Exhibit 10.1




 





 


ABL CREDIT AGREEMENT


 


among


 


SMURFIT-STONE CONTAINER CORPORATION,


 


SMURFIT-STONE
CONTAINER ENTERPRISES, INC.,


 


CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY
HERETO,


 


THE LENDERS PARTY HERETO,


 


DEUTSCHE BANK AG NEW YORK BRANCH,


 


as ADMINISTRATIVE AGENT and SECURITY AGENT,


 


and


 


DEUTSCHE BANK AG NEW YORK BRANCH,


 


JPMORGAN CHASE BANK, N.A.


 


and


 


GENERAL ELECTRIC CAPITAL CORPORATION,


 


as CO-COLLATERAL AGENTS


 






 


Dated as of April 15, 2010


 






 


DEUTSCHE BANK SECURITIES INC.,


 


J.P. MORGAN SECURITIES INC.,


 


GE CAPITAL MARKETS, INC.


 


BANC OF AMERICA SECURITIES, LLC,


 


and


 


WELLS FARGO CAPITAL FINANCE, LLC


 


as JOINT LEAD ARRANGERS and JOINT BOOK-RUNNERS,


 


J.P. MORGAN SECURITIES INC. as SYNDICATION AGENT,


 


GENERAL ELECTRIC CAPITAL CORPORATION,


 


BANC OF AMERICA SECURITIES, LLC,


 


and


 


WELLS FARGO CAPITAL FINANCE, LLC


 


as DOCUMENTATION AGENTS


 


and


 


THE BANK OF NOVA SCOTIA


 


and


 


REGIONS BANK


 


as SENIOR MANAGING AGENTS




 





 

















 


Table
of Contents


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  1.01.

  	
  Defined Terms

  	
   

  	
  2

  
	
  1.02.

  	
  References to “UCC”

  	
   

  	
  74

  
	
  1.03.

  	
  Terms Generally

  	
   

  	
  74

  
	
  1.04.

  	
  Pro Forma Calculations

  	
   

  	
  75

  
	
  1.05.

  	
  Accounting Terms; GAAP

  	
   

  	
  75

  
	
  1.06.

  	
  Interpretation Québec

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01.

  	
  The Commitments

  	
   

  	
  76

  
	
  2.02.

  	
  Minimum Amount of Each Borrowing

  	
   

  	
  81

  
	
  2.03.

  	
  Notice of Borrowing

  	
   

  	
  81

  
	
  2.04.

  	
  Disbursement of Funds

  	
   

  	
  82

  
	
  2.05.

  	
  Notes

  	
   

  	
  85

  
	
  2.06.

  	
  Conversions

  	
   

  	
  86

  
	
  2.07.

  	
  Pro Rata Borrowings

  	
   

  	
  87

  
	
  2.08.

  	
  Interest

  	
   

  	
  87

  
	
  2.09.

  	
  Interest Periods

  	
   

  	
  89

  
	
  2.10.

  	
  Increased Costs, Illegality, etc.

  	
   

  	
  90

  
	
  2.11.

  	
  Compensation

  	
   

  	
  92

  
	
  2.12.

  	
  Lending Offices and Affiliate Lenders for Loans in
  Available Currency

  	
   

  	
  92

  
	
  2.13.

  	
  Replacement of Lenders

  	
   

  	
  93

  
	
  2.14.

  	
  Incremental Commitments

  	
   

  	
  94

  
	
  2.15.

  	
  Interest Act (Canada); Criminal Rate of Interest; Nominal
  Rate of Interest

  	
   

  	
  96

  
	
  2.16.

  	
  Provisions Regarding Bankers’ Acceptances, Drafts, etc.

  	
   

  	
  98

  
	
  2.17.

  	
  Holdings as Agent for Borrowers

  	
   

  	
  98

  
	
  2.18.

  	
  Defaulting
  Lenders

  	
   

  	
  98

  
	
  2.19.

  	
  Extensions of Loans and Commitments

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  
	
  3.01.

  	
  Letters of Credit

  	
   

  	
  105

  
	
  3.02.

