquisition” means anyacquisition of property or series of related acquisitions of property that (a) constitutesassets comprising all or substantially all of an operating unit of business orconstitutes all or substantially all of the common equity of a Person and (b) involvesthe payment of consideration by the Parent Borrower and its Subsidiaries inexcess of $1,500,000; and “Material Disposition” means any Dispositionof property or series of related Dispositions of property that yields grossproceeds to the Parent Borrower or any of its Subsidiaries in excess of $1,500,000.

 

“ConsolidatedFixed Charge Coverage Ratio”:  forany period, the ratio of (a) Consolidated EBITDA for such period less theaggregate amount actually paid by the Parent Borrower and its Subsidiariesduring such period on account of Capital Expenditures to (b) ConsolidatedFixed Charges for such period.

 

“ConsolidatedFixed Charges”:  for any period, thesum (without duplication) of (a) Consolidated Interest Expense for suchperiod, (b) scheduled payments made during such period on account ofprincipal of Indebtedness of Parent Borrower or any of its Subsidiaries(including scheduled principal payments in respect of the Term Loans), (c) paymentsmade by Parent Borrower and its Subsidiaries during such period on account ofincome taxes (including any franchise taxes imposed in lieu of income taxes)and (d) the aggregate amount of Restricted Payments made during suchperiod as permitted by Sections 7.6(b), (d), (f) and (g).

 

“ConsolidatedInterest Coverage Ratio”:  for anyperiod, the ratio of (a) Consolidated EBITDA for such period to (b) ConsolidatedInterest Expense for such period.

 

“ConsolidatedInterest Expense”:  for any period,the excess, if any, of (a) total cash interest expense (including thatattributable to Capital Lease Obligations) of Parent Borrower and itsSubsidiaries for such period with respect to all outstanding Indebtedness of ParentBorrower and its Subsidiaries (including all commissions, discounts and otherfees and charges owed with respect to letters of credit and bankers’ acceptancefinancing and net costs under Hedge Agreements in respect of interest rates tothe extent such net costs are allocable to such period in accordance with GAAP)over (b) total cash interest income of Parent Borrower and itsSubsidiaries for such period.

 

“ConsolidatedNet Income”:  for any period, theconsolidated net income (or loss) of Parent Borrower and its Subsidiaries,determined on a consolidated basis in accordance with GAAP; providedthat there shall be excluded (a) the income (or loss) of any Personaccrued prior to the date it becomes a Subsidiary of the Parent Borrower or ismerged into or consolidated with the Parent Borrower or any of itsSubsidiaries, (b) the income (or loss) of any Person (other than aSubsidiary of the Parent Borrower) in which the Parent Borrower or any of itsSubsidiaries has an ownership interest, except in respect of income to theextent that any such income is actually received by the Parent Borrower or suchSubsidiary in the form of dividends or similar distributions and (c) theundistributed earnings of any Subsidiary of the Parent Borrower to the extentthat the declaration or payment of dividends or similar distributions by suchSubsidiary is not at the time permitted by the terms of any ContractualObligation (other than under any Loan Document) or Requirement of Lawapplicable to such Subsidiary.

 

“ConsolidatedSenior Debt”:  all Consolidated TotalDebt other than the Senior Subordinated Notes and any other Indebtedness of theU.S. Borrowers or the Canadian Borrower that, by its terms or the terms of anyapplicable subordination agreement, is subordinated to the prior payment infull of the Obligations.

 

“ConsolidatedSenior Leverage Ratio”:  as at thelast day of any period, the ratio of (a) Consolidated Senior Debt on suchday to (b) Consolidated EBITDA for such period.

 

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“ConsolidatedTotal Debt”:  at any date, theexcess, if any, of (a) the aggregate principal amount of all Funded Debtof Holdco and its Subsidiaries or Parent Borrower and its Subsidiaries, as thecase may be, at such date, determined on a consolidated basis in accordancewith GAAP over (b) the aggregate amount of cash and Cash Equivalents heldby Holdco and its Subsidiaries or Parent Borrower and its Subsidiaries, as thecase may be, in the United States on such date in excess of the lesser of (i) $2,000,000and (ii) the aggregate amount of cash and Cash Equivalents held by Holdcoand its Subsidiaries or Parent Borrower and its Subsidiaries, as the case maybe, in the United States on such date.

 

“ConsolidatedTotal Leverage Ratio”:  as at thelast day of any period, the ratio of (a) Consolidated Total Debt on suchday to (b) Consolidated EBITDA for such period.

 

“ConsolidatedWorking Capital”:  at any date, theexcess of Consolidated Current Assets on such date over Consolidated CurrentLiabilities on such date.

 

“ContractPeriod”:  with respect to any Bankers’Acceptance, the period commencing on the date such Bankers’ Acceptance isissued and accepted and ending on the date 30, 60, 90 or 180 days thereafter,as the Canadian Borrower may elect (in each case subject to availability); providedthat (i) if such Contract Period would end on a day other than a BusinessDay, such Contract Period shall be extended to the next succeeding BusinessDay, and (ii) no Contract Period shall extend beyond the Revolving TerminationDate.

 

“ContractualObligation”:  as to any Person, anyprovision of any security issued by such Person or of any agreement, instrumentor other undertaking to which such Person is a party or by which it or any ofits property is bound.

 

“Default”:  any of the events specified in Section 8,whether or not any requirement for the giving of notice, the lapse of time, orboth, has been satisfied.

 

“DeliveryOrder”:  the Delivery Order relatingto the Collateral Mortgage Bond.

 

“DiscountProceeds”:  with respect to any Bankers’Acceptance (or, as applicable, any B/A Equivalent Loan), an amount in CanadianDollars (rounded upward, if necessary, to the nearest C$0.01) calculated bymultiplying (a) the face amount of such Bankers’ Acceptance (or, asapplicable, the undiscounted amount of the B/A Equivalent Loan) by (b) thequotient obtained by dividing (i) one by (ii) the sum of (A) oneand (B) the product of (1) the Discount Rate (expressed as a decimal)applicable to such Bankers’ Acceptance (or, as applicable, such B/A EquivalentLoan) and (2) a fraction of which the numerator is the Contract Periodapplicable to such Bankers’ Acceptance (or, as applicable, such B/A EquivalentLoan) and the denominator is 365, with such quotient being rounded upward ordownward to the fifth decimal place and .000005 being rounded upward.

 

“DiscountRate”:  with respect to a Bankers’Acceptance being accepted and purchased on any day, (a) for a Lender thatis a Schedule I Lender, (i) the CDOR Rate applicable to such Bankers’Acceptance or (ii) if the discount rate for a particular Contract Periodis not quoted on the Reuters Screen CDOR Page, the arithmetic average (asdetermined by the Canadian Agent) of the percentage discount rates (expressedas a decimal and rounded upward, if necessary, to the nearest 1/100 of 1%)quoted to the Canadian Agent by the Schedule I Reference Lenders as thepercentage discount rate at which each such Schedule I Reference Lenderwould, in accordance with its normal practices, at approximately 10:00 a.m.,Toronto time, on such day, be prepared to purchase bankers’ acceptancesaccepted by such Schedule I Reference Lender having a face amount and termcomparable to the face amount and Contract Period of such Bankers’ Acceptance,and (b) for a Lender that is a Schedule II Lender or a Schedule IIILender, the lesser of (i) the CDOR Rate applicable to such Bankers’Acceptance plus 0.10% per annum and (ii) the

 

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arithmetic average (as determined by theCanadian Agent) of the percentage discount rates (expressed as a decimal and roundedupward, if necessary, to the nearest 1/100 of 1%) quoted to the Canadian Agentby the Schedule II/III Reference Lenders as the percentage discount rateat which each such Schedule II/III Reference Lender would, in accordancewith its normal practices, at approximately 10:00 a.m., Toronto time, onsuch day, be prepared to purchase bankers’ acceptances accepted by such bankhaving a face amount and term comparable to the face amount and Contract Periodof such Bankers’ Acceptance.

 

“Disposition”:  with respect to any property, any sale,lease, sale and leaseback, assignment, conveyance, transfer or otherdisposition thereof.  The terms “Dispose”and “Disposed of” shall have correlative meanings.

 

“DocumentationAgents”:  as defined in the preamblehereto.

 

“Dollars”and “$”:  dollars in lawfulcurrency of the United States.

 

“DollarEquivalent”: as to any amount denominated in an Alternate Currency or C$ asof any date of determination, the amount of Dollars that would be required topurchase the amount of such Alternate Currency or C$ based upon the spotselling rate at which the Administrative Agent or the Canadian Agent, asappropriate, offers to sell such Alternate Currency or C$ for Dollars in theLondon foreign exchange market at approximately 11:00 a.m. London time onsuch date for delivery two (2) Business Days later.

 

“DomesticSubsidiary”:  any Subsidiary of the ParentBorrower organized under the laws of any jurisdiction within the United States.

 

“Draft”:  a blank non-interest bearing bill of exchange,within the meaning of the Bills of Exchange Act (Canada), or a blank depositorybill within the meaning of the Depository Bills and Notes Act (Canada), asapplicable, drawn by the Canadian Borrower and addressed to a Canadian Lender,denominated in and bearing such distinguishing letters and numbers as such CanadianLender may determine, but which at such time, except as otherwise providedherein, has not been completed or accepted by such Canadian Lender.

 

“EnvironmentalLaws”:  any and all foreign, Federal,state, provincial, local or municipal laws, rules, orders, regulations,statutes, ordinances, codes, decrees, requirements of any GovernmentalAuthority or other Requirements of Law (including common law) regulating,relating to or imposing liability or standards of conduct concerning protectionof the environment or protection of human health as it relates to environmentalhazards, as now or may at any time hereafter be in effect.

 

“EquityFinancing”:  the cash equityinvestment in Holdco by the Equity Investors as the same is further invested incash equity in the Parent Borrower on or prior to the Closing Date, in an amountnot less than $109.0 million on terms and conditions reasonably satisfactoryto the Administrative Agent.

 

“EquityInvestors”:  Odyssey InvestmentPartners Fund III, L.P., General Electric Pension Trust and the IndividualInvestors.

 

“Equivalent”:  on any date, the amount of Canadian Dollarsinto which a specified amount of Dollars may be converted or, as the case maybe, the amount of Dollars into which a specified amount of Canadian Dollars maybe converted, in each case at the applicable Bank of Canada noon rate on suchdate as published on the Reuters Screen page BOFC.

 

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“ERISA”:  the Employee Retirement Income Security Actof 1974, as amended from time to time.

 

“Euro”or “ €”:  the single currency ofthe Participating Member States.

 

“EuroSublimit”:  the maximum principalamount of Loans that the Borrowers may have outstanding at any one timedenominated in Euros, not to exceed the Dollar Equivalent of $25,000,000.

 

“EurocurrencyReserve Requirements”:  for any dayas applied to a Eurodollar Loan, the aggregate (without duplication) of themaximum rates (expressed as a decimal fraction) of reserve requirements ineffect on such day (including basic, supplemental, marginal and emergencyreserves under any regulations of the Board or other Governmental Authorityhaving jurisdiction with respect thereto) dealing with reserve requirementsprescribed for eurocurrency funding (currently referred to as EurocurrencyLiabilities in Regulation D of the Board) maintained by a member bank of theFederal Reserve System.

 

“EurodollarBase Rate”:  with respect to anyEurodollar Loan for any Interest Period, the rate per annum determined by theAdministrative Agent at approximately 11:00 a.m. (London time) on the datethat is two Business Days prior to the beginning of the relevant InterestPeriod by reference to the British Bankers’ Association Interest SettlementRates for deposits in the relevant Approved Currency (as set forth by theBloomberg Information Service or any successor thereto or any other serviceselected by the Administrative Agent which has been nominated by the British Bankers’Association as an authorized information vendor for the purpose of displayingsuch rates) for a period equal to such Interest Period; provided that,to the extent that an interest rate is not ascertainable pursuant to theforegoing provisions of this definition, the Eurodollar Base Rate shall be theinterest rate per annum determined by the Administrative Agent to be theaverage of the rates per annum at which deposits in such Approved Currency areoffered for such relevant Interest Period to major banks in the Londoninterbank market in London, England by the Administrative Agent atapproximately 11:00 a.m. (London time) on the date that is two BusinessDays prior to the beginning of such Interest Period.

 

“EurodollarLoans”:  U.S. Loans, the rate ofinterest applicable to which is based upon the Eurodollar Rate.

 

“EurodollarRate”:  with respect to each dayduring each Interest Period pertaining to a Eurodollar Loan, a rate per annumdetermined for such day in accordance with the following formula (roundedupward to the nearest 1/100th of 1%):

 
|   |        | Eurodollar Base Rate              |   |
|--------|-------------|-----------------------------------|--------|
|   | 1.00 – | Eurocurrency Reserve Requirements |

 

“EurodollarTranche”:  the collective referenceto Eurodollar Loans the then current Interest Periods with respect to all ofwhich begin on the same date and end on the same later date (whether or notsuch Loans shall originally have been made on the same day).

 

“Event ofDefault”:  any of the eventsspecified in Section 8, provided that any requirement for thegiving of notice, the lapse of time, or both, has been satisfied.

 

“ExcessCash Flow”:  for any fiscal year of ParentBorrower, the excess, if any, of (a) the sum, without duplication, of (i) ConsolidatedNet Income for such fiscal year, (ii) the provision for income tax expense(including any franchise taxes imposed in lieu of income taxes and any incometaxes that would be payable if the entity were to become a taxable entity forpurposes of federal, state or local

 

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income taxes) deducted in arriving at suchConsolidated Net Income, (iii) the amount of all non-cash charges(including depreciation and amortization) deducted in arriving at such ConsolidatedNet Income, (iv) decreases in Consolidated Working Capital for such fiscalyear (excluding any changes in Consolidated Working Capital due to the effectsof purchase accounting adjustments) and (v) the aggregate net amount ofnon-cash loss on the Disposition of property by the Parent Borrower and itsSubsidiaries during such fiscal year (other than sales of inventory in theordinary course of business), to the extent deducted in arriving at suchConsolidated Net Income less (b) the sum, without duplication, of (i) theamount of all non-cash items included in arriving at such Consolidated NetIncome, (ii) the aggregate amount actually paid by the Parent Borrower andits Subsidiaries in cash during such fiscal year on account of CapitalExpenditures (excluding the principal amount of Indebtedness incurred inconnection with such Expenditures and any such expenditures financed with theproceeds of any Reinvestment Deferred Amount), including on account of Form Purchases,(iii) the aggregate amount actually paid by the Parent Borrower and itsSubsidiaries during such fiscal year on account of Investments permitted by Section 7.8(h),(i) or (n) (excluding the principal amount of Indebtedness incurred tofinance such Investments), (iv) the aggregate amount of all prepayments ofU.S. Revolving Loans, U.S. Swingline Loans and Canadian Loans during suchfiscal year to the extent accompanying permanent optional reductions of theU.S. Revolving Commitments or Canadian Commitments, as the case may be, and alloptional prepayments of the Term Loans during such fiscal year, (v) theaggregate amount of all regularly scheduled principal payments of Funded Debt(including the Term Loans) of the Parent Borrower and its Subsidiaries madeduring such fiscal year (other than in respect of any revolving credit facilityto the extent there is not an equivalent permanent reduction in commitmentsthereunder), (vi) increases in Consolidated Working Capital for suchfiscal year (excluding any changes in Consolidated Working Capital  due to the effects of purchase accountingadjustments), (vii) the aggregate net amount of non-cash gain on the Dispositionof property by the Parent Borrower and its Subsidiaries during such fiscal year(other than sales of inventory in the ordinary course of business), to theextent included in arriving at such Consolidated Net Income, (viii) anycash payments made during such fiscal year in respect of non-cash chargesdescribed in clause (a)(iii) or (v) above that were deducted indetermining Consolidated Net Income for a prior fiscal year, (ix) theaggregate amount of Restricted Payments made during such fiscal year aspermitted by Section 7.6(b) or (f), (x) amounts paid in cash duringsuch fiscal year by the Parent Borrower and its Subsidiaries in respect oftaxes based upon income (including any franchise taxes imposed in lieu of incometaxes), (xi) cash earnout and royalty payments made during such fiscal year toformer owners of acquired businesses that were not deducted as expenses indetermining such Consolidated Net Income, (xii) the aggregate amount ofcash payments related to pension, post-retirement and deferred compensationobligations made during such fiscal year to the extent not expensed during suchfiscal year, (xiii) dividends paid by the Parent Borrower during such fiscalyear as permitted by Sections 7.6(d) and 7.6(e), (xiv) to the extentnot already deducted in determining Consolidated Net Income, (A) cashexpenses and fees incurred in connection with the Transactions, (B) feesand expenses in connection with or refinancings permitted by Section 7.2and  (C) cash expenses and feesincurred in connection with any Investment permitted to be made pursuant to Section 7.8,Indebtedness permitted to be incurred pursuant to Section 7.2 (whether ornot consummated) or early extinguishment of Indebtedness and with respect toPermitted Acquisitions, not to exceed $4,000,000 in the aggregate during suchfiscal year, which amount, to the extent not expended during such fiscal year,may be carried over to the next succeeding fiscal year but not to anysubsequent fiscal years and (xv) to the extent included in ConsolidatedNet Income, cash indemnity payments received pursuant to indemnificationprovisions in any agreement in connection with the Acquisition, any Permitted Acquisitionor any other Investment permitted hereunder (or in any similar agreementrelated to any other acquisition consummated prior to the Closing Date).

 

“ExcludedForeign Subsidiary”:  any ForeignSubsidiary in respect of which either (a) the pledge of all of the CapitalStock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiaryof the Obligations, would, in the good faith judgment of the Parent Borrower,result in adverse tax

 

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consequences to the Parent Borrower.  The initial Excluded Foreign Subsidiaries areset forth on Schedule 1.1(F).

 

“Existing U.S.Letters of Credit”:  those letters ofcredit issued for the account of the U.S. Borrowers or any Subsidiary of theU.S. Borrowers and identified on Schedule 1.1(E).

 

“Facility”:  each of (a) the Term Commitments and theTerm Loans made thereunder (the “Term Facility”), (b) the U.S.Revolving Commitments and the extensions of credit made thereunder (the “U.S.Revolving Facility”) and (c) the Canadian Commitments and the CanadianExtensions of Credit made thereunder (the “Canadian Subfacility”).

 

“FederalFunds Effective Rate”:  for any day,the weighted average of the rates on overnight federal funds transactions withmembers of the Federal Reserve System arranged by federal funds brokers, aspublished on the next succeeding Business Day by the Federal Reserve Bank ofNew York, or, if such rate is not so published for any day that is aBusiness Day, the average of the quotations for the day of such transactionsreceived by the Administrative Agent from three federal funds brokers of recognizedstanding selected by it.

 

“ForeignPlan”: any employee benefit plan, program, policy, arrangement or agreementmaintained or contributed to by, or entered into with, the Borrowers or anySubsidiary with respect to employees employed outside the United States orCanada.

 

“ForeignSubsidiary”:  any Subsidiary of the ParentBorrower that is not a Domestic Subsidiary.

 

“Form Purchases”:  all expenditures for the acquisition of formsor molds used to manufacture certain hand protection and footwear products.

 

“FundedDebt”:  as to any Person, allIndebtedness of such Person other than that described in clause (f) of thedefinition of the term “Indebtedness” in respect of letters of credit.

 

“FundingOffice”:  the office of theAdministrative Agent or the Canadian Agent, as specified in Section 10.2or such other office as may be specified from time to time by theAdministrative Agent or the Canadian Agent, as the case may be, as its fundingoffice by written notice to the Parent Borrower and the U.S. Lenders or theCanadian Borrower, as the case may be.

 

“GAAP”:  generally accepted accounting principles inthe United States as in effect from time to time, except that for purposes of Section 7.1,GAAP shall be determined on the basis of such principles in effect on the datehereof and consistent with those used in the preparation of the most recentaudited financial statements delivered pursuant to Section 4.1. In theevent that any Accounting Change (as defined below) shall occur and such changeresults in a change in the method of calculation of financial covenants,standards or terms in this Agreement, then the Parent Borrower and theAdministrative Agent agree to enter into negotiations in order to amend suchprovisions of this Agreement so as to equitably reflect such Accounting Changeswith the desired result that the criteria for evaluating the Parent Borrower’sfinancial condition shall be the same after such Accounting Changes as if suchAccounting Changes had not been made. Until such time as such an amendment shall have been executed anddelivered by the Parent Borrower, the Administrative Agent and the U.S.Required Lenders, all financial covenants, standards and terms in thisAgreement shall continue to be calculated or construed as if such AccountingChanges had not occurred.  AccountingChanges refers to changes in accounting principles required by the promulgationof any rule, regulation, pronouncement or opinion by the Financial Accounting

 

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Standards Board of the American Institute ofCertified Public Accountants or, if applicable, the Securities and ExchangeCommission (or successors thereto or agencies with similar functions).

 

“GeneralSecurity Agreement”:  the GeneralSecurity Agreement made by the Canadian Borrower in favor of the Canadian Agent,dated as of July 19, 2005, as amended, supplemented or otherwise modifiedfrom time to time.

 

“GovernmentalAuthority”:  any nation orgovernment, any state, province, municipality or other political subdivisionthereof and any entity exercising executive, legislative, judicial, regulatoryor administrative functions of or pertaining to government (including theNational Association of Insurance Commissioners).

 

“GovernmentalReal Property Disclosure Requirements”:  any Requirement of Law of any GovernmentalAuthority requiring notification of the buyer, lessee, mortgagee, assignee orother transferee of any Real Property, facility, establishment or business, ornotification, registration or filing to or with any Governmental Authority, inconnection with the sale, lease, mortgage, assignment or other transfer(including any transfer of control) of any Real Property, facility,establishment or business, of the actual or threatened presence or release inor into the environment, or the use, disposal or handling of Materials ofEnvironmental Concern on, at, under or near the Real Property, facility,establishment or business to be sold, leased, mortgaged, assigned or transferred.

 

“GroupProperties”:  as defined in Section 4.17(a).

 

“Guaranteeand Collateral Agreement”:  theGuarantee and Collateral Agreement to be executed and delivered by Holdco, the U.S.Borrowers and each U.S. Subsidiary Guarantor, substantially in the form of Exhibit A,as the same may be amended, supplemented or otherwise modified from time totime.

 

“GuaranteeObligation”:  as to any Person (the “guaranteeingperson”), any obligation of (a) the guaranteeing person or (b) anotherPerson (including any bank under any letter of credit) to induce the creationof which the guaranteeing person has issued a reimbursement, counterindemnityor similar obligation, in either case guaranteeing or in effect guaranteeingany Indebtedness, leases, dividends or other obligations (the “primary obligations”)of any other third Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, including any obligation of the guaranteeing person,whether or not contingent, (i) to purchase any such primary obligation orany property constituting direct or indirect security therefor, (ii) toadvance or supply funds (1) for the purchase or payment of any suchprimary obligation or (2) to maintain working capital or equity capital ofthe primary obligor or otherwise to maintain the net worth or solvency of theprimary obligor, (iii) to purchase property, securities or services primarilyfor the purpose of assuring the owner of any such primary obligation of theability of the primary obligor to make payment of such primary obligation or (iv) otherwiseto assure or hold harmless the owner of any such primary obligation againstloss in respect thereof; provided, however, that the termGuarantee Obligation shall not include endorsements of instruments for depositor collection or customary contractual indemnities entered into, in each casein the ordinary course of business.  Theamount of any Guarantee Obligation of any guaranteeing person shall be deemedto be the lower of (a) an amount equal to the stated or determinableamount of the primary obligation in respect of which such Guarantee Obligationis made and (b) the maximum amount for which such guaranteeing person maybe liable pursuant to the terms of the instrument embodying such GuaranteeObligation, unless such primary obligation and the maximum amount for whichsuch guaranteeing person may be liable are not stated or determinable, in whichcase the amount of such Guarantee Obligation shall be such guaranteeing person’smaximum reasonably anticipated liability in respect thereof as determined by theParent Borrower in good faith.

 

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“Guarantors”:  the collective reference to Holdco and theU.S. Subsidiary Guarantors.

 

“HedgeAgreements”:  all interest rate orcurrency swaps, caps or collar agreements or similar arrangements or foreignexchange contracts providing for protection against fluctuations in interestrates or currency exchange rates or the exchange of nominal interest obligations,either generally or under specific contingencies.

 

“HedgeCounterparty”: as defined in the definition of “Obligations”.

 

“Holdco”:  as defined in the preamble hereto.

 

“HoldcoCapital”:  as defined in the preamblethereto.

 

“HoldcoMerger”: as defined in the preamble thereto.

 

“HoldcoNotes”:  as defined in the preamblehereto.

 

“HoldcoNotes Indenture”:  the indenture,dated as of January 7, 2005, as amended on July 19, 2005, governingthe Holdco Notes, as amended, supplemented or otherwise modified in accordancewith Section 7.9.

 

“Hypothec”:  the Deed of Hypothec to secure payment ofbonds or other titles of indebtedness granted by the Canadian Borrower in favorof the Canadian Agent, in its capacity as *fondé de pouvoir*of the Quebec Collateral.  The Hypothecshall secure the Collateral Mortgage Bond and be a first Lien against theQuebec Collateral in priority to all other liens, except for Permitted Liens.

 

“ImmaterialSubsidiary”:  any Subsidiary of theParent Borrower, neither the net assets of which exceed $5,000,000 at any timenor the net sales of which exceed $5,000,000 during the latest twelve-monthperiod (such net assets and net sales to be determined based on the most recentfinancial statements of the Parent Borrower or any such Subsidiary, as applicable,delivered to the Administrative Agent pursuant to this Agreement).

 

“Indebtedness”:  of any Person at any date, withoutduplication, (a) all indebtedness of such Person for borrowed money, (b) allobligations of such Person for the deferred purchase price of property orservices (other than current accounts or trade payables and accrued expensesincurred in the ordinary course of such Person’s business), (c) allobligations of such Person evidenced by notes, bonds, debentures or othersimilar instruments, (d) all indebtedness created or arising under anyconditional sale or other title retention agreement with respect to propertyacquired by such Person (even though the rights and remedies of the seller orlender under such agreement in the event of default are limited to repossessionor sale of such property), (e) all Capital Lease Obligations of suchPerson, (f) the face amount of all obligations of such Person, contingentor otherwise, as an account party under acceptance, letter of credit or similarfacilities, (g) all Guarantee Obligations of such Person in respect ofobligations of the kind referred to in clauses (a) through (f) above,(h) all obligations of the kind referred to in clauses (a) through (g) abovesecured by (or for which the holder of such obligation has an existing right,contingent or otherwise, to be secured by) any Lien on property (includingaccounts and contract rights) owned by such Person, whether or not such Personhas assumed or become liable for the payment of such obligation, and (i) allobligations of such Person in respect of Hedge Agreements.  The amount of any Indebtedness at any date (A) under clause (h) shall be equal to the lesser of (A) the then statedamount of the relevant obligations and (B) the then fair market value ofthe property subject to the relevant Lien and (y) shall exclude any fairvalue adjustments for purchase accounting. For the avoidance of doubt, Indebtedness shall exclude ordinary courseintercompany payables among Parent Borrower and its Subsidiaries.

 

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“Indebtednessfor Borrowed Money”:  of any Personat any date, without duplication, all Indebtedness of such Person of a typedescribed in clauses (a) and (c) of the definition of the term “Indebtedness”.

 

“IndividualInvestors”:  the individuals listedon Schedule 1.1(C).

 

“InitialHoldco Notes”:  as defined in thepreamble hereto.

 

“Insolvency”:  with respect to any Multiemployer Plan, thecondition that such Plan is insolvent within the meaning of Section 4245of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“IntellectualProperty”:  the collective referenceto all rights, priorities and privileges relating to intellectual property,whether arising under United States, multinational or foreign laws or otherwise,including copyrights, copyright licenses, patents, patent licenses, patentapplications, trademarks, trademark licenses, trademark applications,technology, know-how and processes, and all rights to sue at law or in equityfor any infringement or other impairment thereof, including the right toreceive all proceeds and damages therefrom.

 

“InterestPayment Date”:  (a) as to anyABR Loan, the last Business Day of each March, June, September and December tooccur while such Loan is outstanding and the final maturity date of such Loan, (b) asto any Eurodollar Loan having an Interest Period of three months or less, thelast day of such Interest Period, (c) as to any Eurodollar Loan having anInterest Period longer than three months, (i) each day that is threemonths, or a whole multiple thereof, after the first day of such InterestPeriod and (ii) the last day of such Interest Period, (d) as to anyC$ Prime Loans, the last Business Day of each March, June, September and December tooccur while such Loan is outstanding and the final maturity date of such Loan and(e) as to any Loan (other than any U.S. Revolving Loan that is an ABR Loanand any Swingline Loan and C$ Prime Loans), the date of any repayment orprepayment made in respect thereof.

 

“InterestPeriod”:  as to any Eurodollar Loan, (a) initially,the period commencing on the borrowing or conversion date, as the case may be,with respect to such Eurodollar Loan and ending one, two, three, six or (ifavailable to all Lenders under the relevant Facility) nine or twelve monthsthereafter, as selected by the Parent Borrower in its notice of borrowing ornotice of conversion, as the case may be, given with respect thereto; and (b) thereafter,each period commencing on the last day of the next preceding Interest Periodapplicable to such Eurodollar Loan and ending one, two, three, six months or(if available to all Lenders under the relevant Facility) nine or twelve monthsthereafter, as selected by the Parent Borrower by irrevocable notice to theAdministrative Agent not less than three Business Days prior to the last day ofthe then current Interest Period with respect thereto; provided that,all of the foregoing provisions relating to Interest Periods are subject to thefollowing:

 

(i)                                     if any InterestPeriod would otherwise end on a day that is not a Business Day, such InterestPeriod shall be extended to the next succeeding Business Day unless the resultof such extension would be to carry such Interest Period into another calendarmonth in which event such Interest Period shall end on the immediatelypreceding Business Day;

 

(ii)                                  the Parent Borrowermay not select an Interest Period under a particular Facility that would extendbeyond the Revolving Termination Date or beyond the date final payment is dueon the Term Loans, as the case may be;

 

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(iii)                               any Interest Period thatbegins on the last Business Day of a calendar month (or on a day for whichthere is no numerically corresponding day in the calendar month at the end ofsuch Interest Period) shall end on the last Business Day of a calendar month;and

 

(iv)                              the Parent Borrower shallselect Interest Periods so as not to require a payment or prepayment of anyEurodollar Loan during an Interest Period for such Loan in connection with anyscheduled payment of principal with respect thereto.

 

“Invensys”:  Invensys PLC (formerly Siebe PLC), a publiclimited company organized and existing under the laws of England and Wales,Siebe International Limited, a private limited company organized and existingunder the laws of England and Wales, Deutsche Siebe GMBH, a private companyorganized under the laws of Germany and Siebe Inc., a Delaware corporation,collectively.

 

“Investments”:  as defined in Section 7.8.

 

“JoinderAgreement”: the Joinder Agreement of the Canadian Borrower in substantiallythe form attached hereto as Exhibit M, as amended, supplemented orotherwise modified from time to time.

 

“JudgmentCurrency”:  as defined in Section 10.18(a).

 

“JudgmentCurrency Conversion Date”:  asdefined in Section 10.18(a).

 

“KCL”:  Kachele-Cama Latex GmbH, a company organizedand existing under the laws of Germany.

 

“LeaseExpense”:  for any period, theaggregate amount of fixed and contingent rentals payable by the Parent Borrowerand its Subsidiaries, determined on a consolidated basis in accordance withGAAP, for such period with respect to operating leases of real and personalproperty.

 

“Lenders”:  as defined in the preamble hereto.

 

“Letters ofCredit”:  the collective reference toExisting U.S. Letters of Credit, U.S. Letters of Credit and Canadian Letters ofCredit.

 

“Lien”:  any mortgage, pledge, hypothecation,assignment, deposit arrangement, encumbrance in respect of property other thanReal Property, encumbrance in respect of Real Property which intrinsicallyentitles the holder to foreclose upon the property for recovery of a debt, lien(statutory or other), prior claim, charge or other security interest or any preference,priority or other security agreement or preferential arrangement of any kind ornature whatsoever (including any conditional sale or other title retentionagreement and any capital lease having substantially the same economic effectas any of the foregoing).

 

“Loan”:  any loan or advance made by any Lenderpursuant to this Agreement which includes any advance made by way of acceptanceof a Draft.

 

“LoanDocuments”:  this Agreement, theSecurity Documents, the Assumption Agreement, the Joinder Agreement and anyNotes and the Canadian Loan Documents.

 

“LoanParties”:  Holdco, the U.S.Borrowers, the Canadian Borrower and each Subsidiary of the Parent Borrowerthat is party to a Loan Document.

 

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“MaterialAdverse Effect”:  a material adverseeffect on (a) the business, property, operations or condition (financialor otherwise) of Parent Borrower and its Subsidiaries taken as a whole or (b) thevalidity or enforceability of this Agreement or any of the other Loan Documentsor the rights or remedies, taken as a whole, of the Administrative Agent, theCanadian Agent, the Syndication Agent or the Lenders hereunder or thereunder.

 

“Materialsof Environmental Concern”:  anygasoline or petroleum (including crude oil or any fraction thereof) orpetroleum products or any hazardous or toxic substances, materials or wastes,defined or regulated as such in or under any Environmental Law, includingasbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

 

“MaturingAmount”:  as defined in Section 2.22.

 

“Merger”:  as defined in the preamble hereto.

 

“Moody’s”:  as defined in the definition of “Cash Equivalents”.

 

“MorningPride”:  as defined in the preamblehereto.

 

“MortgagedProperties”:  the real propertieslisted on Schedule 1.1(B), (i) as to which the Administrative Agentfor the benefit of the U.S. Lenders has been granted a Lien pursuant to the Mortgagesand (ii) as to which the Canadian Agent for the benefit of the CanadianLenders has been granted a Lien pursuant to the Mortgages.

 

“Mortgages”:  each of the mortgages and deeds of trust madeby any Loan Party in favor of, or for the benefit of, the Administrative Agentfor the benefit of the U.S. Lenders or in favor of, or for the benefit of, theCanadian Agent for the benefit of the Canadian Lenders, (a) in the case ofproperties in the United States, substantially in the form of Exhibit D-1or D-2, as the case may be, or (b) in the case of properties located inCanada, in form and substance reasonably satisfactory to the Canadian Agent (ineither case with such changes thereto as shall be advisable under the law ofthe jurisdiction in which such mortgage or deed of trust is to be recorded), asthe same may be amended, supplemented or otherwise modified from time to time.  For greater certainty, Mortgages shallinclude the Hypothec and the Ontario Leasehold Mortgage.

 

“MultiemployerPlan”:  a plan which is amultiemployer plan as defined in Section 4001(a)(3) of ERISA and withrespect to which Parent Borrower or a Commonly Controlled Entity is an employeror has an obligation to make contributions.

 

“Net CashProceeds”:  (a) in connectionwith any Asset Sale or any Recovery Event, the proceeds thereof in the form ofcash and Cash Equivalents (including any such proceeds received by way ofdeferred payment of principal pursuant to a note or installment receivable orpurchase price adjustment receivable or otherwise, but only as and whenreceived) of such Asset Sale or Recovery Event, net of attorneys’ fees,accountants’ fees, investment banking fees, amounts required to be applied tothe repayment of Indebtedness secured by a Lien expressly permitted hereunderon any asset that is the subject of such Asset Sale or Recovery Event (otherthan any Lien pursuant to a Security Document) and other customary fees andexpenses actually incurred in connection therewith and net of taxes paid orreasonably estimated to be payable as a result thereof (after taking intoaccount any available tax credits or deductions and any tax sharingarrangements) and net of amounts deposited in escrow in connection therewith orreasonably expected to be paid as a result of any purchase price adjustment,indemnities or reserves related thereto (provided that such amounts shall beNet Cash Proceeds to the extent and at the time released or not required to beso used) and (b) in connection with any issuance or sale of equitysecurities or

 

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debtsecurities or instruments or the incurrence of loans, the cash proceedsreceived from such issuance or incurrence, net of attorneys’ fees, investmentbanking fees, accountants’ fees, underwriting discounts and commissions andother customary fees and expenses actually incurred in connection therewith.

 

“Non-ExcludedTaxes”:  as defined in Section 2.17(a).

 

“Non-U.S.Lender”:  as defined in Section 2.17(d).

 

“NorthSafety”:  as defined in the preamblehereto.

 

“Notes”:  the collective reference to any promissorynote evidencing Loans.

 

“Notice ofIntent to Cure”:  as defined in Section 6.2(b).

 

“NSP”:  as defined in the preamble hereto.

 

“Obligations”:  the collective reference to the unpaid principalof and interest on the Loans and Reimbursement Obligations and all otherobligations of any Borrower (including, without limitation, interest accruingat the then applicable rate provided herein after the maturity of the Loans andReimbursement Obligations and interest accruing at the then applicable rateprovided herein after the filing of any petition in bankruptcy, or thecommencement of any insolvency, reorganization or like proceeding, relating toany Borrower, whether or not a claim for post-filing or post-petition interestis allowed in such proceeding) to any Agent or to any Lender (or, in the caseof Hedge Agreements, any Person that was a Lender or an Affiliate of a Lender atthe time it entered into such Hedge Agreement (a “Hedge Counterparty”)),whether direct or indirect, absolute or contingent, due or to become due, ornow existing or hereafter incurred, which may arise under, out of, or inconnection with, this Agreement, any other Loan Document, the Letters ofCredit, any Hedge Agreement entered into by the Borrowers with any Lender (orany Affiliate of any Lender) or any other document made, delivered or given inconnection herewith or therewith, in each case whether on account of principal,interest, reimbursement obligations, fees, indemnities, costs, expenses orotherwise (including, without limitation, all fees and disbursements of counselto the Administrative Agent, the Canadian Agent or to the Lenders that arerequired to be paid by the Borrowers pursuant hereto or to any of the foregoingagreements).

 

“ObligationCurrency”:  as defined in Section 10.18(a).

 

“OntarioLeasehold Mortgage”:  the leaseholdmortgage dated as of July 19, 2005 made by the Canadian Borrower in favorof the Canadian Agent with respect to 26 Dansk Court, Toronto, Ontario, asamended, supplemented or otherwise modified from time to time.

 

“OtherTaxes”:  any and all present orfuture stamp or documentary taxes or any other excise or property taxes,charges or similar levies arising from any payment made hereunder or from theexecution, delivery or enforcement of, or otherwise with respect to, this Agreementor any other Loan Document and any interest and penalties related thereto.

 

“ParentBorrower”:  as defined in thepreamble hereto.

 

“Participant”:  as defined in Section 10.6(b).

 

“ParticipatingMember States”:  the member states ofthe European Communities that adopt or have adopted the Euro as their lawfulcurrency in accordance with the legislation of the European Union relating toEuropean Monetary Union.

 

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“PBGC”:  the Pension Benefit Guaranty Corporationestablished pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“PermittedAcquisition”:  any acquisition madeby the Parent Borrower or any of its Subsidiaries of all or substantially allof the assets of, or all the Capital Stock of, or a division or businessoperated by, another Person engaged in a business meeting the requirements of Section 7.15,provided that (a) at the time of such acquisition and after givingeffect thereto no Default or Event of Default shall have occurred and becontinuing, (b) such acquisition shall be consummated in all materialrespects in accordance with all applicable laws and regulations, (c) theapplicable Borrower, prior to any such acquisition, shall have delivered to theAdministrative Agent satisfactory evidence that the Person, business or divisionto be acquired in such acquisition had positive EBITDA (calculated in a mannerconsistent with the calculation of “Consolidated EBITDA”) for the periodconsisting of four consecutive fiscal quarters most recently completed, (d) aftergiving effect to such acquisition on a pro forma basis (determined giving effectto any projected cost savings set forth on a schedule prepared in goodfaith by the Chief Financial Officer of Parent Borrower provided to theAdministrative Agent and to which the Administrative Agent does not reasonablyobject in a reasonable period of time (but in any event within five BusinessDays)) the covenants contained in Section 7.1 shall not have beenviolated, such covenants being recomputed as of the last day of the mostrecently completed fiscal quarter of Parent Borrower for which financial statementsshall have been delivered to the Lenders pursuant to Section 4.1 or 6.1 asif such acquisition (and any related assumption of Indebtedness) had occurredon the first day of the period of four consecutive fiscal quarters then endedand (e) the Parent Borrower shall have delivered to the AdministrativeAgent a certificate of a Responsible Officer setting forth calculationsdemonstrating compliance with the condition contained in clause (c) aboveand attaching all relevant and available financial information regarding thebusiness or Person which is the subject of such acquisition.

 

“PermittedHolders”:  collectively, (i) OdysseyInvestment Partners Fund III, L.P. and any of its Affiliates (other than any oftheir portfolio companies) and (ii) General Electric Pension Trust and itsAffiliates.

 

“PermittedLien”:  as defined in Section 7.3.

 

“Person”:  an individual, partnership, corporation,limited liability company, business trust, joint stock company, trust,unincorporated association, joint venture, Governmental Authority or otherentity of whatever nature.

 

“Plan”:  at a particular time, any employee benefitplan, other than a Multiemployer Plan, that is covered by ERISA and in respectof which the Parent Borrower or a Commonly Controlled Entity is (or, if suchplan were terminated at such time, would under Section 4069 of ERISA bedeemed to be) an employer as defined in Section 3(5) of ERISA.

 

“Pledge ofBond Agreement”:  the pledge of bondagreement made by the Canadian Borrower in favor of the Canadian Agent.

 

“PPSA”:the Personal Property Security Act as in effect in the Province of Ontario, theCivil Code of Quebec as in effect in the Province of Quebec, or any otherCanadian federal or provincial statute pertaining to the granting, perfecting,priority or ranking of security interests, Liens, hypothecs on personalproperty, and any successor statutes, together with any regulations thereunder,in each case as in effect from time to time. References to sections of the PPSAshall be construed to also refer to any successor sections.

 

“PricingGrid”:  the pricing grid attachedhereto as Annex A.

 

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“Prime Rate”:  as defined in the definition of ABR.

 

“Projections”:  as defined in Section 6.2(c).

 

“QuebecCollateral”: all property of the Canadian Borrower located in the Provinceof Quebec.

 

“QuebecSecurity Documents”: the Hypothec, the Collateral Mortgage Bond, the DeliveryOrder and the Pledge of Bond Agreement.

 

“RawdonProperty”: as defined in Section 6.12(c)

 

“RealProperty”:  collectively, all right,title and interest (including any leasehold, mineral or other estate) in and toany and all parcels of or interests in real property owned, leased or operatedby any person, whether by lease, license or other means, together with, in eachcase, all easements,hereditaments and appurtenances relating thereto, all improvements andappurtenant fixtures and other real property and real property rightsincidental to the ownership, lease or operation thereof.

 

“RecoveryEvent”:  any settlement of or paymentin respect of any property or casualty insurance claim or any condemnationproceeding relating to any asset of Holdco or any of its Subsidiaries with avalue in excess of $500,000.

 

“Refinancing”:  the repayment in full and the termination ofany commitment to make extensions of credit under all of the outstandingindebtedness listed on Schedule 1.1(D) of Holdco or any of itsSubsidiaries.