  	
  Maximum Letter of Credit Outstandings; Currencies Final
  Maturities

  	
   

  	
  107

  
	
  3.03.

  	
  Letter of Credit Requests; Minimum Stated Amount

  	
   

  	
  107

  
	
  3.04.

  	
  Letter of Credit Participations

  	
   

  	
  108

  
	
  3.05.

  	
  Agreement to Repay Letter of Credit Drawings

  	
   

  	
  110

  
	
  3.06.

  	
  Increased Costs

  	
   

  	
  112

  
	
  3.07.

  	
  Extended Commitments

  	
   

  	
  112

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  COMMITMENT FEES; REDUCTIONS OF COMMITMENT

  	
   

  	
  113

  



 


i

















 


Table of Contents

(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  4.01.

  	
  Fees

  	
   

  	
  113

  
	
  4.02.

  	
  Voluntary Termination of Unutilized Commitments

  	
   

  	
  114

  
	
  4.03.

  	
  Mandatory Reduction of Commitments

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  PREPAYMENTS; PAYMENTS; TAXES

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  
	
  5.01.

  	
  Voluntary Prepayments

  	
   

  	
  114

  
	
  5.02.

  	
  Mandatory Repayments; Cash Collateralization

  	
   

  	
  115

  
	
  5.03.

  	
  Method and Place of Payment; Deposits and Accounts

  	
   

  	
  118

  
	
  5.04.

  	
  Net Payments; Taxes

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  CONDITIONS PRECEDENT TO THE CLOSING DATE AND TO THE FUNDING
  DATE

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  
	
  6.01.

  	
  Conditions Precedent to the Closing Date

  	
   

  	
  126

  
	
  6.02.

  	
  Conditions Precedent to the Funding Date

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

  	
   

  	
  132

  
	
   

  	
   

  	
   

  	
   

  
	
  7.01.

  	
  No Default; Representations and Warranties

  	
   

  	
  132

  
	
  7.02.

  	
  Notice of Borrowing; Letter of Credit Request

  	
   

  	
  132

  
	
  7.03.

  	
  Borrowing Base and Commitment Limitations

  	
   

  	
  132

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  133

  
	
   

  	
   

  	
   

  	
   

  
	
  8.01.

  	
  Organization; Powers

  	
   

  	
  133

  
	
  8.02.

  	
  Authorization; Absence of Conflicts

  	
   

  	
  133

  
	
  8.03.

  	
  Enforceability

  	
   

  	
  134

  
	
  8.04.

  	
  Governmental Approvals

  	
   

  	
  134

  
	
  8.05.

  	
  Financial
  Statements

  	
   

  	
  134

  
	
  8.06.

  	
  No Material Adverse Effect

  	
   

  	
  135

  
	
  8.07.

  	
  Title to Properties; Possession Under Leases

  	
   

  	
  135

  
	
  8.08.

  	
  Subsidiaries

  	
   

  	
  135

  
	
  8.09.

  	
  Litigation; Compliance with Laws

  	
   

  	
  135

  
	
  8.10.

  	
  Federal Reserve Regulations

  	
   

  	
  136

  
	
  8.11.

  	
  Investment Company Act

  	
   

  	
  136

  
	
  8.12.

  	
  Tax Returns

  	
   

  	
  136

  
	
  8.13.

  	
  No Material Misstatements

  	
   

  	
  136

  
	
  8.14.

  	
  Employee Benefit Plans

  	
   

  	
  137

  
	
  8.15.

  	
  Environmental
  and Safety Matters

  	
   

  	
  138

  
	
  8.16.

  	
  Solvency

  	
   

  	
  139

  
	
  8.17.

  	
  Security Documents

  	
   

  	
  139

  
	
  8.18.

  	
  Labor Matters

  	
   

  	
  141

  



 


ii

















 


Table of Contents

(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  8.19.

  	
  Location of Real Property

  	
   

  	
  141

  
	
  8.20.

  	
  Patents, Trademarks, etc.

  	
   

  	
  141

  
	
  8.21.

  	
  Borrowing Base Calculation

  	
   

  	
  142

  
	
  8.22.

  	
  Accounts

  	
   

  	
  142

  
	
  8.23.

  	
  Inventory

  	
   

  	
  142

  
	
  8.24.

  	
  Anti-Terrorism Law

  	
   

  	
  142

  
	
  8.25.

  	
  Own Enquiries

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01.

  	
  Existence; Businesses and Properties

  	
   

  	
  143

  
	
  9.02.

  	
  Insurance

  	
   

  	
  143

  
	
  9.03.

  	
  Payment of Taxes

  	
   

  	
  144

  
	
  9.04.

  	
  Financial Statements, Reports, etc.

  	
   

  	
  144

  
	
  9.05.

  	
  Litigation and Other Notices

  	
   

  	
  147

  
	
  9.06.

  	
  Maintaining Records; Access to Properties and Inspections

  	
   

  	
  148

  
	
  9.07.

  	
  Use of Proceeds

  	
   

  	
  148

  
	
  9.08.

  	
  Compliance with Law

  	
   

  	
  149

  
	
  9.09.

  	
  Further Assurances

  	
   

  	
  149

  
	
  9.10.

  	
  Information Regarding Collateral; Deposit Accounts

  	
   

  	
  150

  
	
  9.11.

  	
  Material Contracts

  	
   

  	
  151

  
	
  9.12.

  	
  Environmental Matters

  	
   

  	
  151

  
	
  9.13.

  	
  Certain Post-Funding Collateral Obligations

  	
   

  	
  152

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE COVENANTS

  	
   

  	
  152

  
	
   

  	
   

  	
   

  	
   

  
	
  10.01.

  	
  Indebtedness

  	
   

  	
  152

  
	
  10.02.

  	
  Liens

  	
   

  	
  154

  
	
  10.03.

  	
  Sale/Leaseback Transactions

  	
   

  	
  156

  
	
  10.04.

  	
  Investments, Loans and Advances

  	
   

  	
  157

  
	
  10.05.

  	
  Mergers, Consolidations, Sales of Assets and Acquisitions

  	
   

  	
  158

  
	
  10.06.

  	
  Restricted Payments

  	
   

  	
  160

  
	
  10.07.

  	
  Transactions with Stockholders and Affiliates

  	
   

  	
  160

  
	
  10.08.

  	
  Business

  	
   

  	
  161

  
	
  10.09.

  	
  Limitations on Debt Prepayments

  	
   

  	
  161

  
	
  10.10.

  	
  Amendment of Certain Documents

  	
   

  	
  161

  
	
  10.11.

  	
  Limitation on Dispositions of Stock of Subsidiaries

  	
   

  	
  162

  
	
  10.12.

  	
  Restrictions on Ability of Subsidiaries to Pay Dividends

  	
   

  	
  162

  
	
  10.13.

  	
  Disposition of Collateral and Other Assets

  	
   

  	
  163

  
	
  10.14.

  	
  Fiscal Year

  	
   

  	
  163

  
	
  10.15.

  	
  Material Subsidiaries

  	
   

  	
  163

  
	
  10.16.

  	
  Consolidated Fixed Charge Coverage Ratio

  	
   

  	
  164

  
	
  10.17.

  	
  No Additional Deposit Accounts; etc.

  	
   

  	
  164

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT

  	
   

  	
  164

  



 


iii

















 


Table of Contents

(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  11.01.

  	
  Events of Default

  	
   

  	
  164

  
	
  11.02.

  	
  Application of Proceeds

  	
   

  	
  168

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  THE AGENTS

  	
   

  	
  171

  
	
   

  	
   

  	
   

  	
   

  
	
  12.01.

  	
  Appointment

  	
   

  	
  171

  
	
  12.02.

  	
  Nature of Duties

  	
   

  	
  172

  
	
  12.03.

  	
  Lack of Reliance on the Agents

  	
   

  	
  172

  
	
  12.04.

  	
  Certain Rights of the Administrative Agent

  	
   

  	
  172

  
	
  12.05.

  	
  Reliance

  	
   

  	
  173

  
	
  12.06.