 

“RefinancingIndebtedness”:  with respect to anyPerson, any refunding, refinancing, or extension of any Indebtedness of suchPerson but only to the extent that (i) such Refinancing Indebtedness issubordinated to the Obligations to at least the same extent as the Indebtednessbeing refunded, refinanced or extended, if at all, (ii) such RefinancingIndebtedness is scheduled to mature either (a) no earlier than theIndebtedness being refunded, refinanced or extended, or (b) after thematurity of the Term Loans, (iii) the portion, if any, of the RefinancingIndebtedness that is scheduled to mature on or prior to the maturity date ofthe Term Loans has a weighted average life to maturity at the time such RefinancingIndebtedness is incurred that is equal to or greater than the weighted averagelife to maturity of the portion of the Indebtedness being refunded, refinancedor extended that is scheduled to mature on or prior to the maturity date of theTerm Loans, (iv) such Refinancing Indebtedness is in an aggregateprincipal amount that is equal to or less than the sum of (a) theaggregate principal amount then outstanding under the Indebtedness beingrefunded, refinanced or extended, (b) the amount of accrued and unpaidinterest, if any, and premiums owed, if any, not in excess of preexistingpayment provisions on such Indebtedness being refunded, refinanced or extendedand (c) the amount of customary fees, expenses and costs related to theincurrence of such Refinancing Indebtedness and (v) such RefinancingIndebtedness is incurred by the same Person that initially incurred theIndebtedness being refunded, refinanced or extended, except that the ParentBorrower may incur Refinancing Indebtedness to refund, refinance or extendIndebtedness of any wholly owned Subsidiary of the Parent Borrower.

 

“RefundedU.S. Swingline Loans”:  as defined inSection 2.5(d).

 

“Register”:  as defined in Section 10.6(d).

 

“RegulationU”:  Regulation U of the Board as ineffect from time to time.

 

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“ReimbursementObligations”:  the collectivereference to the U.S. Reimbursement Obligations and the Canadian ReimbursementObligations.

 

“ReinvestmentDeferred Amount”:  with respect toany Reinvestment Event, the aggregate Net Cash Proceeds received by the ParentBorrower or any of its Subsidiaries in connection therewith that are notapplied to prepay the Term Loans or reduce the Revolving Commitments pursuantto Section 2.9(b) as a result of the delivery of a ReinvestmentNotice.

 

“ReinvestmentEvent”:  any Asset Sale or RecoveryEvent in respect of which the Parent Borrower has delivered a ReinvestmentNotice.

 

“ReinvestmentNotice”:  a written notice executedby a Responsible Officer stating that no Event of Default has occurred and iscontinuing and that the Parent Borrower (directly or indirectly through aSubsidiary) intends and expects to use all or a specified portion of the NetCash Proceeds of an Asset Sale or Recovery Event to acquire assets useful in theParent Borrower’s or any of its Subsidiaries’ business.

 

“ReinvestmentPrepayment Amount”:  with respect toany Reinvestment Event, the Reinvestment Deferred Amount relating thereto lessany amount expended prior to the relevant Reinvestment Prepayment Date toacquire assets (directly or through the purchase of the Capital Stock of aPerson) useful in the Parent Borrower’s or any of its Subsidiaries’ business.

 

“ReinvestmentPrepayment Date”:  with respect toany Reinvestment Event, the earlier of (a) the date occurring 270 daysafter such Reinvestment Event and (b) the date on which the Parent Borrowershall have determined not to, or shall have otherwise ceased to, acquire assetsuseful in the Parent Borrower’s or any of its Subsidiaries’ business with allor any portion of the relevant Reinvestment Deferred Amount.

 

“Related”:  as defined in Section 1.3.

 

“RelevantCurrency Equivalent”:  the Dollar Equivalentor Alternate Currency Equivalent, as applicable.

 

“Reorganization”:  with respect to any Multiemployer Plan, thecondition that such plan is in reorganization within the meaning of Section 4241of ERISA.

 

“ReportableEvent”:  any of the events set forthin Section 4043(b) of ERISA, other than those events as to which thethirty day notice period is waived under PBGC Reg. § 4043.

 

“RequiredLenders”:  the holders of more than50% of the sum of (i) the aggregate unpaid principal amount of the Term Loans,(ii) the U.S. Revolving Commitments or, if the U.S. Revolving Commitmentshave been terminated, the U.S. Revolving Extensions of Credit and (iii) theDollar Equivalent of the Canadian Commitments or, if the Canadian Commitments havebeen terminated, the Dollar Equivalent of the Canadian Extensions of Credit.

 

“Requirementof Law”:  as to any Person, theCertificate of Incorporation and By-Laws or other organizational or governingdocuments of such Person, and any law, treaty, municipal by-law, building code,rule or regulation or determination of an arbitrator or a court or otherGovernmental Authority, in each case applicable to or binding upon such Personor any of its property or to which such Person or any of its property issubject.

 

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“RequisiteLenders”:  with respect to anyFacility, the holders of more than 50% of the aggregate unpaid principal amountof the Term Loans, the Total U.S. Revolving Extensions of Credit, or the DollarEquivalent of the Canadian Extensions of Credit as the case may be, outstandingunder such Facility (or, in the case of the U.S. Revolving Facility and theCanadian Subfacility, prior to any termination of the U.S. RevolvingCommitments or the Canadian Commitments, the holders of more than 50% of theTotal U.S. Revolving Commitments or the Dollar Equivalent of the CanadianCommitments, respectively).

 

“RequisiteU.S. Revolving Facility Lenders”: the Requisite Lenders in respect of the U.S. Revolving Facility.

 

“ResponsibleOfficer”:  the chief executiveofficer, president or chief financial officer of the Parent Borrower, but inany event, with respect to financial matters, the chief financial officer of theParent Borrower.

 

“RestrictedPayments”:  as defined in Section 7.6.

 

“RevolvingCredit Exposure”: at any time, the aggregate of Canadian Exposure of allCanadian Lenders plus the aggregate U.S. Revolving Credit Exposure of all U.S.Revolving Lenders.

 

“RevolvingTermination Date”:  the earliest of (i) June 30,2010 and (ii) March 31, 2010, but only if Holdco fails to repay infull the outstanding principal amount of the Holdco Notes, together withaccrued interest and any premium, on or prior to March 31, 2010 using onlyproceeds of Refinancing Indebtedness, no portion of which matures earlier than December 31,2012.

 

“S&P”  as defined in the definition of “Cash Equivalents.”

 

“Schedule ILender”:  any Lender named on Schedule Ito the Bank Act (Canada).

 

“Schedule IReference Lender”:  any Schedule ILender as may be agreed by the Canadian Borrower and the Canadian Agent fromtime to time.

 

“Schedule IILender”:  any Lender named on Schedule IIto the Bank Act (Canada) or any Lender that is a Canadian financial institutionother than a Canadian chartered bank and is not a Schedule III Lender.

 

“Schedule II/IIIReference Lenders”: Credit Suisse, Toronto Branch and other specifiedCanadian Lenders that are either a Schedule II Lender or a Schedule IIILender and approved by the Canadian Borrower and the Canadian Agent.

 

“Schedule IIILender”: any Lender named on Schedule III to the Bank Act (Canada).

 

“ScheduledDebt”:  all Indebtedness of Holdco andits Subsidiaries listed on Schedule 7.2(e).

 

“SEC”:  the Securities and Exchange Commission, anysuccessor thereto and any analogous Governmental Authority.

 

“SecuredParties”:  the U.S. Secured Partiesand the Canadian Secured Parties.

 

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“SecurityDocuments”:  the collective referenceto the Guarantee and Collateral Agreement, the Mortgages, the Canadian SecurityDocuments and all other security documents hereafter delivered to and acceptedby the Administrative Agent or the Canadian Agent, as the case may be, grantinga Lien on any property of any Person to secure the obligations and liabilitiesof any Loan Party under any Loan Document.

 

“Seller”:  as defined in the preamble hereto.

 

“SeniorSubordinated Notes”:  the 9 7/8%Senior Subordinated Notes in the aggregate principal amount of $152,500,000 due2011 of NSP.

 

“Senior SubordinatedNotes Indenture”:  the indenturedated as of August 13, 2003, as amended on July 19, 2005, governingthe Senior Subordinated Notes, including any refinancing, refunding orreplacement thereof, as amended, supplemented or otherwise modified in accordancewith Section 7.9.

 

“SingleEmployer Plan”:  any Plan that iscovered by Title IV of ERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  when used with respect to any Person, meansthat, as of any date of determination, (a) the amount of the present fairsaleable value of the assets of such Person will, as of such date, exceed theamount of all liabilities of such Person, contingent or otherwise, as of suchdate, as such quoted terms are determined in accordance with applicable federaland state laws governing determinations of the insolvency of debtors, (b) thepresent fair saleable value (as such quoted terms are determined in accordancewith applicable federal and state laws governing determinations of theinsolvency of debtors) of the assets of such Person will, as of such date, begreater than the amount that will be required to pay the liability of suchPerson on its debts as such debts become absolute and matured, (c) suchPerson will not have, as of such date, an unreasonably small amount of capitalwith which to conduct its business, and (d) such Person will be able topay its debts as they mature.  Forpurposes of this definition, (i) debt means liability on a claim, (ii) claimmeans any (x) right to payment, whether or not such a right is reduced tojudgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,disputed, undisputed, legal, equitable, secured or unsecured or (y) right to anequitable remedy for breach of performance if such breach gives rise to a rightto payment, whether or not such right to an equitable remedy is reduced tojudgment, fixed, contingent, matured or unmatured, disputed, undisputed,secured or unsecured and (iii) the Parent Borrower may assume, so long asno Default or Event of Default shall have occurred and be continuing at thetime such assumption is made, that all or a portion of the then outstandingTerm Loans or other Indebtedness of the Parent Borrower hereunder will berefinanced at the maturity thereof.

 

“SpecifiedChange of Control”:  a Change ofControl as defined in the Holdco Notes Indenture or the Senior SubordinatedNotes Indenture.

 

“SpotSelling Rate”:  the spot selling rateat which the Administrative Agent offers to sell the Alternate Currency for Dollarsin the London foreign exchange market at approximately 11:00 a.m. Londontime on such date for delivery two (2) Business Days later.

 

“Subsidiary”:  as to any Person, a corporation, partnership,limited liability company or other entity of which shares of stock or otherownership interests having ordinary voting power (other than stock or suchother ownership interests having such power only by reason of the happening ofa contingency) to elect a majority of the board of directors or other managersof such corporation, partnership or other entity are at the time owned, or themanagement of which is otherwise controlled, directly or indirectly through oneor more intermediaries, or both, by such Person.  Unless otherwise qualified, all references

 

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to aSubsidiary or to Subsidiaries in this Agreement shall refer to a Subsidiary orSubsidiaries of the Parent Borrower.

 

“SyndicationAgent”:  as defined in the preamblehereto.

 

“Survey”:a survey of any Mortgaged Property (and all improvements thereon) which is (a) (i) preparedby a surveyor or engineer licensed to perform surveys in the state or provincewhere such Mortgaged Property is located, (ii) dated (or redated) notearlier than six months prior to the date of delivery thereof unless thereshall have occurred within six months prior to such date of delivery anyexterior construction on the site of such Mortgaged Property, in which eventsuch survey shall be dated (or redated) after the completion of suchconstruction or if such construction shall not have been completed as of suchdate of delivery, not earlier than 20 days prior to such date of delivery,(iii) certified by the surveyor (in a manner reasonably acceptable to theAdministrative Agent or Canadian Agent, as applicable) to the AdministrativeAgent (or the Canadian Agent, as applicable), the Collateral Agent and theTitle Company, (iv) complying in all respects with the minimum detailrequirements of the American Land Title Association as such requirements are ineffect on the date of preparation of such survey and (v) sufficient forthe Title Company to remove all standard survey exceptions from the titleinsurance policy (or commitment) relating to such Mortgaged Property and issuethe endorsements of the type required by Section 5.01(h)(iii) or (b) otherwiseacceptable to the Administrative Agent or the Canadian Agent, as applicable.

 

“TermCommitment”:  as to any Lender, theobligation of such Lender, if any, to make a Term Loan hereunder on the ClosingDate in a principal amount not to exceed the amount set forth under the headingTerm Commitment opposite such Lender’s name on Schedule 1.1(A).  The original aggregate amount of the TermCommitments is $88,000,000 and may be increased in accordance with Section 2.25.

 

“TermLender”:  each Lender that is theholder of a Term Loan.

 

“Term Loan”:  as defined in Section 2.1(a).

 

“Term LoanTermination Date”:  the earliest of (i) June 30,2012, (ii) the date of termination of the Commitments pursuant to Section 8.1,(iii) February 15, 2011, but only if the Parent Borrower fails torepay in full the outstanding principal amount of the Senior SubordinatedNotes, together with accrued interest and any premium, on or prior to December 15,2010 using only the proceeds of Refinancing Indebtedness, no portion of whichmatures earlier than December 31, 2012 and (iv) March 31, 2010,but only if Holdco fails to repay in full the outstanding principal amount ofthe Holdco Notes, together with accrued interest and any premium, on or priorto March 31, 2010 using only proceeds of Refinancing Indebtedness, noportion of which matures earlier than December 31, 2012.

 

“TermPercentage”:  as to any Term Lenderat any time, the percentage which the aggregate principal amount of such Lender’sTerm Loans then outstanding constitutes of the aggregate principal amount ofthe Term Loans then outstanding; provided that solely for purposes ofcalculating the amount of each installment of Term Loans (other than the lastinstallment) payable to a Term Lender pursuant to Section 2.2, such TermLender’s Term Percentage shall be calculated without giving effect to anyportion of any prior mandatory or optional prepayment attributable to such TermLender’s Term Loans which shall have been declined by such Term Lender (or, inthe case of any Term Lender which shall have acquired its Term Loans byassignment from another Person, by such other Person).

 

“TitleCompany”:  any title insurancecompany as shall be retained by the Parent Borrower and reasonably acceptable tothe Administrative Agent or the Canadian Agent.

 

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“TitlePolicy”: as defined in Section 5.1(A)(h)(iii)

 

“TotalCanadian Commitments”:  at any time,the aggregate amount of the Canadian Commitments then in effect.

 

“TotalCanadian Extensions of Credit”:  atany time, the aggregate amount of the Canadian Extensions of Credit of theCanadian Lenders outstanding at such time.

 

“TotalCommitments”:  $50,000,000.

 

“TotalOutstandings”:  the aggregate Dollar Equivalentprincipal amount of all U.S. Revolving Extensions of Credit and Canadian Loansplus (without duplication) the Canadian L/C Obligations and the U.S. L/CObligations.

 

“Total U.S.Revolving Commitments”:  at any time,the aggregate amount of the U.S. Revolving Commitments then in effect.

 

“Total U.S.Revolving Extensions of Credit”:  atany time, the aggregate amount of the U.S. Revolving Extensions of Credit ofthe U.S. Revolving Lenders outstanding at such time.

 

“TransactionDocuments”:  the AcquisitionDocuments and the Loan Documents.

 

“Transactions”:  collectively, the transactions to occur on orprior to the Closing Date pursuant to the Transaction Documents, including (a) theconsummation of the Acquisition; (b) the execution, delivery and performanceof the Loan Documents and the initial borrowings hereunder; (c) the Refinancing;(d) the Equity Financing; (e) the issuance of the Additional HoldcoNotes; (f) the transactions pursuant to the Bond Consent Solicitations;and (g) the payment of all fees and expenses to be paid on or prior to theClosing Date and owing in connection with the foregoing.

 

“Transferee”:  any Assignee or Participant.

 

“Type”:  as to any Loan, its nature as an ABR Loan, a EurodollarLoan, a C$ Prime Loan or a Bankers’ Acceptance.

 

“U.S.Borrowers”:  as defined in thepreamble hereto.

 

“U.S.Commitment”:  as to any U.S. Lender,the sum of the Term Commitment and the U.S. Revolving Commitment of suchLender.

 

“U.S.Issuing Lender”:  any U.S. RevolvingLender designated as the U.S. Issuing Lender in a written notice from theAdministrative Agent and the Parent Borrower to the U.S. Lenders.  For the avoidance of doubt, Bank of Americashall serve as the U.S. Issuing Lender with respect to the Existing U.S.Letters of Credit.

 

“U.S. L/CCommitment”:  $5,000,000.

 

“U.S. L/CFee Payment Date”:  the last BusinessDay of each March, June, September and December and the last day ofthe U.S. Revolving Commitment Period.

 

“U.S. L/CObligations”:  at any time, an amountequal to the sum of (a) the aggregate then undrawn and unexpired amount ofthe then outstanding U.S. Letters of Credit and (b) the aggregate

 

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amount ofdrawings under U.S. Letters of Credit that have not then been reimbursedpursuant to Section 3.5.

 

“U.S. L/CParticipants”:  the collectivereference to all the U.S. Revolving Lenders other than the U.S. Issuing Lender.

 

“U.S.Lenders”:  as defined in the preamblehereto.

 

“U.S.Letters of Credit”:  as defined in Section 3.1(a).

 

“U.S. Loans”:  the collective reference to the Term Loans,the U.S. Revolving Loans and the U.S. Swingline Loans.

 

“U.S.Reimbursement Obligation”:  theobligation of the U.S. Borrowers to reimburse the relevant U.S. Issuing Lenderpursuant to Section 3.5 for amounts drawn under Letters of Credit.

 

“U.S.Required Lenders”:  at any time, theholders of more than 50% of the sum of (i) the aggregate unpaid principalamount of the Term Loans then outstanding and (ii) the Total U.S.Revolving Commitments then in effect or, if the U.S. Revolving Commitments havebeen terminated, the Total U.S. Revolving Extensions of Credit thenoutstanding.

 

“U.S.Required Prepayment Lenders”:  theRequisite Lenders in respect of each of the Term Facility and the U.S. RevolvingFacility.

 

“U.S.Revolving Commitment”:  as to anyU.S. Lender, the obligation of such Lender, if any, to make U.S. RevolvingLoans and participate in U.S. Swingline Loans and U.S. Letters of Credit in anaggregate principal and/or face amount not to exceed the amount set forth underthe heading “U.S. Revolving Commitment” opposite such Lender’s name on Schedule 1.1(A) orin the Assignment and Acceptance pursuant to which such Lender became a partyhereto, as the same may be changed from time to time pursuant to the termshereof.  The amount of the Total U.S.Revolving Commitments is $50,000,000 minus the amount at such time outstandingunder the Canadian Subfacility.  Uponsuch adjustment of the Total U.S. Revolving Commitments, the U.S. Revolving Commitmentas to any U.S. Lender shall be reduced pro rata in accordance with such Lender’sU.S. Revolving Percentage.

 

“U.S.Revolving Commitment Period”:  theperiod from but excluding the Closing Date to and excluding the RevolvingTermination Date; provided, that in regard to U.S. Swingline Loans notto exceed $2,000,000, the “U.S. Revolving Commitment Period” shall include theClosing Date.

 

“U.S.Revolving Credit Exposure”: with respect to any U.S. Revolving Lender atany time, the outstanding amount of such Lender’s U.S. Revolving Loans plussuch Lender’s pro rata share of the outstanding amount of L/C Obligations withrespect to U.S. Letters of Credit plus such Lender’s pro rata share of theoutstanding amount of U.S. Swingline Loans.

 

“U.S.Revolving Extensions of Credit”:  asto any U.S. Revolving Lender at any time, an amount equal to the sum of (a) theaggregate principal amount of all U.S. Revolving Loans held by such Lender thenoutstanding, (b) such Lender’s U.S. Revolving Percentage of the U.S. L/CObligations then outstanding and (c) such Lender’s U.S. RevolvingPercentage of the aggregate principal amount of U.S. Swingline Loans thenoutstanding.

 

“U.S.Revolving Lender”:  at any time, eachU.S. Lender that then has a U.S. Revolving Commitment or that then holds U.S.Revolving Loans.

 

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“U.S.Revolving Loans”:  as defined in Section 2.3(a).

 

“U.S.Revolving Percentage”:  as to anyU.S. Revolving Lender at any time, the percentage which such Lender’s U.S.Revolving Commitment then constitutes of the Total U.S. Revolving Commitments(or, at any time after the U.S. Revolving Commitments shall have expired orterminated, the percentage which the aggregate principal amount of such Lender’sU.S. Revolving Loans then outstanding constitutes the aggregate principalamount of the U.S. Revolving Loans then outstanding).

 

“U.S.Secured Parties”: the Administrative Agent, the U.S. Lenders and theHedging Counterparties.

 

“U.S.Subsidiary Borrowers”:  as defined inthe recitals hereto.

 

“U.S.Subsidiary Guarantor”:  eachSubsidiary of the Parent Borrower other than any Excluded Foreign Subsidiary.

 

“U.S.Swingline Commitment”:  theobligation of the U.S. Swingline Lender to make U.S. Swingline Loans pursuantto Section 2.5 in an aggregate principal amount at any one time outstandingnot to exceed $5,000,000.

 

“U.S.Swingline Lender”:  Credit Suisse, inits capacity as the lender of U.S. Swingline Loans.

 

“U.S.Swingline Loans”:  as defined in Section 2.5(a).

 

“U.S.Swingline Participation Amount”:  asdefined in Section 2.5(e).

 

“U.S.Wholly Owned Subsidiary”:  as to anyPerson, any Domestic Subsidiary all of the Capital Stock of which (other thandirectors’ qualifying shares required by law) is owned by such Person directlyand/or through other U.S. Wholly Owned Subsidiaries.

 

“U.S.Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a U.S. Wholly Owned Subsidiary of theParent Borrower.

 

“UniformCustoms”:  the Uniform Customs andPractice for Documentary Credits (1993 Revision), International Chamber ofCommerce Publication No. 500, as the same may be amended from time totime.

 

“UnitedStates”:  the United States ofAmerica.

 

## 1.2                                 OtherDefinitional Provisions.

 

### (a)                                  Unlessotherwise specified therein, all terms defined in this Agreement shall have thedefined meanings when used in the other Loan Documents or any certificate orother document made or delivered pursuant hereto or thereto.

###  

### (b)                                 Asused herein and in the other Loan Documents, and any certificate or otherdocument made or delivered pursuant hereto or thereto, (i) accountingterms relating to Holdco and its Subsidiaries not defined in Section 1.1and accounting terms partly defined in Section 1.1, to the extent notdefined, shall have the respective meanings given to them under GAAP, (ii) thewords “include”, “includes” and “including” shall be deemed to be followed bythe phrase “without limitation” and (iii) the

 

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### words “asset” and “property”shall be construed to have the same meaning and effect and to refer to any andall tangible and intangible assets and properties, including cash, CapitalStock, securities, revenues, accounts, leasehold interests and contract rights.

###  

### (c)                                  Thewords “hereof”, “herein” and “hereunder” and words of similar import when usedin this Agreement shall refer to this Agreement as a whole and not to anyparticular provision of this Agreement, and Section, Schedule and Exhibit referencesare to this Agreement unless otherwise specified.

###  

### (d)                                 Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

###  

## 1.3                                 Related Lender. EachCanadianLender is, or is an affiliate of, a U.S. Lender (although not all U.S. Lendersare affiliates of Canadian Lenders at the date of this Agreement.)  The term “Related” when used with respect toa U.S. Lender or a Canadian Lender means the Canadian Lender or U.S. Lender, asthe case may be, of which such former Lender is an affiliate (or which is thesame Person as such former Lender).

 

# SECTION 2

#  

# AMOUNT AND TERMS OF COMMITMENTS

#  

## 2.1                                 Term Commitments;Procedure for Term Loan Borrowing.

 

### (a)                                  Subjectto the terms and conditions hereof, each Term Lender severally agrees to make aterm loan (a “Term Loan”) to Acquisition Corp. on the Closing Date in anamount not to exceed the amount of the Term Commitment of such TermLender.  The Term Loans may from time totime be Eurodollar Loans or ABR Loans, as determined by the Parent Borrower andnotified to the Administrative Agent in accordance with Sections 2.1(b) and2.10.

###  

### (b)                                 TheParent Borrower shall give the Administrative Agent irrevocable telephonicnotice confirmed promptly in writing in form and substance as provided in Exhibit N(which telephonic notice must be received by the Administrative Agent prior to12:00 P.M., New York City time, one Business Day prior to the anticipatedClosing Date) requesting that the Term Lenders make the Term Loans on the ClosingDate and specifying the amount to be borrowed. The Term Loans made on the Closing Date shall initially be ABR Loans,and, unless otherwise agreed by the Administrative Agent in its sole discretion,no Term Loan may be made as, converted into or continued as a Eurodollar Loanhaving an Interest Period in excess of one month prior to the date that is 10days after the Closing Date.  Uponreceipt of such notice the Administrative Agent shall promptly notify each TermLender thereof.  Not later than 12:00Noon, New York City time, on the Closing Date each Term Lender shall makeavailable to the Administrative Agent at the Funding Office an amount inimmediately available funds equal to the Term Loan or Term Loans to be made bysuch Lender.  The Administrative Agentshall transfer to the account of the U.S. Borrowers specified by the ParentBorrower the aggregate of the amounts made available to the AdministrativeAgent by the Term Lenders in immediately available funds.

###  

## 2.2                                 Repayment of TermLoans.  The principal amount of the TermLoan of each Term Lender shall mature in twenty-eight consecutive quarterlyinstallments, commencing on September 30, 2005, each of which shall be inan amount equal to such Term Lender’s Term Percentage multiplied by the amountset forth below opposite such installment:

 

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| **Quarterly Installment** | ** ** | **Principal Amount** | ** ** |
|---------------------------|------------|----------------------|------------|
|                      |       |                 |       |   |
| 1-24                      |       | $                    | 220,000    |   |
| 25-28                     |       | $                    | 20,680,000 |   |

 

; provided, that the outstanding principalamount of the Term Loan of each Lender, together with accrued interest thereonto the date of repayment, shall be paid in full on the Term Loan TerminationDate (whether or not such Term Loan Termination Date, as determined from timeto time, is earlier than any of the applicable dates above).

 

## 2.3                                 RevolvingCommitments.

 

### (a)                                  Subjectto the terms and conditions hereof, each U.S. Revolving Lender severally agreesto make revolving credit loans (“U.S. Revolving Loans”) in any ApprovedCurrency to the U.S. Borrowers from time to time during the U.S. RevolvingCommitment Period in an aggregate principal amount at any one time outstandingwhich, when added to such U.S. Lender’s U.S. Revolving Percentage of the sum of(i) the U.S. L/C Obligations then outstanding and (ii) the aggregateprincipal amount of the U.S. Swingline Loans then outstanding, does not exceedthe amount of such U.S. Lender’s Revolving Commitment.  During the U.S. Revolving Commitment Periodthe U.S. Borrowers may use the U.S. Revolving Commitments by borrowing,prepaying the U.S. Revolving Loans in whole or in part, and reborrowing, all inaccordance with the terms and conditions hereof.  The U.S. Revolving Loans may from time totime be Eurodollar Loans or ABR Loans, as determined by the Parent Borrower andnotified to the Administrative Agent in accordance with Sections 2.4 and 2.10.

###  

### (b)                                 TheU.S. Borrowers shall repay all outstanding U.S. Revolving Loans on theRevolving Termination Date in the Approved Currency in which such Loan isdenominated.

###  

### (c)                                  Subjectto the terms and conditions hereof and in the Canadian Loan Documents, theCanadian Lenders agree to make revolving credit loans to, and to accept Draftsfrom, the Canadian Borrower (such loans and acceptances of Drafts, the “CanadianLoans”) from time to time during the Canadian Commitment Period in anaggregate principal amount at any one time outstanding which, when added to theCanadian L/C Obligations then outstanding does not exceed the CanadianCommitments then in effect.

###  

### (d)                                 TheCanadian Loans shall be denominated in C$ and may from time to time be (i) C$Prime Loans, (ii) Bankers’ Acceptances or B/A Equivalent Loans or (iii) acombination thereof, as determined by the Canadian Borrower and notified to theCanadian Agent in accordance with the provisions hereof and of the CanadianLoan Documents.

###  

### (e)                                  C$Prime Loans may be borrowed, repaid without premium or penalty and reborrowedfrom time to time by the Canadian Borrower during the Canadian CommitmentPeriod in accordance with the provisions hereof and of the Canadian Loan Documents.

###  

### (f)                                    TheCanadian Borrower shall repay all outstanding Canadian Loans on the RevolvingTermination Date.

###  

## 2.4                                 Procedurefor Revolving Loan Borrowing.

 

### (a)                                  TheU.S. Borrowers may borrow under the U.S. Revolving Commitments during the U.S.Revolving Commitment Period on any Business Day, provided that theParent Borrower shall give the Administrative Agent irrevocable telephonic noticeconfirmed promptly in writing in form and

 

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### substance as provided in Exhibit N(which notice must be received by the Administrative Agent prior to 12:00 Noon,New York City time, (a) (i) three Business Days prior to therequested Borrowing Date, in the case of Eurodollar Loans in Dollars, and (ii) fourBusiness Days prior to the requested Borrowing Date in the case of EurodollarLoans in Alternate Currency, or (b) one Business Day prior to the requestedBorrowing Date, in the case of ABR Loans), specifying (i) the amount andType of U.S. Revolving Loans to be borrowed, (ii) the requested BorrowingDate, (iii) the account to which the proceeds of such Loans should be transferredand (iv) in the case of Eurodollar Loans, the respective amounts of eachsuch Type of Loan and the respective lengths of the initial Interest Period thereforas well as the requested Approved Currency. Unless otherwise agreed by the Administrative Agent in its solediscretion, no U.S. Revolving Loan may be made as, converted into or continuedas a Eurodollar Loan having an Interest Period in excess of one month prior tothe date that is 10 days after the Closing Date.  Each borrowing under the U.S. RevolvingCommitments shall be in an amount equal to (x) in the case of ABR Loans,$1,000,000 or a whole multiple thereof (or, if the then aggregate AvailableU.S. Revolving Commitments are less than $1,000,000, such lesser amount) and(y) in the case of Eurodollar Loans, or, in the case of Eurodollar Loans to bemade in Alternate Currency, the Dollar Equivalent of the principal amountthereof shall be in an amount equal to $5,000,000 or a whole multiple of$1,000,000 in excess thereof; provided that the U.S. Swingline Lendermay request, on behalf of the Parent Borrower, borrowings under the U.S.Revolving Commitments that are ABR Loans in other amounts pursuant to Section 2.5.  Upon receipt of any such notice from theParent Borrower, the Administrative Agent shall promptly notify each U.S. RevolvingLender thereof.  Each U.S. RevolvingLender will make the amount of its pro rata share of each borrowing availableto the Administrative Agent for the account of the Borrowers at the FundingOffice prior to 12:00 Noon, New York City time (or, if denominated in AlternateCurrency, 12:00 Noon, local time), on the Borrowing Date requested by theParent Borrower in funds immediately available to the Administrative Agent; provided,that the amount of U.S. Loans at any time outstanding shall not exceed the U.S.Commitment, and provided, further, that the Total Outstandingsshall not at any time exceed the Total Commitments.  Such borrowing will then be made available tothe U.S. Borrowers by the Administrative Agent transferring to the account ofthe U.S. Borrowers specified by the Parent Borrower the aggregate of theamounts made available to the Administrative Agent by the U.S. RevolvingLenders and in like funds as received by the Administrative Agent.

###  

### (b)                                 TheCanadian Borrower may obtain a Canadian Loan during the Canadian CommitmentPeriod on any Business Day, provided thatthe Canadian Borrower shall give the Canadian Agent irrevocable telephonicnotice confirmed promptly in writing in form and substance as provided in Exhibit N(which notice must be received by the Canadian Agent prior to (i) by 11:00 A.M.,Toronto time, one Business Day prior to the requested Borrowing Date, in thecase of C$ Prime Loans, or (ii) in accordance with Section 2.21(e),in the case of Canadian Loans comprised of Bankers’ Acceptances, specifying theamount and Type of Canadian Loans to be borrowed; the initial Contract Periodfor any Bankers’ Acceptances to be included in such borrowing; whether aCanadian Lender is required to purchase the Bankers’ Acceptances accepted byit; in the case of a rollover or conversion of any Bankers’ Acceptance ascontemplated by Section 2.22, the particulars of the maturing Bankers’Acceptance; the date of such borrowing (which shall be a Business Day); and thelocation and number of the Canadian Borrower’s account to which funds are to bedisbursed.  If no election as to the Typeof borrowing is specified, then the requested borrowing shall be a C$ PrimeLoan.  Each borrowing under the CanadianCommitments shall be in an amount equal to C$1,000,000 or a whole multiplethereof (or, if then aggregate Available Canadian Commitments are less thanC$1,000,000, such lesser amount).  If noContract Period is specified with respect to any requested Bankers’ Acceptance,then the Canadian Borrower shall be deemed to have selected a Contract Periodof 30 days’ duration.  Upon receipt ofany such notice of borrowing from the Canadian Borrower, the Canadian Agentshall promptly notify each Canadian Lender thereof and, in the case of a noticerequesting Bankers’ Acceptances, the Canadian Agent shall advise each CanadianLender of the face amount and term of each Draft to be accepted by it andwhether such Lender is required, pursuant to the notice by the CanadianBorrower, to purchase the Bankers’ Acceptances

 

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### accepted by it.  Each Canadian Lender will make the amount ofits pro rata share of each borrowing (except that, if the face amount of anyDraft to be accepted by a Canadian Lender, determined as provided for above,would not be C$100,000 or a whole multiple of C$100,000, the Canadian Agentshall either increase or decrease such face amount to the nearest wholemultiple of C$100,000) available to the Canadian Agent for the account of theCanadian Borrower at the Funding Office prior to 12:00 Noon, Toronto time, onthe Borrowing Date requested by the Canadian Borrower in funds immediatelyavailable to the Canadian Agent; provided, that the amount of CanadianLoans at any time outstanding shall not exceed the Canadian Commitments; and provided,further, that the Total Outstandings shall not at any time exceed theTotal Commitments.  Such borrowing willthen be made available to the Canadian Borrower by the Canadian Agenttransferring to the account of the Canadian Borrower specified by the CanadianBorrower the aggregate of the amounts made available to the Canadian Agent bythe Canadian Lenders and in like funds as received by the Canadian Agent.

###  

### (c)                                  TheCanadian Agent shall open and maintain on its books at its Toronto main branch,accounts and records evidencing the Canadian Loans made available to theCanadian Borrower by the Canadian Lenders under this Agreement.  The Canadian Agent shall record therein theamount of such Canadian Loans, each payment of principal and interest madethereon, the Bankers’ Acceptances and B/A Equivalent Loans accepted, paid andcancelled by the Canadian Borrower hereunder, the Canadian Letters of Creditoutstanding, paid or expired and all other amounts becoming due to the CanadianLenders under this Agreement, including Acceptance Fees, commitment fees,administration fees and letters of credit fees, and all payments on accountthereof.  Such accounts and recordsmaintained by the Canadian Lenders will constitute, in the absence of manifesterror, *prima facie* evidence of the indebtednessof the Canadian Borrower to the Canadian Lenders pursuant to this Agreement,the date the Canadian Lenders made each Canadian Extension of Credit availableto the Canadian Borrower and the amounts the Canadian Borrower has paid fromtime to time on account thereof.

###  

## 2.5                                 U.S.Swingline Commitment; Procedure for U.S. Swingline Borrowing; Refunding of U.S.Swingline Loans.

 

### (a)                                  Subjectto the terms and conditions hereof, the U.S. Swingline Lender agrees to make aportion of the credit otherwise available to the Parent Borrower under the U.S.Revolving Commitments from time to time during the U.S. Revolving CommitmentPeriod by making swing line loans (“U.S. Swingline Loans”) to the ParentBorrower; provided that (i) the aggregate principal amount of U.S.Swingline Loans outstanding at any time shall not exceed the U.S. SwinglineCommitment then in effect (notwithstanding that the U.S. Swingline Loansoutstanding at any time, when aggregated with the U.S. Swingline Lender’soutstanding U.S. Revolving Loans, may exceed the U.S. Swingline Commitment thenin effect) and (ii) the Parent Borrower shall not request, and the U.S.Swingline Lender shall not make, any U.S. Swingline Loan if, after givingeffect to the making of such U.S. Swingline Loan, the aggregate amount of theAvailable U.S. Revolving Commitments would be less than zero.  During the U.S. Revolving Commitment Period,the Parent Borrower may use the U.S. Swingline Commitment by borrowing,repaying and reborrowing, all in accordance with the terms and conditionshereof.  U.S. Swingline Loans shall beABR Loans only.

###  

### (b)                                 TheParent Borrower shall repay to the U.S. Swingline Lender the then unpaidprincipal amount of each U.S. Swingline Loan on the Revolving CreditTermination Date.

###  

### (c)                                  Wheneverthe Parent Borrower desires that the U.S. Swingline Lender make a U.S.Swingline Loan it shall give the U.S. Swingline Lender irrevocable telephonicnotice confirmed promptly in writing in form and substance as provided in Exhibit N(which telephonic notice must be received by the U.S. Swingline Lender notlater than 1:00 P.M., New York City time, on the proposed Borrowing Date),specifying (i) the amount to be borrowed and (ii) the requestedBorrowing Date (which

 

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### shall be a Business Day duringthe U.S. Revolving Commitment Period). Each borrowing under the U.S. Swingline Commitment shall be in an amountequal to $500,000 or a whole multiple of $100,000 in excess thereof.  Not later than 3:00 P.M., New York Citytime, on the Borrowing Date specified in a notice in respect of U.S. SwinglineLoans, the U.S. Swingline Lender shall make available to the Parent Borrower anamount in immediately available funds equal to the amount of the U.S. SwinglineLoans to be made by the U.S. Swingline Lender on such Borrowing Date by depositingsuch proceeds in the account of the Parent Borrower specified in the notice tothe U.S. Swingline Lender.

###  

### (d)                                 TheU.S. Swingline Lender, at any time and from time to time in its sole andabsolute discretion may, on behalf of the Parent Borrower (which herebyirrevocably directs the U.S. Swingline Lender to act on its behalf), on oneBusiness Day’s notice given by the U.S. Swingline Lender no later than 12:00Noon, New York City time, request each U.S. Revolving Lender to make, and eachU.S. Revolving Lender hereby agrees to make, a U.S. Revolving Loan, in anamount equal to such U.S. Revolving Lender’s U.S. Revolving Percentage of theaggregate amount of the U.S. Swingline Loans (the “Refunded U.S. SwinglineLoans”) outstanding on the date of such notice, to repay the U.S. SwinglineLender.  Each U.S. Revolving Lender shallmake the amount of such U.S. Revolving Loan available to the AdministrativeAgent at the Funding Office in immediately available funds, not later than11:00 A.M., New York City time, one Business Day after the date of suchnotice.  The proceeds of such U.S. RevolvingLoans shall be immediately made available by the Administrative Agent to theU.S. Swingline Lender for application by the U.S. Swingline Lender to therepayment of the Refunded U.S. Swingline Loans. The Parent Borrower irrevocably authorizes the U.S. Swingline Lender tocharge the Parent Borrower’s accounts with the Administrative Agent (up to theamount available in each such account) to pay immediately the amount of suchRefunded U.S. Swingline Loans to the extent amounts received from the U.S.Revolving Lenders are not sufficient to repay in full such Refunded U.S.Swingline Loans.

###  

### (e)                                  Ifprior to the time a U.S. Revolving Loan would have otherwise been made pursuantto Section 2.5(d), one of the events described in Section 8.1(f) shallhave occurred and be continuing with respect to the Parent Borrower or if forany other reason, as determined by the U.S. Swingline Lender in its solediscretion, U.S. Revolving Loans may not be made as contemplated by Section 2.5(d),each U.S. Revolving Lender shall, on the date such U.S. Revolving Loan was tohave been made pursuant to the notice referred to in Section 2.5(d),purchase for cash an undivided participating interest in the then outstandingU.S. Swingline Loans by paying to the U.S. Swingline Lender an amount (the “U.S. SwinglineParticipation Amount”) equal to (i) such U.S. Revolving Lender’s U.S.Revolving Percentage times (ii) the sum of the aggregate principalamount of U.S. Swingline Loans then outstanding that were to have been repaidwith such U.S. Revolving Loans.

###  

### (f)                                    Whenever,at any time after the U.S. Swingline Lender has received from any U.S.Revolving Lender such Lender’s U.S. Swingline Participation Amount, the U.S.Swingline Lender receives any payment on account of the U.S. Swingline Loans,the U.S. Swingline Lender will distribute to such U.S. Revolving Lender itsU.S. Swingline Participation Amount (appropriately adjusted, in the case ofinterest payments, to reflect the period of time during which such U.S.Revolving Lender’s participating interest was outstanding and funded and, inthe case of principal and interest payments, to reflect such U.S. RevolvingLender’s prorata portion of such payment if such payment is notsufficient to pay the principal of and interest on all U.S. Swingline Loansthen due); provided, however, that in the event that such paymentreceived by the U.S. Swingline Lender is required to be returned, such U.S. RevolvingLender will return to the U.S. Swingline Lender any portion thereof previouslydistributed to it by the U.S. Swingline Lender.

###  

### (g)                                 EachU.S. Revolving Lender’s obligation to make the U.S. Revolving Loans referred toin Section 2.5(d) and to purchase participating interests pursuant toSection 2.5(e) shall be absolute and unconditional and shall not beaffected by any circumstance, including (i) any setoff, counterclaim,

 

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### recoupment, defense or otherright that such U.S. Revolving Lender or the Parent Borrower may have againstthe U.S. Swingline Lender, the Parent Borrower or any other Person for anyreason whatsoever, (ii) the occurrence or continuance of a Default or anEvent of Default or the failure to satisfy any of the other conditionsspecified in Section 5, (iii) any adverse change in the condition(financial or otherwise) of the Parent Borrower, (iv) any breach of thisAgreement or any other Loan Document by the Parent Borrower, any other LoanParty or any other U.S. Revolving Lender or (v) any other circumstance,happening or event whatsoever, whether or not similar to any of the foregoing.

###  

## 2.6                                 Commitment Fees,etc.

##  

### (a)                                  TheU.S. Borrowers agree to pay to the Administrative Agent for the account of eachU.S. Revolving Lender a commitment fee for the period from and including theClosing Date to the last day of the U.S. Revolving Commitment Period, computedat the Commitment Fee Rate on the average daily amount of the Available U.S.Revolving Commitment of such Lender during the period for which payment ismade, payable quarterly in arrears on the last Business Day of each March,June, September and December and on the Revolving Termination Date,commencing on the first of such dates to occur after the date hereof.

###  

### (b)                                 TheU.S. Borrowers agree to pay to the Administrative Agent the fees in the amountsand on the dates previously agreed to in writing by the Parent Borrower and theAdministrative Agent.

###  

## 2.7                                 Terminationor Reduction of Revolving Commitments.

 

### (a)                                  TheParent Borrower shall have the right, upon not less than three Business Days’notice to the Administrative Agent, to terminate the U.S. Revolving Commitmentsor, from time to time, to reduce the amount of the U.S. Revolving Commitments; providedthat no such termination or reduction of U.S. Revolving Commitments shall bepermitted if, after giving effect thereto and to any prepayments of the U.S.Revolving Loans and U.S. Swingline Loans made on the effective date thereof,the Total U.S. Revolving Extensions of Credit would exceed the Total U.S.Revolving Commitments.  Any suchreduction shall be in an amount equal to the Dollar Equivalent of $1,000,000,or a whole multiple thereof, and shall reduce permanently the U.S. RevolvingCommitments then in effect.  Upon receiptof any such notice from the Parent Borrower, the Administrative Agent shallpromptly notify each U.S. Revolving Lender thereof.

###  

### (b)                                 TheCanadian Borrower shall have the right, upon not less than three Business Days’notice to the Canadian Agent, to terminate the Canadian Commitments or, fromtime to time, to reduce the amount of the Canadian Commitments without premiumor penalty; provided that no such termination or reduction of CanadianCommitments shall be permitted if, after giving effect thereto and to any prepaymentsof the Canadian Loans made on the effective date thereof, the CanadianExtensions of Credit would exceed the Canadian Commitments at that time.  Any such reduction shall be in an amountequal to C$1,000,000, or a whole multiple thereof (unless the entire balance ofthe Canadian Commitments is then terminated), and shall reduce permanently theCanadian Commitments then in effect.