  	
  Indemnification

  	
   

  	
  173

  
	
  12.07.

  	
  Agents in their Individual Capacities

  	
   

  	
  173

  
	
  12.08.

  	
  Holders

  	
   

  	
  173

  
	
  12.09.

  	
  Resignation and Removal of Agents

  	
   

  	
  174

  
	
  12.10.

  	
  Collateral Matters

  	
   

  	
  176

  
	
  12.11.

  	
  Delivery of Information

  	
   

  	
  177

  
	
  12.12.

  	
  Quebec Security

  	
   

  	
  177

  
	
  12.13.

  	
  Co-Collateral Agents

  	
   

  	
  177

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  MISCELLANEOUS

  	
   

  	
  178

  
	
   

  	
   

  	
   

  	
   

  
	
  13.01.

  	
  Payment of Expenses, etc.

  	
   

  	
  178

  
	
  13.02.

  	
  Right of Setoff

  	
   

  	
  180

  
	
  13.03.

  	
  Notices

  	
   

  	
  181

  
	
  13.04.

  	
  Benefit of Agreement; Assignments; Participations

  	
   

  	
  181

  
	
  13.05.

  	
  No Waiver; Remedies Cumulative

  	
   

  	
  184

  
	
  13.06.

  	
  Payments Pro Rata

  	
   

  	
  184

  
	
  13.07.

  	
  Computations

  	
   

  	
  185

  
	
  13.08.

  	
  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
  JURY TRIAL

  	
   

  	
  185

  
	
  13.09.

  	
  Counterparts

  	
   

  	
  186

  
	
  13.10.

  	
  Effectiveness

  	
   

  	
  187

  
	
  13.11.

  	
  Headings Descriptive

  	
   

  	
  187

  
	
  13.12.

  	
  Amendment or Waiver; etc.

  	
   

  	
  187

  
	
  13.13.

  	
  Survival; Continuing Obligation

  	
   

  	
  190

  
	
  13.14.

  	
  Domicile of Loans

  	
   

  	
  190

  
	
  13.15.

  	
  Register

  	
   

  	
  190

  
	
  13.16.

  	
  Confidentiality

  	
   

  	
  190

  
	
  13.17.

  	
  Patriot Act

  	
   

  	
  191

  
	
  13.18.

  	
  OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENT;
  ETC.

  	
   

  	
  191

  
	
  13.19.

  	
  Waiver of Sovereign Immunity

  	
   

  	
  193

  
	
  13.20.

  	
  Judgment Currency

  	
   

  	
  193

  
	
  13.21.

  	
  Qualified Secured Hedging Agreements and Qualified Secured
  Cash Management Agreements

  	
   

  	
  194

  



 


iv

















 


Table of Contents

(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  NATURE OF OBLIGATIONS

  	
   

  	
  195

  
	
   

  	
   

  	
   

  	
   

  
	
  14.01.

  	
  Nature of Obligations

  	
   

  	
  195

  
	
  14.02.

  	
  Independent Obligation

  	
   

  	
  197

  
	
  14.03.

  	
  Authorization

  	
   

  	
  197

  
	
  14.04.

  	
  Reliance

  	
   

  	
  197

  
	
  14.05.

  	
  Contribution; Subrogation

  	
   

  	
  197

  
	
  14.06.

  	
  Waiver

  	
   

  	
  198

  
	
  14.07.

  	
  Limitation on Canadian Borrower Obligations

  	
   

  	
  198

  
	
  14.08.

  	
  Rights and Obligations

  	
   

  	
  198

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  REVOLVING LOANS; INTRA-LENDER ISSUES

  	
   

  	
  199

  
	
   

  	
   

  	
   

  	
   

  
	
  15.01.

  	
  Specified Foreign Currency Participations

  	
   

  	
  199

  
	
  15.02.

  	
  Settlement Procedures for Specified Foreign Currency
  Participations

  	
   

  	
  200

  
	
  15.03.

  	
  Obligations Irrevocable

  	
   

  	
  201

  
	
  15.04.

  	
  Recovery or Avoidance of Payments

  	
   

  	
  202

  
	
  15.05.

  	
  Indemnification by Lenders

  	
   

  	
  202

  
	
  15.06.

  	
  Specified Foreign Currency Loan Participation Fee

  	
   

  	
  203

  
	
  15.07.

  	
  Defaulting Lenders; etc.

  	
   

  	
  203

  
	
  15.08.

  	
  U.S. Dollar Payments

  	
   

  	
  203

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
  LENDER LOSS SHARING AGREEMENT

  	
   

  	
  204

  
	
   

  	
   

  	
   

  	
   

  
	
  16.01.

  	
  Definitions

  	
   

  	
  204

  
	
  16.02.

  	
  CAM Exchange

  	
   

  	
  204

  
	
  16.03.

  	
  Miscellaneous

  	
   

  	
  205

  



 


v

















 


Table of Contents

(continued)


 


SCHEDULES


 


	
  SCHEDULE
  1.01(a)

  	
  —

  	
  Commitments

  
	
  SCHEDULE
  1.01(b)

  	
  —

  	
  Provisions
  Relating to Bankers’ Acceptances, Bankers’ Acceptance Loans and B/A Discount
  Notes

  
	
  SCHEDULE
  1.01(c)

  	
  —

  	
  Material
  Subsidiaries

  
	
  SCHEDULE
  1.01(d)

  	
  —

  	
  Mortgaged
  Properties

  
	
  SCHEDULE
  3.01(a)

  	
  —

  	
  Existing
  Letters of Credit

  
	
  SCHEDULE
  8.07

  	
  —

  	
  Certain
  Title Matters

  
	
  SCHEDULE
  8.08

  	
  —

  	
  Subsidiaries

  
	
  SCHEDULE
  8.09

  	
  —

  	
  Litigation
  and Compliance with Laws

  
	
  SCHEDULE
  8.14(b)

  	
  —

  	
  Canadian
  Pension Plan Matters

  
	
  SCHEDULE
  8.15

  	
  —

  	
  Environmental
  Matters

  
	
  SCHEDULE
  8.17(a)

  	
  —

  	
  UCC
  Lien Filing Offices

  
	
  SCHEDULE
  8.18

  	
  —

  	
  Labor
  Matters

  
	
  SCHEDULE
  8.19

  	
  —

  	
  Real
  Properties

  
	
  SCHEDULE
  9.09(c)

  	
  —

  	
  Certain
  Non-Collateral Properties

  
	
  SCHEDULE
  10.02(a)(iv)

  	
  —

  	
  Existing
  Liens

  
	
  SCHEDULE
  10.04

  	
  —

  	
  Certain
  Permitted Investments

  
	
  SCHEDULE
  10.17

  	
  —

  	
  Deposit
  Accounts

  
	
  SCHEDULE
  13.03

  	
  —

  	
  Lender
  Addresses/Lending Offices

  



 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A-1

  	
  —

  	
  Form of
  Notice of Borrowing

  
	
  EXHIBIT
  A-2

  	
  —

  	
  Form of
  Notice of Conversion/Continuation

  
	
  EXHIBIT
  B-1

  	
  —

  	
  Form of
  Revolving Note

  
	
  EXHIBIT
  B-2

  	
  —

  	
  Form of
  Swingline Note

  
	
  EXHIBIT
  C

  	
  —

  	
  Form of
  Letter of Credit Request

  
	
  EXHIBIT
  D-1

  	
  —

  	
  Form of
  U.S. Perfection Certificate

  
	
  EXHIBIT
  D-2

  	
  —

  	
  Form of
  Canadian Perfection Certificate

  
	
  EXHIBIT
  E

  	
  —

  	
  Form of
  Intercreditor Agreement

  
	
  EXHIBIT
  F

  	
  —

  	
  Form of
  Solvency Certificate

  
	
  EXHIBIT
  G

  	
  —

  	
  Form of
  Compliance Certificate

  
	
  EXHIBIT
  H

  	
  —

  	
  Form of
  Assignment and Assumption Agreement

  
	
  EXHIBIT
  I

  	
  —

  	
  Form of
  Joinder Agreement

  
	