###  

## 2.8                                 OptionalPrepayments.  (a)  EachU.S. Borrower may at any time and from time to time prepay the U.S. Loans madeto it, in whole or in part, without premium or penalty, in the ApprovedCurrency in which such Loan is denominated, upon irrevocable telephonic noticeconfirmed promptly in writing substantially in the form of Exhibit G,which telephonic notice must be received by the Administrative Agent prior to12:00 noon, New York City time, at least three Business Days prior thereto inthe case of Eurodollar Loans and at least one Business Day prior theretootherwise, which notice shall specify the date and amount of prepayment and theType of Loan to be prepaid, and, if a combination

 

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## thereof, the amount allocableto each; provided that if a Eurodollar Loan is prepaid on any day otherthan the last day of the Interest Period applicable thereto, the U.S. Borrowersshall also pay any amounts owing pursuant to Section 2.18.  Upon receipt of any such notice, theAdministrative Agent shall promptly notify each relevant U.S. Lenderthereof.  If any such notice is given,the amount specified in such notice shall be due and payable on the datespecified therein, together with (except in the case of U.S. Revolving Loansthat are ABR Loans and U.S. Swingline Loans) accrued interest to such date onthe amount prepaid.  Partial prepaymentsof Term Loans and U.S. Revolving Loans shall be in an aggregate principalamount of or, in the case of Alternate Currency Revolving Loans, the DollarEquivalent of the principal amount thereof shall be in an amount equal to$1,000,000 or a whole multiple thereof. Partial prepayments of U.S. Swingline Loans shall be in an aggregateprincipal amount of $100,000 or a whole multiple thereof.  Amounts prepaid pursuant to this Section 2.8shall be applied as directed by the Parent Borrower.

 

### (b)                                 TheCanadian Borrower may at any time and from time to time prepay the C$ PrimeLoans made to it, in whole or in part, without premium or penalty, upon irrevocabletelephonic notice confirmed promptly in writing substantially in the form of Exhibit Gwhich telephonic notice must be received by the Canadian Agent prior to 12:00noon, Toronto time, at least one Business Day prior thereto, which notice shallspecify the date and amount of prepayment, and, if a combination thereof, theamount allocable to each.  Upon receiptof any such notice, the Canadian Agent shall promptly notify each relevantCanadian Lender thereof.  If any suchnotice is given, the amount specified in such notice shall be due and payableon the date specified therein.  Partialprepayments of C$ Prime Loans shall be in an aggregate principal amount ofC$1,000,000 or a whole multiple thereof.

###  

### (c)                                  Notwithstandinganything to the contrary contained in this Agreement, the applicable Borrowermay rescind any notice of prepayment under Section 2.8(a) or (b) ifsuch prepayment would have resulted from a refinancing of the Facilities, whichrefinancing shall not be consummated or shall otherwise be delayed.

###  

## 2.9                                 MandatoryPrepayments and Commitment Reductions.

 

### (a)                                  Unless,with respect to the Term Loans or the U.S. Revolving Credit Facility, the U.S.Required Prepayment Lenders or, with respect to the Canadian Subfacility, theCanadian Required Prepayment Lenders shall otherwise agree, (x) if anyCapital Stock shall be issued by Parent Borrower or any of its Subsidiaries(each an “Equity Issuance Prepayment Event”) and (y) if any Indebtedness of the type referred to in clause (a) or(c) of the definition thereof set forth in Section 1.1. shall be incurred by Parent Borroweror any of its Subsidiaries (other than any Indebtedness permitted by Section 7.2)(each a “Debt Issuance Prepayment Event”), an amount equal to (i) in thecase of an Equity Issuance Prepayment Event, 50% of the Net Cash Proceedsthereof and (ii) in the case of a Debt Issuance Prepayment Event, 100% ofthe Net Cash Proceeds thereof shall be applied promptly (and in any event,within three Business Days of the receipt thereof) toward the prepayment of theTerm Loans, the prepayment of the U.S. Revolving Loans and the prepayment ofthe Canadian Loans as set forth in Section 2.9(d).

###  

### (b)                                 Unless,with respect to the Term Loans or the U.S. Revolving Credit Facility, the U.S.Required Prepayment Lenders or, with respect to the Canadian Subfacility, theCanadian Required Prepayment Lenders, shall otherwise agree, if on any date ParentBorrower or any of its Subsidiaries shall receive Net Cash Proceeds from anyAsset Sale or Recovery Event then, unless a Reinvestment Notice shall be deliveredpromptly in respect thereof, such Net Cash Proceeds shall be applied promptly(and in any event within three Business Days of the receipt thereof) toward theprepayment of the Term Loans, the prepayment of the U.S. Revolving Loans andthe prepayment of the Canadian Loans as set forth in Section 2.9(d); providedthat, notwithstanding the foregoing, (i) the aggregate Net Cash Proceedsof Recovery Events that may be excluded from the foregoing requirement pursuantto a Reinvestment Notice

 

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### shall not exceed $5,000,000 inany fiscal year of the Parent Borrower and (ii) on each Reinvestment PrepaymentDate, an amount equal to the Reinvestment Prepayment Amount with respect to therelevant Reinvestment Event shall be applied toward the prepayment of the TermLoans, the prepayment of the U.S. Revolving Loans and the prepayment of the CanadianLoans as set forth in Section 2.9(d); provided, further,that a Reinvestment Notice may not be provided in respect of an Asset Saleconsisting of a transaction permitted by Section 7.11.

###  

### (c)                                  Unless,with respect to the Term Loans or the U.S. Revolving Credit Facility, the U.S.Required Prepayment Lenders or, with respect to the Canadian Subfacility, theCanadian Required Prepayment Lenders, shall otherwise agree, if for any fiscalyear of the Parent Borrower, commencing with the fiscal year ending December 31,2006, there shall be Excess Cash Flow, the Borrowers shall, on the relevantExcess Cash Flow Application Date (as defined below), apply 50% (if the ConsolidatedTotal Leverage Ratio of Parent Borrower as of the end of such fiscal year isequal to or greater than 3.0 to 1.0), 25% (if the Consolidated Total LeverageRatio of Parent Borrower as of the end of such fiscal year is less than 3.0****to 1.0 and equal to or greater than 2.50 to 1.0) or zeropercent (0%) (if the Consolidated Total Leverage Ratio of Parent Borrower as ofthe end of such fiscal year is less than 2.50 to 1.0) of such Excess Cash Flow forsuch prior year toward the prepayment of the Term Loans, the prepayment of theU.S. Revolving Loans and the prepayment of the Canadian Loans as set forth in Section 2.9(d).  Each such prepayment shall be made on a date(an “Excess Cash Flow Application Date”) no later than five days afterthe earlier of (i) the date on which the financial statements referred toin Section 6.1(a), for the fiscal year with respect to which such prepaymentis made, are required to be delivered to the Lenders and (ii) the datesuch financial statements are actually delivered.

###  

### (d)                                 Unlessotherwise agreed by the U.S. Required Prepayment Lenders or the Canadian RequiredPrepayment Lenders, as the case may be, amounts to be applied in connectionwith prepayments  made pursuant to Section 2.9(a),2.9(b) or 2.9(c) shall be applied, first, to the prepayment ofthe Term Loans (in each case pro rata to the remaining scheduled installments)until the Term Loans have been paid in full and, second, to prepay, prorata, any outstanding U.S. Revolving Loans (in each case pro rata to each U.S. Lenderin accordance with such Lender’s U.S. Revolving Percentage) and any outstandingCanadian Loans (in each case pro rata to each Canadian Lender in accordancewith such Lender’s Canadian Revolving Percentage) (without a correspondingcommitment reduction of the U.S. Revolving Commitments or the CanadianCommitments) and, after all of the U.S. Revolving Loans and all of the CanadianLoans have been repaid, and to the extent of the balance of any excessremaining after the foregoing prepayments, the U.S. Borrowers shall cashcollateralize outstanding U.S. L/C Obligations by depositing a correspondingamount in cash in a cash collateral account established with the AdministrativeAgent for the benefit of the U.S. Lenders on terms and conditions satisfactoryto the Administrative Agent and, to the extent of any excess remaining theCanadian Borrower shall cash collateralize outstanding Canadian L/C Obligationsby depositing a corresponding amount in cash in a cash collateral accountestablished with the Canadian Agent for the benefit of the Canadian Lenders onterms and conditions satisfactory to the Canadian Agent.  To the extent there remains Net Cash Proceedsafter the Canadian Letters of Credit have been cash collateralized, Borrowershall be entitled to retain such remaining Net Cash Proceeds.  The application of any prepayment pursuant toSection 2.9 shall be made, first, to ABR Loans and, second,to Eurodollar Loans in such manner as to minimize break funding costs set forthin Section 2.18.  All prepaymentsmade pursuant to this Section 2.9 shall be made without premium orpenalty, provided that if a Eurodollar Loan is prepaid on any day other thanthe last day of the Interest Period applicable thereto, Borrowers shall alsopay amounts owing pursuant to Section 2.18.  Each prepayment of the Loans under Section 2.9(except in the case of U.S. Revolving Loans that are ABR Loans, U.S. SwinglineLoans or Canadian Loans that are C$ Prime Loans) shall be accompanied byaccrued interest to the date of such prepayment on the amount prepaid.

 

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## 2.10                           Conversionand Continuation Options.

 

### (a)                                  TheParent Borrower may elect from time to time to convert Eurodollar Loans to ABRLoans by giving the Administrative Agent at least three Business Days’ (or, inthe case of Eurodollar Loans denominated in Alternate Currency that are to becontinued, at least four Business Days’) prior irrevocable telephonic noticeconfirmed promptly in writing in form and substance as provided in Exhibit O(which telephonic notice must be received by the Administrative Agent not laterthan 12:00 Noon, New York City time) of such election, provided that anysuch conversion of Eurodollar Loans may only be made on the last day of anInterest Period with respect thereto.  Ifon any date the aggregate Dollar Equivalent principal amount of all EurodollarLoans denominated in Alternate Currency exceeds the Euro Sublimit, one or moreof the U.S. Borrowers shall promptly make a prepayment of such Eurodollar Loans(in accordance with the procedures set forth in this paragraph) in an aggregateamount equal to or greater than such excess. The Parent Borrower may elect from time to time to convert ABR Loans toEurodollar Loans by giving the Administrative Agent at least three BusinessDays’ prior irrevocable telephonic notice confirmed promptly in writing in formand substance as provided in Exhibit O (which telephonic notice must bereceived by the Administrative Agent not later than 12:00 Noon, New York City time)of such election (which notice shall specify the length of the initial InterestPeriod therefor), provided that no ABR Loan under a particular Facilitymay be converted into a Eurodollar Loan when any Event of Default has occurredand is continuing and the Administrative Agent has or the Requisite Lenders inrespect of such Facility have determined in its or their sole discretion not topermit such conversions.  Upon receipt ofany such notice the Administrative Agent shall promptly notify each relevantLender thereof.  Loans consisting ofAlternate Currency Revolving Loans may not be converted to ABR Loans.

###  

### (b)                                 AnyEurodollar Loan may be continued as such upon the expiration of the thencurrent Interest Period with respect thereto by the Parent Borrower givingnotice to the Administrative Agent, in accordance with the applicableprovisions of the term “Interest Period” set forth in Section 1.1, of thelength of the next Interest Period to be applicable to such Loans, providedthat no Eurodollar Loan under a particular Facility may be continued as suchwhen any Event of Default has occurred and is continuing and the AdministrativeAgent has or the Requisite Lenders in respect of such Facility have determinedin its or their sole discretion not to permit such continuations, and provided,further, that if the Parent Borrower shall fail to give any requirednotice as described above in this paragraph or if such continuation is notpermitted pursuant to the preceding proviso such Loans other than Alternate CurrencyLoans shall be automatically converted to ABR Loans on the last day of suchthen expiring Interest Period.  Uponreceipt of any such notice the Administrative Agent shall promptly notify eachrelevant Lender thereof.  EurodollarLoans denominated in an Alternate Currency shall not be converted to an ABRLoan, but shall continue as a Eurodollar Loan having an Interest Period of onemonth in the circumstance described above.

###  

## 2.11                           Limitations on EurodollarTranches.  Notwithstanding anythingto the contrary in this Agreement, all borrowings, conversions andcontinuations of Eurodollar Loans hereunder and all selections of InterestPeriods hereunder shall be in such amounts and be made pursuant to suchelections so that, (a) after giving effect thereto, the aggregate principalamount of the Eurodollar Loans comprising each Eurodollar Tranche shall beequal to or, in the case of Alternate Currency Revolving Loans, the DollarEquivalent of the principal amount equal to $5,000,000 or a whole multiple of$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranchesshall be outstanding at any one time.

 

## 2.12                           InterestRates and Payment Dates.

 

### (a)                                  EachEurodollar Loan shall bear interest for each day during each Interest Periodwith respect thereto at a rate per annum equal to the Eurodollar Ratedetermined for such day plus the Applicable Margin.

 

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### (b)                                 EachABR Loan shall bear interest at a rate per annum equal to the ABR plusthe Applicable Margin.

###  

### (c)                                  EachC$ Prime Loan shall bear interest at a rate per annum equal to the C$ PrimeRate plus the Applicable Margin.

###  

### (d)                                 (i) If all or a portion of the principal amount of any Loan or ReimbursementObligation shall not be paid when due (whether at the stated maturity, byacceleration or otherwise), all outstanding U.S. Loans, U.S. ReimbursementObligations, Canadian Loans and Canadian Reimbursement Obligations (whether ornot overdue) shall bear interest at a rate per annum equal to (w) in the caseof the U.S. Loans, the rate that would otherwise be applicable thereto pursuantto the foregoing provisions of this Section plus 2%, (x) in thecase of U.S. Reimbursement Obligations, the rate applicable to ABR Loans underthe U.S. Revolving Facility plus 2%, (y) in the case of Canadian Loans,the rate that would otherwise be applicable thereto pursuant to the foregoingprovisions of this Section plus 2%, or (z) in the case of CanadianReimbursement Obligations, the rate applicable to C$ Prime Loans under the CanadianSubfacility plus 2%, and (ii) if all or a portion of any interestpayable on any U.S. Loan or U.S. Reimbursement Obligation or any commitment feeor other amount payable hereunder to the U.S. Lenders shall not be paid whendue (whether at the stated maturity, by acceleration or otherwise), suchoverdue amount shall bear interest at a rate per annum equal to the rate thenapplicable to ABR Loans plus 2% (or, in the case of any such otheramounts that do not relate to a particular Facility, the rate then applicableto ABR Loans under the U.S. Revolving Facility plus 2%), in each case,with respect to clauses (i) and (ii) above, from the date of such non-paymentuntil such amount is paid in full (as well after as before judgment).

###  

### (e)                                  Interestshall be payable in arrears on each Interest Payment Date, provided thatinterest accruing pursuant to paragraph (d) of this Section shall bepayable from time to time on demand. Interest in respect of U.S. Loans and U.S. Reimbursement Obligations(and all other amounts denominated in $ or €) shall be payable in $ or €,respectively, and interest in respect of Canadian Loans or CanadianReimbursement Obligations (and all other amounts denominated in C$) shall bepayable in C$.

###  

## 2.13                           Computationof Interest and Fees.

 

### (a)                                  Interestand fees payable pursuant hereto shall be calculated on the basis of a 360-dayyear for the actual days elapsed, except that, with respect to ABR Loans therate of interest on which is calculated on the basis of the Prime Rate and C$Prime Loans, the interest thereon shall be calculated on the basis of a 365-(or 366-, as the case may be) day year for the actual days elapsed.  Acceptance Fees and commitment fees andinterest calculated on the basis of the CDOR Rate shall be calculated on thebasis of a 365-day year for the actual days elapsed.  The Administrative Agent shall as soon aspracticable notify the Parent Borrower and the relevant U.S. Lenders of eachdetermination of a Eurodollar Rate.  Anychange in the interest rate on a Loan resulting from a change in the ABR, theC$ Prime Rate or the Eurocurrency Reserve Requirements shall become effectiveas of the opening of business on the day on which such change becomes effective(it being agreed that the effective date of any change in the ABR or the C$Prime Rate shall be the date of announcement of such change).  The Administrative Agent or the CanadianAgent shall as soon as practicable notify the Parent Borrower and the relevantU.S. Lenders or the Canadian Borrower and the relevant Canadian Lenders, as thecase may be, of the effective date and the amount of each such change in interestrate.

###  

### (b)                                 Eachdetermination of an interest rate by the Administrative Agent or the CanadianAgent pursuant to any provision of this Agreement shall be conclusive andbinding on the relevant Borrowers and the relevant Lenders in the absence ofmanifest error.  The Administrative Agentshall, at

 

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### the request of the ParentBorrower, deliver to the Parent Borrower a statement showing the quotationsused by the Administrative Agent in determining any interest rate pursuant to Section 2.12(a).

###  

### (c)                                  Forthe purposes of the Interest Act (Canada), in any case in which an interestrate is stated in this Agreement to be calculated on the basis of a year of 365days, as the case may be, the yearly rate of interest to which such interestrate is equivalent is equal to such interest rate multiplied by the number ofdays in the year in which the relevant interest payment accrues and divided by365.

###  

### (d)                                 Forthe purposes of any Canadian Loan, the rates of interest under this Agreementare nominal rates, and not effective rates or yields.  The principle of deemed reinvestment ofinterest does not apply to any interest calculation under this Agreement inrespect to any Canadian Loan.  If anyprovision of this Agreement or any of the Canadian Loan Documents would obligethe Canadian Borrower to make any payment of interest or other amount payableto any Canadian Lender in an amount or calculated at a rate which would beprohibited by law or would result in a receipt by that Canadian Lender of “interest”at a “criminal rate” (as such terms are construed under the *Criminal Code* (Canada)), then, notwithstanding suchprovision, such amount or rate shall be deemed to have been adjusted withretroactive effect to the maximum amount or rate of interest, as the case maybe, as would not be so prohibited by Law or so result in a receipt by thatCanadian Lender of “interest” at a “criminal rate,” such adjustment to beeffected, to the extent necessary (but only to the extent necessary), asfollows:

###  

#### (i)                                     first, by reducingthe amount or rate of interest required to be paid to the affected CanadianLender; and

####  

#### (ii)                                  thereafter, by reducingany fees, commissions, premiums and other amounts required to be paid to theaffected Canadian Lender which would constitute interest for purposes of Section 347of the *Criminal Code* (Canada).

####  

## 2.14                           Inabilityto Determine Interest Rate.  If priorto the first day of any Interest Period:

 

(a)                                  the AdministrativeAgent shall have determined (which determination shall be conclusive andbinding upon the U.S. Borrowers in the absence of manifest error) that, byreason of circumstances affecting the relevant market, adequate and reasonablemeans do not exist for ascertaining the Eurodollar Rate for the ApprovedCurrency in which any Eurodollar Loan is determined or the currency specifiedin the notice requesting such borrowing pursuant to Section 2.4 inaccordance with the terms hereof for such Interest Period, or

 

(b)                                 the AdministrativeAgent shall have received notice from the Requisite Lenders in respect of therelevant Facility that the Eurodollar Rate for the Approved Currency in whichany Eurodollar Loan is denominated or the currency specified in the noticerequesting such borrowing pursuant to Section 2.4 determined or to bedetermined for such Interest Period will not adequately and fairly reflect thecost to such U.S. Lenders (as conclusively certified by such Lenders) of makingor maintaining their affected Loans during such Interest Period,

 

theAdministrative Agent shall give telecopy or telephonic notice thereof to theParent Borrower and the relevant Lenders as soon as practicablethereafter.  If such notice is given (x)any Eurodollar Loans under the relevant Facility requested to be made on thefirst day of such Interest Period shall be made as ABR Loans, (y) anyLoans under the relevant Facility that were to have been converted on the firstday of such Interest Period to Eurodollar Loans shall be continued as ABR Loansand (z) any outstanding Eurodollar Loans under the relevant Facility shall beconverted, on the first day of the next succeeding Interest Period, to ABRLoans.  Until such notice has beenwithdrawn by the Administrative Agent (which the Administrative

 

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Agent shall beobligated to do when the circumstances giving rise to such notice no longerexist), no further Eurodollar Loans under the relevant Facility shall be madeor continued as such, nor shall the Parent Borrower have the right to convertLoans under the relevant Facility to Eurodollar Loans.

 

## 2.15                           ProRata Treatment and Payments.

 

### (a)                                  Eachborrowing by the U.S. Borrowers from the U.S. Lenders hereunder, each paymentby the U.S. Borrowers on account of any commitment fee and any reduction of theCommitments of the U.S. Lenders shall be made pro rata according to therespective Term Percentages or U.S. Revolving Percentages, as the case may be,of the relevant Lenders.  Each borrowingby the Canadian Borrower from the Canadian Lenders hereunder and any reductionof the Commitments of the Canadian Lenders shall be made pro rata according tothe respective Canadian Revolving Percentages of the relevant Lenders.

###  

### (b)                                 Eachpayment (including each prepayment) by the U.S. Borrowers on account ofprincipal of and interest on the Term Loans shall be made pro rata according tothe respective outstanding principal amounts of the Term Loans then held by theTerm Lenders).  The amount of eachprincipal prepayment of the Term Loans shall be applied to reduce the thenremaining installments of the Term Loans pro rata based upon the then remainingprincipal amount thereof.  Amountsprepaid on account of the Term Loans may not be reborrowed.

###  

### (c)                                  Eachpayment (including each prepayment) by the U.S. Borrowers on account ofprincipal of and interest on the U.S. Revolving Loans shall be made pro rataaccording to the respective outstanding principal amounts of the U.S. RevolvingLoans then held by the U.S. Revolving Lenders.

###  

### (d)                                 Allpayments (including prepayments) to be made by the Parent Borrower or theCanadian Borrower, as the case may be, hereunder, whether on account ofprincipal, interest, fees or otherwise, shall be made without setoff or counterclaimand shall be made prior to 12:00 Noon, New York City time (in the case of U.S.Loans or obligations) or, in the case of Loans denominated in AlternateCurrency, 12:00 Noon, local time or 12:00 Noon, Toronto time (in the case ofCanadian Loans or obligations), on the due date thereof to the AdministrativeAgent, for the account of the U.S. Lenders, or, as the case may be, theCanadian Agent, for the account of the Canadian Lenders at the applicableFunding Office, in Dollars or Canadian Dollars, as the case may be, and in immediatelyavailable funds.  The Administrative Agentor the Canadian Agent, as the case may be, shall distribute such paymentsreceived by it to the U.S. Lenders or the Canadian Lenders, as the case may be,promptly upon receipt in like funds as received.  If any payment hereunder (other than paymentson the Eurodollar Loans) becomes due and payable on a day other than a BusinessDay, such payment shall be moved to the preceding Business Day.  If any payment on a Eurodollar Loan becomesdue and payable on a day other than a Business Day, the maturity thereof shallbe extended to the next succeeding Business Day unless the result of such extensionwould be to extend such payment into another calendar month, in which eventsuch payment shall be made on the immediately preceding Business Day.  In the case of any extension of any paymentof principal pursuant to the preceding two sentences, interest thereon shall bepayable at the then applicable rate during such extension.

###  

### (e)                                  Unlessthe Administrative Agent or the Canadian Agent, as appropriate, shall have beennotified in writing by any Lender prior to the date of a borrowing that suchLender will not make the amount that would constitute its share of suchborrowing available to the Administrative Agent or the Canadian Agent, asappropriate, the Administrative Agent or the Canadian Agent, as appropriate, mayassume that such Lender is making such amount available to the AdministrativeAgent or the Canadian Agent, as appropriate, and the Administrative Agent orthe Canadian Agent, as appropriate, may, in reliance upon such assumption, makeavailable to the Parent Borrower or the Canadian Borrower, as appropriate,

 

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### a corresponding amount.  If such amount is not made available to theAdministrative Agent or the Canadian Agent, as appropriate, by the requiredtime on the Borrowing Date therefor, such Lender shall pay to theAdministrative Agent or the Canadian Agent, as appropriate, on demand, suchamount with interest thereon at a rate equal to the daily average Federal FundsEffective Rate, or in the case of Canadian Loans, the C$ Prime Rate for theperiod until such Lender makes such amount immediately available to theAdministrative Agent or the Canadian Agent, as appropriate.  A certificate of the Administrative Agent orthe Canadian Agent, as appropriate, submitted to any Lender with respect to anyamounts owing under this paragraph shall be conclusive in the absence ofmanifest error.  If and to the extentthat such Lender’s share of such borrowing is not made available to theAdministrative Agent or the Canadian Agent, as appropriate, by such Lenderwithin three Business Days of such Borrowing Date, the Administrative Agent orthe Canadian Agent, as appropriate, shall also be entitled to recover such amountwith interest thereon (and no other interest) at the rate per annum applicableto ABR Loans or the C$ Prime Loans under the relevant Facility, on demand, fromthe Borrowers.

###  

### (f)                                    Unlessthe Administrative Agent or the Canadian Agent, as appropriate, shall have beennotified in writing by the Parent Borrower or the Canadian Borrower, asappropriate, prior to the date of any payment being made hereunder that the Borrowerswill not make such payment to the Administrative Agent or the Canadian Agent,as appropriate, the Administrative Agent or the Canadian Agent, as appropriate,may assume that the Borrowers are making such payment, and the AdministrativeAgent or the Canadian Agent, as appropriate, may, but shall not be required to,in reliance upon such assumption, make available to the Lenders theirrespective pro rata shares of a corresponding amount.  If such payment is not made to theAdministrative Agent or the Canadian Agent, as appropriate, by the Borrowerswithin three Business Days of such required date, the Administrative Agent orthe Canadian Agent, as appropriate, shall be entitled to recover, on demand,from each Lender to which any amount which was made available pursuant to thepreceding sentence, such amount with interest thereon (net of any interest orother reimbursement received from such Lender) at the rate per annum equal tothe daily average Federal Funds Effective Rate or, in the case of the CanadianLenders, the C$ Prime Rate.  Nothingherein shall be deemed to limit the rights of the Administrative Agent or theCanadian Agent as appropriate, or any Lender against the Borrowers.

###  

## 2.16                           Requirements of Law.

 

### (a)                                  Ifthe adoption of or any change in any Requirement of Law or in theinterpretation or application thereof, in each case after the date hereof, orcompliance by any Lender with any request or directive (whether or not havingthe force of law) from any central bank or other Governmental Authority madesubsequent to the date hereof:

###  

#### (i)                                     shall subject anyLender to any tax of any kind whatsoever with respect to this Agreement, anyLetter of Credit, any Application or any Eurodollar Loan or other Loan made byit or any Bankers’ Acceptance or B/A Equivalent Loan purchased or accepted byit, or change the basis of taxation of payments to such Lender in respectthereof (except for Non-Excluded Taxes covered by Section 2.17 and changesin the rate of tax on the overall net income or capital of such Lender);

####  

#### (ii)                                  shall impose, modifyor hold applicable any reserve, special deposit, compulsory loan or similarrequirement against assets held by, deposits or other liabilities in or for theaccount of, advances, loans or other extensions of credit by, or any otheracquisition of funds by, any office of such Lender that is not otherwiseincluded in the determination of the Eurodollar Rate hereunder or the DiscountRate hereunder; or

####  

#### (iii)                               shall impose on suchLender any other condition;

 

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and the resultof any of the foregoing is to increase the cost to such Lender, by an amountthat such Lender reasonably deems to be material, of making, converting into,continuing or maintaining Eurodollar Loans or other Loans or issuing orparticipating in Letters of Credit or purchasing or accepting Bankers’ Acceptancesor B/A Equivalent Loans, or to reduce any amount receivable hereunder inrespect thereof, then, in any such case, the U.S. Borrowers or the CanadianBorrower, as the case may be, shall promptly (and in any event within 3Business Days) after receipt by the U.S. Borrowers or the Canadian Borrower, asthe case may be, of a reasonably detailed invoice therefor pay such Lender anyadditional amounts necessary to compensate such Lender for such increased costor reduced amount receivable.  If any Lenderbecomes entitled to claim any additional amounts pursuant to this paragraph, itshall promptly notify the Parent Borrower (with a copy to the AdministrativeAgent) of the event by reason of which it has become so entitled; providedthat the Parent Borrower shall not be required to compensate a Lender pursuantto this paragraph for any amounts incurred more than six months prior to thedate that such Lender notifies the Parent Borrower of such Lender’s intentionto claim compensation therefor and provided, further, that if thecircumstances giving rise to such claim have a retroactive effect, then suchsix-month period shall be extended to include the period of such retroactiveeffect.

 

### (b)                                 Ifany Lender shall have determined that the adoption of or any change in anyRequirement of Law regarding capital adequacy or in the interpretation orapplication thereof, in each case after the date hereof, or compliance by suchLender or any corporation controlling such Lender with any request or directiveregarding capital adequacy (whether or not having the force of law) from anyGovernmental Authority made subsequent to the date hereof shall have the effectof reducing the rate of return on such Lender’s or such corporation’s capitalas a consequence of its obligations hereunder or under or in respect of anyLetter of Credit or Bankers’ Acceptance or B/A Equivalent Loan to a level belowthat which such Lender or such corporation could have achieved but for suchadoption, change or compliance (taking into consideration such Lender’s or suchcorporation’s policies with respect to capital adequacy) by an amount reasonablydeemed by such Lender to be material, then from time to time, after submissionby such Lender to the Parent Borrower or the Canadian Borrower, as the case maybe (with a copy to the Administrative Agent) of a reasonably detailed writtenrequest therefor, the relevant Borrowers shall pay to such Lender suchadditional amount or amounts as will compensate such Lender for such reduction;provided that such Borrowers shall not be required to compensate aLender pursuant to this paragraph for any amounts incurred more than six monthsprior to the date that such Lender notifies the Parent Borrower of such Lender’sintention to claim compensation therefor and provided, further,that if the circumstances giving rise to such claim have a retroactive effect,then such six-month period shall be extended to include the period of such retroactiveeffect.

###  

### (c)                                  Acertificate as to any additional amounts payable pursuant to this Section submittedby any Lender to the Parent Borrower (with a copy to the Administrative Agent)shall be presumptively correct.  Theobligations of any of the Borrowers pursuant to this Section shall survivethe termination of this Agreement and the payment of the Loans and all otheramounts payable hereunder.

###  

## 2.17                           Taxes.

 

### (a)                                  Exceptas otherwise required by applicable law, all payments made by the Loan Parties underthis Agreement shall be made free and clear of, and without deduction orwithholding for or on account of, any present or future income, stamp or othertaxes, levies, imposts, duties, charges, fees, deductions or withholdings, nowor hereafter imposed, levied, collected, withheld or assessed by anyGovernmental Authority, excluding net income taxes and franchise taxes (imposedin lieu of net income taxes) imposed on the Administrative Agent, the Canadian Agentor any Lender as a result of a present or former connection between theAdministrative Agent, the Canadian Agent or such Lender and the jurisdiction ofthe Governmental Authority imposing such tax or any political subdivision ortaxing authority thereof or therein (other than any such connection arisingsolely from the Administrative Agent, the Canadian

 

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### Agent or such Lender havingexecuted, delivered or performed its obligations or received a payment under,or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,imposts, duties, charges, fees, deductions or withholdings, including anyinterest and penalties related thereto (“Non-Excluded Taxes”) or OtherTaxes are required to be withheld from any amounts payable to theAdministrative Agent, the Canadian Agent or any Lender hereunder, the amountsso payable to the Administrative Agent, the Canadian Agent or such Lender shallbe increased to the extent necessary to yield to the Administrative Agent, theCanadian Agent or such Lender (after payment of all Non-Excluded Taxes andOther Taxes, including Non-Excluded Taxes or Other Taxes imposed on amountspayable under this  Section 2.17(a))interest or any such other amounts payable hereunder at the rates or in theamounts specified in this Agreement, provided, however, that the LoanParties shall not be required to increase any such amounts payable to anyLender with respect to any Non-Excluded Taxes (i) that are attributable tosuch Lender’s failure to comply with the requirements of paragraph (d) or (e) ofthis Section, (ii) with respect to the U.S. Loans, that are United Stateswithholding taxes imposed on amounts payable to such Lender at the time theLender becomes a party to this Agreement, except to the extent that such Lender’sassignor (if any) was entitled, at the time of assignment, to receiveadditional amounts from the U.S. Borrowers with respect to such Non-ExcludedTaxes pursuant to this paragraph, or (iii) with respect to the CanadianLoans, that are Canadian withholding taxes imposed on amounts payable to suchLender at the time such Lender becomes a party to this Agreement, except to theextent that such Lender’s assignor (if any) was entitled, at the time ofassignment, to receive additional amounts from the Canadian Borrower withrespect to such Non-Excluded Taxes pursuant to this paragraph.

###  

### (b)                                 Inaddition, the Parent Borrower and the Canadian Borrower shall pay any OtherTaxes to the relevant Governmental Authority in accordance with applicable law.

###  

### (c)                                  Wheneverany Non-Excluded Taxes or Other Taxes are payable by the Borrowers, as promptlyas possible thereafter the Parent Borrower shall send to the AdministrativeAgent or the Canadian Agent, as the case may be, for its own account or for theaccount of the relevant Lender, as the case may be, a certified copy of anoriginal official receipt received by the Parent Borrower showing paymentthereof.  The Borrowers shall jointly andseverally indemnify the Administrative Agent, the Canadian Agent and eachLender, within 30 days after demand therefor, for the full amount of any Non-ExcludedTaxes or Other Taxes (including Non-Excluded Taxes or Other Taxes imposed orasserted on or attributable to amounts payable under this Section) paid by theAdministrative Agent, the Canadian Agent or such Lender, as the case may be,whether or not such Non-Excluded Taxes or Other Taxes were correctly or legallyimposed or asserted.

###  

### (d)                                 EachU.S. Lender (or Transferee) that is not a citizen or resident of the UnitedStates, a corporation, partnership or other entity created or organized in orunder the laws of the United States (or any jurisdiction thereof), or anyestate or trust that is subject to federal income taxation regardless of thesource of its income (a “Non-U.S. Lender”) shall deliver to the ParentBorrower and the Administrative Agent (or, in the case of a Participant, to theLender from which the related participation shall have been purchased) twocopies of either U.S. Internal Revenue Service Form W-8BEN (claimingeligibility for benefits of an income tax treaty to which the United States isa party) or Form W-8ECI, or, in the case of a Non-U.S. Lender claimingexemption from U.S. federal withholding tax under Section 871(h) or881(c) of the Code with respect to payments of “portfolio interest”, astatement substantially in the form of Exhibit H and a Form W-8BEN,or any subsequent versions thereof or successors thereto, properly completedand duly executed by such Non-U.S. Lender claiming complete exemption from, ora reduced rate of, U.S. federal withholding tax on all payments by theBorrowers under this Agreement and the other Loan Documents.  Such forms shall be delivered by each Non-U.S.Lender on or before the date it becomes a party to this Agreement (or, in thecase of any Participant, on or before the date such Participant purchases therelated participation).  In addition,each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence orinvalidity of any form previously delivered by such Non-U.S. Lender.  

 

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### Each Non-U.S. Lender shallpromptly notify the Parent Borrower at any time it determines that it is nolonger in a position to provide any previously delivered certificate to theParent Borrower (or any other form of certification adopted by the U.S. taxingauthorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lendershall not be required to deliver any form pursuant to this paragraph that suchNon-U.S. Lender is not legally able to deliver.

###  

### (e)                                  ALender that is entitled to an exemption from or reduction of non-U.S.withholding tax under the law of the jurisdiction in which the Borrowers arelocated, or any treaty to which such jurisdiction is a party, with respect topayments under this Agreement shall deliver to the Parent Borrower (with a copyto the Administrative Agent), at the time or times prescribed by applicable lawand reasonably requested by the Parent Borrower, such properly completed andexecuted documentation prescribed by applicable law as will permit suchpayments to be made without withholding or at a reduced rate, providedthat such Lender is legally entitled to complete, execute and deliver suchdocumentation and in such Lender’s judgment such completion, execution orsubmission would not materially prejudice the legal position of such Lender orotherwise be materially disadvantageous to such Lender.

###  

### (f)                                    Ifthe Administrative Agent or any Lender receives a refund or otherwise wouldhave received a refund but for the offset of the amount of such refund againstthe Lender’s Non-Excluded Taxes (“Tax Refund”), which in the good faithjudgment of such Lender is allocable to Non-Excluded Taxes paid by the ParentBorrower, it shall promptly pay the portion of such Tax Refund to the ParentBorrower that will leave it in no better or worse after-tax position (takinginto account all out-of-pocket expenses of such Lender incurred in obtainingsuch Tax Refund) then if the Non-Excluded Taxes giving rise to such refund hadnever been imposed in the first instance, provided, however, thatthe Parent Borrower agrees to promptly return such Tax Refund to the AdministrativeAgent or the applicable Lender, as the case may be, if it receives notice fromthe Administrative Agent or applicable Lender that such Administrative Agent orLender is required to repay such Tax Refund but only if such repayment is requiredbecause the initial Tax Refund was permitted in error.

###  

### (g)                                 Theagreements in this Section shall survive the termination of this Agreementand the payment of the Loans and all other amounts payable hereunder.

###  

## 2.18                           Indemnity.  The U.S. Borrowers agree to indemnify eachU.S. Lender and to hold each U.S. Lender harmless from any loss or expense(other than any loss of Applicable Margin) that such Lender may sustain orincur as a consequence of (a) the failure by the Borrowers in making aborrowing of, conversion into or continuation of Eurodollar Loans after theParent Borrower has given a notice requesting the same in accordance with theprovisions of this Agreement, (b) the failure by the Borrowers in makingany prepayment of or conversion from Eurodollar Loans after the Parent Borrowerhas given a notice thereof in accordance with the provisions of this Agreementor (c) the making of a prepayment of Eurodollar Loans on a day that is notthe last day of an Interest Period with respect thereto.  Such indemnification may include an amountequal to the excess, if any, of (i) the amount of interest that would haveaccrued on the amount so prepaid, or not so borrowed, converted or continued,for the period from the date of such prepayment or of such failure to borrow,convert or continue to the last day of such Interest Period (or, in the case ofa failure to borrow, convert or continue, the Interest Period that would have commencedon the date of such failure) in each case at the applicable rate of interestfor such Loans provided for herein (excluding, however, the Applicable Marginincluded therein, if any) over (ii) the amount of interest (as reasonablydetermined by such Lender) that would have accrued to such Lender on suchamount by placing such amount on deposit for a comparable period with leadingbanks in the London interbank eurodollar market.  A certificate as to any amounts payablepursuant to this Section submitted to the Parent Borrower by any U.S.Lender shall be conclusive in the absence of manifest error.  This covenant shall survive the terminationof this Agreement and the payment of the Loans and all other amounts payablehereunder.

 

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## 2.19                           Change of Lending Office.  Each Lender agrees that, upon the occurrenceof any event giving rise to the operation of Section 2.16 or 2.17(a) withrespect to such Lender, it will, if requested by the Parent Borrower, use reasonableefforts (subject to overall policy considerations of such Lender) to designateanother lending office for any Loans affected by such event with the object ofavoiding the consequences of such event; provided that such designationis made on terms that, in the sole judgment of such Lender, cause such Lenderand its lending office(s) to suffer no economic, legal or regulatory disadvantage,and provided, further, that nothing in this Section shallaffect or postpone any of the obligations of any Borrower or the rights of anyLender pursuant to Section 2.16 or 2.17(a).

 

## 2.20                           Replacementof Lenders under Certain Circumstances. The Parent Borrower or the Canadian Borrower, as appropriate, shall bepermitted to (a) replace any Lender which (i) defaults in itsobligation to make Loans hereunder or (ii) in connection with any proposedamendment, modification, supplement or waiver with respect to any of theprovisions of the Loan Documents as contemplated in Section 10.1 wheresuch amendment, modification, supplement or waiver has been approved by (x) theU.S. Required Lenders (and, if applicable, the U.S. Required Prepayment Lendersand/or the Requisite Lenders), or (y) the Canadian Required Lenders (and,if applicable, the Canadian Required Prepayment Lenders and/or the RequisiteLenders), if applicable, in accordance with such Section, fails to consent toany such proposed amendment, modification, supplement or waiver and (b) replaceor remove any Lender which requests reimbursement for amounts owing pursuant toSection 2.16 or 2.17 and, if the Parent Borrower or the Canadian Borrower,if appropriate, elects to remove such Lender, terminate such Lender’s U.S.Revolving Commitment or Canadian Commitment hereunder; provided that (A)(i) suchreplacement or removal, as the case may be, does not conflict with anyRequirement of Law, (ii) no Event of Default shall have occurred and becontinuing at the time of such replacement or removal, as the case may be, (iii) priorto any such replacement or removal, as the case may be, pursuant to clause (b) abovesuch Lender shall have taken no action under Section 2.19 so as toeliminate the continued need for payment of amounts owing pursuant to Section 2.16or 2.17, (iv) the Parent Borrower shall be liable to such replaced orremoved U.S. Lender under Section 2.18 if any Eurodollar Loan owing tosuch replaced or removed Lender shall be purchased other than on the last dayof the Interest Period relating thereto and (v) any such replacement or removal,as the case may be, shall not be deemed a waiver of any rights which the ParentBorrower or the Canadian Borrower, if appropriate, the Administrative Agent orthe Canadian Agent, as appropriate, or any other Lender shall have against thereplaced or removed Lender, (B) in the case of replacement of a Lenderunder this Section 2.20, (i) the replacement financial institutionshall purchase, at par, all Loans including all accrued, but unpaid interestand fees and other amounts owing to such replaced Lender on or prior to thedate of replacement, (ii) the replacement financial institution, if not alreadya Lender, shall be reasonably satisfactory to the Administrative Agent or theCanadian Agent, as appropriate, and the U.S. Issuing Lender and the CanadianIssuing Lender, as appropriate, (iii) the replaced Lender shall beobligated to make such replacement in accordance with the provisions of Section 10.6and (iv) until such time as such replacement shall be consummated, theParent Borrower or the Canadian Borrower, if appropriate, shall pay alladditional amounts (if any) required pursuant to Section 2.16 or 2.17, (C) ifthe Parent Borrower or the Canadian Borrower, if appropriate, elects to removea Lender under clause (b) of this Section 2.20 and if such Lender hasany Loans outstanding at such time, the consent of the Administrative Agent orthe Canadian Agent, as appropriate, and the U.S. Required Lenders or theCanadian Required Lenders, as appropriate, shall be required to terminate suchLender’s U.S. Revolving Commitment or Canadian Commitment, as appropriate, and (D) inthe case of replacement of a non-consenting Lender under clause (a)(ii) ofthis Section 2.20, the Parent Borrower or the Canadian Borrower, ifappropriate, shall replace such Lender within 60 days of such Lender’s failureto consent to the proposed action.

 

## 2.21                           Bankers’ AcceptancesUnder the Canadian Subfacility.  TheCanadian Borrower may issue Drafts denominated in C$ for acceptance by theCanadian Lenders subject to the following provisions:

 

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(a)                                  Bankers’ Acceptancesshall be denominated in C$, for acceptance and, at the Canadian Borrower’soption, purchased by the Canadian Lenders at the Discount Rate;

 

(b)                                 each utilization byway of Bankers’ Acceptances is for a minimum aggregate face amount of C$1,000,000or any greater amount which is a whole multiple of C$100,000;

 

(c)                                  each Bankers’Acceptance has a term of not less than one (1) month and not more than six(6) months;

 

(d)                                 each Bankers’Acceptance will mature on a Business Day on or before the Revolving TerminationDate;

 

(e)                                  the Canadian Agenthas been notified verbally by 11:00 A.M. (Toronto time) two (2) BusinessDays prior to the date of issuance, of the Canadian Borrower’s intention toissue Bankers’ Acceptances, such verbal notice to be followed by writtenconfirmation in the form and substance provided in Exhibit N not laterthan 3:00 P.M. (Toronto time) on the same day;

 

(f)                                    an Acceptance Feeshall be payable by the Canadian Borrower to a Canadian Lender in advance uponthe issuance of a Bankers’ Acceptance to be accepted by such Canadian Lendercalculated at the rate per annum (based on a 365-day year) equal to theApplicable Margin for Bankers’ Acceptances, such Acceptance Fee to becalculated on the face amount of such Bankers’ Acceptance and to be computed onthe basis of the number of days in the term of such Bankers’ Acceptance;

 

(g)                                 the face amount ofBankers’ Acceptances shall be used when calculations are made to determine theamount of the Canadian Loans;

 

(h)                                 Bankers’ Acceptancesissued by the Canadian Borrower hereunder and outstanding at any particulartime may not be repaid or prepaid prior to the respective scheduled maturitythereof except with the prior consent of a Canadian Lender, which consent shallonly be granted upon such terms and conditions with respect to timing, breakagecosts or otherwise as such Canadian Lender shall alone determine in itsreasonable discretion; and

 

(i)                                     upon acceptance ofa Bankers’ Acceptance by a Canadian Lender, such Lender shall purchase, orarrange for the purchase of, each Bankers’ Acceptance from the Borrower at theDiscount Rate for such Canadian Lender applicable to such Bankers’ Acceptanceaccepted by it and provide to the Canadian Agent the Discount Proceeds for theaccount of the Canadian Borrower.  TheAcceptance Fee payable by the Canadian Borrower to a Canadian Lender shall beset off against the Discount Proceeds payable by such Canadian Lender under thisSection 2.21.

 

2.22                           Repayment, Rollover andConversion of Bankers’ Acceptances and C$ Prime Loans.  With respect to each Canadian Loan which isoutstanding as a Bankers’ Acceptance, at or before 11:00 A.M. (Torontotime) two (2) Business Day prior to the maturity date of such Banker’sAcceptance, the Canadian Borrower shall notify the Canadian Agent verbally ofits intention to either (i) issue new or replacement Bankers’ Acceptanceson such maturity date to provide for the payment of such maturing Bankers’Acceptance or (ii) convert such maturing Bankers’ Acceptance on itsmaturity date into C$ Prime Loans.  Suchnotice shall be irrevocable and to be followed by written confirmation in formand substance as provided in Exhibit O not later than 3:00 P.M.(Toronto time) on the same day.  The provisionsof Section 2.21 shall apply *mutatis mutandis*to each such new issue of Bankers’ Acceptances. If the Canadian Borrower fails to give the notices required in this Section 2.22,then such Bankers’ Acceptance

 

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so maturing shall be automatically converted on its maturity date intoa C$ Prime Loan.  Provided that theCanadian Agent has received a notice in accordance with this Section requesting:

 

(i)                                     theCanadian Lenders to accept Bankers’ Acceptances, if applicable (or advance B/AEquivalent Loans), to replace all or a portion of outstanding Bankers’Acceptances as they mature, the Canadian Lenders shall, on the maturity of suchBankers’ Acceptances and concurrent with the payment by the Canadian Agent ofthe face (and, if applicable, principal) amount of such Bankers’ Acceptances orthe portion thereof to be replaced (the “Maturing Amount”) (orarrangements satisfactory to the Canadian Agent being effected to ensure theDiscount Proceeds from the replacement Bankers’ Acceptances are applied torepay the Maturing Amount and the Canadian Borrower concurrently paying to theCanadian Agent any positive difference between the Maturing Amount and suchDiscount Proceeds), accept (and purchase if required) on the terms hereinBankers’ Acceptances (or, if applicable, advance B/A Equivalent Loans) havingan aggregate face (and, if applicable, principal) amount equal to the MaturingAmount; or

 

(ii)                                  theCanadian Lenders to continue all or a portion of any outstanding maturingBankers’ Acceptances into C$ Prime Loans, each such Canadian Lender shall, uponthe maturity date of such Bankers’ Acceptances accepted or advanced by it,provide a borrowing to the Canadian Borrower by way of a C$ Prime Loan intowhich the matured Bankers’ Acceptances or a portion thereof are being continuedin a principal amount equal to the aggregate face (or principal) amount of thematured Bankers’ Acceptances or the portion thereof that are being continued.

 

(b)                                 With respect to eachCanadian Loan which is outstanding as a C$ Prime Loan, the Canadian Borrowermay elect from time to time to convert such C$ Prime Loan to Bankers’Acceptances (or, if applicable, B/A Equivalent Loans) by giving the CanadianAgent at least two Business Days prior verbal notice of such election.  Such notice shall be irrevocable and to befollowed by written confirmation in form and substance as provided in Exhibit Onot later than 3:00 P.M. (Toronto time) on the same day.  Provided that the Canadian Agent has receiveda notice in accordance with this Section requesting the Canadian Lendersto accept (and if required, purchase) Bankers’ Acceptances (or if applicable,advance B/A Equivalent Loans) to replace all or a portion of an outstanding C$Prime Loan, then upon receipt by each such Canadian Lender on the applicableBorrowing Date of a payment equal to the principal amount of the outstanding C$Prime Loan continued, each such Canadian Lender shall accept (and if required,purchase) Bankers’ Acceptances (or if applicable, advance B/A Equivalent Loans)in an aggregate face (and, if applicable, principal) amount equal to theoutstanding principal amount of the C$ Prime Loans to be continued.

 

(c)                                  Notwithstandingreceipt of such notices by the Canadian Agent, the Canadian Agent and theCanadian Lenders may refuse to give effect to any such notices if any Event ofDefault has occurred and is continuing and the Canadian Agent has or theCanadian Lenders have determined in its or their sole discretion not to permitsuch new issue of Bankers’ Acceptances and/or conversions.

 

## 2.23                           Powerof Attorney for the Execution of Bankers’ Acceptances.  To facilitate availment of the Canadian Loansby way of Bankers’ Acceptances, the Canadian Borrower hereby appoints eachCanadian Lender as its agent to sign and endorse on its behalf, in handwritingor by facsimile or mechanical signature as and when deemed necessary by suchCanadian Lender, blank forms of Bankers’ Acceptances in order to allow suchCanadian Lender to complete and accept from time to time such instruments inthe aggregate and face amounts and for the maturities chosen by a CanadianBorrower (subject to the provisions of Sections 2.21 and 2.22hereof).  The Canadian Borrowerrecognizes and agrees that all Banker’s Acceptances signed and/or endorsed onits behalf by a Canadian Lender shall bind the Canadian Borrower as fully andeffectually as if signed in the handwriting of and duly issued by

 

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## the proper signing officers ofthe Canadian Borrower.  In thisconnection, the parties also agree as follows:

 

(a)                                  eachCanadian Lender shall deal prudently in accordance with Canadian BankingStandards with any Bankers’ Acceptance forms purported to have been pre-signedand/or pre-endorsed by the Canadian Borrower and shall use them only inaccordance with the instructions of the Canadian Borrower given to suchCanadian Lender in conformity with this Agreement.  Each Canadian Lender shall be presumed tohave acted prudently when following such instructions in the absence of grossnegligence, bad faith or willful misconduct; alternatively, the CanadianBorrower agrees that, at the request of the Canadian Agent, the CanadianBorrower shall deliver to the Canadian Agent a “depository note” which complieswith the requirements of the Depository Bills and Notes Act (Canada), andconsents to the deposit of any such depository note in the book-based debtclearance system maintained by the Canadian Depository for Securities;

 

(b)                                 on request of theCanadian Borrower, each Canadian Lender shall cancel all forms of Bankers’Acceptance which have been pre-signed or pre-endorsed by or on behalf of the CanadianBorrower and which are held by such Canadian Lender and have not yet beenissued in accordance with the Canadian Borrower’s instructions hereunder;

 

(c)                                  each Canadian Lendershall maintain a record with respect to Bankers’ Acceptances (i) completedby it in blank hereunder, (ii) voided by it for any reason, (iii) acceptedby it hereunder and (iv) cancelled at their respective maturities.  The Canadian Lenders agree to provide such recordsto the Canadian Borrower promptly upon request; and

 

(d)                                 the Canadian Borrowerwaives presentment for payment and any other defense to payment of any amountsdue to a Canadian Lender in respect of a Bankers’ Acceptance and purchased byit pursuant to this Agreement which might exist solely by reason of suchBankers’ Acceptance being held, at the maturity thereof, by such CanadianLender in its own right, and the Canadian Borrower agrees not to claim any daysof grace if such Canadian Lender, as holder, sues the Canadian Borrower on theBankers’ Acceptance for payment of the amount payable by the Canadian Borrowerthereunder.  On the last day of theContract Period of a Bankers’ Acceptance, or such earlier date as may berequired or permitted pursuant to the provisions of this Agreement, theCanadian Borrower shall pay the Canadian Lender that has accepted and purchasedsuch Bankers’ Acceptance the full face amount of such Bankers’ Acceptance and,after such payment, the Canadian Borrower shall have no further liability inrespect of such Bankers’ Acceptance and such Canadian Lender shall be entitledto all benefits of, and be responsible for all payments due to third partiesunder, such Bankers’ Acceptance.

 

## 2.24                           CircumstancesMaking Bankers’ Acceptances Unavailable.

 

### (a)                                  Ifthe Canadian Agent determines in good faith, which determination shall be final,conclusive and binding upon the Canadian Borrower, and notifies the CanadianBorrower that, by reason of circumstances affecting the money market, there isno market for Bankers’ Acceptances, then:

###  

#### (i)                                     the right of theCanadian Borrower to request a borrowing by way of Bankers’ Acceptance shall besuspended until the Canadian Agent determines that the circumstances causingsuch suspension no longer exist and the Canadian Agent so notifies the CanadianBorrower; and

 

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#### (ii)                                  any notice relatingto a borrowing by way of Bankers’ Acceptance which is outstanding at such timeshall be deemed to be a notice requesting a borrowing by way of C$ Prime Loans.

####  

### (b)                                 TheCanadian Agent shall promptly notify the Canadian Borrower of the suspension ofthe Canadian Borrower’s right to request a borrowing by way of Bankers’Acceptance and of the termination of such suspension.

###  

## 2.25                           Increasesof the Facilities.

 

### (a)                                  Atthe discretion of the U.S. Borrowers, the U.S. Borrowers may request in writingat any time after the Closing Date that the then effective aggregate principalamount of any Type or Types of Term Loans be increased; provided that (1) theaggregate principal amount of the increases in the Term Loans pursuant to this Section 2.25shall not exceed $100,000,000 and each increase shall not be less than$10,000,000, (2) no Event of Default shall have occurred and be continuingor occur as a result of such increases in the Term Loans, (3) the proceedsof such increases in the Term Loans shall be used solely for PermittedAcquisitions and the costs and expenses related thereto, and (4) theBorrowers shall, and shall cause their Subsidiaries to, execute and deliver evidencethat, on a pro forma basis, after giving effect to the increase and use ofproceeds, the Consolidated Senior Leverage Ratio shall not exceed 3.25 to 1.00and evidence of compliance, on a pro forma basis (as set forth in thedefinition of the term “Permitted Acquisition”), with Section 7.1of this Agreement, and such other documents and instruments and take such otheractions as may be reasonably requested by Administrative Agent in connectionwith such  increases.  Any request under this Section 2.25shall be submitted by the Borrowers to the Administrative Agent (which shallpromptly forward copies to the Lenders), specify the proposed effective dateand amount of such increase and be accompanied by an officer’s certificatestating on behalf of the Borrowers that no Event of Default exists or willoccur as a result of such increase.

###  

### (b)                                 NoLender shall have any obligation, express or implied, to offer to increase theaggregate principal amount of its applicable Term Loans.  Only the consent of each Lender (an “IncreasingLender”) which agrees to increase the principal amount of its Term Loansshall be required for an increase in the aggregate principal amount of theapplicable Term Loans pursuant to this Section 2.25.  Amendments to this Agreement that arerequired to give effect to any such increases shall only require the consent ofthe Parent Borrower and the Administrative Agent.  No Lender which elects not to increase theprincipal amount of its Term Loans may be replaced in respect of its existingapplicable Term Loans as a result thereof without such Lender’s consent.  Each Increasing Lender shall as soon aspracticable specify the amount of the proposed increase which it is willing toassume.  The U.S. Borrowers may acceptsome or all of the offered amounts or designate new lenders which, if theysatisfy the requirements of Section 10.6(c) as if they were Assigneesseeking to become Lenders, shall qualify as additional Lenders hereunder in accordancewith this Section 2.25 (each such new lender being a “New Lender”),which New Lenders may assume all or a portion of the increase in the aggregateprincipal amount of the applicable Term Loans. The U.S. Borrowers and the Administrative Agent shall have discretionjointly to adjust the allocation of the increased aggregate principal amount ofthe applicable Term Loans among Increasing Lenders and New Lenders.

###  

### (c)                                  EachNew Lender designated by the U.S. Borrowers shall become an additional partyhereto as a Lender concurrently with the effectiveness of the proposed increasein the aggregate principal amount of the applicable Term Loans, upon itsexecution of an instrument of joinder, in each case in form and substancesatisfactory to the Administrative Agent. Subject to the foregoing, any increase requested by the U.S. Borrowersshall be effective as of the date proposed by the U.S. Borrowers and shall bein the principal amount equal to (i) the principal amount which IncreasingLenders are willing to assume as increases to the principal amount of theirapplicable Term Loans, plus (ii) the principal

 

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### amount offered by New Lenderswith respect to the applicable Term Loans, in either case as adjusted by theU.S. Borrowers and the Administrative Agent pursuant to this Section 2.25.

###  

### (d)                                 Allnew Term Loans to be made under this Section 2.25 shall be made to theU.S. Borrowers on the same day as such increase in the applicable Term Loansunder this Section 2.25 becomes effective. The initial Interest Periods applicable to such new and/or increasedTerm Loans shall end on dates which correspond to the respective nextsucceeding Interest-Period-end dates applicable to the Term Loans on the datesuch new and increased Term Loans are made. Any Term Loan made pursuant to this Section 2.25 shall mature inthat number of consecutive quarterly installments as is equal to the number ofthen remaining installments payable in respect of the Term Loans made on theClosing Date, all but the last four of which shall be in an amount equal to 1⁄4of 1% of the original principal amount of such Term Loan and the last four ofwhich shall be in an amount equal to 1⁄4 of the remaining amount thereof.  Upon effectiveness of any such increase, theTerm Loan Percentage of each U.S. Lender will be adjusted to give effect to theincrease in the applicable Term Loans and the Administrative Agent shalldistribute to the Lenders a revised Schedule 1.1(A) reflecting theapplicable Term Loans of each Lender after giving effect to such increase.

###  

### (e)                                  Tothe extent that the Applicable Margins on any Term Loan made or committed to bemade pursuant to this Section are greater than those applicable to thethen existing Term Loans, the Applicable Margins on all the then existing TermLoans shall be increased upon the effectiveness of the applicable increaseeffected pursuant to this Section.  Inthe event that the upfront fee payable on any Term Loan increased pursuant tothis Section exceeds the upfront fee payable on the original extension ofTerm Loans (in the case of first increase under this Section), or the upfrontfee payable on the immediately preceding increase of Term Loans (in the case ofany subsequent increase under this Section), the Borrowers shall pay to eachLender an amount, calculated on the Term Loan (including any prior increasedTerm Loan) of such Lender, equal to the number of basis points by which the feepayable on such Term Loan increased pursuant to this Section exceeded theupfront fee payable on such original or immediately preceding, as the case maybe, increase of Term Loan.  If any TermLoans made or committed to pursuant to this Section are issued at adiscount, such discount shall be treated as an upfront fee.

###  

### (f)                                    Withoutthe prior written consent of each holder of the then outstanding Term Loans, noTerm Loan shall be made pursuant to this Section 2.25 the proceeds to theU.S. Borrowers of which (after deducting any fees payable in connectiontherewith and taking into account any applicable original issue discount) areless than the price the applicable Lender would have then been required to payin the market for a Term Loan in an amount equal to such Term Loan.

###  

## 2.26                           B/A Equivalent Loans.  If a Canadian Lender is not a chartered bankunder the Bank Act (Canada) or if a Canadian Lender notifies the Canadian Agentin writing that it is otherwise unable to accept Bankers’ Acceptances, suchCanadian Lender will, instead of accepting and purchasing Bankers’ Acceptances,make a Loan (a “B/A Equivalent Loan”) from its Canadian Lending Officeto the Canadian Borrower in the amount and for the same term as the draft thatsuch Canadian Lender would otherwise have been required to accept and purchasehereunder.  Each such Canadian Lender mayrequest that such B/A Equivalent Loan be evidenced by a non-interest bearingpromissory note, in a form approved by the Canadian Borrower and the Canadian Agent.  Each such Canadian Lender will provide to theCanadian Agent the Discount Proceeds of such B/A Equivalent Loan for theaccount of the Canadian Borrower in the same manner as such Canadian Lenderwould have provided the Discount Proceeds in respect of the draft that suchCanadian Lender would otherwise have been required to accept and purchasehereunder. Each such B/A Equivalent Loan will bear interest at the same ratethat would result if such Canadian Lender had accepted (and been paid anacceptance fee) and purchased (on a discounted basis) a Bankers’ Acceptance forthe relevant Contract Period (it being the intention of the parties that eachsuch B/A Equivalent Loan shall have the same economic consequences for theLenders and the Canadian Borrower

 

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## as the Bankers’ Acceptance thatsuch B/A Equivalent Loan replaces).  Allsuch interest shall be paid in advance on the date such B/A Equivalent Loan ismade, and will be deducted from the principal amount of such B/A EquivalentLoan in the same manner in which the Discount Proceeds of a Bankers’ Acceptancewould be deducted from the face amount of the Bankers’ Acceptance.  Subject to the repayment requirements of thisAgreement, on the last day of the relevant Contract Period for such B/AEquivalent Loan, the Canadian Borrower shall be entitled to convert each suchB/A Equivalent Loan into another type of Loan, or to roll over each such B/AEquivalent Loan into another B/A Equivalent Loan, all in accordance with theapplicable provisions of this Agreement. For greater certainty, unless the context requires otherwise, allprovisions of this Agreement which are applicable to Bankers’ Acceptances arealso applicable, *mutatis mutandis*, to B/A EquivalentLoans.

 

## 2.27                           CollectionAllocation Mechanism.

 

### (a)                                  Onthe CAM Exchange Date, (i) each U.S. Revolving Lender shall immediately bedeemed to have acquired (and shall promptly make payment therefor to the U.S.Administrative Agent in accordance with Section 2.5(d)) participations inthe U.S. Swingline Loans in an amount equal to such U.S. Revolving Lender’s prorata share of each U.S. Swingline Loan outstanding on such date, (ii) simultaneouslywith the automatic conversions pursuant to clause (iii) below, theLenders shall automatically and without further act (and without regard to theprovisions of Section 10.5) be deemed to have exchanged interests in theLoans (other than the U.S. Swingline Loans) and Bankers’ Acceptances and B/AEquivalent Loans and participations in the U.S. Swingline Loans and Letters ofCredit, such that in lieu of the interest of each Lender in each Loan, Bankers’Acceptance, B/A Equivalent Loan and L/C Obligations in which it shallparticipate as of such date (including such Lender’s interest in theObligations, Guaranty and Collateral of each Loan Party in respect of each suchLoan, Bankers’ Acceptance, and B/A Equivalent Loan and L/C Obligations), suchLender shall hold an interest in every one of the Loans (other than the U.S.Swingline Loans) and Bankers’ Acceptances and B/A Equivalent Loans and aparticipation in every one of the U.S. Swingline Loans and all of the L/CObligations (including the Obligations, guaranty and Collateral of each LoanParty in respect of each such Loan), whether or not such Lender shallpreviously have participated therein, equal to such Lender’s CAM Percentagethereof and (iii) simultaneously with the deemed exchange of interests pursuantto clause (ii) above, the interest in the Loans and Bankers’Acceptances and B/A Equivalent Loans denominated in Canadian Dollars to bereceived in such deemed exchange shall be converted into Obligations denominatedin Dollars and on and after such date all amounts accruing and owed to Lendersin respect of such Obligations shall accrue and be payable in Dollars at therates otherwise applicable hereunder.  Itis understood and agreed that Lenders holding interests in Bankers’ Acceptancesand B/A Equivalent Loans on the CAM Exchange Date shall discharge theobligations to such Bankers’ Acceptances and B/A Equivalent Loans at maturityin exchange for the interests acquired by such Lenders in the CAMExchange.  Each Lender and each LoanParty hereby consents and agrees to the CAM Exchange, and each Lender agreesthat the CAM Exchange shall be binding upon its successors and assigns and anyperson that acquires a participation in its interests in any Loan or Bankers’Acceptance or B/A Equivalent Loan or any participation in any U.S. SwinglineLoan or Letter of Credit.  Each LoanParty agrees from time to time to execute and deliver to the AdministrativeAgent or the Canadian Agent, as appropriate, all such promissory notes andother instruments and documents as the Administrative Agent or the CanadianAgent, as appropriate, shall reasonably request to evidence and confirm therespective interests of the Lenders after giving effect to the CAM Exchange,and each Lender agrees to surrender any promissory notes originally received byit in connection with its Loans hereunder to the Administrative Agent or theCanadian Agent, as appropriate, against delivery of any promissory notesevidencing its interests in the Loans and Bankers’ Acceptances and B/AEquivalent Loans so executed and delivered; provided, however,that the failure of any Loan Party to execute or deliver or of any Lender toaccept any such promissory note, instrument or document shall not affect thevalidity or effectiveness of the CAM Exchange.

 

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### (b)                                 Asa result of the CAM Exchange, upon and after the CAM Exchange Date, each paymentreceived by the Administrative Agent or the Canadian Agent pursuant to any LoanDocument in respect of any of the Obligations, and each distribution made bythe Administrative Agent or the Canadian Agent in respect of the Obligations,shall be distributed to the Lenders prorata in accordance withtheir respective CAM Percentages.  Anydirect payment received by a Lender upon or after the CAM Exchange Date,including by way of setoff, in respect of an Obligation shall be paid over tothe Administrative Agent for distribution to the Lenders in accordance herewith.

###  

## 2.28                           SpecialProvisions Relating to Currencies Other Than Dollars.

 

### (a)                                  Allfunds to be made available to Administrative Agent pursuant to this Agreementin Euros shall be made available to Administrative Agent in immediatelyavailable, freely transferable, cleared funds to such account with such bank insuch principal financial center in such Participating Member State (or inLondon) as Administrative Agent shall from time to time nominate for this purpose.

###  

### (b)                                 Inrelation to the payment of any amount denominated in Euros, AdministrativeAgent shall not be liable to Borrower or any of the Lenders for any delay, orthe consequences of any delay, in the crediting to any account of any amountrequired by this Agreement to be paid by Administrative Agent if AdministrativeAgent shall have taken all relevant and necessary steps to achieve, on the daterequired by this Agreement, the payment of such amount in immediatelyavailable, freely transferable, cleared funds (in Euros) to the account withthe bank in the principal financial center in the Participating Member Statewhich Borrower or, as the case may be, any Lender shall have specified for suchpurpose.  In this Section 2.28(b), “allrelevant steps” means all such steps as may be prescribed from time to time bythe regulations or operating procedures of such clearing or settlement systemas Administrative Agent may from time to time determine for the purpose ofclearing or settling payments of Euros. Furthermore, and without limiting the foregoing, Administrative Agentshall not be liable to Borrower or any of the Lenders with respect to theforegoing matters in the absence of its gross negligence or willful misconduct(as determined by a court of competent jurisdiction in a final andnon-appealable decision or pursuant to a binding arbitration award or asotherwise agreed in writing by the affected parties).

###  

## 2.29                           DollarEquivalent Calculations.  For purposesof this Agreement, the Dollar Equivalent of each Loan that is a Eurodollar Loanor Letter of Credit denominated in Alternate Currency and the Dollar Equivalentof the stated amount of each Canadian Extension of Credit shall be calculatedon the date when any such Loan is made, such Letter of Credit is issued, on thefirst Business Day of each month and at such other times as designated by theAdministrative Agent or the Canadian Agent, as appropriate.  Such Dollar Equivalent shall remain in effectuntil the same is recalculated by the Administrative Agent or the CanadianAgent as provided above and notice of such recalculation is received by theBorrowers, it being understood that until such notice of such recalculation isreceived, the Dollar Equivalent shall be that Dollar Equivalent as lastreported to the Borrowers by the Administrative Agent or the Canadian Agent, asappropriate.  The Administrative Agentshall promptly notify the U.S. Borrowers and the U.S. Lenders of each suchdetermination of the Dollar Equivalent. The Canadian Agent shall promptly notify the Canadian Borrower and theCanadian Lenders of each such determination of the Dollar Equivalent.

 

## 2.30                           Parent Borrower as Agent  The U.S. Borrowers appoint the ParentBorrower as their agent for all purposes under Section 2 and authorize theAdministrative Agent to accept instruction from the Parent Borrower on theirbehalf.

 

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# SECTION 3

#  

# LETTERS OF CREDIT

#  

## 3.1                                 U.S. L/C Commitment.

 

### (a)                                  Subjectto the terms and conditions hereof, the U.S. Issuing Lender, in reliance on theagreements of the other U.S. Revolving Lenders set forth in Section 3.4(a),agrees to issue letters of credit (“U.S. Letters of Credit”) denominatedin any Approved Currency for the account of the U.S. Borrowers until the datethat is 30 days prior to the U.S. Revolving Termination Date in such form asmay be approved from time to time by the U.S. Issuing Lender; providedthat the U.S. Issuing Lender shall have no obligation to issue any U.S. Letterof Credit if, after giving effect to such issuance, (i) the U.S. L/CObligations would exceed the U.S. L/C Commitment (including on any date onwhich Dollar Equivalents are determined), (ii) the aggregate amount of theAvailable U.S. Revolving Commitments would be less than zero or (iii) theTotal Outstandings would exceed the Total Commitments.  Each U.S. Letter of Credit shall (i) bedenominated in any Approved Currency and (ii) expire no later than theearlier of (x) the first anniversary of its date of issuance and (y) the datethat is five Business Days prior to the U.S. Revolving Termination Date, providedthat any U.S. Letter of Credit with a one-year term may provide for the renewalthereof, unless notice of termination thereof is given by the U.S. IssuingLender prior to the expiry date thereof, for additional one-year periods (whichshall in no event extend beyond the date referred to in clause (y) above).  Each of the Existing U.S. Letters of Creditshall be deemed to be a U.S. Letter of Credit issued hereunder for all purposesof the Loan Documents and from and after the Closing Date shall be subject toand governed by the terms and conditions hereof.

###  

### (b)                                 EachU.S. Letter of Credit shall be subject to the Uniform Customs and, to theextent not inconsistent therewith, the laws of the State of New York.

###  

### (c)                                  TheU.S. Issuing Lender shall not at any time be obligated to issue any U.S. Letterof Credit hereunder if such issuance would conflict with, or cause the U.S.Issuing Lender or any U.S. L/C Participant to exceed any limits imposed by, anyapplicable Requirement of Law.

###  

## 3.2                                 Procedurefor Issuance of U.S. Letter of Credit. The Parent Borrower may from time to time request that the U.S. IssuingLender issue a U.S. Letter of Credit by delivering to the U.S. Issuing Lenderan Application therefor, completed to the satisfaction of the U.S. IssuingLender at the address given to the Parent Borrower by the Administrative Agentin the written notice designating the U.S. Issuing Lender as such, and suchother certificates, documents and other papers and information as the U.S.Issuing Lender may request.  Upon receiptof any Application, the U.S. Issuing Lender will process such Application andthe certificates, documents and other papers and information delivered to it inconnection therewith in accordance with its customary procedures and shallpromptly issue the U.S. Letter of Credit requested thereby (but in no eventshall the U.S. Issuing Lender be required to issue any U.S. Letter of Creditearlier than three Business Days after its receipt of the Application thereforand all such other certificates, documents and other papers and informationrelating thereto) by issuing the original of such U.S. Letter of Credit to thebeneficiary thereof or as otherwise may be agreed to by the U.S. Issuing Lenderand the Parent Borrower.  The U.S.Issuing Lender shall furnish a copy of such U.S. Letter of Credit to the ParentBorrower promptly following the issuance thereof.  The U.S. Issuing Lender shall promptlyfurnish to the Administrative Agent, which shall in turn promptly furnish tothe Lenders, notice of the issuance of each U.S. Letter of Credit (includingthe amount thereof).

 

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## 3.3                                 Feesand Other Charges.

 

### (a)                                  TheU.S. Borrowers will pay a fee on the undrawn face amount of all outstandingU.S. Letters of Credit at a per annum rate equal to the Applicable Margin thenin effect with respect to Eurodollar Loans under the U.S. Revolving Facility,shared ratably among the U.S. Revolving Lenders and payable quarterly inarrears on each U.S. L/C Fee Payment Date after the issuance date.  In addition, the U.S. Borrowers shall pay tothe U.S. Issuing Lender for its own account a fronting fee of 20 basis pointsper annum or such other rate as shall be agreed upon between the U.S. IssuingLender and the U.S. Borrowers on the undrawn and unexpired amount of each U.S.Letter of Credit, payable quarterly in arrears on each L/C Fee Payment Dateafter the issuance date.

###  

### (b)                                 Inaddition to the foregoing fees, the U.S. Borrowers shall pay or reimburse theU.S. Issuing Lender for such normal and customary costs and expenses as areincurred or charged by the U.S. Issuing Lender in issuing, negotiating, effectingpayment under, amending or otherwise administering any U.S. Letter of Creditissued by it.

###  

## 3.4                                 U.S.L/C Participations.

 

### (a)                                  TheU.S. Issuing Lender irrevocably agrees to grant and hereby grants to each U.S.L/C Participant, and, to induce the U.S. Issuing Lender to issue U.S. Lettersof Credit hereunder, each U.S. L/C Participant irrevocably agrees to accept andpurchase and hereby accepts and purchases from the U.S. Issuing Lender, on theterms and conditions hereinafter stated, for such U.S. L/C Participant’s ownaccount and risk an undivided interest equal to such U.S. L/C Participant’sU.S. Revolving Percentage in the U.S. Issuing Lender’s obligations and rightsunder each U.S. Letter of Credit issued hereunder and the amount of each draftpaid by the U.S. Issuing Lender thereunder. Each U.S. L/C Participant unconditionally and irrevocably agrees withthe U.S. Issuing Lender that, if a draft is paid under any U.S. Letter ofCredit for which the U.S. Issuing Lender is not reimbursed in full by theParent Borrower in accordance with the terms of this Agreement, such U.S. L/CParticipant shall pay to the U.S. Issuing Lender upon demand at the U.S.Issuing Lender’s address for notices specified herein an amount equal to suchU.S. L/C Participant’s U.S. Revolving Percentage of the amount of such draft,or any part thereof, that is not so reimbursed.

###  

### (b)                                 Ifany amount required to be paid by any U.S. L/C Participant to the U.S. IssuingLender pursuant to Section 3.4(a) in respect of any unreimbursed portionof any payment made by the U.S. Issuing Lender under any U.S. Letter of Creditis paid to the U.S. Issuing Lender within three Business Days after the datesuch payment is due, such U.S. L/C Participant shall pay to the U.S. IssuingLender on demand an amount equal to the product of (i) the amount, times (ii) thedaily average Federal Funds Effective Rate during the period from and includingthe date such payment is required to the date on which such payment isimmediately available to the U.S. Issuing Lender, times (iii) a fractionthe numerator of which is the number of days that elapse during such period andthe denominator of which is 360.  If anysuch amount required to be paid by any U.S. L/C Participant pursuant to Section 3.4(a) isnot made available to the U.S. Issuing Lender by such U.S. L/C Participantwithin three Business Days after the date such payment is due, the U.S. IssuingLender shall be entitled to recover from such U.S. L/C Participant, on demand,such amount with interest thereon calculated from such due date at the rate perannum applicable to ABR Loans under the Revolving Facility.  A certificate of the U.S. Issuing Lendersubmitted to any U.S. L/C Participant with respect to any amounts owing underthis Section shall be conclusive in the absence of manifest error.

###  

### (c)                                  Whenever,at any time after the U.S. Issuing Lender has made payment under any U.S.Letter of Credit and has received from any U.S. L/C Participant its pro ratashare of such payment in accordance with Section 3.4(a), the U.S. IssuingLender receives any payment related to such

 

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### U.S. Letter of Credit (whetherdirectly from the Parent Borrower or otherwise, including proceeds ofcollateral applied thereto by the U.S. Issuing Lender), or any payment ofinterest on account thereof, the U.S. Issuing Lender will distribute to suchU.S. L/C Participant its pro rata share thereof; provided, however,that in the event that any such payment received by the U.S. Issuing Lendershall be required to be returned by the U.S. Issuing Lender, such U.S. L/C Participantshall return to the U.S. Issuing Lender the portion thereof previouslydistributed by the U.S. Issuing Lender to it.

###  

## 3.5                                 ReimbursementObligations of U.S. Borrowers.  TheU.S. Borrowers, jointly and severally, agree in accordance with the terms andprovisions of this Section to reimburse the U.S. Issuing Lender on eachdate on which the U.S. Issuing Lender notifies the Parent Borrower of the dateand amount of a draft presented under any U.S. Letter of Credit and paid by theU.S. Issuing Lender for the amount of (a) such draft so paid and (b) anytaxes, fees, charges or other costs or expenses incurred by the U.S. IssuingLender in connection with such payment. Each such payment shall be made to the U.S. Issuing Lender at itsaddress for notices specified herein in the Approved Currency in which theobligation giving rise to such payment is denominated and in immediatelyavailable funds.  Interest shall bepayable on any and all amounts remaining unpaid by the Borrowers under this Section fromthe date such amounts become payable (whether at stated maturity, byacceleration or otherwise) until payment in full at the rate set forth in (i) untilthe second Business Day following the date of the applicable drawing, Section 2.12(b) and(ii) thereafter, Section 2.12(d).

 

## 3.6                                 ObligationsAbsolute.  The U.S. Borrowers’obligations under this Section 3 shall be absolute and unconditional underany and all circumstances and irrespective of any setoff, counterclaim ordefense to payment that the Borrowers may have or have had against the U.S.Issuing Lender, any beneficiary of a U.S. Letter of Credit or any otherPerson.  The U.S. Borrowers also agreewith the U.S. Issuing Lender that the U.S. Issuing Lender shall not beresponsible for, and the U.S. Borrowers’ Reimbursement Obligations under Section 3.5shall not be affected by, among other things, the validity or genuineness ofdocuments or of any endorsements thereon, even though such documents shall infact prove to be invalid, fraudulent or forged, or any dispute between or amongany U.S. Borrower and any beneficiary of any U.S. Letter of Credit or any otherparty to which such U.S. Letter of Credit may be transferred or any claims whatsoeverof any U.S. Borrower against any beneficiary of such U.S. Letter of Credit orany such transferee.  The U.S. IssuingLender shall not be liable for any error, omission, interruption or delay intransmission, dispatch or delivery of any message or advice, howevertransmitted, in connection with any U.S. Letter of Credit, except for errors oromissions found by a final and nonappealable decision of a court of competentjurisdiction to have resulted from the gross negligence or willful misconductof the U.S. Issuing Lender.  The U.S.Borrowers agree that any action taken or omitted by the U.S. Issuing Lenderunder or in connection with any U.S. Letter of Credit or the related drafts ordocuments, if done in the absence of gross negligence or willful misconduct andin accordance with the standards of care specified in the Uniform CommercialCode of the State of New York, shall be binding on the U.S. Borrowers and shallnot result in any liability of the U.S. Issuing Lender to the U.S. Borrowers.

 

## 3.7                                 U.S.Letter of Credit Payments.  If anydraft shall be presented for payment under any U.S. Letter of Credit, the U.S.Issuing Lender shall promptly notify the Parent Borrower of the date and amountthereof.  The responsibility of the U.S.Issuing Lender to the Borrowers in connection with any draft presented forpayment under any U.S. Letter of Credit shall, in addition to any paymentobligation expressly provided for in such U.S. Letter of Credit, be limited todetermining that the documents (including each draft) delivered under such U.S.Letter of Credit in connection with such presentment are substantially inconformity with such U.S. Letter of Credit.

 

## 3.8                                 Applications.  To the extent that any provision of anyApplication related to any U.S. Letter of Credit is inconsistent with the provisionsof this Section 3, the provisions of this Section 3 shall apply.

 

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## 3.9                                 Canadian L/CCommitment.  No Canadian Letter ofCredit shall be issued hereunder if, after giving effect thereto, (a) theaggregate face amount of the Canadian Letters of Credit then outstanding plusthe aggregate unreimbursed amount of drawings under Canadian Letters of Creditwould exceed the Canadian L/C Commitment, (b) the aggregate CanadianExtensions of Credit would exceed the Total Canadian Commitment at that time,or (c) the Total Outstandings would exceed the Total Commitments.  All other terms and conditions of theCanadian L/C Commitment and all Canadian Letters of Credit issued from time totime by the Canadian Issuer Lender shall, to the extent not covered by thisAgreement, be governed by the relevant Canadian L/C Agreements.  The Canadian Borrower agrees to pay fees inaccordance with the schedule previously agreed to.  At the time the Canadian Issuing Lender wantsto issue a Canadian Letter of Credit at the request of the Canadian Borrower,the Canadian Issuing Lender shall send a notice to the Canadian Agent.

 

# SECTION 4

#  

# REPRESENTATIONS AND WARRANTIES

#  

To induce theSyndication Agent, the Administrative Agent, the Canadian Agent and therelevant Lenders to enter into this Agreement and to make the Loans and issueor participate in the Letters of Credit, Holdco and the Borrowers herebyjointly and severally represent and warrant to the Syndication Agent, theAdministrative Agent, the Canadian Agent and each Lender that:

 

## 4.1                                 Financial Condition.

 

### (a)                                  Theaudited consolidated balance sheets of NSP Holdings L.L.C. and NSP as at December 31,2002, December 31, 2003 and December 31, 2004 and the relatedstatements of operations, changes in members’ deficit and cash flows for thefiscal years ended on such dates, reported on by and accompanied by anunqualified report from Ernst & Young, LLP, present fairly in allmaterial respects the consolidated financial condition of NSP Holdings L.L.C.and NSP as at such dates, and the consolidated results of its operations andits consolidated cash flows for the respective fiscal years then ended.  The unaudited consolidated balance sheet ofNSP Holdings L.L.C. and NSP as at April 2, 2005, and the related unauditedstatements of operations and cash flows for the 3-month period ended on suchdate, present fairly in all material respects the consolidated financialcondition of NSP Holdings L.L.C. and NSP as at such date, and the consolidatedresults of its operations and its consolidated cash flows for the 3-monthperiod then ended (subject to normal year-end audit adjustments).  The (x) unaudited consolidated balancesheets of NSP Holdings L.L.C. and NSP as at April 30, 2005 and May 28,2005, and the related unaudited consolidated statements of operations and cashflows for the fiscal months ended on such dates, and (y) the unauditedbalance sheets of NSP’s general industrial, fire service and utility/high voltagebusiness segments as at April 30, 2005 and May 28, 2005 and therelated statements of operations and cash flows for the fiscal months ended atsuch dates, present fairly in all material respects the consolidated financialcondition of NSP Holdings L.L.C. and NSP, and the business segments as at suchdates, and the consolidated results of its operations and its consolidated cashflows for the monthly periods then ended. All such financial statements, including the related schedules and notesthereto, have been prepared in accordance with GAAP applied consistentlythroughout the periods involved (except as approved by the aforementioned firmof accountants and disclosed therein and for the absence of certain notesthereto).  NSP and its Subsidiaries donot have any material Guarantee Obligations, contingent liabilities andliabilities for taxes, or any long-term leases or unusual forward or long-termcommitments, including any interest rate or foreign currency swap or exchangetransaction or other obligation in respect of derivatives, that are notreflected in the most recent financial statements referred to in this paragraphbut which would in accordance with GAAP be so reflected in a consolidatedbalance sheet of the Parent Borrower

 

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### and its Subsidiaries as of theClosing Date.  During the period from December 31,2004 to and including the date hereof there has been no Disposition by NSP orany of its subsidiaries of any material part of its business or property.

###  

### (b)                                 TheParent Borrower has heretofore delivered to the Lenders the ConfidentialOffering Circular dated June 28, 2005 of NSP Holdings L.L.C. and NSPHoldings Capital Corp. in respect of the 11 3/4% Senior Pay in Kind due 2012,and any amendment or supplement thereto which contains the unaudited *pro forma* consolidated balance sheet and statements ofoperations of NSP Holdings L.L.C., and as of and for the three-month periodended April 2, 2005, in each case after giving effect to the Transactionsas if they had occurred on such date in the case of the balance sheet and as ofthe beginning of all periods presented in the case of the statements ofoperations.  Such *pro forma*financial statements have been prepared in good faith by NSP Holdings L.L.C.and its Subsidiaries, based on the assumptions stated therein (whichassumptions are believed by NSP Holdings L.L.C. and its Subsidiaries on thedate hereof and on the Closing Date to be reasonable), are based on the bestinformation available to NSP Holdings L.L.C. and its Subsidiaries as of thedate of delivery thereof, accurately reflect all adjustments required to bemade to give effect to the Transactions, and in accordance with Regulation S-X,and present fairly in all material respects the *pro forma*consolidated financial position and results of operations of NSP HoldingsL.L.C. as of such date and for such periods, assuming that the Transactions hadoccurred at such dates.

###  

## 4.2                                 No Change.  Since December 31, 2004, there has beenno development or event that has had or could reasonably be expected to have aMaterial Adverse Effect.

 

## 4.3                                 Existence;Compliance with Law.  Each of theParent Borrower and its Subsidiaries (a) is duly organized, validlyexisting and in good standing under the laws of the jurisdiction of its organization,(b) has the corporate (or other equivalent) power and authority, and thelegal right, to own and operate its property, to lease the property it operatesas lessee and to conduct the business in which it is currently engaged, (c) isduly qualified as a foreign corporation (or equivalent thereof) and in goodstanding under the laws of each jurisdiction where its ownership, lease oroperation of property or the conduct of its business requires suchqualification except to the extent the failure to be so qualified and/or ingood standing could not reasonably be expected to have a Material AdverseEffect and (d) is in compliance with all Requirements of Law except to theextent that the failure to comply therewith could not, in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

## 4.4                                 Power;Authorization; Enforceable Obligations. Each Loan Party has the corporate (or, in the case of any Loan Partywhich is not a corporation, such equivalent) power and authority, and the legalright, to make, deliver and perform the Loan Documents to which it is a partyand, in the case of the Borrowers, to borrow hereunder.  Each Loan Party has taken all necessarycorporate (or, in the case of any Loan Party which is not a corporation, suchequivalent) action to authorize the execution, delivery and performance of theLoan Documents to which it is a party and, in the case of the Borrowers, toauthorize the borrowings on the terms and conditions of this Agreement.  No consent or authorization of, filing with,notice to or other act by or in respect of, any Governmental Authority or anyother Person is required in connection with the borrowings hereunder or withthe execution, delivery, performance, validity or enforceability of thisAgreement or any of the Loan Documents, except (i) consents,authorizations, filings and notices described in Schedule 4.4, whichconsents, authorizations, filings and notices have been obtained or made andare in full force and effect (other than such consents, authorizations, filingsand notices the failure to obtain or make which could not reasonably beexpected to have a Material Adverse Effect) and (ii) the filings referredto in Section 4.19.  Each LoanDocument has been duly executed and delivered on behalf of each Loan Party partythereto.  This Agreement constitutes, andeach other Loan Document upon execution will constitute, a legal, valid andbinding obligation of each Loan Party party thereto, enforceable against eachsuch Loan Party in accordance with its terms, except as enforceability

 

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## may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingthe enforcement of creditors’ rights generally and by general equitableprinciples (whether enforcement is sought by proceedings in equity or at law).