  EXHIBIT
  J

  	
  —

  	
  Form of
  Borrowing Base Certificate

  
	
  EXHIBIT
  K

  	
  —

  	
  Form of
  Incremental Commitment Agreement

  
	
  EXHIBIT
  L

  	
  —

  	
  Form of
  Section 5.04(b)(ii) Certificate

  
	
  EXHIBIT
  M

  	
  —

  	
  Form of
  Guarantee and Collateral Agreement

  
	
  EXHIBIT
  N

  	
  —

  	
  Form of
  Canadian Guarantee and Collateral Agreement

  
	
  EXHIBIT
  O

  	
  —

  	
  Form of
  Mortgage

  
	
  EXHIBIT
  P-1

  	
  —

  	
  Form of
  Closing Date Opinion of U.S. Counsel

  



 


1

















 


Table of Contents

(continued)


 


	
  EXHIBIT
  P-2

  	
  —

  	
  Form of
  Closing Date Opinion of Craig A. Hunt

  
	
  EXHIBIT
  P-3

  	
  —

  	
  Form of
  Closing Date Opinion of Canadian Counsel

  
	
  EXHIBIT P-4

  	
  —

  	
  Form of
  Closing Date Opinion of Nova Scotia Counsel

  



 


2

















 


ABL CREDIT AGREEMENT, dated as
of April 15, 2010, among Smurfit-Stone Container Corporation, a Delaware
corporation (“SSCC”), Smurfit-Stone Container Enterprises, Inc., a
Delaware corporation (“SSCE”), each Domestic Subsidiary of Holdings set
forth on the signature pages hereto (together with Holdings and each other
Domestic Subsidiary of Holdings that becomes a U.S. Borrower pursuant to Section
9.09(b), collectively, the “U.S. Borrowers”), each Canadian Subsidiary
of Holdings set forth on the signature pages hereto (together with each other
Canadian Subsidiary of Holdings that becomes a Canadian Borrower pursuant to Section
9.09(b), collectively, the “Canadian Borrowers”, and the Canadian
Borrowers together with the U.S. Borrowers, collectively, the “Borrowers”),
the Lenders party hereto from time to time, Deutsche Bank AG New York Branch,
as Administrative Agent and Security Agent, and Deutsche Bank AG New York
Branch, JPMorgan Chase Bank, N.A., and General Electric Capital Corporation, as
Co-Collateral Agents.  All capitalized
terms used herein and defined in Section 1 are used herein as therein
defined.


 


W  I  T  N  E  S  S  E  T
H :


 


WHEREAS, SSCC and certain of
its Subsidiaries are currently debtors in reorganization proceedings (the “U.S.
Proceedings”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy
Code”), in the United States Bankruptcy Court for the District of Delaware
(the “U.S. Bankruptcy Court”) (SSCC and such Subsidiaries, the “U.S.
Debtor Entities”), and SSC Canada and certain of its Subsidiaries (SSC
Canada and such Subsidiaries, the “Canadian Debtor Entities” and,
together with the U.S. Debtor Entities, the “Debtors”) are currently
debtors subject to reorganization proceedings in Canada (the “Canadian
Proceedings” and, together with the U.S. Proceedings, the “Bankruptcy
Proceedings”) under the Companies’ Creditors Arrangement Act (“CCAA”)
in the Ontario Superior Court of Justice (the “Canadian Bankruptcy Court”
and, together with the U.S. Bankruptcy Court, the “Bankruptcy Court”);


 


WHEREAS, the U.S. Debtor
Entities are continuing to operate their businesses and manage their properties
as debtors and debtors in possession under Sections 1107 and 1108 of the
Bankruptcy Code;


 