 

## 4.5                                 No Legal Bar.  The execution, delivery and performance ofthis Agreement and the other Loan Documents, the issuance of Letters of Credit,the borrowings hereunder and the use of the proceeds thereof will not violateany Requirement of Law or any Contractual Obligation of the Parent Borrower orany of its Subsidiaries and will not result in, or require, the creation orimposition of any Lien on any of their respective properties or revenuespursuant to any Requirement of Law or any such Contractual Obligation (otherthan the Liens created by the Security Documents).  No Requirement of Law or ContractualObligation applicable to the Parent Borrower or any of its Subsidiaries couldreasonably be expected to have a Material Adverse Effect.

 

## 4.6                                 No MaterialLitigation.  Except as set forth on Schedule 4.6,no litigation, investigation or proceeding of or before any arbitrator orGovernmental Authority is pending or, to the knowledge of the Parent Borrower,threatened by or against the Parent Borrower or any of its Subsidiaries oragainst any of their respective properties or revenues (a) with respect toany of the Loan Documents or any of the transactions contemplated hereby orthereby, or (b) that could reasonably be expected to have a MaterialAdverse Effect.

 

## 4.7                                 No Default.  Neither the Parent Borrower nor any of itsSubsidiaries is in default under or with respect to any of its ContractualObligations in any respect that could reasonably be expected to have a MaterialAdverse Effect.  No Default or Event ofDefault has occurred and is continuing.

 

## 4.8                                 Ownership ofProperty; Liens.  Each of the ParentBorrower and its Subsidiaries is the sole registered and beneficial owner of,and has title in fee simple to, or a valid leasehold interest in, all its realproperty material to the conduct of its business, and good title to, or a validleasehold interest in, all its other property material to the conduct of itsbusiness, and none of such property is subject to any Lien except as permittedby Section 7.3.  Schedule 4.8contains a true and complete list of each interest in Real Property (i) ownedby the Parent Borrower and its Subsidiaries as of the date hereof and describesthe type of interest therein held by the Parent Borrower and its Subsidiariesand (ii) leased, subleased or otherwise occupied or utilized by the ParentBorrower and its Subsidiaries, as lessee, sublessee, franchisee or licensee, asof the date hereof and describes the type of interest therein held by theParent Borrower and its Subsidiaries and whether such lease, sublease or otherinstrument requires the consent of the landlord thereunder or other partiesthereto to the Transactions.

 

## 4.9                                 IntellectualProperty.  The Parent Borrower andeach of its Subsidiaries owns, is licensed under, or otherwise has a right touse, all Intellectual Property used in the conduct of its business as currentlyconducted, except for any failure to so own or license Intellectual Propertywhich individually or in the aggregate could not reasonably be expected to havea Material Adverse Effect.  No writtenclaim has been asserted and is pending by any Person challenging or questioningthe use of any Intellectual Property or the validity or effectiveness of anyIntellectual Property used in the conduct of the business of the Parent Borrower and its Subsidiaries, nor doesthe Parent Borrower know of any valid basis for any such claim except for anyclaims which individually or in the aggregate could not reasonably be expectedto have a Material Adverse Effect.  Tothe knowledge of the Parent Borrower and its Subsidiaries, the use of IntellectualProperty by the Parent Borrower and its Subsidiaries does not infringe on therights of any Person in any respect, except for any infringement whichindividually or in the aggregate could not reasonably be expected to have aMaterial Adverse Effect.

 

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## 4.10                           Taxes.  The Parent Borrower and each of itsSubsidiaries has filed or caused to be filed all federal, state, provincial andother material tax returns that are required to be filed and has paid all taxesshown to be due and payable on said returns or on any assessments made againstit or any of its property and all other taxes, fees or other charges imposed onit or any of its property by any Governmental Authority (other than any theamount or validity of that are currently being contested in good faith byappropriate proceedings and with respect to which reserves in conformity withGAAP have been provided on the books of the Parent Borrower or itsSubsidiaries, as the case may be); no tax Lien has been filed, and, to theknowledge of the Parent Borrower, no material claim is being asserted, withrespect to any such tax, fee or other charge.

 

## 4.11                           Federal Regulations.  No part of the proceeds of any Loans will beused for “buying” or “carrying” any “margin stock” within the respectivemeanings of each of the quoted terms under Regulation U as now and from time totime hereafter in effect or for any purpose that violates the provisions of theRegulations of the Board.  If requestedby any Lender or the Administrative Agent, the Parent Borrower will furnish tothe Administrative Agent and each Lender a statement to the foregoing effect inconformity with the requirements of FR Form G-3 or FR Form U-1, asapplicable, referred to in Regulation U.

 

## 4.12                           Labor Matters.  Except as, in the aggregate, could notreasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labordisputes against the Parent Borrower or any of its Subsidiaries pending or, tothe knowledge of the Parent Borrower, threatened; (b) hours worked by andpayment made to employees of the Parent Borrower and its Subsidiaries have notbeen in violation of the Fair Labor Standards Act or any other applicableRequirement of Law dealing with such matters; and (c) all payments duefrom the Parent Borrower or any of its Subsidiaries on account of employeehealth and welfare insurance have been paid or accrued as a liability on thebooks of the Parent Borrower or the relevant Subsidiary.

 

## 4.13                           ERISA, Canadian Pensionand Benefit Plans and Foreign Plans. (a)  Except as disclosed on Schedule 4.13, neither aReportable Event nor an “accumulated funding deficiency” (within the meaning ofSection 412 of the Code or Section 302 of ERISA) has occurred duringthe five-year period prior to the date on which this representation is made ordeemed made with respect to any Plan which could reasonably be expected to havea Material Adverse Effect and each Plan has complied in all material respectswith the applicable provisions of ERISA and the Code.  No termination of a Single Employer Plan hasoccurred which could reasonably be expected to result in a material liability,and no Lien in favor of the PBGC or a Plan or Multiemployer Plan has arisen,during such five-year period.  Except asdisclosed on Schedule 4.13, the present value of all accrued benefits undereach Single Employer Plan (based on those assumptions used to fund such Plans)did not, as of the last annual valuation date prior to the date on which thisrepresentation is made or deemed made, exceed the value of the assets of suchPlan allocable to such accrued benefits by a material amount.  Neither the Parent Borrower nor any CommonlyControlled Entity has had a complete or partial withdrawal from anyMultiemployer Plan that has resulted or could reasonably be expected to resultin a material liability under ERISA; and neither the Parent Borrower nor anyCommonly Controlled Entity is reasonably likely to incur withdrawal liabilityhaving a Material Adverse Effect as a result of participation in MultiemployerPlans.

 

### (b)                                 Eachof the Canadian Borrower and its Subsidiaries has withheld from each payment toeach of their respective officers, directors and employees the amount of alltaxes, levies, imposts, duties, charges, fees, deductions or withholdings,including income tax, pension plan, unemployment insurance and other paymentsand deductions required to be withheld therefrom, and has paid the same to theproper taxation or other receiving authority in accordance with allRequirements of Law.  None of theCanadian Borrower nor any of its Subsidiaries is subject to any claim by orliability to any of their respective officers, directors or employees forsalary (including vacation pay) or benefits which

 

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### would rank in whole or in partpari passu with or prior to the Liens created by the Canadian SecurityDocuments.  No pension plan or fundmaintained by or on behalf of the Canadian Borrower or any of its Subsidiariesfor the benefit of any officer, director or employee of the Canadian Borroweror any such Subsidiaries is a so-called defined benefit plan.  For any pension plan or fund, and for anyother employee benefit plan, which is a defined contribution plan requiring theCanadian Borrower or any of its Subsidiaries to contribute thereto, or todeduct from payments to any individual and pay such deductions into or to thecredit of such pension plan or fund, all required employer contributions havebeen properly withheld by the Canadian Borrower or such Subsidiary and fullypaid into the funding arrangements for the applicable pension plan orfund.  Any assessments owed to thePension Benefits Guarantee Fund established under the Pension Benefits Act(Ontario), or other assessments or payments required under similar legislationin any other jurisdiction, have been paid when due.  None of the Canadian Borrower, any of itsSubsidiaries or any of their respective Affiliates is subject to ERISA.

###  

### (c)                                  Exceptwhere noncompliance would not reasonably be expected to result in a MaterialAdverse Effect, each Foreign Plan has been maintained in substantial compliancewith its terms and with the requirements of any and all applicable laws,statutes, rules, regulations and orders and has been maintained, whererequired, in good standing with applicable regulatory authorities, and neitherthe Borrowers nor any Subsidiary have incurred any material obligation inconnection with the termination of or withdrawal from any Foreign Plan.  The present value of the accrued benefitliabilities (whether or not vested) under each Foreign Plan which is funded,determined as of the end of the most recently ended fiscal year of theBorrowers or Subsidiary (based on the actuarial assumptions used for purposesof the applicable jurisdiction’s financial reporting requirements), did not exceedthe current value of the assets of such Foreign Plan, and for each Foreign Planwhich is not funded, the obligations of such Foreign Plan are properly accrued.

###  

## 4.14                           InvestmentCompany Act; Public Utility Holding Company Act; Other Regulations.  No Loan Party is (a) an “investmentcompany”, or a company “controlled” by an “investment company”, within themeaning of the Investment Company Act of 1940, as amended or (b) a “holdingcompany,” an “affiliate” of a “holding company” or a “subsidiary company” of a “holdingcompany,” within the meaning of the Public Utility Holding Company Act of 1935,as amended.  No Loan Party is subject toregulation under any Requirement of Law (other than Regulation X of theBoard) that limits its ability to incur Indebtedness.

 

## 4.15                           Subsidiaries.  Except as disclosed to the AdministrativeAgent by the Parent Borrower in writing from time to time after the ClosingDate, (a) Schedule 4.15 sets forth the name and jurisdiction oforganization of each Subsidiary and, as to each such Subsidiary, the percentageof each class of Capital Stock owned by any Loan Party and (b) there areno outstanding subscriptions, options, warrants, calls, rights or otheragreements or commitments (other than stock options granted to employees or directorsand directors’ qualifying shares) of any nature relating to any Capital Stockof the Parent Borrower or any Subsidiary, except as created by the LoanDocuments or as listed on Schedule 4.15.

 

## 4.16                           Use of Proceeds.  The proceeds of the Term Loans made on theClosing Date, the Equity Financing and the Additional Holdco Notes, togetherwith up to $2,000,000 proceeds of U.S. Swingline Loans, will be used to pay theAcquisition consideration, refinance certain existing indebtedness and pay feesand expenses in connection with the Transactions.  The proceeds of the U.S. Revolving Loans andother U.S. Swingline Loans shall be used for general corporate purposes.  The proceeds of the U.S. Letters of Creditshall be used to support payment obligations in the ordinary course ofbusiness.  The proceeds of the CanadianLoans shall be used to finance the working capital needs of the CanadianBorrower.  The proceeds of any increasein the Term Loans pursuant to Section 2.25 shall be used to fund PermittedAcquisitions, pay the fees and expenses related thereto, and to refinanceIndebtedness of the Person or associated with the assets to be so acquired.

 

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## 4.17                           Environmental Matters.  Except as set forth on Schedule 4.17,and except as, in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect:

 

(a)                                  the facilities andproperties owned, leased or operated by the Parent Borrower or any of itsSubsidiaries (the “Group Properties”) do not contain, any Materials ofEnvironmental Concern in amounts or concentrations or under circumstances thatconstitute or constituted a violation of, or could give rise to liabilityunder, any Environmental Law;

 

(b)                                 neither the ParentBorrower nor any of its Subsidiaries has received or has knowledge of anynotice of violation, alleged violation, non-compliance, liability or potentialliability regarding environmental matters or compliance with Environmental Lawswith regard to any of the Group Properties or the business operated by theParent Borrower or any of its Subsidiaries (the “Business”), nor doesthe Parent Borrower have knowledge or reason to believe that any such noticewill be received or is being threatened;

 

(c)                                  Materials ofEnvironmental Concern have not been transported or disposed of from the GroupProperties in violation of, or in a manner or to a location that couldreasonably be expected to give rise to liability under, any Environmental Law,nor have any Materials of Environmental Concern been generated, treated, storedor disposed of at, on or under any of the Group Properties in violation of, orin a manner that could reasonably be expected to give rise to liability under,any applicable Environmental Law;

 

(d)                                 no judicial proceedingor governmental or administrative action is pending or, to the knowledge of theParent Borrower, threatened, under any Environmental Law to which the ParentBorrower or any Subsidiary is or will be named as a party with respect to theGroup Properties or the Business, nor are there any consent decrees or otherdecrees, consent orders, administrative orders or other orders, or otheradministrative or judicial requirements outstanding under any Environmental Lawwith respect to the Group Properties or the Business;

 

(e)                                  there has been norelease or threat of release of Materials of Environmental Concern at or fromthe Group Properties, or arising from or related to the operations of theParent Borrower or any Subsidiary in connection with the Group Properties orotherwise in connection with the Business, in violation of or in amounts or ina manner that could reasonably be expected to give rise to liability under EnvironmentalLaws;

 

(f)                                    the GroupProperties and all operations at the Group Properties are in compliance, and havein the last five years been in compliance, with all applicable EnvironmentalLaws, and there is no contamination at, under or about the Group Properties orviolation of any Environmental Law with respect to the Group Properties or theBusiness; and

 

(g)                                 neither the ParentBorrower nor any of its Subsidiaries has assumed any liability of any otherPerson under Environmental Laws.

 

## 4.18                           Accuracy of Information,etc.  Subject to the next succeedingsentence and to the qualifications provided therein, no statement orinformation contained in this Agreement, any other Loan Document, or to thebest of the Parent Borrower’s knowledge, any other document or writtencertificate or written statement furnished by or on behalf of any Loan Party tothe Syndication Agent, the Administrative Agent, the Canadian Agent or theLenders, or any of them, pursuant to the Loan Documents or at the request ofCredit Suisse, as Sole Lead Arranger and Sole Bookrunner, for use in connectionwith the transactions contemplated by this Agreement or the other Loan Documents,taken as a whole, contained as of the date this Agreement or such other LoanDocument was delivered or such

 

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## statement, document orcertificate was so furnished, any untrue statement of a material fact oromitted to state a material fact necessary to make the statements containedherein or therein, taken as a whole, not misleading in light of thecircumstances in which they were made in any material respect.  The projections and pro forma financial informationcontained in the materials referenced above are based upon good faith estimatesand assumptions believed by management of the Parent Borrower to be reasonableat the time made, it being recognized by the Lenders that such financial informationas it relates to future events is not to be viewed as fact and that actualresults during the period or periods covered by such financial information maydiffer from the projected results set forth therein by a material amount.  There is no fact known to any Loan Party thatcould reasonably be expected to have a Material Adverse Effect that has notbeen expressly disclosed herein, in the other Loan Documents or in any otherdocuments, certificates and statements furnished to the Syndication Agent, theAdministrative Agent, the Canadian Agent and the Lenders for use in connectionwith the transactions contemplated hereby and by the other Loan Documents whentaken as a whole.

 

## 4.19                           Security Documents.

 

### (a)                                  TheGuarantee and Collateral Agreement is effective to create in favor of theAdministrative Agent, for the benefit of the U.S. Secured Parties and theCanadian Secured Parties, a legal, valid and enforceable security interest inthe Collateral described therein (other than Collateral described as “all otherproperty not otherwise described above” and the proceeds thereof) and theproceeds thereof which can be perfected by filings described in Schedule 4.19(a).  In the case of the Pledged Stock described inthe Guarantee and Collateral Agreement, stock certificates representing suchPledged Stock having been delivered to the Administrative Agent and, in thecase of the other Collateral described in the Guarantee and CollateralAgreement, financing statements and other filings specified on Schedule 4.19(a) inappropriate form having been filed in the offices specified on Schedule 4.19(a),the Guarantee and Collateral Agreement constitutes a fully perfected Lien on,and security interest in, all right, title and interest of the Loan Parties insuch Collateral (other than Collateral described as “all other property nototherwise described above” and the proceeds thereof) and the proceeds thereof,as security for the Borrower Obligations (as defined in the Guarantee andCollateral Agreement), in each case prior and superior in right to any otherPerson (except, in the case of Collateral other than Pledged Stock, Lienspermitted by Section 7.3 that have priority by operation of law).

###  

### (b)                                 Eachof the Mortgages is effective to create in favor of the Administrative Agent,for the benefit of the Lenders, or the Canadian Agent, for the benefit of theCanadian Lenders, as applicable, a legal, valid and enforceable first priorityLien on the Mortgaged Properties described therein and proceeds thereof, andwhen the Mortgages have been filed in the offices specified on Schedule 4.19(b),each such Mortgage shall constitute a fully perfected first priority Lien on,and security interest in, all right, title and interest of the Loan Parties inthe Mortgaged Properties and the proceeds thereof, as security for theObligations, in each case prior and superior in right to any other Person otherthan Liens permitted by Section 7.3 that have priority by operation oflaw.

###  

### (c)                                  TheHypothec creates in favor of the Canadian Agent for the benefit of the CanadianLenders a legal, valid and enforceable Lien in the Quebec Collateral describedtherein and proceeds thereof.  In thecase of certified Pledged Stock (as defined in the Canadian SecurityDocuments), certificates representing such Pledged Stock having been deliveredto the Canadian Agent, and in the case of the other Collateral described in theCanadian Security Documents, financing statements in appropriate form havingbeen filed in the offices specified on Schedule 4.19(c), the CanadianSecurity Documents constitute fully perfected Liens on, and security interestsin, all right, title and interest of the Loan Parties in such Collateral andthe proceeds thereof, as security for the obligations described therein asbeing secured thereby, in each case prior and superior in right to any otherperson except for Liens permitted under Section 7.3 to the extent suchLiens have priority under applicable law.

 

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### (d)                                 Toevidence and secure the due payment and performance of the Canadian Extensionsof Credit and the other covenants and obligations of the Canadian Borrowerunder this Credit Agreement, the Canadian Borrower shall execute and deliver orcause to be executed and delivered the following documents to the CanadianAgent for the benefit of the Canadian Lenders, all in the Canadian Agent’srequired form and otherwise satisfactory to the Canadian Agent in its solediscretion: (i) the Hypothec, (ii) the Collateral Mortgage Bond, (iii) theDelivery Order and (iv) the Pledge of Bond Agreement.

###  

## 4.20                           Solvency.  Each Loan Party is, and after giving effectto the Transactions, incurrence of all Indebtedness and obligations beingincurred in connection herewith and therewith will be Solvent.

 

## 4.21                           Senior Indebtedness.  The Obligations constitute “SeniorIndebtedness” of the U.S. Borrowers under and as defined in the SubordinatedNote Indenture.  The obligations of eachU.S. Subsidiary Guarantor under the Guarantee and Collateral Agreementconstitute “Guarantor Senior Indebtedness” of such U.S. Subsidiary Guarantorunder and as defined in the Subordinated Note Indenture.

 

## 4.22                           Regulation H.  No Mortgage encumbers improved real propertythat is located in an area that has been identified by the Secretary of Housingand Urban Development as an area having special flood hazards and in whichflood insurance has been made available under the National Flood Insurance Actof 1968.

 

## 4.23                           Certain Documents.  The Parent Borrower has delivered to theAdministrative Agent and Syndication Agent a complete and correct copy of eachdocument or instrument pursuant to which the Scheduled Debt has been created oris evidenced, including any modifications with respect to any of the foregoing.

 

## 4.24                           Capital Structure.

 

### (a)                                  Allof the issued and outstanding shares of the Capital Stock of the Parent Borrowerare owned by Holdco.

###  

### (b)                                 Setforth on Schedule 4.24(b) is a complete and correct list of allSubsidiaries of the Parent Borrower on the date hereof, including, for each ofthe Borrowers, the Subsidiary Guarantors and any Subsidiary the capital stockof which is being pledged for the benefit of the Lenders pursuant to the termsof the Loan, the number of issued and outstanding shares of the Capital Stockthereof.  The Parent Borrower owns,directly or indirectly, 100% of the Capital Stock of each of itsSubsidiaries.  The direct owner of theCapital Stock of each such Subsidiary is set forth on Schedule 4.24(b).

###  

## 4.25                           Mortgaged Properties.  Schedule 1.1(B) includes a completeand correct list of all interests in real property owned on the date hereof bythe Parent Borrower and/or any of its Subsidiaries having a value (togetherwith improvements thereon) of at least $1,000,000, and in the case of leasedreal property, has a remaining term of at least one year, and an annual baserent in excess of $100,000, except for the leased Real Property at 6303 and6311 Roper Road, Edmonton, Alberta.

 

## 4.26                           AcquisitionDocuments; Representations and Warranties in Acquisition Agreement.  Schedule 4.26 lists (i) eachexhibit, schedule, annex or other attachment to the Acquisition Agreement and (ii) eachagreement, certificate, instrument, letter or other document contemplated bythe Acquisition Agreement or any item referred to in clause (i) to beentered into, executed or delivered or to become effective in connection withthe Acquisition or otherwise entered into, executed or delivered in connectionwith the Acquisition on or prior to the Closing Date or any material agreement,certificate,

 

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## instrument, letter or otherdocument contemplated by the Acquisition Agreement or any item referred to inclause (i) to be entered into, executed or delivered or to become effectivein connection with the Acquisition or otherwise entered into, executed ordelivered in connection with the Acquisition after the Closing Date.  The Lenders have been furnished true andcomplete copies of each Acquisition Document to the extent executed anddelivered on or prior to the Closing Date. All representations and warranties of each Seller and NSP set forth inthe Acquisition Agreement were true and correct in all material respects as ofthe time such representations and warranties were made and shall be true andcorrect in all material respects as of the Closing Date as if suchrepresentations and warranties were made on and as of such date, unless statedto relate to a specific earlier date, in which case such representations andwarranties shall be true and correct in all material respects as of suchearlier date.

 

## 4.27                           Anti-Terrorism Law.

 

### (a)                                  NoLoan Party and, to the knowledge of the Loan Parties, none of its Affiliates isin violation of any Requirement of Law relating to terrorism or moneylaundering (“Anti-Terrorism Laws”), including Executive Order No. 13224on Terrorist Financing, effective September 24, 2001 (the “ExecutiveOrder”), and the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

###  

### (b)                                 NoLoan Party and to the knowledge of the Loan Parties, no Affiliate or broker orother agent of any Loan Party acting or benefiting in any capacity inconnection with the Loans is any of the following:

###  

#### (i)                                     a person that islisted in the annex to, or is otherwise subject to the provisions of, the ExecutiveOrder;

####  

#### (ii)                                  a person owned orcontrolled by, or acting for or on behalf of, any person that is listed in theannex to, or is otherwise subject to the provisions of, the Executive Order;

####  

#### (iii)                               a person with which anyLender is prohibited from dealing or otherwise engaging in any transaction byany Anti-Terrorism Law;

####  

#### (iv)                              a person that commits,threatens or conspires to commit or supports “terrorism” as defined in theExecutive Order; or

####  

#### (v)                                 a person that is namedas a “specially designated national and blocked person” on the most currentlist published by the U.S. Treasury Department Office of Foreign Assets Control(“OFAC”) at its official website or any replacement website or otherreplacement official publication of such list.

####  

### (c)                                  NoLoan Party and, to the knowledge of the Loan Parties, no broker or other agentof any Loan Party acting in any capacity in connection with the Loans (i) conductsany business or engages in making or receiving any contribution of funds, goodsor services to or for the benefit of any person described in paragraph (b) above,(ii) deals in, or otherwise engages in any transaction relating to, anyproperty or interests in property blocked pursuant to the Executive Order, or (iii) engagesin or conspires to engage in any transaction that evades or avoids, or has thepurpose of evading or avoiding, or attempts to violate, any of the prohibitionsset forth in any Anti-Terrorism Law.

###  

## 4.28                           Casualty Event.  The Parent Borrower and its Subsidiaries havenot received any notice of, nor has any knowledge of, the occurrence or pendencyor contemplation of any Casualty Event affecting all or any portion of itsproperty.

 

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# SECTION 5

#  

# CONDITIONS PRECEDENT

#  

## 5.1                                 Conditionsto Initial Extension of Credit.  Theagreement of each Lender to make the initial extension of credit requested tobe made by it is subject to the satisfaction or waiver pursuant to Section 10.1,prior to or concurrently with the making of such extension of credit on theClosing Date (but in any event no later than July 19, 2005), of thefollowing conditions precedent:

 

(a)                                  Loan Documents.  The Administrative Agent and the CanadianAgent shall have received (i) this Agreement, executed and delivered bythe Syndication Agent, the Administrative Agent, the Canadian Agent, theBorrowers and the Lenders, (ii) the Guarantee and Collateral Agreement,executed and delivered by Holdco, the U.S. Borrowers and each U.S. SubsidiaryGuarantor, (iii) an Acknowledgment and Consent in the form attached to theGuarantee and Collateral Agreement, executed and delivered by each Issuer (asdefined therein) organized under the laws of any jurisdiction within the UnitedStates, if any, that is not a Loan Party or a Grantor under the Guarantee andCollateral Agreement and (iv) the Canadian Loan Documents, executed anddelivered by the Canadian Agent and the Canadian Borrower.

 

### (b)                                 Financingsand Other Transactions, etc.

###  

#### (i)                                     The Transactionsshall have been consummated or shall be consummated simultaneously on theClosing Date, in each case in all material respects in accordance with theterms hereof and the terms of the Transaction Documents, without the waiver oramendment of any such terms not approved by the Administrative Agent other thanany waiver or amendment thereof that is not materially adverse to the interestsof the Lenders.

####  

#### (ii)                                  Holdco shall havereceived not less than $25.0 million in gross proceeds (prior to any applicableoriginal issue discount) from the issuance and sale of the Additional HoldcoNotes.

####  

#### (iii)                               The Equity Financingshall have been consummated.  The termsof the Equity Financing shall not require any payments or other distributionsof cash or property in respect thereof other than payments in kind, or anypurchases, redemptions or other acquisitions thereof for cash or property otherthan payments in kind, in each case prior to the payment in full of allobligations under the Loan Documents, except as permitted by the Loan Documents.

####  

#### (iv)                              The Refinancing shallhave been consummated in full to the satisfaction of the Lenders with all Liensin favor of the existing lenders being unconditionally released; the AdministrativeAgent shall have received a “pay-off” letter in form and substance reasonablysatisfactory to the Administrative Agent with respect to all debt beingrefinanced in the Refinancing; and the Administrative Agent shall have receivedfrom any person holding any Lien securing any such debt, such UCC terminationstatements, PPSA financing charge statements, mortgage releases, releases ofassignments of leases and rents, releases of Liens in Intellectual Property andother instruments, in each case in proper form for recording, as theAdministrative Agent shall have reasonably requested to release and terminateof record the Liens securing such debt.

####  

(c)                                  Fees.  The Lenders, the Syndication Agent, theCanadian Agent and the Administrative Agent each shall have received all feesrequired to be paid by the Borrowers, and all expenses required to be paid bythe Borrowers for which invoices have been presented to Parent

 

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Borrower (including the reasonable fees andexpenses of legal counsel), on or before the Closing Date.

 

(d)                                 Closing Certificate.  The Administrative Agent and the CanadianAgent shall have received, with a counterpart for each Lender, a certificate ofeach Loan Party, dated the Closing Date, substantially in the form of Exhibit C,with appropriate insertions and attachments.

 

(e)                                  Legal Opinions.  The Administrative Agent and the CanadianAgent, as appropriate, shall have received the executed legal opinions of (i) DechertLLP, counsel to the Parent Borrower and its Subsidiaries, substantially in theform of Exhibit F-1, (ii) Sternthal Katznelson Montigny, L.L.P.,counsel to the Canadian Borrower and its Subsidiaries, substantially in theform of Exhibit F-2, and (iii) eachlocal counsel listed on Schedule 5.1(e), substantially to the effect setforth in Exhibit F-3.  Suchlegal opinions shall cover such other matters incident to the transactionscontemplated by this Agreement as the Administrative Agent, the Canadian Agentand Syndication Agent may reasonably require.

 

(f)                                    Pledged Stock;Stock Powers; Pledged Notes.  TheAdministrative Agent shall have received (i) the certificates representingthe shares of Capital Stock pledged pursuant to the Guarantee and CollateralAgreement that are represented by certificates, together with an undated stockpower for each such certificate executed in blank by a duly authorized officerof the pledgor thereof and (ii) each promissory note (if any) pledged tothe Administrative Agent pursuant to the Guarantee and Collateral Agreementendorsed (without recourse) in blank (or accompanied by an executed transferform in blank) by the pledgor thereof. The Canadian Agent shall have received each promissory note, if any,pledged to the Canadian Agent pursuant to the Canadian Security Documentsendorsed (without recourse) in blank (or accompanied by an executed transferform in blank satisfactory to the Canadian Agent) by the pledgor thereof.  The Administrative Agent or the CanadianAgent, as appropriate, shall have received certified copies of UCC, PPSA,United States Patent and Trademark Office and United States Copyright Office,tax and judgment lien searches, bankruptcy and pending lawsuit searches orequivalent reports or searches, each of a recent date listing all effectivefinancing statements, lien notices or comparable documents that name any LoanParty as debtor and that are filed in those state or provincial and countyjurisdictions in which any property of any Loan Party is located and the stateor provincial and county jurisdictions in which any Loan Party is organized ormaintains its principal place of business and such other searches that theCollateral Agent deems necessary or appropriate, none of which encumber theCollateral covered or intended to be covered by the U.S. Security Documents orthe Canadian Security Documents (other than Permitted Liens or any other Liensacceptable to the Administrative Agent or the Canadian Agent, as applicable);

 

(g)                                 Filings, Registrationsand Recordings.  Each document(including any Uniform Commercial Code financing statement) required bythe Security Documents or under law or reasonably requested by theAdministrative Agent or the Canadian Agent to be executed, filed, registered orrecorded in order to create in favor of the Administrative Agent for thebenefit of the U.S. Lenders or in favor of the Canadian Agent  for the benefit of the Canadian Lenders, asapplicable, a perfected Lien on the Collateral described therein, prior andsuperior in right to any other Person (other than with respect to Liensexpressly permitted by Section 7.3), shall be in proper form for filing,registration or recordation and shall have been delivered to the AdministrativeAgent and the Syndication Agent, or the Canadian Agent, as applicable.

 

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### (h)                                 RealProperty Requirements.  (A) Exceptas provided in Section 5.1(h)(B) in respect of Mortgaged Property ofthe Canadian Borrower and its Subsidiaries, the Administrative Agent shall havereceived:

###  

#### (i)                                     a Mortgageencumbering each Mortgaged Property in favor of the Administrative Agent, forthe benefit of the Lenders, duly executed and acknowledged by each Loan Partythat is the owner of or holder of any interest in such Mortgaged Property,together with such certificates, affidavits, questionnaires or returns as shallbe required in connection with the recording or filing thereof to create a lienunder applicable Requirements of Law, and such financing statements and anyother instruments necessary to grant a mortgage lien under the laws of anyapplicable jurisdiction, all of which shall be in form and substance reasonablysatisfactory to the Administrative Agent;

####  

#### (ii)                                  with respect to eachMortgaged Property, such consents, approvals, amendments, supplements,estoppels, tenant subordination agreements or other instruments as necessary toconsummate the Transactions or as shall reasonably be deemed necessary by theAdministrative Agent in order for the owner or holder of the fee or leaseholdinterest constituting such Mortgaged Property to grant the Lien contemplated bythe Mortgage with respect to such Mortgaged Property, in each case, to theextent obtainable using commercially reasonable efforts;

####  

#### (iii)                               with respect to eachMortgage, a policy of title insurance (or marked up title insurance commitmenthaving the effect of a policy of title insurance) insuring the Lien of suchMortgage as a valid first mortgage Lien on the Mortgaged Property and fixturesdescribed therein in the amount equal to not less than 115% of the fair marketvalue of such Mortgaged Property and fixtures, which fair market value is setforth on Schedule 5.1(h), which policy (or such marked-up commitment)(each, a “Title Policy”) shall (A) be issued by the Title Company, (B) tothe extent necessary, include such reinsurance arrangements (with provisionsfor direct access, if necessary) as shall be reasonably acceptable to theCollateral Agent, (C) contain a “tie-in” or “cluster” endorsement, ifavailable under applicable law (i.e., policies which insure againstlosses regardless of location or allocated value of the insured property up toa stated maximum coverage amount), (D) have been supplemented by suchendorsements (or where such endorsements are not available, opinions of specialcounsel, architects or other professionals reasonably acceptable to theCollateral Agent) as shall be reasonably requested by the Collateral Agent(including endorsements on matters relating to usury, first loss, last dollar,zoning, contiguity, revolving credit, doing business, non-imputation, publicroad access, survey, variable rate, environmental lien, subdivision, mortgagerecording tax, separate tax lot  and so-calledcomprehensive coverage over covenants and restrictions), and (E) containno exceptions to title other than exceptions acceptable to the AdministrativeAgent;

####  

#### (iv)                              with respect to eachMortgaged Property, such affidavits, certificates, information (includingfinancial data) and instruments of indemnification (including a so-called “gap”indemnification) as shall be required to induce the Title Company to issue theTitle Policy/ies and endorsements contemplated above;

####  

#### (v)                                 evidence reasonablyacceptable to the Administrative Agent of payment by Borrower of all TitlePolicy premiums, search and examination charges, escrow charges and relatedcharges, mortgage recording taxes, fees, charges, costs and expenses requiredfor the recording of the Mortgages and issuance of the Title Policies referredto above;

####  

#### (vi)                              with respect to each RealProperty or Mortgaged Property, copies of all leases in which Borrower or anySubsidiary holds the lessor’s interest or other agreements relating topossessory

 

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#### interests, if any.  To the extentany of the foregoing affect any Mortgaged Property, such agreement shall besubordinate to the Lien of the Mortgage to be recorded against such MortgagedProperty, either expressly by its terms or pursuant to a subordination,non-disturbance and attornment agreement, and shall otherwise be acceptable tothe Administrative Agent;

####  

#### (vii)                           with respect to eachMortgaged Property, each Loan Party shall have made all notifications,registrations and filings, to the extent required by, and in accordance with,all Governmental Real Property Disclosure Requirements applicable to suchMortgaged Property;

####  

#### (viii)                        Surveys with respect to each ofthe Mortgaged Properties set forth on Schedule 5.1(h)(viii); and

####  

#### (ix)                                a completed FederalEmergency Management Agency Standard Flood Hazard Determination with respect toeach Mortgaged Property.

####  

(B)  The Canadian Agent shall havereceived:

 

(i)                                     aMortgage encumbering each Mortgaged Property of the Canadian Borrower and anyof its Subsidiaries in favor of the Canadian Agent, for the benefit of theCanadian Lenders, duly executed and acknowledged by each Loan Party that is theowner of or holder of any interest in such Mortgaged Property, together withsuch certificates, affidavits, questionnaires or returns as shall be requiredin connection with the recording or filing thereof to create a lien underapplicable Requirements of Law, and such financing statements and any otherinstruments necessary to grant a mortgage lien under the laws of any applicablejurisdiction, all of which shall be in form and substance reasonablysatisfactory to the Canadian Agent;

 

(ii)                                  withrespect to each Mortgaged Property of the Canadian Borrower and any of itsSubsidiaries, such consents, approvals, amendments, supplements, estoppels,tenant subordination agreements or other instruments as necessary to consummatethe Transactions or as shall reasonably be deemed necessary by the CanadianAgent in order for the owner or holder of the fee or leasehold interest constitutingsuch Mortgaged Property to grant the Lien contemplated by the Mortgage withrespect to such Mortgaged Property;

 

(iii)                                  withrespect to each Mortgage relating to owned Real Property made by the CanadianBorrower and any of the its Subsidiaries, a Title Policy, which shall (A) beissued by the Title Company, (B) to the extent necessary, include suchreinsurance arrangements (with provisions for direct access, if necessary) asshall be reasonably acceptable to the Canadian Agent, (C) contain a “tie-in”or “cluster” endorsement, if available under applicable law (i.e., policieswhich insure against losses regardless of location or allocated value of theinsured property up to a stated maximum coverage amount), (D) have beensupplemented by such endorsements (or where such endorsements are notavailable, opinions of special counsel, architects or other professionalsreasonably acceptable to the Canadian Agent) as shall be reasonably requestedby the Canadian (including endorsements on matters relating to usury, firstloss, last dollar, zoning, contiguity, revolving credit, doing business,non-imputation, public road access, survey, variable rate, environmental lien,subdivision, mortgage recording tax, separate tax lot, and so-calledcomprehensive coverage over covenants and restrictions), and (E) containno exceptions to title other than exceptions acceptable to the Canadian Agent;

 

(iv)                              withrespect to each Mortgage relating to owned Real Property of the CanadianBorrower and any of its Subsidiaries, such affidavits, certificates,information (including financial data) and instruments of indemnification(including a so-called “gap” indemnification) as shall be

 

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required to induce the TitleCompany to issue the Title Policy/ies and endorsements contemplated above;

 

(v)                                 evidencereasonably acceptable to the Canadian Agent of payment by the Canadian Borrowerof all Title Policy premiums, search and examination charges, escrow chargesand related charges, mortgage recording taxes, fees, charges, costs andexpenses required for the recording of the Mortgages and issuance of the TitlePolicies referred to above;

 

(vi)                              withrespect to each Real Property or Mortgaged Property of the Canadian Borrowerand any of its Subsidiaries, copies of all leases in which the CanadianBorrower or any of its Subsidiaries holds the lessor’s interest or otheragreements relating to possessory interests, if any.  To the extent any of the foregoing affect anyMortgaged Property, such agreement shall be subordinate to the Lien of theMortgage to be recorded against such Mortgaged Property, either expressly byits terms or pursuant to a subordination, non-disturbance and attornmentagreement, and shall otherwise be acceptable to the Canadian Agent;

 

(vii)                           withrespect to each Mortgaged Property of the Canadian Borrower and any of itsSubsidiaries, each Loan Party shall have made all notifications, registrationsand filings, to the extent required by, and in accordance with, allRequirements of Law applicable to such Mortgaged Property; and

 

(i)                                     Insurance.  The Administrative Agent and the CanadianAgent shall have received insurance certificates satisfying the requirements ofthe Security Documents.

 

(j)                                     Leverage Ratios.  The Administrative Agent shall have receivedevidence, in form and substance satisfactory to it, that as of the Closing Dateand calculated as described below, the Parent Borrower’s pro forma ConsolidatedTotal Leverage Ratio is not greater than 3.8 to 1.0 and Holdco’s pro formaConsolidated Total Leverage Ratio is not greater than 5.7 to 1.0.  For the purposes of the computation of theRatios described in the preceding sentence, Consolidated Total Debt shall becalculated as of the Closing Date, giving effect to any borrowings andprepayments to occur hereunder on such Date (with good faith estimates of theamount of cash and Cash Equivalents as of the Closing Date), and ConsolidatedEBITDA shall be calculated for the period of four consecutive fiscal quartersending April 2, 2005 after giving pro forma effect to the Transactions.

 

(k)                                  Solvency.  The Administrative Agent shall have receiveda certificate from the chief financial officer of Holdco certifying that Holdcoand its Subsidiaries, on a consolidated basis after giving effect to theTransactions and the other transactions contemplated hereby, are solvent.

 

(l)                                     Patriot Act.  The Administrative Agent shall have received,at least five Business Days prior to the Closing Date, all documentation andother information required by regulatory authorities under applicable “knowyour customer” and anti-money laundering rules and regulations, includingwithout limitation the PATRIOT Act.

 

(m)                               Consents.  The Lenders shall be satisfied that allrequisite Governmental Authorities and third parties (except for third partiesthe consents of which are not required pursuant to clause (h) of thisSection 5.1) shall have approved or consented to the Transactions, andthere shall be no governmental or judicial action, actual or threatened, thathas or would have, singly or in the aggregate, a reasonable likelihood ofrestraining, preventing or imposing burdensome conditions on the Transactionsor the other transactions contemplated hereby.

 

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(n)                                 Litigation.  There shall be no litigation, public orprivate, or administrative proceedings, governmental investigation or otherlegal or regulatory developments, actual or threatened, that, singly or in theaggregate, could reasonably be expected to result in a Material Adverse Effect,or could materially and adversely affect the ability of Holdco, the ParentBorrower or their Subsidiaries to fully and timely perform their respectiveobligations under the Transaction Documents, or the ability of the parties toconsummate the financings contemplated hereby or the other Transactions.

 

(o)                                 Indebtedness andMinority Interests.  After givingeffect to the Transactions and the other transactions contemplated hereby, noLoan Party shall have outstanding any Indebtedness or preferred stock otherthan (i) Indebtedness outstanding hereunder, (ii) the SeniorSubordinated Notes, (iii) the Holdco Notes, (iv) the Indebtednesslisted on Schedule 7.2(e) and (v) Indebtedness owed to theBorrowers or any Guarantor.

 

## 5.2                                 Conditions to EachExtension of Credit.  The agreementof each Lender to make any extension of credit requested to be made by it onany date (including its initial extension of credit) is subject to thesatisfaction of the following conditions precedent:

 

(a)                                  Requests for Loans.

 

(i)                                     Inthe case of a Term Loan, the Administrative Agent shall have received a noticerequesting such Loan as required by Section 2.1(b).

 

(ii)                                  Inthe case of a U.S. Revolving Loan, the Administrative Agent shall have receiveda notice requesting such Loan as required by Section 2.4(a).

 

(iii)                               Inthe case of a U.S. Swingline Loan, the U.S. Swingline Lender shall havereceived a notice requesting such Loan as required by Section 2.5(c).

 

(iv)                              Inthe case of a Canadian Revolving Loan, the Canadian Agent shall have received anotice requesting such Loan as required by Section 2.3(d).

 

(v)                                 Inthe case of Bankers’ Acceptances and B/A Equivalent Loans, the Canadian Agentshall have received a notice (x) of the Canadian Borrower’s intention to issueBankers’ Acceptances pursuant to Section 2.21(e), or (y) requesting a B/AEquivalent Loan pursuant to Section 2.26.

 

(vi)                              Inthe case of the issuance, amendment, extension or renewal of a U.S. Letter ofCredit, the U.S. Issuing Lender shall have received a notice requesting theissuance, execution, amendment, extension or renewal of such Letter of Credit,as applicable, as required by Section 3.2.

 

(b)                                 Representations andWarranties.  Each of therepresentations and warranties made by any Loan Party in or pursuant to theLoan Documents shall be true and correct in all material respects on and as ofsuch date as if made on and as of such date except for such representations andwarranties expressly stated to be made as of a specific earlier date, in whichcase such representations and warranties shall be true and correct in allmaterial respects as of such earlier date.

 

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(c)                                  No Default.  No Default or Event of Default shall haveoccurred and be continuing on such date or after giving effect to theextensions of credit requested to be made on such date.

 

Each borrowingby and issuance of a Letter of Credit on behalf of the Borrowers hereundershall constitute a representation and warranty by the Borrowers as of the dateof such extension of credit that the conditions contained in this Section 5.2have been satisfied.

 

# SECTION 6

#  

# AFFIRMATIVE COVENANTS

#  

The ParentBorrower hereby agree that, so long as the Commitments remain in effect, anyLetter of Credit remains outstanding or any Loan or other amount is owing toany Lender, the Syndication Agent, the Canadian Agent or the AdministrativeAgent hereunder (other than contingent and indemnification obligations), theParent Borrower shall and shall cause each of its Subsidiaries to:

 

## 6.1                                 FinancialStatements.

 

### (a)                                  Furnishto the Administrative Agent for distribution to each Lender:

###  

#### (i)                                     as soon asavailable, but in any event within 90 days after the end of each fiscalyear of Holdco, a copy of the audited consolidated balance sheets of Holdco andits consolidated Subsidiaries and Parent Borrower and its consolidatedsubsidiaries as at the end of such year and the related audited consolidatedstatements of operations for such year, setting forth in each case in comparativeform (to the extent practicable taking into account predecessors) the figuresfor the previous year of such entities and any predecessors, reported onwithout a “going concern” or like qualification or exception, or qualificationarising out of the scope of the audit, by Ernst & Young LLP or otherindependent certified public accountants of nationally recognized standing;

####  

#### (ii)                                  as soon as available,but in any event not later than 45 days after the end of each of the firstthree quarterly periods of each fiscal year of Holdco, the unauditedconsolidated balance sheets of Holdco and its consolidated Subsidiaries andParent Borrower and its consolidated subsidiaries as at the end of such quarterand the related unaudited consolidated statements of operations for suchquarter and the portion of the fiscal year through the end of such quarter,setting forth in each case in comparative form (to the extent practicabletaking into account predecessors) the figures for the previous year of suchentities and any predecessors, certified by a Responsible Officer as beingfairly stated in all material respects (subject to normal year-end audit adjustmentsand the absence of certain footnotes);

####  

#### (iii)                               as soon as available,but in any event not later than 30 days after the end of each month or 45 daysin the case of the end of the third, sixth, ninth and twelfth months occurringduring each fiscal year of Holdco, the unaudited consolidated balance sheets ofHoldco and its Subsidiaries and Parent Borrower and its consolidatedsubsidiaries as at the end of such month and the related unaudited consolidatedstatements of operations for such month and the portion of the fiscal yearthrough the end of such month, setting forth in each case in comparative form(to the extent practicable taking into account predecessors) the figures forthe previous year of such entities and any predecessors, certified by aResponsible Officer as being fairly stated in all material respects (subject tonormal year-end audit adjustments and the absence of certain footnotes

 

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#### and final purchase accounting adjustments); provided, however,that if the Parent Borrower is required to commence a new fiscal period as ofthe Closing Date, then no July 2005 month-end financial statements shallbe required to be furnished hereunder; and

####  

All suchfinancial statements shall be complete and correct in all material respects andshall be prepared in reasonable detail and in accordance with GAAP appliedconsistently throughout the periods reflected therein and with prior periods(except as approved by such accountants or officer, as the case may be, anddisclosed therein).

 

### (b)                                 Causethe Canadian Borrower to deliver to the Administrative Agent and the CanadianAgent for distribution to each Lender:

###  

#### (i)                                     within 90 daysafter the end of each fiscal year of the Canadian Borrower, a copy of itsunaudited balance sheet of the Canadian Borrower as at the end of such year andthe related unaudited statements of income and of cash flows for such year,setting forth in each case in comparative form the figures for the previousyear, prepared in accordance with GAAP; and

####  

#### (ii)                                  as soon as available,but in any event not later than 30 days after the end of each month or 45 daysin the case of the third, sixth, ninth and twelfth months occurring during eachfiscal year of the Canadian Borrower, its unaudited balance sheet of theCanadian Borrower as at the end of such month and the related unauditedstatements of income and of cash flows for such month and the portion of thefiscal year through the end of such month, setting forth in each case incomparative form the figures for the previous year, certified by a ResponsibleOfficer as being fairly stated in all material respects (subject to normalyear-end adjustments and the absence of certain footnotes).

####  

## 6.2                                 Certificates;Other Information.  Furnish to theAdministrative Agent for distribution to each Lender (or, in the case of clause(g), furnish to the relevant Lender):

 

(a)                                  concurrently with thedelivery of the financial statements referred to in Section 6.1(a)(i), (i) acertificate of the independent certified public accountants reporting on suchfinancial statements stating that in making the examination necessary thereforno knowledge was obtained of any Default or Event of Default, except asspecified in such certificate and (ii) all “management letters”, if any,delivered by such accountants in connection therewith;

 

(b)                                 concurrently with thedelivery of any financial statements pursuant to Section 6.1(a), (i) acertificate of a Responsible Officer stating that such Responsible Officer hasobtained no knowledge of any Default or Event of Default except as specified insuch certificate and (ii) in the case of quarterly or annual financialstatements, (x) a Compliance Certificate containing all information andcalculations necessary for determining compliance by the Parent Borrower andits Subsidiaries with the provisions of this Agreement referred to therein asof the last day of the fiscal quarter or fiscal year of Parent Borrower, and,if such Compliance Certificate demonstrates an Event of Default of any covenantunder Section 7.1, the Permitted Holders and the Individual Investors maydeliver, together with such Compliance Certificate, notice of their intent tocure (a “Notice of Intent to Cure”) such Event of Default throughcapital contributions or the purchase of Equity interests as contemplatedpursuant to clause (n) of the definition of “Consolidated EBITDA”; providedthat the delivery of a Notice of Intent to Cure shall in no way affect or alterthe occurrence, existence or continuation of any such Event of Default or therights, benefits, powers and remedies of the Administrative Agent and the Lendersunder any Loan Document;

 

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(c)                                  as soon as available,and in any event no later than 60 days after the end of each fiscal year ofParent Borrower, a detailed consolidated budget for the new fiscal year(including a projected consolidated balance sheet of the Parent Borrower andits subsidiaries as of the end of the new fiscal year, the related consolidatedstatements of projected cash flow, projected changes in financial position andprojected income and supporting information applicable thereto), and, as soonas available, significant revisions, if any, of such budget and projectionswith respect to such fiscal year which are delivered to the Board of Directorsof Parent Borrower for its review (collectively, the “Projections”),which Projections shall in each case be accompanied by a certificate of aResponsible Officer stating that such Projections are based on reasonableestimates, information and assumptions at the time made in light of thecircumstances then existing and that such Responsible Officer has no reason tobelieve that such Projections are incorrect or misleading in any material respect;

 

(d)                                 concurrently with thedelivery of any financial statements pursuant to Section 6.1(a)(ii), anarrative discussion and analysis of the financial condition and results ofoperations of Parent Borrower and its Subsidiaries for such fiscal quarter andfor the period from the beginning of the then current fiscal year to the end ofsuch fiscal quarter, as compared to the comparable periods of the previous yearand, for each of the three month periods included in such quarter, a narrativediscussion and analysis of the financial condition and results of operations ofParent Borrower and its Subsidiaries for such month and to the portion of theProjections covering such periods;

 

(e)                                  no later than fiveBusiness Days prior to the effectiveness thereof, copies of substantially finaldrafts of any proposed amendment, supplement, waiver or other modification withrespect to any Scheduled Debt;

 

(f)                                    within five daysafter the same are sent, copies of all financial statements and reports thatHoldco or the Parent Borrower sends to the holders of any class of its debtsecurities or public equity securities and, within five days after the same arefiled, copies of all financial statements and reports that Holdco or the ParentBorrower may make to, or file with, the SEC; and

 

(g)                                 promptly, suchadditional financial and other information as any Lender may from time to timereasonably request.

 

## 6.3                                 Payment ofObligations.  Pay, discharge orotherwise satisfy at or before maturity or before they become delinquent, asthe case may be, all its material obligations of whatever nature (including alltaxes), except where (a) the amount or validity thereof is currently beingcontested in good faith by appropriate proceedings and reserves in conformitywith GAAP with respect thereto have been provided on the books of the ParentBorrower or its Subsidiaries, as the case may be or (b) the failure to so pay,discharge or otherwise satisfy any such obligations could not, individually orin the aggregate, reasonably be expected to have a Material Adverse Effect.

 

## 6.4                                 Maintenanceof Existence; Compliance.  Except forthe Merger to be effected in connection with the Acquisition, (a) (i)  preserve,renew and keep in full force and effect its legal existence and (ii) takeall reasonable action to maintain all rights, privileges and franchisesnecessary or desirable in the normal conduct of its business, except, in eachcase, as otherwise permitted by Section 7.4 and except, in the case ofclause (ii) above, to the extent that failure to do so could notreasonably be expected to have a Material Adverse Effect; and (b) complywith all Contractual Obligations and Requirements of Law except to the extentthat failure to comply therewith could not, in the aggregate, reasonably beexpected to have a Material Adverse Effect.

 

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## 6.5                                 Maintenanceof Property; Insurance.  (a)  Keepall material tangible property useful and necessary in its business in as goodworking order and condition as currently maintained, ordinary wear and tear anddamage occurring as a result of a Casualty Event excepted and (b) maintainwith financially sound and reputable insurance companies insurance on all itsproperty in at least such amounts and against at least such risks (butincluding in any event public liability, product liability and businessinterruption) as are usually insured against in the same general area bycompanies engaged in the same or a similar business.

 

## 6.6                                 Inspectionof Property; Books and Records; Discussions.  (a)  Keep books of records andaccount in which full, true and correct entries in conformity with GAAP and allRequirements of Law shall be made of all dealings and transactions in relationto its business and activities and (b) permit representatives of anyLender, at its own expense, to visit and inspect (but not collect soil,groundwater, sediment, surface water or air samples) any of its properties andexamine and make abstracts from any of its books and records, at suchreasonable times during normal business hours upon reasonable advance writtennotice to the Parent Borrower and, subject to the proviso below, as often asmay reasonably be desired and to discuss the business, operations, propertiesand financial and other condition of the Parent Borrower and its Subsidiarieswith officers and employees of the Parent Borrower and its Subsidiaries andwith its independent certified public accountants (subject to such independentcertified public accountants’ customary procedures) (such visits andinspections shall be coordinated by the Lenders to the extent reasonably practicable);provided that such visits shall occur no more than two times per year ifno Event of Default has occurred and is continuing.  In the absence of an Event of Default, theAdministrative Agent and the Lenders shall give Parent Borrower the opportunityto participate in any discussions with Parent Borrower’s independent certifiedpublic accountants.

 

## 6.7                                 Notices.  Promptly give notice to the AdministrativeAgent and the Canadian Agent of:

 

(a)                                  the occurrence of anyDefault or Event of Default;

 

(b)                                 any (i) defaultor event of default under any Contractual Obligation of the Parent Borrower orany of its Subsidiaries or (ii) litigation, investigation or proceedingthat may exist at any time between Parent Borrower or any of its Subsidiariesand any Governmental Authority, that in either case, if not cured or ifadversely determined, as the case may be, could reasonably be expected to havea Material Adverse Effect;

 

(c)                                  any litigation orproceeding affecting Parent Borrower or any of its Subsidiaries in which theamount involved is $1,000,000 or more and not covered by insurance or in whichinjunctive or similar relief is sought and, with respect to any litigation orproceeding relating to respiratory claims, Parent Borrower shall provide to theAdministrative Agent notice of such litigations and proceedings as disclosed inthe periodic reports and public filings of Parent Borrower, provided that aftersuch notice is provided to the Administrative Agent, and to the extentreasonably requested by the Administrative Agent, the Parent Borrower shallprovide to the Administrative Agent any supporting documentation with respectto such litigations and proceedings;

 

(d)                                 any of the followingevents which could reasonably be expected to result in a liability in excess of$1,000,000, as soon as possible and in any event within 30 days after theParent Borrower knows or has reason to know thereof:  (i) the occurrence of any ReportableEvent with respect to any Plan, a failure to make any required contribution toa Plan, the creation of any Lien in favor of the PBGC or a Plan or anywithdrawal from, or the termination, Reorganization or Insolvency of, anyMultiemployer Plan or (ii) the institution of proceedings or the taking ofany other action by the PBGC or the Parent Borrower or any Commonly ControlledEntity or any

 

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Multiemployer Plan with respect to thewithdrawal from, or the termination, Reorganization or Insolvency of, any Plan;and

 

(e)                                  any development orevent that has had or could reasonably be expected to have a Material AdverseEffect.

 

Each noticepursuant to this Section 6.7 shall be accompanied by a statement of aResponsible Officer setting forth details of the occurrence referred to thereinand stating what action Holdco or the Parent Borrower or the relevant Subsidiaryproposes to take with respect thereto.

 

## 6.8                                 Environmental Laws.

 

### (a)                                  Complyin all material respects with, and ensure compliance in all material respectsby all tenants and subtenants, if any, with, all applicable Environmental Laws,and obtain and comply in all material respects with and maintain, and ensurethat all tenants and subtenants obtain and comply in all material respects withand maintain, any and all licenses, approvals, notifications, registrations orpermits required by applicable Environmental Laws.  For the purposes of this Section 6.8(a) noncomplianceby the Parent Borrower shall be deemed not to constitute a breach of thiscovenant; provided that, upon learning of any actual or suspectednoncompliance, the Parent Borrower shall in a timely fashion undertakereasonable efforts to achieve compliance; and provided, further,that, in any case, such noncompliance, and any other noncompliance with anyEnvironmental Law, individually or in the aggregate, could not reasonably be expectedto result in a Material Adverse Effect.

###  

### (b)                                 Conductand complete all investigations, studies, sampling and testing, and allremedial, removal and other actions required under Environmental Laws andpromptly comply in all material respects with all lawful orders and directivesof all Governmental Authorities regarding Environmental Laws.  For the purposes of this Section 6.8(b) noncomplianceby the Parent Borrower shall be deemed not to constitute a breach of thiscovenant; provided that, upon learning of any actual or suspectednoncompliance, the Parent Borrower shall in a timely fashion undertakereasonable efforts to achieve compliance; and provided, further,that, in any case, such noncompliance, and any other noncompliance with anyEnvironmental Law, individually or in the aggregate, could not reasonably beexpected to result in a Material Adverse Effect.

###  

### (c)                                  Atall times have appointed one or more employees of the Parent Borrower or itsSubsidiaries who together have responsibility for the management of allenvironmental matters and issues applicable to the Parent Borrower and itsSubsidiaries and for implementing programs and procedures to assure compliancewith all Environmental Laws.

###  

## 6.9                                 AdditionalCollateral, etc.

##  

### (a)                                  Withrespect to any property acquired after the Original Closing Date by the ParentBorrower or any of its Subsidiaries (other than (x) any property described inparagraph (b), (c) or (d) below, (y) any property subject to a Lienexpressly permitted by Section 7.3(g) if the agreement in which suchLien is granted prohibits the creation of any other Lien on such property and(z) property acquired by an Excluded Foreign Subsidiary) as to which theAdministrative Agent, for the benefit of the Lenders, does not have a perfectedLien, promptly (i) execute and deliver to the Administrative Agent suchamendments to the Guarantee and Collateral Agreement or such other documents asthe Administrative Agent deems necessary or advisable to grant to theAdministrative Agent, for the benefit of the U.S. Secured Parties and theCanadian Secured Parties, a security interest in such property, (ii) inthe case of property acquired by the Canadian Borrower or any CanadianSubsidiary Guarantor, execute and deliver to the Canadian Agent such amendmentsto the Canadian Security Documents or such other documents as

 

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### the Canadian Agent deemsnecessary or advisable to grant to the Canadian Agent, for the benefit of theCanadian Lenders, a security interest in such property and (iii) take allactions necessary or advisable to grant to the Administrative Agent, for thebenefit of the U.S. Secured Parties and the Canadian Secured Parties, or to theCanadian Agent, for the benefit of the Canadian Lenders, as the case may be, aperfected first priority security interest in such property, including thefiling of Uniform Commercial Code or other financing statements in suchjurisdictions as may be required by the Guarantee and Collateral Agreement, theCanadian Security Documents or by law or as may be reasonably requested by theAdministrative Agent or the Canadian Agent, as the case may be.

###  

### (b)                                 Withrespect to any fee interest in any real property having a value (together withimprovements thereof) of at least $1,000,000 acquired after the Closing Date bythe Parent Borrower or any of its Subsidiaries (other than (x) any such realproperty subject to a Lien expressly permitted by Section 7.3(g) and(y) real property acquired by any Excluded Foreign Subsidiary) or in the caseof leases with a remaining term of more than one year and an annual base rentin excess of $100,000, promptly (i) execute and deliver a first priorityMortgage, in favor of the Administrative Agent, for the benefit of the U.S.Lenders or the Canadian Agent, for the benefit of the Canadian Lenders, as thecase may be, covering such real property, (ii) if requested by theAdministrative Agent or the Canadian Agent, as the case may be, provide theU.S. Lenders or the Canadian Lenders, as the case may be, with (x) title andextended coverage insurance covering such real property in an amount at leastequal to the purchase price of such real property (or such other amount asshall be reasonably specified by the Administrative Agent or the CanadianAgent, as the case may be) as well as a current ALTA survey thereof, togetherwith a surveyor’s certificate or an existing Survey (together with an affidavitof no change) sufficient for the Title Company to remove all standard surveyexceptions from the title insurance policy or commitment and (y) to the extentobtainable by Parent Borrower or any Subsidiary, as applicable, within acommercially reasonable period of time using commercially reasonable efforts,any consents or estoppels reasonably deemed necessary or advisable by theAdministrative Agent or the Canadian Agent, as the case may be, in connectionwith such mortgage or deed of trust, each of the foregoing in form and substancereasonably satisfactory to the Administrative Agent or the Canadian Agent, asthe case may be, and (iii) if requested by the Administrative Agent or theCanadian Agent, as the case may be, deliver to the Administrative Agent or theCanadian Agent, as the case may be, legal opinions relating to the mattersdescribed above, which opinions shall be in form and substance, and fromcounsel, reasonably satisfactory to the Administrative Agent or the CanadianAgent, as the case may be.

###  

### (c)                                  Withrespect to any new Subsidiary (other than an Excluded Foreign Subsidiary)created or acquired after the Closing Date by the Parent Borrower or any of itsSubsidiaries (which, for the purposes of this paragraph (c), shall include anyexisting Subsidiary that ceases to be an Excluded Foreign Subsidiary), and,with respect to any Subsidiary in existence on the date hereof which is not aparty to the Guarantee and Collateral Agreement on the Closing Date as to whichthe Administrative Agent reasonably requests, promptly (i) execute anddeliver to the Administrative Agent such amendments to the Guarantee andCollateral Agreement as the Administrative Agent deems necessary or advisableto grant to the Administrative Agent, for the benefit of the Lenders, aperfected first priority security interest in the Capital Stock of such new orexisting Subsidiary, as the case may be, that is owned by the Parent Borroweror any of its Subsidiaries, (ii) deliver to the Administrative Agent thecertificates representing such Capital Stock, together with undated stockpowers, in blank, executed and delivered by a duly authorized officer of theParent Borrower or such Subsidiary, as the case may be, (iii) cause suchnew or existing Subsidiary, as the case may be, (A) to become a party tothe Guarantee and Collateral Agreement, (B) to take such actions necessaryor advisable to grant to the Administrative Agent for the benefit of theLenders a perfected first priority security interest in the Collateraldescribed in the Guarantee and Collateral Agreement with respect to such new orexisting Subsidiary, as the case may be, including the filing of UniformCommercial Code financing statements in such jurisdictions as may be requiredby the Guarantee and Collateral Agreement or by law or as may be requested bythe Administrative Agent

 

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### and (C) to deliver to theAdministrative Agent a certificate of such Subsidiary, substantially in theform of Exhibit C, with appropriate insertions and attachments, and (iv) ifrequested by the Administrative Agent, deliver to the Administrative Agentlegal opinions relating to the matters described above, which opinions shall bein form and substance, and from counsel, reasonably satisfactory to theAdministrative Agent.

###  

### (d)                                 Withrespect to any new Excluded Foreign Subsidiary created or acquired after theClosing Date by the Parent Borrower or any of its Subsidiaries (other than theCanadian Borrower or any Subsidiaries thereof), promptly (i) execute anddeliver to the Administrative Agent such amendments to the Guarantee andCollateral Agreement as the Administrative Agent deems necessary or advisableto grant to the Administrative Agent, for the benefit of the U.S. SecuredParties and the Canadian Secured Parties, a perfected first priority securityinterest in the Capital Stock entitled to vote of such new Subsidiary, as thecase may be, that is owned by the Parent Borrower or any of its Subsidiaries(provided that in no event shall more than 65% of the total outstanding CapitalStock of any such new Subsidiary, as the case may be, be required to be sopledged), (ii) deliver to the Administrative Agent the certificatesrepresenting such Capital Stock, together with undated stock powers, in blank,executed and delivered by a duly authorized officer of the Parent Borrower orsuch Subsidiary, as the case may be, and take such other action as may benecessary or, in the opinion of the Administrative Agent, desirable to perfectthe Administrative Agent’s security interest therein, and (iii) legalopinions relating to the matters described above, which opinions shall be inform and substance, and from counsel, reasonably satisfactory to the AdministrativeAgent.

###  

### (e)                                  Withrespect to any new Canadian Wholly Owned Subsidiary created or acquired afterthe Closing Date by the Canadian Borrower or any of its Subsidiaries, promptly (i) executeand deliver to the Canadian Agent such amendments to the Canadian SecurityDocuments as the Canadian Agent deems necessary or advisable to grant to theCanadian Agent, for the benefit of the Canadian Lenders, a perfected firstpriority security interest in the Capital Stock of such new Subsidiary, that isowned by the Canadian Borrower or any of its Subsidiaries, (ii) deliver tothe Canadian Agent the certificates representing such Capital Stock, togetherwith undated stock powers, in blank, executed and delivered by a dulyauthorized officer of the Canadian Borrower or such Subsidiary, as the case maybe, and take such other action as may be necessary or, in the opinion of theCanadian Agent, desirable to perfect the Canadian Lenders’ security interesttherein, (iii) cause such new Subsidiary (A) to become a party to theapplicable Canadian Security Documents and (B) to take such actionsnecessary or advisable to grant to the Canadian Agent, for the benefit of theCanadian Lenders, a perfected first priority security interest or first-rankinghypothec, as the case may be, in the Collateral or in Collateral similar to theone described in the Canadian Security Documents with respect to such newSubsidiary (except to the extent of Liens on such Collateral permitted by Section 7.3which have priority in accordance with applicable law), including, withoutlimitation, the filing of appropriate financing statements in suchjurisdictions as may be required by the applicable Canadian law or as may berequested by the Canadian Agent, and (iv) if requested by the CanadianAgent, deliver to the Canadian Agent legal opinions relating to the mattersdescribed above, which opinions shall be in form and substance, and fromcounsel, reasonably satisfactory to the Canadian Agent.

###  

## 6.10                           Real Estate Documentation.  Furnish to the Canadian Agent all real estatedocumentation reasonably required by the Canadian Agent with respect to theMortgaged Property of the Canadian Borrower and each of its Subsidiaries toperfect such first priority Lien.

 

## 6.11                           Maintenance of Ratings.  Use commercially reasonable efforts tomaintain at all times ratings for the Facilities by both Standard &Poor’s and Moody’s.

 

## 6.12                           Post-ClosingCollateral Matters.  The applicableLoan Parties shall use their commercially reasonable efforts to obtain anddeliver to Administrative Agent, within the time periods set

 

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## forth below (unless waived orextended by Administrative Agent in its discretion), to the extent such itemshave not been delivered as of the Closing Date, or delivery has not been waivedby Administrative Agent in its discretion, the following:

 

### (a)                                  theproperty owners’ consents to leasehold mortgage financing, on terms andconditions reasonably satisfactory to the Administrative Agent, with respect toeach of the leased Real Properties set forth on Schedule 6.12(a) withinthirty (30) days after the Closing Date, and if any such consents are obtained,the applicable Loan Party will use commercially reasonably efforts to deliverto Administrative Agent with respect to any Real Property for which suchconsent has been obtained, within forty-five (45) days after the Closing Date,the following:

###  

(1)                                  dulyexecuted and acknowledged Mortgages, financing statements and other instrumentsmeeting the requirements of Section 5.1(h)(i);

 

(2)                                  consents,approvals, amendments, supplements, estoppels, tenant subordination agreementsor other instruments meeting the requirements of Section 5.1(h)(ii);

 

(3)                                  policiesof title insurance meeting the requirements of Section 5.1(h)(iii);

 

(4)                                  affidavits,certificates, information and instruments as required by Section 5.1(h)(iv);

 

(5)                                  evidenceof payment of all applicable title insurance premiums, mortgage recordingtaxes, fees, charges, costs and expenses required for the re-cording of eachMortgage and issuance of the title insurance policies as required by Section 5.1(h)(v);

 

(6)                                  copiesof all leases or other agreements as required by Section 5.1(h)(vi);

 

(7)                                  notifications,registrations and filings meeting the requirements of Section 5.1(h)(vii);

 

(8)                                  Surveysas required by Section 5.1(h)(viii);

 

(9)                                  acompleted Federal Emergency Management Agency Standard Flood HazardDetermination as required by Section 5.1(h)(ix); and

 

(10)                            writtenopinions of local counsel in the states in which each such Real Property islocated, as required by Section 5.1(e).

 

### (b)                                 withrespect to each of the owned Real Properties set forth on Schedule 6.12(b),within thirty (30) days after the Closing Date, the applicable Loan Party willuse commercially reasonable efforts to deliver to Administrative Agent thefollowing:

###  

(1)                                  dulyexecuted and acknowledged Mortgages, financing statements and other instrumentsmeeting the requirements of Section 5.1(h)(i);

 

(2)                                  tothe extent applicable, consents, approvals, amendments, supplements, estoppels,tenant subordination agreements or other instruments meeting the requirementsof Section 5.1(h)(ii);

 

(3)                                  policiesof title insurance meeting the requirements of Section 5.1(h)(iii);

 

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(4)                                  affidavits,certificates, information and instruments as required by Section 5.1(h)(iv);

 

(5)                                  evidenceof payment of all applicable title insurance premiums, mortgage recordingtaxes, fees, charges, costs and expenses required for the re-cording of eachMortgage and issuance of the title insurance policies as required by Section 5.1(h)(v);

 

(6)                                  copiesof all leases or other agreements as required by Section 5.1(h)(vi);

 

(7)                                  notifications,registrations and filings meeting the requirements of Section 5.1(h)(vii);

 

(8)                                  Surveysas required by Section 5.1(h)(viii);

 

(9)                                  acompleted Federal Emergency Management Agency Standard Flood Hazard Determinationas required by Section 5.1(h)(ix); and

 

(10)                            writtenopinions of local counsel in the states in which each such Real Property islocated, as required by Section 5.1(e).

 

### (c)                                  TheCanadian Borrower shall use its commercially reasonable efforts to obtain anddeliver to the Canadian Agent, within the time periods set forth below (unlesswaived or extended by the Canadian Agent in its discretion), to the extent suchitems have not been delivered as of the Closing Date, or delivery has not beenwaived by the Canadian Agent in its discretion, the following:

###  

(1)                                  apriority agreement (the “Cominar Priority Agreement”) from Cominar RealEstate Investment Trust, on terms and conditions satisfactory to the CanadianAgent, with respect to the lease of 10550 Parkway Boulevard, Anjou, Quebec,pursuant to which Cominar Real Estate Investment Trust subordinates itshypothec granted by the Canadian Borrower (the “Cominar Hypothec”) infavor of the Canadian Agent so that the Hypothec ranks prior to the CominarHypothec within thirty (30) days after the Closing Date;

 

(2)                                  confirmationof registration of the Cominar Priority Agreement with the Quebec Register ofPersonal and Moveable Real Rights within thirty (30) days after the ClosingDate;

 

(3)                                  anup-to-date Survey with respect to the Mortgaged Property of the CanadianBorrower located at the municipal address known as 3719 rue des Commissaires,Rawdon, Quebec (the “Rawdon Property”) within thirty (30) days after theClosing Date;

 

(4)                                  anupdated title opinion, in form and substance satisfactory to the CanadianAgent, from Solomon & Malus reflecting the Rawdon Survey within thirty(30) days after the Closing Date;

 

(5)                                  aduly executed amended Hypothec to the extent required (the “Amended Hypothec”),in form and substance satisfactory to the Canadian Agent, amended to reflectthe correct legal description of the Rawdon Property within forty-five (45)days after the Closing Date;

 

(6)                                  confirmationof registration of the Amended Hypothec with the Quebec land registry division ofMontcalm within forty-five (45) days after the Closing Date; and

 

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(7)                                  aduly executed bailee letter from 1197727 Ontario Inc. (carrying on businessunder the trade name of Quality Manufacturing), in form and substancesatisfactory to the Canadian Agent, with respect to the third party warehouselocated at 10 Allison Avenue, Morrisburg, Ontario within (30) days after theClosing Date.

 

# SECTION 7

#  

# NEGATIVE COVENANTS

#  

Holdco (solelyin respect of Section 7.21) and Parent Borrower hereby agree that, so longas the Commitments remain in effect, any Letter of Credit remains outstandingor any Loan or other amount is owing to any Lender, the Canadian Agent or theAdministrative Agent hereunder (other than contingent or indemnificationobligations), Parent Borrower shall not, and shall not permit any of itsSubsidiaries to, directly or indirectly, and Holdco, in respect of Section 7.21,shall not:

 

## 7.1                                 FinancialCondition Covenants.

 

### (a)                                  ConsolidatedTotal Leverage Ratio.  Permit theConsolidated Total Leverage Ratio as at the last day of any period of fourconsecutive fiscal quarters of Parent Borrower ending with any fiscal quarterending during any period set forth below to exceed the ratio set forth belowopposite such period:

###  

| **Period**                | ** ** | **Consolidated Total  Leverage Ratio** | ** ** |
|---------------------------|------------|----------------------------------------|------------|
|                      |       |                                   |       |
| 9/30/05  through 3/31/06  |       | 4.60x                                  |       |
| 6/30/06  through 12/31/06 |       | 4.50x                                  |       |
| 3/31/07  through 12/31/07 |       | 4.25x                                  |       |
| 3/31/08  through 12/31/08 |       | 4.00x                                  |       |
| 3/31/09  through 12/31/09 |       | 3.75x                                  |       |
| 3/31/10  through 6/30/12  |       | 3.50x                                  |       |

 

### (b)                                 ConsolidatedInterest Coverage Ratio.  Permit theConsolidated Interest Coverage Ratio for any period of four consecutive fiscalquarters of Parent Borrower ending with any fiscal quarter ending during anyperiod set forth below to be less than the ratio set forth below opposite suchperiod:

 

| **Period**               | ** ** | **Consolidated Interest  Coverage Ratio** | ** ** |
|--------------------------|------------|-------------------------------------------|------------|
|                     |       |                                      |       |
| 9/30/05 through 12/31/07 |       | 2.25x                                     |       |
| 3/31/08 through 6/30/12  |       | 2.50x                                     |       |

 

### (c)                                  ConsolidatedFixed Charge Coverage Ratio.  Permitthe Consolidated Fixed Charge Coverage Ratio for any period of four consecutivefiscal quarters of Parent Borrower ending with any fiscal quarter ending duringany period set forth below to be less than the ratio set forth below oppositesuch period:

 

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| **Period**               | ** ** | **Consolidated Fixed Charge  Coverage Ratio** | ** ** |
|--------------------------|------------|-----------------------------------------------|------------|
| ** **               | ** ** | ** **                                    | ** ** |
| 9/30/05 through 12/31/06 |       | 1.25x                                         |       |
| 3/31/07 through 12/31/08 |       | 1.30x                                         |       |
| 3/31/09 through 6/30/12  |       | 1.40x                                         |       |

##  

## 7.2                                 Indebtedness.  Create, issue, incur, assume, become liable inrespect of or suffer to exist any Indebtedness, except:

 

(a)                                  Indebtedness of anyLoan Party pursuant to any Loan Document;

 

(b)                                 Indebtedness of theParent Borrower to any Subsidiary and of any U.S. Subsidiary Guarantor to theParent Borrower or any other Subsidiary;

 

(c)                                  Indebtedness of theCanadian Borrower to any Canadian Subsidiary Guarantor and of any CanadianSubsidiary Guarantor to the Canadian Borrower or any other Canadian SubsidiaryGuarantor;

 

(d)                                 Guarantee Obligationsincurred in the ordinary course of business by the Parent Borrower or any ofits Subsidiaries of obligations of any U.S. Subsidiary Guarantor, the CanadianBorrower or any Canadian Subsidiary Guarantor, respectively;

 

(e)                                  Indebtednessoutstanding on the date hereof and listed on Schedule 7.2(e);

 

(f)                                    additionalIndebtedness of the Parent Borrower or any of its Subsidiaries in an aggregateprincipal amount at any time outstanding not to exceed $11,500,000 (calculatedbased upon the exchange rate in effect on the date such Indebtedness isincurred);

 

(g)                                 Indebtedness of anyForeign Subsidiary (other than the Canadian Borrower or any Subsidiary thereofincorporated or organized in Canada) not to exceed $8,000,000 in the aggregateof principal amount at any one time outstanding (calculated based upon theexchange rate in effect on the date such Indebtedness is incurred);

 

(h)                                 Indebtedness ofForeign Subsidiaries to the Parent Borrower, any U.S. Subsidiary Guarantor, theCanadian Borrower or any Canadian Subsidiary Guarantor not to exceed $25,000,000in the aggregate of principal amount at any one time outstanding for all suchForeign Subsidiaries (calculated based upon the exchange rate in effect on thedate such Indebtedness is incurred) to be used for Permitted Acquisitions;provided, that any such Indebtedness shall be evidenced by an intercompany notethat is pledged, in the case of a note held by the Parent Borrower or any U.S.Subsidiary Guarantor, to the Administrative Agent for the benefit of theSecured Parties and, in the case of a note held by the Canadian Borrower or anyCanadian Subsidiary, to the Canadian Agent for the benefit of the CanadianSecured Parties;

 

(i)                                     Indebtedness ofForeign Subsidiaries to the Parent Borrower, any U.S. Subsidiary Guarantor, theCanadian Borrower or any Canadian Subsidiary Guarantor including, withoutlimitation, Indebtedness arising from push down accounting, allocations oftransfer pricing and allocations of the purchase price paid in acquisitions,provided, however, that none of such Indebtedness shall have been incurred inconnection with the transfer of cash or Cash Equivalents to the Foreign Subsidiary.

 

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(j)                                     Indebtedness ofany Foreign Subsidiary to any other Foreign Subsidiary (other than the CanadianBorrower or any Subsidiary thereof which is a Guarantor);

 

(k)                                  purchase moneyIndebtedness hereafter incurred by the Parent Borrower or any of itsSubsidiaries to finance the purchase, repair or improvement of fixed or capitalassets in an amount not to exceed $5,000,000 at any one time outstanding(calculated based upon the exchange rate in effect on each date suchIndebtedness is incurred);

 

(l)                                     Capital LeaseObligations permitted to be incurred under Section 7.7;

 

(m)                               Indebtedness to sellersto finance Permitted Acquisitions in an amount not to exceed $10,000,000 at anyone time outstanding (calculated based upon the exchange rate in effect on eachdate such Indebtedness is incurred);

 

(n)                                 Indebtedness in theform of surety bonds and appeal bonds, customs bonds, utility bonds,performance or bid bonds and return of money bonds and other similarobligations incurred in the ordinary course of business consistent with pastpractice and not in connection with debt for money borrowed;

 

(o)                                 Indebtedness in theform of obligations under indemnification, purchase price adjustments,incentive, non-compete, consulting, deferred compensation, earn-out and similarobligations incurred in connection with the Acquisition, an Investmentpermitted under Section 7.8 or a Disposition;

 

(p)                                 obligations(contingent or otherwise) of the Parent Borrower existing or arising under anyHedge Agreement entered into in the ordinary course of business and not forspeculative purposes; provided, that if such obligations relate tointerest rates, (i) such obligations relate to payment obligations onIndebtedness otherwise permitted to be incurred by the Loan Documents and (ii) thenotional principal amount of such obligations at the time incurred does notexceed the principal amount of the Indebtedness to which such obligationsrelated;

 

(q)                                 Indebtedness assumed in connection with aPermitted Acquisition after the date hereof (and not created in contemplationthereof);

 

(r)                                    Indebtednessrepresenting deferred compensation to employees of the Parent Borrower and anyof its Subsidiaries incurred in the ordinary course of business;

 

(s)                                  RefinancingIndebtedness in respect of clauses (e) and (q).

 

## 7.3                                 Liens.  Create, incur, assume or suffer to exist anyLien upon any of its property, whether now owned or hereafter acquired, exceptfor the following Liens (each, a “Permitted Lien”):

 

(a)                                  Liens for taxes,assessments or governmental charges or levies not yet delinquent or that arebeing contested in good faith by appropriate proceedings, provided thatadequate reserves with respect thereto are maintained on the books of theParent Borrower or its Subsidiaries, as the case may be, in conformity withGAAP;

 

(b)                                 carriers’,warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or otherlike Liens arising in the ordinary course of business imposed by law that donot secure amounts in each case overdue for a period of more than 30 days orthat are being contested in good faith by appropriate proceedings;

 

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(c)                                  pledges or depositsin connection with workers’ compensation, unemployment insurance and othersocial security legislation;

 

(d)                                 deposits to secure theperformance of bids, tenders, trade contracts (other than for borrowed money),leases, statutory obligations, surety and appeal bonds, utility bonds, returnof money bonds, performance bonds and other obligations of a like natureincurred in the ordinary course of business;

 

(e)                                  easements,rights-of-way, restrictions, minor defects or irregularities of title and othersimilar encumbrances incurred in the ordinary course of business that, in theaggregate, are not substantial in amount and that do not in any case materiallydetract from the value of the property subject thereto or materially interferewith the ordinary conduct of the business of the Parent Borrower or any of itsSubsidiaries;

 

(f)                                    Liens in existenceon the date hereof listed on Schedule 7.3(f), including Liens securingIndebtedness permitted by Sections 7.2(e) for which collateral isdescribed on Schedule 7.2(e) and Refinancing Indebtedness relatedthereto, provided that no such Lien is spread to cover any additionalproperty after the Closing Date and that the amount of Indebtedness securedthereby is not increased;

 

(g)                                 Liens securingIndebtedness of the Parent Borrower or any other Subsidiary incurred pursuantto Section 7.2(k) and (l) to finance the acquisition of fixed or capitalassets, provided that (i) such Liens and the Indebtedness securedthereby are incurred within 120 days of the acquisition of such fixed orcapital assets, (ii) such Liens do not at any time encumber any propertyother than the property financed by such Indebtedness except for accessions tosuch property and the proceeds and products thereof and (iii) the amountof Indebtedness secured thereby is not increased;

 

(h)                                 Liens created pursuantto this Agreement and the Security Documents, or which are specificallypermitted by the terms of any Security Document;

 

(i)                                     any interest ortitle of a lessor under any lease entered into by the Parent Borrower or anyother Subsidiary as tenant (A) in the ordinary course of its business andcovering only the assets so leased, (B) as provided in such lease, or (C) asotherwise available at law or equity;

 

(j)                                     all building codesand zoning ordinances and other laws, ordinances, regulations, rules, orders ordeterminations of any federal, state, county, municipal and other governmentalauthority now or hereafter enacted;

 

(k)                                  Liens securingreimbursement of obligations in respect of (i) documentary letters ofcredit, provided that such Liens cover only the documents, the goodscovered thereby and the proceeds thereof and (ii) bankers’ acceptancescreated in respect of drawings under such letters of credit, providedthat such Liens cover only the specific goods covered by such letter of creditand the proceeds thereof;

 

(l)                                     Liens consistingof rights of set-off of a customary nature or bankers’ liens on amounts ondeposit, whether arising by contract or operation of law, in each case incurredin the ordinary course of business;

 

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(m)                               Liens encumberingcustomary initial deposits in respect of commodity trading accounts or otherbrokerage accounts incurred in the ordinary course of business;

 

(n)                                 Liens not otherwisepermitted by this Section 7.3 on assets of Foreign Subsidiaries (otherthan the Canadian Borrower or any Subsidiary thereof) so long as neither (i) theaggregate outstanding principal amount of the obligations secured thereby nor (ii) theaggregate fair market value (determined, in the case of each such Lien, as ofthe date such Lien is incurred) of the assets subject thereto exceeds (as toall Foreign Subsidiaries) $1,500,000 at any one time;

 

(o)                                 Liens on goods infavor of customs and revenue authorities which secure payment of customs dutiesin connection with the importation of such goods;

 

(p)                                 Liens securingobligations (other than Indebtedness) under operating, reciprocal easements orsimilar agreements entered into in the ordinary course of business by theParent Borrower and its Subsidiaries which do not materially interfere with theordinary conduct of the business of the Parent Borrower and its Subsidiaries;

 

(q)                                 Liens on property orassets of, or any shares of stock of or secured debt of, any Person existing atthe time of the acquisition thereof pursuant to a Permitted Acquisition; providedthat such Liens are not incurred in connection with, or in contemplation of,such Permitted Acquisition;

 

(r)                                    Liens arising fromthe filing, for notice purposes only, of financing statements in respect ofoperating leases;

 

(s)                                  Liens securingIndebtedness of any Foreign Subsidiary incurred pursuant to Section 7.2(g);

 

(t)                                    Liens (i) oncash advances in favor of the seller of any property to be acquired in anInvestment permitted pursuant to Sections 7.8 (i) or (n) to be appliedagainst the purchase price for such Investment, and (ii) on any assetsthat are the subject of an agreement for a Disposition thereof permittedhereunder that arise pursuant to such agreement, so long as such assets aredisposed within six (6) months of the date such agreement shall have beenentered into;

 

(u)                                 Liens consisting ofrestrictions on the transfer of securities pursuant to applicable federal andstate securities laws;

 

(v)                                 any attachment orjudgment lien not constituting an Event of Default; and

 

(w)                               Liens not otherwisepermitted by this Section 7.3 on assets not constituting Collateralsecuring Indebtedness and other obligations and liabilities in an aggregateamount not to exceed $1,500,000 at any one time outstanding.

 

## 7.4                                 Fundamental Changes.  Except for the Merger to be effected inconnection with the Acquisition, enter into any merger, consolidation oramalgamation, or liquidate, wind up or dissolve itself (or suffer anyliquidation or dissolution), or Dispose of, all or substantially all of itsproperty or business, except that:

 

(a)                                  any Subsidiary of theParent Borrower may be merged or consolidated with or into the Parent Borrower(provided that the Parent Borrower shall be the continuing or surviving

 

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corporation) or with or into any U.S. WhollyOwned Subsidiary Guarantor (provided that a U.S. Wholly Owned SubsidiaryGuarantor shall be the continuing or surviving corporation);

 

(b)                                 any Subsidiary of theParent Borrower may Dispose of any or all of its assets (upon voluntaryliquidation or otherwise) to the Parent Borrower or any U.S. Wholly OwnedSubsidiary Guarantor;

 

(c)                                  Dispositionspermitted under Section 7.5;

 

(d)                                 any CanadianSubsidiary Guarantor may be merged or consolidated with or into any CanadianBorrower (provided that a Canadian Borrower shall be the continuing orsurviving corporation) or with or into any Canadian Wholly Owned SubsidiaryGuarantor (provided that a Canadian Wholly Owned Subsidiary Guarantorshall be the continuing or surviving corporation);

 

(e)                                  any CanadianSubsidiary Guarantor may Dispose of any or all of its assets (upon voluntaryliquidation or otherwise) to the Canadian Borrower or any other CanadianSubsidiary Guarantor;

 

(f)                                    any Subsidiary ofthe Parent Borrower (other than the Canadian Borrower or any Guarantor) may bemerged into or consolidated with any other Subsidiary of the Parent Borrower(other than the Canadian Borrower or any Guarantor);

 

(g)                                 any Subsidiary ofParent Borrower may merge with any other Person in connection with a PermittedAcquisition; provided however, that if such Subsidiary is a U.S. Borrower or aU.S. Subsidiary Guarantor, such Person, upon consummation of the merger, shallbecome a U.S. Borrower or a U.S. Subsidiary Guarantor, respectively; and

 

(h)                                 any ImmaterialSubsidiary may dissolve, liquidate or wind up its affairs at any time providedthat such dissolution, liquidation or winding up, as applicable could notreasonably be expected to have a Material Adverse Effect.