WHEREAS, the Debtors have
filed a Joint Plan of Reorganization (the “Plan of Reorganization”) with
the U.S. Bankruptcy Court pursuant to which certain U.S. Debtor Entities expect
to be reorganized and emerge from the Bankruptcy Proceedings.  The assets of SSC Canada and Smurfit-MBI
shall be transferred to certain newly organized Canadian Subsidiary or Canadian
Subsidiaries of Holdings that will be Canadian Borrowers on the Funding Date,
which transfer shall be approved by the Canadian Bankruptcy Court pursuant to a
vesting order, sanction order or other order issued by the Canadian Bankruptcy
Court.  The Plan of Reorganization is
described in, and included as an exhibit to, the Debtors’ Disclosure Statement
(the “Disclosure Statement”) approved by the U.S. Bankruptcy Court on January
29, 2010 and is expected to be confirmed by the U.S. Bankruptcy Court and
sanctioned by the Canadian Bankruptcy Court on or prior to the Funding
Date.  Pursuant to the Plan of
Reorganization, on the Funding Date, SSCC will merge with and into SSCE (the “Funding
Date Merger”), with SSCE continuing as the surviving corporation and
changing its name to “Smurfit-Stone Container Corporation”;


 

















 


WHEREAS, SSCC and the Borrowers have
requested (i) the U.S. Facility Lenders to make to SSCE and the other U.S.
Borrowers from time to time U.S. Facility Revolving Loans in either U.S.
Dollars or Canadian Dollars in an initial aggregate principal amount not in
excess of U.S. $550,000,000 under a revolving credit facility initially
maturing four years from the Funding Date, and (ii) the Canadian Facility
Lenders to make to the U.S. Borrowers and the Canadian Borrowers from time to
time Canadian Facility Revolving Loans in either U.S. Dollars or Canadian
Dollars in an initial aggregate principal amount not in excess of U.S.
$100,000,000 under a revolving credit facility initially maturing four years
from the Funding Date;


 


WHEREAS, SSCC and the Borrowers have also
requested (i) the Issuing Lenders to issue U.S. Facility Letters of Credit
denominated in either U.S. Dollars or Canadian Dollars in an aggregate face
amount at any time outstanding not in excess of U.S. $112,500,000, and (ii) the
Issuing Lenders to issue Canadian Facility Letters of Credit denominated in
either U.S. Dollars or Canadian Dollars in an aggregate face amount at any time
outstanding not in excess of U.S. $37,500,000;


 


WHEREAS, SSCC and SSCE have
entered into the Term Loan Facility, which will be secured by a perfected first
priority security interest in the Term Priority Collateral and a perfected
second priority security interest in the ABL Priority Collateral of the U.S.
Loan Parties.  The Obligations hereunder
will be secured by, among other items, a perfected first priority security
interest in the ABL Priority Collateral and a perfected second priority
security interest in the Term Priority Collateral; and


 


WHEREAS, subject to and upon
the terms and conditions set forth herein, the Lenders are willing to make
available to the Borrowers the senior secured revolving credit facilities
provided for herein;


 


NOW, THEREFORE, IT IS AGREED:


 


SECTION 1. 
Definitions and Accounting Terms.


 


1.01.     Defined
Terms.  As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):


 


“ABL
Priority Collateral” shall, prior to the Funding Date, have the meaning
assigned to the term “ABL Collateral” in the form of Intercreditor Agreement
attached as Exhibit E hereto, and from and after the Funding Date, have
the meaning assigned to the term “ABL Collateral” in the Intercreditor
Agreement, in each case for the purposes hereof as if the term “ABL Collateral”
is amended by deleting the word “Grantors” in each case in such definition and
inserting “Loan Parties” in each case in lieu thereof.


 


“Account”
shall mean (i) any “Account” as such term is defined in Article 9 of the UCC or
the PPSA, as applicable, and (ii) any other right to payment for the sale,
lease, license, assignment or other disposal of any Inventory or the
performance of services (whether performed or to be performed), in each case
existing on the date of this Agreement or hereafter arising, whether or not
earned by performance.


 


2

















 


“Account
Debtor”  shall mean, with
respect to any Account, the obligor with respect to such Account.


 


“Acquired Entity” shall have the
meaning provided in Section 10.05(f).


 


“Acquisition Indebtedness” shall have the
meaning provided in Section 10.01(j).


 


“Additional Commitment Fee”
shall have the meaning provided in Section 2.14(a).