 

## 7.5                                 Disposition ofProperty.  Dispose of any of itsproperty, whether now owned or hereafter acquired, or, in the case of anySubsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to anyPerson, except:

 

(a)                                  the Disposition ofobsolete, worn out, salvage or surplus property in the ordinary course ofbusiness; provided that the aggregate consideration received for allsuch property is at least equal to the aggregate fair market value thereof;

 

(b)                                 the sale of inventoryor sale or lease of equipment in the ordinary course of business;

 

(c)                                  Dispositionspermitted by Section 7.4 (a), (b), (d), (e), (f), (g) or (h);

 

(d)                                 the sale or issuanceof any Subsidiary’s Capital Stock to the Parent Borrower or any U.S. WhollyOwned Subsidiary Guarantor or the sale or issuance of the Parent Borrower’sCapital Stock to Holdco;

 

(e)                                  the sale of NorthSafety Products (Africa) (Pty) Ltd. and its subsidiaries;

 

(f)                                    Restricted Paymentspermitted under Section 7.6;

 

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(g)                                 Dispositions of CashEquivalents; provided that the aggregate consideration received for allsuch Cash Equivalents is at least equal to the aggregate fair market valuethereof; and

 

(h)                                 Dispositions ofproperty by the Parent Borrower or any of its Subsidiaries not otherwisepermitted under this Section 7.5 having a fair market value not to exceed$15,000,000 in the aggregate for any fiscal year of the Parent Borrower; providedthat (x) at the time of such Disposition, no Default or Event of Default shallexist or would result from such Disposition, (y) the purchase price for suchproperty shall be paid to the Parent Borrower or such Subsidiary for not lessthan 75% cash or Cash Equivalent consideration (provided further that to theextent any debt obligations or other securities received in connection with anyDisposition pursuant to this clause (h) are actually converted intocash within six months following the receipt thereof by the Parent Borrower orany of its Subsidiaries, such debt obligations or other securities shall betreated as cash for purposes of such 75% cash consideration requirement) and(z) the aggregate consideration received for all such property is at leastequal to the fair market value thereof.

 

## 7.6                                 Restricted Payments.  Declare or pay any dividend (other thandividends payable solely in common stock of the Person making such dividend)on, or make any payment on account of, or set apart assets for a sinking orother analogous fund for, the purchase, redemption, defeasance, retirement orother acquisition of, any Capital Stock of the Parent Borrower or anySubsidiary, whether now or hereafter outstanding, or make any otherdistribution in respect thereof, either directly or indirectly, whether in cashor property or in obligations of the Parent Borrower or any Subsidiary(collectively, “Restricted Payments”), except:

 

(a)                                  that any Subsidiarymay make Restricted Payments to the Parent Borrower or any U.S. Wholly OwnedSubsidiary Guarantor, and any Subsidiary of the Canadian Borrower may makeRestricted Payments to the Canadian Borrower or to any Canadian SubsidiaryGuarantor;

 

(b)                                 payments made toHoldco for corporate overhead expenses reasonably incurred by Holdco, includingwithout limitation, the (i) insurance premiums, (ii) legal,administration, accounting, audit and tax fees and expenses (includingfranchise fees or similar taxes and fees required to maintain its corporateexistence), (iii) reimbursement payments to investors for their ordinarycourse out-of-pocket expenses and (iv) fees and expenses of boardmeetings; provided that the payments permitted under this clause (b) shallnot exceed $1,250,000 in the aggregate for any fiscal year of the ParentBorrower;

 

(c)                                  so long as no Defaultor Event of Default shall have occurred and be continuing, the Parent Borrowermay make Restricted Payments to Holdco to permit Holdco to purchase Holdco’scommon stock or common stock options from present or former officers, directorsor employees of any Loan Party, members of management of any Loan Party, theParent Borrower or any Subsidiary upon the death, disability or termination ofemployment of such director, member of management, officer or employee, providedthat the aggregate amount of payments under this clause (c) after thedate hereof (net of any proceeds received by Holdco and contributed to theParent Borrower after the date hereof in connection with resales of any commonstock or common stock options so purchased) shall not exceed $2,500,000 in anyfiscal year or $10,000,000 in the aggregate from and after the Closing Date;

 

(d)                                 the Parent Borrowermay, so long as no Default or Event of Default shall have occurred and be continuing,pay cash dividends to Holdco from time to time in amounts necessary for Holdcoto pay interest on the Holdco Notes when and as (and only when and as) such interest

 

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becomes due and payable, provided thatthe Parent Borrower shall not make any such cash dividend payments to Holdco beforethe Revolver Termination Date;

 

(e)                                  Any Subsidiary of KCLmay, so long as no Default or Event of Default shall have occurred and becontinuing, make Restricted Payments to its shareholders other than KCL in anaggregate amount which bears the same ratio to the Restricted Payments made bysuch Subsidiary to KCL as the number of shares of the common stock of suchSubsidiary owned by such shareholders bears to the aggregate number of sharesof the common stock of such Subsidiary owned by KCL not to exceed €1,000,000 inany fiscal year;

 

(f)                                    that the ParentBorrower or any Subsidiary may make Restricted Payments to Holdco to pay (i) taxesof Holdco attributable to earnings of its Subsidiaries (ii) customary compensationand other amounts payable to members of the board of directors; and (iii) indemnificationin favor its directors, officers and agents in respect of its services as suchwhich indemnification is either (A) required or permitted under theapplicable provisions of the Delaware General Corporation Law or (B) requiredor permitted by Holdco’s bylaws; and

 

(g)                                 that the ParentBorrower or any Subsidiary may make Restricted Payments to Holdco to enable thepayment of management, monitoring, consulting and advisory fees and relatedexpenses and any other fees and expenses (or any accruals relating to such feesand related expenses) permitted under Section 7.10(e).

 

## 7.7                                 CapitalExpenditures.  Make or commit to makeany Capital Expenditure, except:

 

(a)                                  Capital Expendituresof the Parent Borrower and its Subsidiaries in the ordinary course of businessnot exceeding $15,000,000 during any fiscal year of the Parent Borrower; providedthat (A) up to $7,500,000 of any amount referred to above, if not soexpended in the fiscal year for which it is permitted, may be carried over forexpenditure in the next succeeding fiscal year but not in any subsequent fiscalyears and (B) Capital Expenditures made pursuant to this paragraph (a) duringany fiscal year shall be deemed made, first, in respect of amounts permittedfor such fiscal year as provided above and, second, in respect of amountscarried over from the prior fiscal year pursuant to subclause (A) above;provided that, in connection with any Permitted Acquisition, the amount ofCapital Expenditures that would otherwise be permitted in any such fiscal yearpursuant to this clause (a) (including as a result of the application ofsubclause (B) of this clause (a)) may be increased in an amount equal tothe greater of 2% of revenues of the Permitted Acquisition for the latesttwelve months for which financial statements are available and 125% of theaverage historical capital expenditures for the previous three fiscal years ofthe acquired business (excluding for purposes hereof, any capital expendituresconstituting a portion of the purchase price of, or in contemplation of,acquisitions made by or for the acquired business within the previous threefiscal years) (“Incremental Capital Expenditures”); provided further that up to50% of such Incremental Capital Expenditure amount, if not so expended in theinitial fiscal year for which it is permitted, may be carried over forexpenditure in the next fiscal year but not in any subsequent fiscal years inaddition to any amounts carried over pursuant to this Section 7.7(a)(A) above;however, that in no event shall Incremental Capital Expenditures exceed$10,000,000 in the aggregate in any fiscal year; and

 

(b)                                 Capital Expendituresmade with the proceeds of any Reinvestment Deferred Amount.

 

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## 7.8                                 Investments.  Make any advance, loan, extension of credit(by way of guaranty or otherwise) or capital contribution to, or purchase anyCapital Stock, bonds, notes, debentures or other debt securities of, or anyassets constituting a business unit of, or make any other investment in, anyPerson (all of the foregoing, “Investments”), except (withoutduplication):

 

(a)                                  extensions of tradecredit in the ordinary course of business;

 

(b)                                 investments in cashand Cash Equivalents;

 

(c)                                  Guarantee Obligationspermitted by Section 7.2;

 

(d)                                 loans and advances toemployees of the Parent Borrower or any Subsidiary of the Parent Borrower inthe ordinary course of business (including for travel, entertainment andrelocation expenses) in an aggregate amount for the Parent Borrower or anySubsidiary of the Parent Borrower not to exceed at any one time outstanding$350,000;

 

(e)                                  Investments in assetsuseful in the business of the Parent Borrower and its Subsidiaries made by theParent Borrower or any of its Subsidiaries with the proceeds of any ReinvestmentDeferred Amount;

 

(f)                                    (i) Investmentsby the Parent Borrower or any of its Subsidiaries in the Parent Borrower or anyPerson that, prior to such Investment, is a U.S. Borrower or a U.S. WhollyOwned Subsidiary Guarantor and (ii) Investments by any U.S. Borrower orany U.S. Subsidiary Guarantor in any newly-formed U.S. Wholly Owned Subsidiaryof a U.S. Borrower or a U.S. Subsidiary Guarantor that has no material assetsor liabilities prior to such Investment and with respect to which all therequirements of Section 6.9 shall be satisfied;

 

(g)                                 loans to officers andemployees of the Borrowers for the sole purpose of purchasing equity of Holdco,secured with the equity purchased therewith and not exceeding $5,000,000 at anyone time outstanding;

 

(h)                                 Investments in jointventures and unconsolidated subsidiaries useful in the business of the ParentBorrower and its Subsidiaries and in Foreign Subsidiaries in amounts not toexceed $3,000,000 individually and $6,000,000 in the aggregate at any one timeoutstanding (calculated based on the date such Investment was made);

 

(i)                                     in addition toInvestments otherwise expressly permitted by this Section, PermittedAcquisitions completed subsequent to the Closing Date for an aggregate purchaseprice (including cash, Capital Stock and promissory notes and contingentobligations (which shall be deemed to be made when such contingent purchaseobligations are paid) given as consideration therefor and Indebtedness assumedin connection therewith, but excluding investment banking, brokerage, legal,accounting and other similar fees paid in connection therewith and fees paid inconnection with the financing thereof) not to exceed $150,000,000 for all suchPermitted Acquisitions (calculated based on the date such Investment was made);

 

(j)                                     Investments inrespect of any Hedge Agreement permitted under Section 7.2;

 

(k)                                  loans permitted bySections 7.2(h) and any Scheduled Debt owing by a Subsidiary to anotherSubsidiary;

 

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(l)                                     (i) Investmentsby the Canadian Borrower or any Canadian Subsidiary Guarantor in the CanadianBorrower or any Person that, prior to such Investment, is a Canadian SubsidiaryGuarantor and (ii) Investments by the Canadian Borrower or any CanadianSubsidiary Guarantor in any newly-formed Canadian Wholly Owned Subsidiary ofthe Canadian Borrower that has no material assets or liabilities prior to suchInvestment and with respect to which all the requirements of Section 6.9shall be satisfied;

 

(m)                               Investments by anyForeign Subsidiary that is not a Guarantor in any other Foreign Subsidiary, anyBorrower or any Guarantor;

 

(n)                                 Investments nototherwise permitted by this Section in an aggregate amount not to exceed$5,000,000 subsequent to the Closing Date (calculated based on the date suchInvestment was made);

 

(o)                                 Investments set forthon Schedule 7.8(o);

 

(p)                                 the Acquisition; and

 

(q)                                 Investments in jointventures and unconsolidated subsidiaries in South Africa in amounts not toexceed $1,500,000 in the aggregate.

 

## 7.9                                 OptionalPayments and Modifications of Certain Debt Instruments.  (a) Make or offer to make any optionalor voluntary payment, prepayment, repurchase or redemption of, or otherwiseoptionally or voluntarily defease or segregate funds with respect to Holdco todefease or segregate funds with respect to, any Indebtedness (other than anyScheduled Debt that is not subordinated in right of payment to theObligations), other than with the proceeds of Refinancing Indebtedness or (b) amend,modify, waive or otherwise change, or consent or agree to any amendment,modification, waiver or other change to, any of the terms of any subordinatedIndebtedness included in the Scheduled Debt (including the Senior SubordinatedNotes and the Holdco Notes), other than any such amendment, modification,waiver or other change that (i) (A) would extend the maturity orreduce the amount of any payment of principal thereof or reduce the rate orextend any date for payment of interest thereon or (B) is not adverse inany respect to the interests of the Borrowers or Lenders in the reasonableopinion of the U.S. Required Lenders and (ii) does not involve the paymentof a consent fee or (c) designate any Indebtedness (other than obligationsof the Loan Parties pursuant to the Loan Documents) as “Designated SeniorIndebtedness” for the purposes of the Senior Subordinated Notes and the SeniorSubordinated Notes Indenture or the Holdco Notes and Holdco Notes Indenture.

 

## 7.10                           Transactionswith Affiliates.  Enter into anytransaction, including any purchase, sale, lease or exchange of property, therendering of any service or the payment of any management, advisory or similarfees, with any Affiliate (other than between or among (x) the ParentBorrower or any U.S. Wholly Owned Subsidiary Guarantor, (y) the CanadianBorrower and/or any Canadian Subsidiary Guarantor(s) and (z) any ForeignSubsidiary (other than the Canadian Borrower or any Canadian SubsidiaryGuarantor) and any other such Foreign Subsidiary) unless such transaction is (a) otherwisepermitted under this Agreement, (b) in the ordinary course of business ofthe Parent Borrower or such Subsidiary, as the case may be, (c) upon fairand reasonable terms (i) no less favorable to the Parent Borrower or suchSubsidiary, as the case may be, than it would obtain in a comparable arm’slength transaction with a Person that is not an Affiliate or (ii) in thecase of a transaction between the Parent Borrower and such Subsidiary, morefavorable to the Parent Borrower than it would obtain in a comparable arm’slength transaction with a Person that is not an Affiliate, (d) any of theTransactions, (e)  the payment of management, monitoring, consulting andadvisory fees and related expenses and any other fees and expenses (or anyaccruals relating to such fees and related expenses) paid to Equity Investorsin an amount

 

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## not to exceed $1,000,000 in anyfiscal year and (f) the payment of transaction fees and expenses to EquityInvestors in connection with Permitted Acquisitions or other Investmentspermitted under Section 7.8 made on usual and customary terms and, inrespect of any such fees and expenses in connection with each PermittedAcquisition or other permitted Investment that exceed $1,000,000 in theaggregate, which fees and expenses are approved by a majority of thedisinterested members of the board of directors of the Parent Borrower.

 

## 7.11                           Sales and Leasebacks.  Enter into any arrangement with any Personproviding for the leasing by the Parent Borrower or any Subsidiary of real orpersonal property that has been or is to be sold or transferred by the ParentBorrower or such Subsidiary to such Person or to any other Person to whom fundshave been or are to be advanced by such Person on the security of such propertyor rental obligations of the Parent Borrower or such Subsidiary unless sucharrangement is entered into in connection with the financing of the acquisitionof such property through the proceeds of a Capital Lease Obligation permittedby Section 7.3(g) and the sale or transfer of such property occurswithin ninety days following the acquisition thereof by the Parent Borrower orany of its Subsidiaries except for Sale and Leasebacks by Parent Borrower orany of its Subsidiaries not exceeding $5,000,000 during any fiscal year of theParent Borrower; provided that up to $5,000,000 of any amountreferred to above, if not so expended in the fiscal year for which it ispermitted, may be carried over for expenditure in the next succeeding fiscalyear but not in any subsequent fiscal years.

 

## 7.12                           Changes in Fiscal Periods.  Permit the fiscal year of the Parent Borrowerto end on a day other than December 31 or change the Parent Borrower’smethod of determining fiscal quarters.

 

## 7.13                           Negative Pledge Clauses.  Enter into or suffer to exist or becomeeffective any agreement that prohibits or limits the ability of the ParentBorrower or any of its Subsidiaries to create, incur, assume or suffer to existany Lien upon any of its property or revenues, whether now owned or hereafteracquired, to secure its obligations under the Loan Documents to which it is aparty, other than (a) this Agreement and the other Loan Documents and (b) anyagreements governing any purchase money Liens or Capital Lease Obligationsotherwise permitted hereby (in which case, any prohibition or limitation shallonly be effective against the assets financed thereby).

 

## 7.14                           Clauses RestrictingSubsidiary Distributions.  Enter intoor suffer to exist or become effective any consensual encumbrance orrestriction on the ability of any Subsidiary of the Parent Borrower to (a) makeRestricted Payments in respect of any Capital Stock of such Subsidiary held by,or pay any Indebtedness owed to, the Parent Borrower or any other Subsidiary ofthe Parent Borrower, (b) make loans or advances to, or other Investmentsin, the Parent Borrower or any other Subsidiary of the Parent Borrower or (c) transferany of its assets to the Parent Borrower or any other Subsidiary of the ParentBorrower, except for such encumbrances or restrictions existing under or byreason of (i) any restrictions existing under the Loan Documents, (ii) anyrestrictions with respect to a Subsidiary imposed pursuant to an agreement thathas been entered into in connection with the Disposition of all orsubstantially all of the Capital Stock or assets of such Subsidiary, and (iii) anyrestrictions on the ability of any Subsidiary to transfer any such assetimposed by the provisions of the documentation pursuant to which there shallhave been created a Lien permitted by Section 7.3.

 

## 7.15                           Lines of Business.  Enter into any business, either directly orthrough any Subsidiary, except for the manufacture, distribution and sale of personalprotection and safety equipment and related products.

 

## 7.16                           Limitation on LeaseExpense.  Permit Lease Expense toexceed $12,500,000 for any fiscal year of the Parent Borrower; providedthat, the amount of Lease Expense that would otherwise be permitted in any suchfiscal year pursuant to this Section 7.16 may be increased in an amountproportionate

 

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## to the increase in ConsolidatedEBITDA resulting from Permitted Acquisitions, and any such increase shall becalculated based upon the Consolidated EBITDA of Parent Borrower for the twelvemonths immediately preceding the consummation of the Permitted Acquisition andon a pro forma basis for the Permitted Acquisition as if such PermittedAcquisition was completed on the first day of such period.

 

## 7.17                           Change of Name.  Permit the Canadian Borrower or any CanadianSubsidiary Guarantor to change its name, unless a 30-day prior written noticehas been given to the Canadian Agent.

 

## 7.18                           Anti-TerrorismLaw; Anti-Money Laundering.

 

### (a)                                  Directlyor indirectly, (i) knowingly conduct any business or engage in making orreceiving any contribution of funds, goods or services to or for the benefit ofany person described in Section 4.27, (ii) knowingly deal in, orotherwise engage in any transaction relating to, any property or interests inproperty blocked pursuant to the Executive Order or any other Anti-TerrorismLaw, or (iii) knowingly engage in or conspire to engage in any transactionthat evades or avoids, or has the purpose of evading or avoiding, or attemptsto violate, any of the prohibitions set forth in any Anti-Terrorism Law (andthe Loan Parties shall deliver to the Lenders any certification or otherevidence requested from time to time by any Lender in its reasonablediscretion, confirming the Loan Parties’ compliance with this Section 7.18).

###  

### (b)                                 Causeor permit any of the funds of such Loan Party that are used to repay the Loansto be derived from any unlawful activity with the result that the making of theLoans would be in violation of any Requirement of Law.

###  

## 7.19                           Embargoed Person.  Cause or permit (a) any of the funds orproperties of the Loan Parties that are used to repay the Loans to constituteproperty of, or be beneficially owned directly or indirectly by, any personsubject to sanctions or trade restrictions under United States law (“EmbargoedPerson” or “Embargoed Persons”) that is identified on (1) the “Listof Specially Designated Nationals and Blocked Persons” maintained by OFACand/or on any other similar list maintained by OFAC pursuant to any authorizingstatute including, but not limited to, the International Emergency EconomicPowers Act, 50 U.S.C. §§ 1701 et seq.,The Trading with the Enemy Act, 50 U.S.C. App. 1 etseq., and any Executive Order or Requirement of Law promulgated thereunder,with the result that the investment in the Loan Parties (whether directly orindirectly) is prohibited by a Requirement of Law, or the Loans made by theLenders would be in violation of a Requirement of Law, or (2) theExecutive Order, any related enabling legislation or any other similarExecutive Orders or (b) any Embargoed Person to have any direct orindirect interest, of any nature whatsoever in the Loan Parties, with theresult that the investment in the Loan Parties (whether directly or indirectly)is prohibited by a Requirement of Law or the Loans are in violation of aRequirement of Law.

 

## 7.20                           Limitationon Capital and Holdco Capital. Capital may not hold any material properties, become liable for anymaterial obligations, engage in any trade or business, or conduct any businessactivity, other than (a) the issuance of its equity interests to theParent Borrower or any wholly owned subsidiary of the Parent Borrower and theactivities incidental or related thereto and (b) the incurrence ofIndebtedness as a co-obligor or guarantor, as the case may be, of the SeniorSubordinated Notes, the Loan Documents and any other Indebtedness that ispermitted to be incurred by Borrower under the Loan Documents and theactivities incidental or related thereto; provided that the net proceedsof such Indebtedness are retained by the Parent Borrower or loaned to orcontributed as capital to one or more Subsidiaries other than Capital.  Neither the Parent Borrower nor any of itsSubsidiaries shall engage in any transactions with Capital in violation of theimmediately preceding sentence.  HoldcoCapital may not

 

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## hold any properties, becomeliable for any obligations, engage in any trade or business or conduct anyactivity, other than consummation of the Holdco Merger.

 

## 7.21                           Limitation on Holdco.  Holdco may not hold any material properties,become liable for any material obligations, engage in any trade or business, orconduct any business activity, other than (a) the ownership of equityinterests of the Parent Borrower and the activities incidental or relatedthereto, (b) liabilities under the Holdco Notes and activities incidentalthereto and any refinancing thereof contemplated by the definitions of “TermLoan Termination Date” or “Revolving Termination Date”, (c) liabilitiesunder the Loan Documents, (d) cash and Cash Equivalents and (e) corporate,administrative and operating expenses in the ordinary course of business.  Neither the Parent Borrower nor any of itsSubsidiaries shall engage in any transactions with Holdco in violation of theimmediately preceding sentence.

 

# SECTION 8

#  

# EVENTS OF DEFAULT

#  

## 8.1                                 Events of Default.  If any of the following events shall occurand be continuing:

 

(a)                                  the Borrowers shallfail to pay any principal of any Loan or Reimbursement Obligation when due inaccordance with the terms hereof; or the Borrowers shall fail to pay anyinterest on any Loan or Reimbursement Obligation, or any other amount payablehereunder or under any other Loan Document, within five days after any suchinterest or other amount becomes due in accordance with the terms hereof; or

 

(b)                                 any representation orwarranty made or deemed made by any Loan Party herein or in any other LoanDocument or that is contained in any certificate, document or financial orother statement furnished by it at any time under or in connection with this Agreementor any such other Loan Document shall prove to have been inaccurate in anymaterial respect on or as of the date made or deemed made; or

 

(c)                                  (i)  any LoanParty shall default in the observance or performance of any agreement containedin clause (i) or (ii) of Section 6.4(a) (with respect tothe Parent Borrower only), Section 6.7(a) or Section 7 of thisAgreement or (ii) an “Event of Default” under and as defined in anyMortgage or in any of the Canadian Loan Documents shall have occurred and becontinuing; or

 

(d)                                 any Loan Party shalldefault in the observance or performance of any other agreement contained inthis Agreement or any other Loan Document (other than as provided in paragraphs(a) through (c) of this Section), and such default shall continueunremedied for a period of 30 days after notice to the Parent Borrower from theAdministrative Agent or any Lender; or

 

(e)                                  the Parent Borroweror any of its Subsidiaries shall (i) default in making any payment of anyprincipal of any Indebtedness (including any Guarantee Obligation, butexcluding the Loans) on the scheduled or original due date with respectthereto; or (ii) default in making any payment of any interest on any suchIndebtedness beyond the period of grace, if any, provided in the instrument oragreement under which such Indebtedness was created; or (iii) default inthe observance or performance of any other agreement or condition relating toany such Indebtedness or contained in any instrument or agreement evidencing,securing or relating thereto, or any other

 

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event shall occur or condition exist, theeffect of which default or other event or condition is to cause, or to permitthe holder or beneficiary of such Indebtedness (or a trustee or agent on behalfof such holder or beneficiary) to cause, with the giving of notice if required,such Indebtedness to become due prior to its stated maturity or (in the case ofany such Indebtedness constituting a Guarantee Obligation) to become payable; providedthat a default, event or condition described in clause (i), (ii) or (iii) ofthis paragraph (e) shall not at any time constitute an Event of Defaultunless, at such time, one or more defaults, events or conditions of the typedescribed in clauses (i), (ii) and (iii) of this paragraph (e) shallhave occurred and be continuing with respect to Indebtedness the outstandingprincipal amount of which exceeds in the aggregate the Dollar Equivalent of$5,000,000; or

 

(f)                                    (i) Holdco,the Parent Borrower or any of their Subsidiaries (other than an ImmaterialSubsidiary) shall commence any case, proceeding or other action (A) underany existing or future law of any jurisdiction, domestic or foreign, relatingto bankruptcy, insolvency, reorganization or relief of debtors, seeking to havean order for relief entered with respect to it, or seeking to adjudicate it abankrupt or insolvent, or seeking reorganization, arrangement, adjustment,winding-up, liquidation, dissolution, composition or other relief with respectto it or its debts, or (B) seeking appointment of a receiver, trustee,custodian, conservator or other similar official for it or for all or anysubstantial part of its assets, or Holdco, the Parent Borrower or any of theirSubsidiaries (other than an Immaterial Subsidiary) shall make a generalassignment for the benefit of its creditors; or (ii) there shall becommenced against Holdco, the Parent Borrower or any of their Subsidiaries(other than an Immaterial Subsidiary) any case, proceeding or other action of anature referred to in clause (i) above that (A) results in the entryof an order for relief or any such adjudication or appointment or (B) remainsundismissed, undischarged or unbonded for a period of 60 days; or (iii) thereshall be commenced against Holdco, the Parent Borrower or any of itsSubsidiaries (other than an Immaterial Subsidiary) any case, proceeding orother action seeking issuance of a warrant of attachment, execution, distraintor similar process against all or any substantial part of its assets thatresults in the entry of an order for any such relief that shall not have beenvacated, discharged, or stayed or bonded pending appeal within 60 days from theentry thereof; or (iv) Holdco, the Parent Borrower or any of its Subsidiaries(other than an Immaterial Subsidiary) shall take any action in furtherance of,or indicating its consent to, approval of, or acquiescence in, any of the actsset forth in clause (i), (ii), or (iii) above; or (v) Holdco, theParent Borrower or any of its Subsidiaries (other than an ImmaterialSubsidiary) shall generally not, or shall be unable to, or shall admit inwriting its inability to, pay its debts as they become due; or

 

(g)                                 (i) any Personshall engage in any “prohibited transaction” (as defined in Section 406 ofERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulatedfunding deficiency” (as defined in Section 302 of ERISA), whether or notwaived, shall exist with respect to any Plan or Multiemployer Plan or any Lienin favor of the PBGC, a Plan or a Multiemployer Plan shall arise on the assetsof the Parent Borrower or any Commonly Controlled Entity, (iii) a ReportableEvent shall occur with respect to, or proceedings shall commence to have atrustee appointed, or a trustee shall be appointed, to administer or toterminate, any Single Employer Plan, which Reportable Event or commencement ofproceedings or appointment of a trustee is, in the reasonable opinion of theU.S. Required Lenders, likely to result in the termination of such Plan underTitle IV of ERISA, (iv) any Single Employer Plan shall terminate underTitle IV of ERISA, (v) the Parent Borrower or any Commonly ControlledEntity shall, or in the reasonable opinion of the U.S. Required Lenders becomeslikely to, incur any liability in connection with a withdrawal from, or theInsolvency or Reorganization of, a Multiemployer Plan or (vi) any otherevent or condition shall occur or exist with respect to a Plan or MultiemployerPlan; and in each case in clauses (i) through (vi) above, such eventor condition, together with all other such events

 

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or conditions, if any, could, in the opinionof the U.S. Required Lenders, reasonably be expected to have a Material AdverseEffect; or

 

(h)                                 one or more judgmentsor decrees shall be entered against the Parent Borrower or any of itsSubsidiaries involving in the aggregate a liability (not paid or fully coveredby insurance or Invensys as to which the relevant insurance company or Invensys,as the case may be, has acknowledged coverage) of the Dollar Equivalent of$10,000,000 or more, and all such judgments or decrees shall not have beenvacated, discharged, stayed or bonded pending appeal within 30 days from theentry thereof; or

 

(i)                                     any of theSecurity Documents shall cease, for any reason, to be in full force and effectin all material respects, or any Loan Party or any Affiliate of any Loan Partyshall so assert, or any Lien created by any of the Security Documents shallcease to be enforceable and of the same effect and priority purported to becreated thereby other than as to Collateral having an aggregate value less than$1,000,000 or as a result of the Administrative Agent’s or the Canadian Agent’s,as applicable, failure to take any necessary action with respect to theCollateral or the Security Documents; or

 

(j)                                     any guaranteecontained in Section 2 of the Guarantee and Collateral Agreement or in anyCanadian Security Document shall cease, for any reason, to be in full force andeffect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

 

(k)                                  (i)  any “person”or “group” (as such terms are used in Sections 13(d) and 14(d) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including such person’s or group’sAffiliates and associates, other than the Permitted Holders shallbecome, or obtain rights (whether by means or warrants, options or otherwise)to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5under the Exchange Act), directly or indirectly, of more than 33-1/3% of theoutstanding common stock of the Parent Borrower, (ii) at any time afterconsummation of the Transactions, Holdco shall cease to be the sole manager ofNSP or a majority of the directors of Holdco shall not have been elected by thePermitted Holders, (iii) theapproval by the holders of Capital Stock of Holdco of any plan or proposal forthe liquidation or dissolution of Holdco, or (iv) a SpecifiedChange of Control shall occur; or

 

(l)                                     the Senior SubordinatedNotes or the guarantees of the Senior Subordinated Notes shall cease, for anyreason, to be validly subordinated to the Obligations or the obligations of theU.S. Subsidiary Guarantors under the Guarantee and Collateral Agreement, as thecase may be, as provided in the Note Agreement, or any Loan Party, anyAffiliate of any Loan Party, or the holders of at least 25% in aggregateprincipal amount of the Senior Subordinated Notes shall so assert;

 

then, and inany such event, (A) if such event is an Event of Default specified inclause (i) or (ii) of paragraph (f) above with respect to anyBorrower, automatically the Commitments shall immediately terminate and theLoans hereunder (including the face amount of all Bankers’ Acceptances and B/AEquivalent Loans accepted by the Canadian Lenders), with accrued interestthereon and all other amounts owing under this Agreement and the other LoanDocuments (including all amounts of L/C Obligations, whether or not thebeneficiaries of the then outstanding Letters of Credit shall have presentedthe documents required thereunder) shall immediately become due and payable,and (B) if such event is any other Event of Default, any or all of thefollowing actions may be taken:  (i) withthe consent of the Requisite U.S. Revolving Facility Lenders, theAdministrative Agent may, or upon the request of the Requisite U.S. RevolvingFacility Lenders, the Administrative Agent shall, by notice to the ParentBorrower declare the U.S. Revolving Commitments to be terminated forthwith,whereupon the U.S. Revolving Commitments shall

 

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immediatelyterminate; (ii) the Canadian Agent may, by notice to the CanadianBorrower, declare the Canadian Commitments to be terminated forthwith,whereupon the Canadian Commitments shall immediately terminate; (iii) withthe consent of the U.S. Required Lenders, the Administrative Agent may, or uponthe request of the U.S. Required Lenders, the Administrative Agent shall, bynotice to the Parent Borrower, declare the U.S. Loans hereunder (with accruedinterest thereon) and all other amounts owing under this Agreement and theother Loan Documents (including all amounts of L/C Obligations, whether or notthe beneficiaries of the then outstanding Letters of Credit shall have presentedthe documents required thereunder to the U.S. Borrowers) to be due and payableforthwith, whereupon the same shall immediately become due and payable; and (iv) withthe consent of the Canadian Required Lender, the Canadian Agent may, or uponrequest of the Canadian Required Lenders, the Canadian Agent shall, by noticeto the Canadian Borrower, declare the Canadian Loans hereunder (including theface amount of all Bankers’ Acceptances accepted by the Canadian Lenders), withaccrued interest thereon, and all other amounts owing under this Agreement andthe other Loan Documents to be due and payable forthwith, whereupon the sameshall immediately become due and payable.

 

With respectto all U.S. Letters of Credit and Canadian Letters of Credit with respect towhich presentment for honor shall not have occurred at the time of anacceleration pursuant to this paragraph, the U.S. Borrowers and the CanadianBorrower, as the case may be, shall at such time deposit in a cash collateralaccount opened by the Administrative Agent or the Canadian Agent, as the casemay be, an amount equal to the aggregate then undrawn and unexpired amount ofsuch U.S. Letters of Credit or Canadian Letters of Credit, as the case maybe.  Amounts held in such cash collateralaccount shall be applied by the Administrative Agent or the Canadian Agent, asthe case may be, to the payment of drafts drawn under such U.S. Letters ofCredit or Canadian Letters of Credit, as the case may be, and the unusedportion thereof after all such U.S. Letters of Credit or Canadian Letters ofCredit, as the case may be, shall have expired or been fully drawn upon, ifany, shall be applied to repay other obligations of the U.S. Borrowers and theCanadian Borrower, as the case may be, hereunder and under the other Loan Documents.  After all such U.S. Letters of Credit orCanadian Letters of Credit, as the case may be, shall have expired or beenfully drawn upon, all Reimbursement Obligations shall have been satisfied andall other obligations of the Parent Borrower and the Canadian Borrower, as thecase may be, hereunder and under the other Loan Documents shall have been paidin full, the balance, if any, in such cash collateral account shall be returnedto the relevant Borrowers (or such other Person as may be lawfully entitledthereto).  Except as expressly providedabove in this Section, presentment, demand, protest and all other notices ofany kind are hereby expressly waived by the Parent Borrower and the CanadianBorrower.

 

With respectto all Bankers’ Acceptances and B/A Equivalent Loans which are outstanding atthe time the Canadian Agent takes any action pursuant to clause (iv) ofthe second preceding paragraph, the Canadian Borrower shall at such timedeposit in a cash collateral account opened by the Canadian Agent an amount ofcash equal to the aggregate undiscounted face amount of all unmatured Bankers’Acceptances and B/A Equivalent Loans. Amounts held in such account shall be applied to pay maturing Bankers’Acceptances and B/A Equivalent Loans, and the unused portion thereof after allsuch Bankers’ Acceptances and B/A Equivalent Loans shall have matured, if any,shall be applied to repay other obligations of the Canadian Borrowerhereunder.  After all Bankers’ Acceptancesand B/A Equivalent Loans shall have been satisfied and all other obligations ofthe Canadian Borrower hereunder shall have been paid in full, the balance, ifany, in such cash collateral account shall be returned to the CanadianBorrower.

 

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# SECTION 9

#  

# THE AGENTS

#  

## 9.1                                 Appointment.

 

### (a)                                  EachU.S. Lender hereby irrevocably designates and appoints the Administrative Agentas the agent of such Lender under this Agreement and the other Loan Documents,and each such Lender irrevocably authorizes the Administrative Agent, in suchcapacity, to take such action on its behalf under the provisions of thisAgreement and the other Loan Documents and to exercise such powers and performsuch duties as are expressly delegated to the Administrative Agent by the termsof this Agreement and the other Loan Documents, together with such other powersas are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in thisAgreement, the Administrative Agent shall not have any duties orresponsibilities, except those expressly set forth herein, or any fiduciaryrelationship with any U.S. Lender, and no implied covenants, functions,responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Loan Document or otherwise exist against theAdministrative Agent.

###  

### (b)                                 EachCanadian Lender hereby irrevocably designates and appoints the AdministrativeAgent and the Canadian Agent as the agents of such Lender under this Agreementand the other Loan Documents, and each such Lender irrevocably authorizes theAdministrative Agent and the Canadian Agent, in such capacities, to take suchaction on its behalf under the provisions of this Agreement and the other LoanDocuments and to exercise such powers and perform such duties as are expresslydelegated to the Administrative Agent and the Canadian Agent, as the case maybe, by the terms of this Agreement and the other Loan Documents, together withsuch other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contraryelsewhere in this Agreement, neither the Administrative Agent nor the CanadianAgent shall have any duties or responsibilities, except those expressly setforth herein, or any fiduciary relationship with any Canadian Lender, and noimplied covenants, functions, responsibilities, duties, obligations orliabilities shall be read into this Agreement or any other Loan Document orotherwise exist against the Administrative Agent or the Canadian Agent.

###  

### (c)                                  Forgreater certainty, and without limiting the powers of the Canadian Agent, orany other Person acting as an agent or mandatory for the Canadian Agenthereunder or under any of the other Loan Documents, the Canadian Borrowerhereby acknowledges that, for purposes of holding any security granted by theCanadian Borrower on property pursuant to the laws of the Province of Quebec tosecure obligations of the Canadian Borrower under any bond, debenture or othertitle of indebtedness issued by the Canadian Borrower, the Canadian Agent shallbe the holder of an irrevocable power of attorney (*fondé depouvoir*) (within the meaning of the *Civil Codeof Quebec*) for all present and future Canadian Lenders and inparticular for all present and future holders of any bond, debenture or othertitle of indebtedness issued by the Canadian Borrower.  Each Canadian Lender hereby irrevocablyconstitutes, to the extent necessary, the Canadian Agent as the holder of anirrevocable power of attorney (*fondé de pouvoir*)(within the meaning of Article 2692 of the *Civil Codeof Quebec*) in order to hold security granted by the CanadianBorrower in the Province of Quebec to secure the obligations of the CanadianBorrower under bond, debenture or other title of indebtedness issued by theCanadian Borrower, and hereby agrees that the Canadian Agent may act as thebondholder and mandatary (i.e. agent) with respect to any bond, debenture orsimilar title of indebtedness that may be issued by the Canadian Borrower andpledged in favor of the Canadian Agent for the benefit of the Canadian Agentand the Canadian Lenders.  Each assigneeof a Canadian Lender shall be deemed to have confirmed and ratified theconstitution of the Canadian Agent as the holder of such irrevocable power ofattorney (*fondé de pouvoir*) by execution of anAssignment and Acceptance. Notwithstanding the provisions of Section 32 of the *An Act**respecting the*

 

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### *specialpowers of legal persons* (Quebec), the Canadian Agentmay acquire and be the holder of any hypothec or debenture.  The Canadian Borrower hereby acknowledgesthat each such hypothec or debenture constitutes a title of indebtedness, assuch term is used in Article 2692 of the *Civil Codeof Quebec*.

###  

The execution by the Canadian Agent as theholder of an irrevocable power of attorney (*fondé de pouvoir*),prior to the Credit Agreement, of any deeds of hypothec or other securitydocuments is hereby ratified and confirmed.

 

The Lenders shall have the right to appoint asuccessor agent (and *fondé de pouvoir*),Credit Suisse Toronto Branch from time to time without notice to or the consentof the Canadian Borrower.  Upon suchappointment, the successor agent shall succeed to and become the agent (and *fondé de pouvoir*) with all the rights, powers and privilegesof the retiring agent (and *fondé de pouvoir*)and the retiring agent (and *fondé de pouvoir*)shall thereupon be immediately discharged from all further duties andobligations under this Agreement.

 

The parties hereto acknowledge and agree thatthe Collateral Mortgage Bond is issued in order to comply with and so as tomake available to the Lenders the security contemplated by Article 2692 ofthe Civil Code of Quebec and, accordingly, Section 32 of the Act respectingthe special powers of legal persons (Quebec) has no application to the holdingby Credit Suisse, Toronto Branch of the Collateral Mortgage Bond.

 

## 9.2                                 Delegation ofDuties.  The Administrative Agent andthe Canadian Agent may execute any of their respective duties under thisAgreement and the other Loan Documents by or through agents or attorneys-in-factand shall be entitled to advice of counsel concerning all matters pertaining tosuch duties.  The Administrative Agentshall not be responsible for the negligence or misconduct of any agents orattorneys-in-fact selected by it with reasonable care.

 

## 9.3                                 ExculpatoryProvisions.  Neither any Agent norany of their respective officers, directors, employees, agents, attorneys-in-factor affiliates shall be (i) liable for any action lawfully taken or omittedto be taken by it or such Person under or in connection with this Agreement orany other Loan Document (except to the extent that any of the foregoing arefound by a final and nonappealable decision of a court of competentjurisdiction to have resulted from its or such Person’s own gross negligence orwillful misconduct) or (ii) responsible in any manner to any of the U.S.Lenders for any recitals, statements, representations or warranties made by anyLoan Party or any officer thereof contained in this Agreement or any other LoanDocument or in any certificate, report, statement or other document referred toor provided for in, or received by the Agents under or in connection with, thisAgreement or any other Loan Document or for the value, validity, effectiveness,genuineness, enforceability or sufficiency of this Agreement or any other LoanDocument or for any failure of any Loan Party a party thereto to perform itsobligations hereunder or thereunder.  TheAgents shall not be under any obligation to any U.S. Lender to ascertain or toinquire as to the observance or performance of any of the agreements containedin, or conditions of, this Agreement or any other Loan Document, or to inspectthe properties, books or records of any Loan Party.

 

## 9.4                                 Relianceby Administrative Agent and the Canadian Agent.  The Administrative Agent and Canadian Agentshall be entitled to rely, and shall be fully protected in relying, upon anyinstrument, writing, resolution, notice, consent, certificate, affidavit,letter, telecopy, telex or teletype message, statement, order or other documentor conversation believed by it to be genuine and correct and to have beensigned, sent or made by the proper Person or Persons and upon advice andstatements of legal counsel (including counsel to the Parent Borrower),independent accountants and other experts selected by the Administrative Agentor Canadian Agent, as the case may be.  TheAdministrative Agent or Canadian Agent, as the case may be, may deem and treatthe payee of any Note as the owner thereof for all purposes unless a writtennotice of assignment, negotiation or transfer thereof shall have been filed

 

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## with the Administrative Agentor Canadian Agent, as the case may be.  TheAdministrative Agent or Canadian Agent shall each be fully justified in failingor refusing to take any action under this Agreement or any other Loan Documentunless it shall first receive such advice or concurrence of the RequiredLenders (or, if so specified by this Agreement, all Lenders) as it deemsappropriate or it shall first be indemnified to its satisfaction by the Lendersagainst any and all liability and expense that may be incurred by it by reasonof taking or continuing to take any such action.  The Administrative Agent or Canadian Agentshall each in all cases be fully protected in acting, or in refraining fromacting, under this Agreement and the other Loan Documents in accordance with arequest of the Required Lenders (or, if so specified by this Agreement, allLenders), and such request and any action taken or failure to act pursuantthereto shall be binding upon all the Lenders and all future holders of theLoans.

 

## 9.5                                 Notice of Default.  Neither the Administrative Agent nor theCanadian Agent shall be deemed to have knowledge or notice of the occurrence ofany Default or Event of Default hereunder unless the Administrative Agent orthe Canadian Agent, as the case may be, has received notice from a Lender orthe Parent Borrower referring to this Agreement, describing such Default orEvent of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent orthe Canadian Agent receives such a notice, the Administrative Agent or theCanadian Agent shall give notice thereof to the Lenders.  The Administrative Agent or the CanadianAgent shall take such action with respect to such Default or Event of Defaultas shall be reasonably directed by the Required Lenders (or, if so specified bythis Agreement, all  Lenders); providedthat unless and until the Administrative Agent or the Canadian Agent shall havereceived such directions, the Administrative Agent or the Canadian Agent may(but shall not be obligated to) take such action, or refrain from taking suchaction, with respect to such Default or Event of Default as it shall deemadvisable in the best interests of the Lenders; provided, further,that with respect to the termination of the U.S. Revolving Commitments andCanadian Commitments and/or the acceleration of the U.S. Loans, theAdministrative Agent or the Canadian Agent shall take such action with respectto such termination and/or acceleration as shall be reasonably directed by theU.S. Revolving Facility Lenders and/or the U.S. Required Lenders and CanadianRequired Lenders, respectively.

 

## 9.6                                 Non-Relianceon Agents and Other U.S. Lenders. Each Lender expressly acknowledges that neither the Agents nor any oftheir respective officers, directors, employees, agents, attorneys-in-fact oraffiliates have made any representations or warranties to it and that no act byany Agent hereinafter taken, including any review of the affairs of a LoanParty or any affiliate of a Loan Party, shall be deemed to constitute any representationor warranty by any Agent to any Lender.  Each  Lender represents to the Agents that it has,independently and without reliance upon any Agent or any other  Lender, and based on such documents andinformation as it has deemed appropriate, made its own appraisal of andinvestigation into the business, operations, property, financial and othercondition and creditworthiness of the Loan Parties and their affiliates andmade its own decision to make its Loans hereunder and enter into thisAgreement.  Each  Lender also represents that it will, independentlyand without reliance upon any Agent or any other  Lender, and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigation asit deems necessary to inform itself as to the business, operations, property,financial and other condition and creditworthiness of the Loan Parties andtheir affiliates.  Except for notices,reports and other documents expressly required to be furnished to the  Lenders by the Administrative Agent or theCanadian Agent, as applicable, hereunder, the Administrative Agent nor theCanadian Agent shall have any duty or responsibility to provide any Lender withany credit or other information concerning the business, operations, property,condition (financial or otherwise), prospects or creditworthiness of any LoanParty or any affiliate of a Loan Party that may come into the possession of theAdministrative Agent or the Canadian Agent, as applicable, or any of itsofficers, directors, employees, agents, attorneys-in-fact or affiliates.

 

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## 9.7                                 Indemnification.  The Lenders agree to indemnify each Agent inits capacity as such (to the extent not reimbursed by the Borrowers and withoutlimiting the obligation of the Borrowers to do so), ratably according to theirrespective Aggregate Exposure Percentages in effect on the date on whichindemnification is sought under this Section (or, if indemnification issought after the date upon which the Commitments shall have terminated and theLoans shall have been paid in full, ratably in accordance with such AggregateExposure Percentages immediately prior to such date), from and against any andall liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind whatsoever that may at anytime (whether before or after the payment of the Loans) be imposed on, incurredby or asserted against such Agent in any way relating to or arising out of, theCommitments, this Agreement, any of the other Loan Documents or any documentscontemplated by or referred to herein or therein or the transactionscontemplated hereby or thereby or any action taken or omitted by such Agentunder or in connection with any of the foregoing; provided that noLender shall be liable for the payment of any portion of such liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs,expenses or disbursements that are found by a final and nonappealable decisionof a court of competent jurisdiction to have resulted from such Agent’s grossnegligence or willful misconduct.  Theagreements in this Section shall survive the payment of the Loans and allother amounts payable hereunder.

 

## 9.8                                 Agentin Its Individual Capacity.  EachAgent and its affiliates may make loans to, accept deposits from and generallyengage in any kind of business with any Loan Party as though such Agent was notan Agent.  With respect to its Loans madeor renewed by it and with respect to any Letter of Credit issued or participatedin by it, (i) each Agent (other than the Canadian Agent) shall have thesame rights and powers under this Agreement and the other Loan Documents as anyU.S. Lender and may exercise the same as though it were not an Agent, and theterms “U.S. Lender” and “U.S. Lenders” shall include each Agent in itsindividual capacity, and (ii) the Canadian Agent shall have the samerights and powers under this Agreement and the other Loan Documents as anyCanadian Lender and may exercise the same as though it were not the CanadianAgent, and the terms “Canadian Lender” and “Canadian Lenders” shall include theCanadian Agent in its individual capacity.

 

## 9.9                                 SuccessorAdministrative Agent.  (a)  TheAdministrative Agent may resign as Administrative Agent upon 30 days’ notice tothe U.S. Lenders and the Parent Borrower. If the Administrative Agent shall resign as Administrative Agent underthis Agreement and the other Loan Documents, then the U.S. Required Lendersshall appoint from among the U.S. Lenders a successor agent for the U.S.Lenders, which successor agent shall (unless an Event of Default under Section 8.1(a) orSection 8.1(f) with respect to any Borrower shall have occurred andbe continuing) be subject to approval by the Parent Borrower (which approvalshall not be unreasonably withheld or delayed), whereupon such successor agentshall succeed to the rights, powers and duties of the Administrative Agent, andthe term “Administrative Agent” shall mean such successor agent effective uponsuch appointment and approval, and the former Administrative Agent’s rights,powers and duties as Administrative Agent shall be terminated, without anyother or further act or deed on the part of such former Administrative Agent orany of the parties to this Agreement or any holders of the Loans.  If no successor agent has acceptedappointment as Administrative Agent by the date that is 30 days following aretiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective and the U.S. Lenders shall assume and perform all of the duties ofthe Administrative Agent hereunder until such time, if any, as the U.S.Required Lenders appoint a successor agent as provided for above.  After any retiring Administrative Agent’sresignation as Administrative Agent, the provisions of this Section 9shall inure to its benefit as to any actions taken or omitted to be taken by itwhile it was Administrative Agent under this Agreement and the other LoanDocuments.

 

### (b)                                 TheCanadian Agent may resign as Canadian Agent upon 30 days’ notice to theCanadian Lenders and the Canadian Borrower. If the Canadian Agent shall resign as Canadian Agent

 

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### under this Agreement and theother Loan Documents, then the Canadian Required Lenders shall appoint fromamong the Canadian Lenders a successor agent for the Canadian Lenders, whichsuccessor agent shall (unless an Event of Default under Section 8.1(a) orSection 8.1(f) with respect to any Borrower shall have occurred andbe continuing) be subject to approval by the Canadian Borrower (which approvalshall not be unreasonably withheld or delayed), whereupon such successor agentshall succeed to the rights, powers and duties of the Canadian Agent, and theterm “Canadian Agent” shall mean such successor agent effective upon suchappointment and approval, and the former Canadian Agent’s rights, powers andduties as Canadian Agent shall be terminated, without any other or further actor deed on the part of such former Canadian Agent or any of the parties to thisAgreement or any holders of the Loans. If no successor agent has accepted appointment as Canadian Agent by thedate that is 30 days following a retiring Canadian Agent’s notice ofresignation, the retiring Canadian Agent’s resignation shall neverthelessthereupon become effective and the Canadian Lenders shall assume and performall of the duties of the Canadian Agent hereunder until such time, if any, asthe Canadian Required Lenders appoint a successor agent as provided forabove.  After any retiring Canadian Agent’sresignation as Canadian Agent, the provisions of this Section 9 shallinure to its benefit as to any actions taken or omitted to be taken by it whileit was Canadian Agent under this Agreement and the other Loan Documents.

###  

## 9.10                           Authorizationto Release Guarantees and Liens.  (a) Notwithstanding anything to the contrary contained herein or in any other LoanDocument, the Administrative Agent is hereby irrevocably authorized by each ofthe U.S. Lenders (without requirement of notice to or consent of any U.S.Lender except as expressly required by Section 10.1) to take any actionrequested by the Parent Borrower having the effect of releasing any Collateralor guarantee obligations to the extent necessary to permit consummation of anytransaction not prohibited by any Loan Document or that has been consented toin accordance with Section 10.1.

 

### (b)                                 Notwithstandinganything to the contrary contained herein or in any other Loan Document, theCanadian Agent is hereby irrevocably authorized by each of the Canadian Lenders(without requirement of notice to or consent of any Canadian Lender except asexpressly required by Section 10.1) to take any action requested by theCanadian Borrower having the effect of releasing any Collateral or guaranteeobligations to the extent necessary to permit consummation of any transactionnot prohibited by any Loan Document or that has been consented to in accordancewith Section 10.1.

###  

## 9.11                           Documentation Agents.  Neither the Documentation Agents nor theSyndication Agent shall have any duties or responsibilities hereunder in their capacityas such.

 

# SECTION 10

#  

# MISCELLANEOUS

#  

## 10.1                           Amendments and Waivers.  Except as provided in Section 2.25,neither this Agreement, any other Loan Document, nor any terms hereof orthereof may be amended, supplemented or modified except in accordance with theprovisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant LoanDocument may, or, with the written consent of the Required Lenders, theAdministrative Agent (or the Canadian Agent, as applicable) and each Loan Partyparty to the relevant Loan Document may, from time to time, (a) enter intowritten amendments, supplements or modifications hereto and to the other Loan Documentsfor the purpose of adding any provisions to this Agreement or the other LoanDocuments or changing in any manner the rights of the Lenders or of the LoanParties hereunder or thereunder or (b) waive, on such terms and conditionsas the Required Lenders or the Administrative Agent (or the Canadian Agent, asapplicable), as the case may be, may specify in

 

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## such instrument, any of therequirements of this Agreement or the other Loan Documents or any Default orEvent of Default and its consequences; provided, however, that nosuch waiver and no such amendment, supplement or modification shall (i) forgiveor reduce the principal amount or extend the final scheduled date of maturityof any Loan, extend the scheduled date of any amortization payment in respectof any Term Loan, reduce the stated rate of any interest or fee payablehereunder or extend the scheduled date of any payment thereof, or increase theamount or extend the expiration date of any Lender’s Revolving Commitment, ineach case without the consent of each Lender directly affected thereby; (ii) reduce any percentage specified in the definition of Required Lenders or U.S.Required Prepayment Lenders, consent to the assignment or transfer by theParent of any of its rights and obligations under this Agreement and the otherLoan Documents, release all or substantially all of the Collateral or releaseany material Guarantor from its obligations under the Guarantee and CollateralAgreement (other than in connection with permitted asset sales), in each casewithout the written consent of all U.S. Lenders; (iii) eliminate or reducethe voting rights of any Lender under this Section 10.1 without thewritten consent of such Lender; (iv) amend, modify or waive any conditionprecedent to any extension of credit under the U.S. Revolving Facility setforth in Section 5.2 (including in connection with any waiver of anexisting Default or Event of Default) without the written consent of theRequisite U.S. Revolving Facility Lenders; (v) amend, modify or waive anyprovision of Section 2.17 without the consent of the Requisite Lenders inrespect of each Facility adversely affected thereby; (vi) reduce thepercentage specified in the definition of Requisite Lenders with respect to anyFacility without the written consent of all Lenders under such Facility; (vii) amend,modify or waive any provision of Section 9 without the written consent ofthe Administrative Agent (or the Canadian Agent, as applicable); (viii) amend,modify or waive any provision of Section 2.5 without the written consentof the Swingline Lender; or (ix) amend, modify or waive any provision of Section 3without the written consent of the U.S. Issuing Lender.  Any such waiver and any such amendment,supplement or modification shall apply equally to each of the Lenders and shallbe binding upon the Loan Parties, the Lenders, the Administrative Agent (or theCanadian Agent, as applicable) and all future holders of the Loans.  In the case of any waiver, the Loan Parties,the Lenders and the Administrative Agent (or the Canadian Agent, as applicable)shall be restored to their former position and rights hereunder and under theother Loan Documents, and any Default or Event of Default waived shall be deemedto be cured and not continuing; but no such waiver shall extend to anysubsequent or other Default or Event of Default, or impair any right consequentthereon.

 

## 10.2                           Notices.  All notices, requests and demands to or uponthe respective parties hereto to be effective shall be in writing (including bytelecopy), and, unless otherwise expressly provided herein, shall be deemed tohave been duly given or made when delivered, or three Business Days after beingdeposited in the mail, postage prepaid, or, in the case of telecopy notice,when received, addressed as follows in the case of the Parent Borrower, theAdministrative Agent and the Canadian Agent, and as set forth in anadministrative questionnaire delivered to the Administrative Agent in the caseof the U.S. Lenders, or to such other address as may be hereafter notified bythe respective parties hereto:

 

Holdco:                                                                                                                                              c/oOdyssey Investment Partners, LLC280 Park AvenueWest Tower, 38th FloorNew York, New York  10017Attention:  Brian KwaitTelecopy:  (212) 351-7925

 

The ParentBorrower:                                                                       2211York Road, Suite 215Oak Brook, Illinois  60523Attention:  David MyersTelecopy:  (630) 572-8518Telephone:  (630) 572-8234

 

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The CanadianBorrower                                                          10,550Parkway Boul.

Ville d’Anjou, Quebec HlJ 2K4

Attention : VP Finance

Telecopy : (514) 351-3361

Telephone: (514) 351-7233

 

With a copyto:                                                                                                     DechertLLP4000 Bell Atlantic Tower1717 Arch StreetPhiladelphia, Pennsylvania  19103-2793Attention:  Geraldine A. Sinatra, Esq.Telecopy:  (215) 994-2222Telephone:  (215) 994-2824

 

and

 

Sternthal Katznelson Montigny, L.L.P.Place du Canada, Suite 1020Montreal, CanadaH3B 2N2Attention:  David SternthalTelecopy:  (514) 878-9195Telephone:  (514) 878-1011

 

TheAdministrative Agent:                                         11Madison AvenueNew York, New York  10010Attention:  Thomas Lynch                  AgencyGroup ManagerTelecopy:  (212) 325-8304Telephone:  (212) 325-9205

 

and

 

The CanadianAgent:                                                                      CreditSuisse, Toronto Branch1 First Canadian PlaceSuite 3000, PO Box 301Toronto, Ontario Canada  M5X 1C9Attention:  Agency OperationsFax:  416-352-4574

 

providedthat any notice, request or demand to or upon the Administrative Agent, theCanadian Agent, the U.S. Lenders or the Canadian Lenders shall not be effectiveuntil received.

 

## 10.3                           No Waiver; CumulativeRemedies.  No failure to exercise andno delay in exercising, on the part of the Administrative Agent, the CanadianAgent or any Lender, any right, remedy, power or privilege hereunder or underthe other Loan Documents shall operate as a waiver thereof; nor shall anysingle or partial exercise of any right, remedy, power or privilege hereunderpreclude any other or further exercise thereof or the exercise of any otherright, remedy, power or privilege.  The rights,remedies, powers and privileges herein provided are cumulative and notexclusive of any rights, remedies, powers and privileges provided by law.

 

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## 10.4                           Survivalof Representations and Warranties.  All representations and warranties madehereunder, in the other Loan Documents and in any document, certificate orstatement delivered pursuant hereto or in connection herewith shall survive theexecution and delivery of this Agreement and the making of the Loans and otherextensions of credit hereunder.

 

## 10.5                           Payment of Expenses andTaxes.  The Borrowers agree (a) topay or reimburse the Administrative Agent, the Syndication Agent and theCanadian Agent for all their reasonable out-of-pocket costs and expensesincurred in connection with the development, preparation and execution of, andany amendment, supplement or modification to, this Agreement and the other LoanDocuments and any other documents prepared in connection herewith or therewith,and the consummation and administration of the transactions contemplated herebyand thereby, including the reasonable fees and disbursements of counsel to theAdministrative Agent, the Syndication Agent and the Canadian Agent and filingand recording fees and expenses, with statements with respect to the foregoingto be submitted to the Parent Borrower prior to the Closing Date (in the caseof amounts to be paid on the Closing Date) and from time to time thereafter ona quarterly basis or such other periodic basis as the Administrative Agentshall deem appropriate, (b) to pay or reimburse each Lender, the CanadianAgent and the Administrative Agent for all its costs and expenses incurred inconnection with the enforcement or preservation of any rights under or workout orrestructuring of this Agreement, the other Loan Documents and any such otherdocuments, including the fees and disbursements of counsel (including the allocatedfees and expenses of in-house counsel) to each Lender and of counsel to theAdministrative Agent and the Canadian Agent, (c) to pay, indemnify, andhold each Lender, the Arranger, the Canadian Agent and the Administrative Agentharmless from, any and all recording and filing fees and any and allliabilities with respect to, or resulting from any delay in paying, stamp,excise and other taxes, if any, that may be payable or determined to be payablein connection with the execution and delivery of, or consummation oradministration of any of the transactions contemplated by, or any amendment,supplement or modification of, or any waiver or consent under or in respect of,this Agreement, the other Loan Documents and any such other documents, and (d) topay, indemnify, and hold each Lender, the Arranger, the Administrative Agent,the Canadian Agent, the Documentation Agents, the Syndication Agent and theirrespective officers, directors, employees, affiliates, agents and controllingpersons (each, an “Indemnitee”) harmless from and against any and allother liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind or nature whatsoever(including reasonable fees, disbursements and other charges of counsel) arisingout of or relating to any claim or any litigation or other proceeding (regardlessof whether such Indemnitee is a party thereto and regardless of whether suchmatter is initiated by a third party or by any Borrower or any of itsaffiliates) that relates to the Transactions, including the financingcontemplated hereby, the Acquisition or any transactions connected therewith orwith respect to the execution, delivery, enforcement, performance andadministration of this Agreement, the other Loan Documents and any such otherdocuments, including any of the foregoing relating to the use of proceeds ofthe Loans or the violation of, noncompliance with or liability under, anyEnvironmental Law applicable to the operations of any Borrower, any of theirSubsidiaries or any of the Group Properties (all the foregoing in this clause(d), collectively, the “Indemnified Liabilities”), provided thatthe Borrowers shall have no obligation hereunder to any Indemnitee with respectto Indemnified Liabilities to the extent such Indemnified Liabilities are foundby a final and nonappealable decision of a court of competent jurisdiction tohave resulted primarily from the gross negligence or willful misconduct of suchIndemnitee.  All amounts due under this Section 10.5shall be payable promptly after receipt of a reasonably detailed invoicetherefor.  Statements payable by theBorrowers pursuant to this Section 10.5 shall be submitted to David Myers(Telephone No. (630) 572-8234) (Telecopy No. (639) 572-8518), at theaddress of the Parent Borrower set forth in Section 10.2, or to such otherPerson or address as may be hereafter designated by the Parent Borrower in awritten notice to the Administrative Agent. The agreements in this Section 10.5 shall survive repayment of theLoans and all other amounts payable hereunder.

 

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## 10.6                           Successorsand Assigns; Participations and Assignments.

 

### (a)                                  ThisAgreement shall be binding upon and inure to the benefit of the Borrowers, theLenders, the Administrative Agent, the Canadian Agent, all future holders ofthe Loans and their respective successors and assigns, except that no Borrowermay assign or transfer any of its rights or obligations under this Agreementwithout the prior written consent of each Lender.

###  

### (b)                                 AnyLender may, without the consent of any Borrower, in accordance with applicablelaw, at any time sell to one or more banks, financial institutions or otherentities (each, a “Participant”) participating interests in any Loanowing to such Lender, any Commitment of such Lender or any other interest ofsuch Lender hereunder and under the other Loan Documents.  In the event of any such sale by a Lender ofa participating interest to a Participant, such Lender’s obligations under thisAgreement to the other parties to this Agreement shall remain unchanged, suchLender shall remain solely responsible for the performance thereof, such Lendershall remain the holder of any such Loan for all purposes under this Agreementand the other Loan Documents, and the Parent Borrower and the AdministrativeAgent (or the Canadian Agent, as applicable) shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement and the other Loan Documents.  In no event shall any Participant under anysuch participation have any right to approve any amendment or waiver of anyprovision of any Loan Document, or any consent to any departure by any LoanParty therefrom, except to the extent that such amendment, waiver or consentwould increase commitments, reduce the principal of, or interest on, the Loansor any fees payable hereunder, postpone the date of the final maturity orscheduled amortization of the Loans or release any Guarantor (other than inconnection with permitted Asset Sales) or all or substantially all of theCollateral, in each case to the extent subject to such participation.  The Borrowers agree that if amountsoutstanding under this Agreement and the Loans are due or unpaid, or shall havebeen declared or shall have become due and payable upon the occurrence of anEvent of Default, each Participant shall, to the maximum extent permitted byapplicable law, be deemed to have the right of setoff in respect of itsparticipating interest in amounts owing under this Agreement to the same extentas if the amount of its participating interest were owing directly to it as aLender under this Agreement, provided that, in purchasing suchparticipating interest, such Participant shall be deemed to have agreed toshare with the Lenders the proceeds thereof as provided in Section 10.7(a) asfully as if it were a Lender hereunder. The Borrowers also agree that each Participant shall be entitled to thebenefits of Sections 2.16, 2.17 and 2.18 with respect to its participation inthe Commitments and the Loans outstanding from time to time as if it was aLender; provided that, in the case of Section 2.17, suchParticipant shall have complied with the requirements of said Section and provided,further, that no Participant shall be entitled to receive any greateramount pursuant to any such Section than the transferor Lender would havebeen entitled to receive in respect of the amount of the participationtransferred by such transferor Lender to such Participant had no such transferoccurred.

###  

### (c)                                  AnyLender (an “Assignor”) may, in accordance with applicable law, at anytime and from time to time assign to any Lender or any affiliate thereof or,with the consent of the Parent Borrower (except in the case of the assignmentof a Term Loan, in which case only notice is required) and the AdministrativeAgent or the Canadian Agent, as well as the U.S. Issuing Lender or the CanadianIssuing Lender, in the case of the assignment of the Canadian Commitments(which, in each case, shall not be unreasonably withheld or delayed), to anadditional bank, financial institution or other entity (an “Assignee”)all or any part of its rights and obligations under this Agreement pursuant toan Assignment and Acceptance, executed by such Assignee, such Assignor and anyother Person whose consent is required pursuant to this paragraph, anddelivered to the Administrative Agent or the Canadian Agent, as appropriate,for its acceptance and recording in its Register; provided that no suchassignment to an Assignee (other than any Lender or any affiliate thereof)shall, unless otherwise agreed by the Parent Borrower and the AdministrativeAgent or the Canadian Agent, as appropriate, be in an aggregate principalamount (treating multiple, simultaneous assignments to two or more ApprovedFunds managed by the same investment

 

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### advisor as a single assignment)of less than (i) $1,000,000, in the case of the Term Loans or (ii) $2,500,000,in the case of the U.S. Revolving Loans, unless the entire Commitments and Loansand other interests of the assigning Lender (and of all Lenders which areApproved Funds managed by the same investment advisor as the assigning Lender)are so assigned; provided, further, that, unless otherwise agreedto by the Parent Borrower and the Administrative Agent, no Canadian Lender andno U.S. Lender having a Related Canadian Lender may assign its Commitment inwhole or in part unless the Assignee has a Related bank, financial institutionor other entity which simultaneously assumes any obligations of the RelatedLender of the transferor Lender with respect to the assigned Commitment; and provided,further, that no such assignment of all or any part of the CanadianCommitments or the Canadian Extensions of Credit shall be made in favor of any Personwhich is a non-resident of Canada for the purpose of Section 212 of theIncome Tax Act (Canada).  Any suchassignment need not be ratable as among the Facilities other than, unlessotherwise agreed to by the Parent Borrower and the Administrative Agent, theCanadian Subfacility.  Upon suchexecution, delivery, acceptance and recording, from and after the effectivedate determined pursuant to such Assignment and Acceptance, (x) the Assigneethereunder shall be a party hereto and, to the extent provided in suchAssignment and Acceptance, have the rights and obligations of a Lenderhereunder with a Commitment and/or Loans as set forth therein, and (y) theAssignor thereunder shall, to the extent provided in such Assignment andAcceptance, be released from its obligations under this Agreement (and, in thecase of an Assignment and Acceptance covering all of an Assignor’s rights andobligations under this Agreement, such Assignor shall cease to be a partyhereto).  The parties to each suchassignment shall execute and deliver to the Administrative Agent or theCanadian Agent, as appropriate, an Assignment and Acceptance (such Assignmentand Acceptance to be (A) electronically executed and delivered to theAdministrative Agent or the Canadian Agent, as appropriate, via an electronicsettlement system then acceptable to the Administrative Agent or the CanadianAgent, as appropriate, which shall initially be the settlement system ofClearPar, LLC, or (B) manually executed and delivered together with aprocessing and recordation fee of $3,500) and the assignee, if it shall not bea Lender immediately prior to the assignment, shall deliver to theAdministrative Agent or the Canadian Agent, as appropriate, an AdministrativeQuestionnaire and applicable tax form(s).  Notwithstanding any provision of this Section 10.6,the consent of the Parent Borrower shall not be required for any assignmentthat occurs when an Event of Default shall have occurred and becontinuing.  The Canadian Agent shall, onbehalf of the Canadian Borrower, maintain at its address referred to in Section 10.2a copy of each Assignment and Acceptance delivered to it and a Register for therecordation of the names and addresses of the Canadian Lenders and theCommitment of, and the principal amount of the Loans owing to, each CanadianLender from time to time.

###  

### (d)                                 TheAdministrative Agent shall, on behalf of the Parent Borrower, maintain at itsaddress referred to in Section 10.2 a copy of each Assignment andAcceptance delivered to it and a register (the “Register”) for therecordation of the names and addresses of the Lenders and the Commitment of,and the principal amount of the Loans owing to, each Lender from time totime.  The entries in the Register shallbe conclusive, in the absence of manifest error, and the Parent Borrower, eachother Loan Party, the Administrative Agent and the Lenders shall treat eachPerson whose name is recorded in the Register as the owner of the Loans and anyNotes evidencing the Loans recorded therein for all purposes of thisAgreement.  Any assignment of any Loan,whether or not evidenced by a Note, shall be effective only upon appropriateentries with respect thereto being made in the Register (and each Note shallexpressly so provide).

###  

### (e)                                  Uponits receipt of an Assignment and Acceptance executed by an Assignor, anAssignee and any other Person whose consent is required by Section 10.6(c),together with payment to the Administrative Agent or the Canadian Agent, in thecase of the assignment of the Canadian Commitments, of a registration andprocessing fee of $3,500, the Administrative Agent or the Canadian Agent, asappropriate, shall (i) promptly accept such Assignment and Acceptance and (ii) recordthe information contained therein in the Register on the effective date determinedpursuant thereto.

 

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### (f)                                    Foravoidance of doubt, the parties to this Agreement acknowledge that the provisionsof this Section 10.6 concerning assignments of Loans and Notes relate onlyto absolute assignments and that such provisions do not prohibit assignmentscreating security interests, including any pledge or assignment by a Lender ofany Loan or Note to any Federal Reserve Bank in accordance with applicable law.

###  

### (g)                                 TheParent Borrower, upon receipt of written notice from the relevant Lender,agrees to issue Notes to any Lender requiring Notes to facilitate transactionsof the type described in paragraph (f) above.

###  

## 10.7                           Adjustments; Set-off.

 

### (a)                                  Exceptto the extent that this Agreement expressly provides for payments to beallocated to a particular Lender (other than any Canadian Lender) or to theLenders under a particular Facility (other than the Canadian Subfacility), ifany Lender (a “Benefited Lender”) shall, at any time after the Loans andother amounts payable hereunder shall immediately become due and payablepursuant to Section 8, receive any payment of all or part of theObligations owing to it, or receive any collateral in respect thereof (whethervoluntarily or involuntarily, by set-off, pursuant to events or proceedings ofthe nature referred to in Section 8.1(f), or otherwise), in a greaterproportion than any such payment to or collateral received by any other Lender,if any, in respect of the Obligations owing to such other Lender, suchBenefited Lender shall purchase for cash from the other Lenders a participatinginterest in such portion of the Obligations owing to each such other Lender, orshall provide such other Lenders with the benefits of any such collateral, as shallbe necessary to cause such Benefited Lender to share the excess payment orbenefits of such collateral ratably with each of the Lenders; provided, however,that if all or any portion of such excess payment or benefits is thereafterrecovered from such Benefited Lender, such purchase shall be rescinded, and thepurchase price and benefits returned, to the extent of such recovery, but withoutinterest.

###  

### (b)                                 Inaddition to any rights and remedies of the Lenders provided by law, each Lendershall have the right, without prior notice to any Borrower, any such noticebeing expressly waived by the Borrowers to the extent permitted by applicablelaw, upon any amount becoming due and payable after all applicable graceperiods by the Borrowers hereunder (whether at the stated maturity, byacceleration or otherwise), to set off and appropriate and apply against suchamount any and all deposits (general or special, time or demand, provisional orfinal), in any currency, and any other credits, indebtedness or claims, in anycurrency, in each case whether direct or indirect, absolute or contingent,matured or unmatured, at any time held or owing by such Lender or any branch oragency thereof to or for the credit or the account of any Borrower, as the casemay be.  Each Lender agrees promptly tonotify the Parent Borrower and the Administrative Agent after any such setoffand application made by such Lender, provided that the failure to givesuch notice shall not affect the validity of such setoff and application.

###  

## 10.8                           Counterparts.  This Agreement may be executed by one or moreof the parties to this Agreement on any number of separate counterparts, andall of said counterparts taken together shall be deemed to constitute one andthe same instrument.  Delivery of an executedsignature page of this Agreement by facsimile transmission shall beeffective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signedby all the parties shall be lodged with the Parent Borrower, the AdministrativeAgent and the Canadian Agent.

 

## 10.9                           Severability.  Any provision of this Agreement that isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof, and any such prohibition orunenforceability

 

110

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## in any jurisdiction shall notinvalidate or render unenforceable such provision in any other jurisdiction.

 

## 10.10                     Integration.  This Agreement and the other Loan Documentsrepresent the agreement of the Borrowers, the Administrative Agent and theLenders with respect to the subject matter hereof, and there are no promises,undertakings, representations or warranties by any Loan Party, theAdministrative Agent or any Lender relative to subject matter hereof notexpressly set forth or referred to herein or in the other Loan Documents.

 

## 10.11                     GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONSOF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  NOTWITHSTANDING THE FOREGOING, HOWEVER, ALLCLAIMS AND RIGHTS OF ACTION OF THE CANADIAN LENDERS AGAINST THE CANADIANBORROWER OR ANY OF THEM HEREUNDER OR UNDER THE CANADIAN LOAN DOCUMENTS SHALL BEGOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THEPROVINCE OF ONTARIO (EXCLUDING ANY PROVISION THEREOF WHICH MAY MAKE THELAWS OF ANOTHER JURISDICTION APPLICABLE) AND THE LAWS OF CANADA APPLICABLETHEREIN.

 

## 10.12                     Submissionto Jurisdiction; Waivers.  EachBorrower hereby irrevocably and unconditionally:

 

(a)                                  if it is a U.S.Borrower or the Canadian Borrower, submits for itself and its property in anylegal action or proceeding relating to this Agreement and the other LoanDocuments to which it is a party, or for recognition and enforcement of anyjudgment in respect thereof, to the non-exclusive general jurisdiction of thecourts of the State of New York, the courts of the United States for theSouthern District of New York, and appellate courts from any thereof; and,if it is the Canadian Borrower, submits for itself and its property in anylegal or proceeding relating to this Agreement and the Canadian Loan Documentsto which it is a party, or for recognition and enforcement of any judgment inrespect thereof, to the non-exclusive general jurisdiction of the courts of theProvince of Ontario;

 

(b)                                 consents that any suchaction or proceeding may be brought in such courts and waives any objectionthat it may now or hereafter have to the venue of any such action or proceedingin any such court or that such action or proceeding was brought in aninconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that serviceof process in any such action or proceeding may be effected by mailing a copythereof by registered or certified mail (or any substantially similar form ofmail), postage prepaid, to the Parent Borrower, as the case may be at itsaddress set forth in Section 10.2 or at such other address of which theAdministrative Agent (and in the case of the Canadian Borrower, the CanadianAgent) shall have been notified pursuant thereto;

 

(d)                                 agrees that nothingherein shall affect the right to effect service of process in any other mannerpermitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)                                  waives, to themaximum extent not prohibited by law, any right it may have to claim or recoverin any legal action or proceeding referred to in this Section any special,exemplary, punitive or consequential damages.

 

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## 10.13                     Acknowledgements.  Each Borrower hereby acknowledges that:

 

(a)                                  it has been advisedby counsel in the negotiation, execution and delivery of this Agreement and theother Loan Documents;

 

(b)                                 neither theAdministrative Agent, the Canadian Agent nor any Lender has any fiduciaryrelationship with or duty to any Borrower arising out of or in connection withthis Agreement or any of the other Loan Documents, and the relationship betweenAdministrative Agent, the Canadian Agent and Lenders, on one hand, and theBorrowers, on the other hand, in connection herewith or therewith is solelythat of debtor and creditor; and

 

(c)                                  no joint venture iscreated hereby or by the other Loan Documents or otherwise exists by virtue ofthe transactions contemplated hereby among the Lenders or among the ParentBorrower and the Lenders.

 

## 10.14                     Confidentiality.  Each of the Administrative Agent, theCanadian Agent and each Lender agrees to keep confidential all non-publicinformation provided to it by any Loan Party pursuant to this Agreement that isdesignated by such Loan Party as confidential; provided that nothingherein shall prevent the Administrative Agent, the Canadian Agent or any Lenderfrom disclosing any such information (a) to the Administrative Agent, theCanadian Agent, any other Lender or any affiliate of any Lender, (b) toany Transferee or prospective Transferee that agrees to comply with theprovisions of this Section, (c) to its employees, directors, agents,attorneys, accountants and other professional advisors or those of any of itsaffiliates, (d) upon the request or demand of any Governmental Authority, (e) inresponse to any order of any court or other Governmental Authority or as mayotherwise be required pursuant to any Requirement of Law, (f) if requestedor required to do so in connection with any litigation or similar proceeding, (g) thathas been publicly disclosed, (h) to the National Association of InsuranceCommissioners or any similar organization or any nationally recognized ratingagency that requires access to information about a Lender’s investmentportfolio in connection with ratings issued with respect to such Lender, (i) inconnection with the exercise of any remedy hereunder or under any other LoanDocument or (j) to any direct or indirect contractual counterparty in swapagreements or such contractual counterparty’s advisor (so long as suchcontractual counterparty agrees to be bound by the provisions of this Section 10.14).

 

## 10.15                     Jointand Several Obligations.  All of theobligations of the U.S. Borrowers hereunder shall be joint and several; provided,however, that in no event shall the maximum liability of any U.S.Borrower in respect of Obligations arising out of Loans and other extensions ofcredit made to the other U.S. Borrowers exceed the greater of (a) theactual loan to such U.S. Borrower and (b) the maximum amount which can beguaranteed by such U.S. Borrower under applicable Federal and state lawsrelating to the insolvency of debtors.

 

## 10.16                     WAIVERS OF JURY TRIAL.  THE BORROWERS, THE ADMINISTRATIVE AGENT ANDTHE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANYLEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

## 10.17                     CanadianAmendments and Waivers.  Neither theCanadian Loan Documents nor any terms in respect of the Canadian Commitmentshereof or thereof may be amended, supplemented or modified without the priorwritten consent of the Canadian Agent and the Canadian Lenders.

 

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## 10.18                     Judgment Currency.

 

### (a)                                  Borrower’sobligation hereunder and under the other Loan Documents to make payments in theapplicable Approved Currency (pursuant to such obligation, the “ObligationCurrency”) shall not be discharged or satisfied by any tender or recoverypursuant to any judgment expressed in or converted into any currency other thanthe Obligation Currency, except to the extent that such tender or recoveryresults in the effective receipt by the Administrative Agent or the respectiveLender of the full amount of the Obligation Currency expressed to be payable tothe Administrative Agent or such Lender under this Agreement or the other LoanDocuments.  If, for the purpose ofobtaining or enforcing judgment against Borrower in any court or in anyjurisdiction, it becomes necessary to convert into or from any currency otherthan the Obligation Currency (such other currency being hereinafter referred toas the “Judgment Currency”) an amount due in the Obligation Currency, theconversion shall be made at the Relevant Currency Equivalent, and in the caseof other currencies, the rate of exchange (as quoted by the AdministrativeAgent or if the Administrative Agent does not quote a rate of exchange on suchcurrency, by a known dealer in such currency designated by the AdministrativeAgent) determined, in each case, as of the Business Day immediately precedingthe day on which the judgment is given (such Business Day being hereinafterreferred to as the “Judgment Currency Conversion Date”).

###  

### (b)                                 Ifthere is a change in the rate of exchange prevailing between the JudgmentCurrency Conversion Date and the date of actual payment of the amount due,Borrower covenants and agrees to pay, or cause to be paid, such additionalamounts, if any (but in any event not a lesser amount) as may be necessary toensure that the amount paid in the Judgment Currency, when converted at therate of exchange prevailing on the date of payment, will produce the amount ofthe Obligation Currency which could have been purchased with the amount ofJudgment Currency stipulated in the judgment or judicial award at the rate ofexchange prevailing on the Judgment Currency Conversion Date.

###  

### (c)                                  Forpurposes of determining the Relevant Currency Equivalent or any other rate ofexchange for this Section 10.18, such amounts shall include any premiumand costs payable in connection with the purchase of the Obligation Currency.

###  

## 10.19                     USA PATRIOT Act Notice.  Each Lender that is subject to the Act (ashereinafter defined) and the Administrative Agent (for itself and not on behalfof any Lender) hereby notifies the Borrowers that pursuant to the requirementsof the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,2001)) (the “Act”), it is required to obtain, verify and recordinformation that identifies the Borrowers, which information includes the name,address and tax identification number of the Borrowers and other informationregarding the Borrowers that will allow such Lender or the AdministrativeAgent, as applicable, to identify the Borrowers in accordance with the Act.  This notice is given in accordance with therequirements of the Act and is effective as to the Lenders and the AdministrativeAgent.

 

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be duly executed anddelivered by their proper and duly authorized officers as of the day and yearfirst above written.

 
|   | SAFETY  PRODUCTS HOLDINGS, INC.                                                                                                                           |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Benjamin Hochberg |   |
|   |                                                                                                                                                      | Name: Benjamin Hochberg |
|   |                                                                                                                                                      | Title: Vice President |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | SPH  ACQUISITION LLC                                                                                                                                      |
|   | (the rights  and obligations of which hereunder                                                                                                           |
|   | are to be  assumed by                                                                                                                                     |
|   | NORCROSS  SAFETY PRODUCTS, L.L.C.                                                                                                                         |
|   | NORTH SAFETY  PRODUCTS INC.                                                                                                                               |
|   |                          and |
|   | MORNING  PRIDE MANUFACTURING L.L.C.)                                                                                                                      |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Benjamin Hochberg |   |
|   |                                                                                                                                                      | Name: Benjamin Hochberg |
|   |                                                                                                                                                      | Title: Vice President |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | CREDIT  SUISSE, acting through its Cayman Islands  Branch, as Administrative Agent and as a Lender                                                        |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Bill O’ Daly |   |
|   |                                                                                                                                                      | Name: Bill O’ Daly |
|   |                                                                                                                                                      | Title: Director |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Cassandra Droogan |   |
|   |                                                                                                                                                      | Name: Cassandra Droogan |
|   |                                                                                                                                                      | Title: Associate |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | CREDIT  SUISSE, TORONTO BRANCH, as Canadian  Agent and as a Canadian Lender                                                                               |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Bruce F. Wetherby |   |
|   |                                                                                                                                                      | Name: Bruce F. Wetherby |
|   |                                                                                                                                                      | Title: Director and Principal Officer |
|   |                                                                                                                                                      |
|   |                                                                                                                                                      |
|   | By:                                                                                                                                                       | /s/ Duncan Webb |   |
|   |                                                                                                                                                      | Name: Duncan Webb |
|   |                                                                                                                                                      | Title: |

 

----

 
|   | BANK OF  AMERICA, N.A., as Syndication Agent and as a Lender                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Peter Vander Horst |   |
|   |                                                                                                                     | Name: Peter Vander Horst |
|   |                                                                                                                     | Title: Principal |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | GMAC  COMMERCIAL FINANCE LLC, as Documentation  Agent and as a Lender                                                    |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ W. Wakefield Smith |   |
|   |                                                                                                                     | Name: W. Wakefield Smith |
|   |                                                                                                                     | Title: Director |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | LASALLE BANK NATIONAL ASSOCIATION, as                                                                                    |
|   |               Documentation  Agent and as a Lender |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Oscar D. Johnson Jr |   |
|   |                                                                                                                     | Name: Oscar D. Johnson Jr |
|   |                                                                                                                     | Title: First Vice President |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | US BANK NATIONAL ASSOCIATION, as                                                                                         |
|   |               Documentation  Agent and as a Lender |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Matthew J. Schulz |   |
|   |                                                                                                                     | Name: Matthew J. Schulz |
|   |                                                                                                                     | Title: Vice President |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | GENERAL ELECTRIC CAPITAL CORPORATION, as Lender                                                                          |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Julia R. Meade |   |
|   |                                                                                                                     | Name: Julia R. Meade |
|   |                                                                                                                     | Title: Duly Authorized Signatory |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | GMAC COMMERCIAL FINANCE CORPORATION –                                                                               |
|   | CANADA, as Canadian Lender                                                                                               |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ W. Wakefield Smith |   |
|   |                                                                                                                     | Name: W. Wakefield Smith |
|   |                                                                                                                     | Title: Director |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | GE CANADA ASSET FINANCING, INC., as Canadian Lender                                                                      |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ [ILLEGIBLE] |   |
|   |                                                                                                                     | Name: |
|   |                                                                                                                     | Title: Duly Authorized Signatory |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | ABN AMRO N.V., Canada Branch, as Canadian Lender                                                                         |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Darcy Mack |   |
|   |                                                                                                                     | Name: Darcy Mack |
|   |                                                                                                                     | Title: First Vice President |
|   |                                                                                                                     |
|   |                                                                                                                     |
|   | By:                                                                                                                      | /s/ Barry Walsh |   |
|   |                                                                                                                     | Name: Barry Walsh |
|   |                                                                                                                     | Title: Vice President |

 

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[OTHER LENDERS]

 

[OTHER CANADIAN LENDERS]

 

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Annex A

 

PRICING GRIDFOR U.S. REVOLVING LOANS, U.S. SWINGLINE LOANSAND CANADIAN LOANS 

 
| **Consolidated Total  Leverage Ratio of the  Parent Borrower** | ** ** | **Applicable Margin  for Eurodollar Loans  and Bankers’  Acceptances or B/A  Equivalent Loans** | ** ** | **Applicable Margin  for ABR Loans and  C$Prime Loans** | ** ** | **Commitment Fee  Rate** | ** ** |
|----------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|--------------------------|------------|
| X >4.25x                                                    |       | 2.50                                                                                                 | %          | 1.50                                                    | %          | 0.50                     | %          |
| 4.25x> X >3.25x                                          |       | 2.25                                                                                                 | %          | 1.25                                                    | %          | 0.50                     | %          |
| X< 3.25x                                                    |       | 2.00                                                                                                 | %          | 1.00                                                    | %          | 0.375                    | %          |

 

Changes in the Applicable Margin resulting from changes in theConsolidated Total Leverage Ratio of the Parent Borrower shall become effectiveon the date (the “Adjustment Date”) on which financial statements aredelivered to the Lenders pursuant to Section 6.1(a) (but in any eventnot later than the 45th day after the end of each of the first three quarterlyperiods of each fiscal year or the 90th day after the end of each fiscal year,as the case may be) and shall remain in effect until the next change to beeffected pursuant to this paragraph; provided that the foregoing changesin the Applicable Margin shall not be effective until at least one full fiscalquarter of the Parent Borrower after the Closing Date has been completed.  If any financial statements referred to aboveare not delivered within the time periods specified above, then, until suchfinancial statements are delivered the Consolidated Total Leverage Ratio of theParent Borrower as at the end of the fiscal period that would have been coveredthereby shall for the purposes of this definition be deemed to be greater than4.0 to 1.0.  In addition, at all timeswhile an Event of Default shall have occurred and be continuing, the ConsolidatedTotal Leverage Ratio of the Parent Borrower shall for the purposes of thisdefinition be deemed to be greater than 4.0 to 1.0.  Each determination of the Consolidated TotalLeverage Ratio of the Parent Borrower pursuant to this pricing grid shall bemade with respect to (or, in the case of Consolidated Total Debt, as at the endof) the period of four consecutive fiscal quarters of the Parent Borrowerending at the end of the period covered by the relevant financial statements.

 

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