 


“Additional Margin”
shall have the meaning provided in Section 2.14(a).


 


“Adjustable Applicable
Commitment Fee Percentage” shall have the meaning provided in the
definition of Applicable Commitment Fee Percentage.


 


“Adjustable Applicable
Margins” shall have the meaning provided in the definition of Applicable
Margin.


 


“Administrative Agent”
shall mean Deutsche Bank AG New York Branch, in its capacity as Administrative
Agent for the Lenders hereunder and under the other Loan Documents, and shall
include any successor to or replacement of the Administrative Agent appointed
pursuant to Section 12.09.


 


“Affiliate” shall mean, when used
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. 
For purposes of this definition, neither any Lender nor any Affiliate of a Lender (other than any
such Affiliate that is Holdings or a Subsidiary of Holdings) shall be deemed to
be an Affiliate of Holdings or any of its Subsidiaries solely by reason of its
ownership of or right to vote any Indebtedness or equity securities of Holdings
or any of its Subsidiaries.


 


“After-Acquired Mortgage Property”
shall mean a parcel (or adjoining parcels) of real property (including any improvements thereon) acquired in fee
ownership by any U.S. Loan Party after the Funding Date.


 


“Agent Advance” shall
have the meaning provided in Section 2.01(e).


 


“Agent Advance Amount”
shall have the meaning provided in Section 2.01(e).


 


“Agent Advance Period”
shall have the meaning provided in Section 2.01(e).


 


“Agents” shall mean,
collectively, the Administrative Agent, the Security Agent and the
Co-Collateral Agents, and individually shall mean any one of the Administrative
Agent, the Security Agent or a Co-Collateral Agent.


 


“Aggregate Canadian
Borrower Exposure” shall mean, at any time, the sum of (a) the aggregate
principal amount of all Canadian Borrower Revolving Loans (including the Face
Amount of all Bankers’ Acceptance Loans incurred by a Canadian Borrower)
outstanding


 


3

















 


at
such time (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars), (b) the aggregate amount of all Letter of Credit
Outstandings (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars) at such time in respect of Letters of Credit issued
for the account of any Canadian Borrower (exclusive of such Letter of Credit
Outstandings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Canadian Borrower Revolving Loans
or Canadian Borrower Swingline Loans) (for this purpose, using the U.S. Dollar
Equivalent of amounts not denominated in U.S. Dollars) and (c) the aggregate
principal amount of all Canadian Borrower Swingline Loans (for this purpose,
using the U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars)
outstanding at such time (exclusive of Canadian Borrower Swingline Loans which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Canadian Borrower Revolving Loans).


 


“Aggregate Canadian Facility Exposure”
shall mean, at any time, the sum of (a) the aggregate principal amount of all
Canadian Facility Revolving Loans (including the Face Amount of all Canadian
Facility Bankers’ Acceptance Loans) outstanding at such time (for this purpose,
using the U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars), (b)
the aggregate amount of all Canadian Facility Letter of Credit Outstandings (for this
purpose, using the U.S. Dollar Equivalent of amounts not denominated in U.S.
Dollars)
at such time in respect of Canadian Facility Letters of Credit issued for the
account of any Borrower (exclusive of such Canadian Facility Letter of Credit
Outstandings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Canadian Facility Revolving Loans
or Canadian Facility Swingline Loans) and (c) the aggregate principal amount of
all Canadian Facility Swingline Loans (for this purpose, using the U.S. Dollar
Equivalent of amounts not denominated in U.S. Dollars) outstanding at such time
(exclusive of Canadian Facility Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Canadian Facility Revolving Loans).


 


“Aggregate Exposure”
shall mean, at any time, the sum of (a) the aggregate principal amount of all
Revolving Loans (including the Face Amount of all Bankers’ Acceptance Loans)
then outstanding (for this purpose, using the U.S. Dollar Equivalent of amounts
not denominated in U.S. Dollars), (b) the aggregate amount of all Letter of
Credit Outstandings (for this purpose, using the U.S. Dollar Equivalent of
amounts not denominated in U.S. Dollars) at such time (exclusive of Letter of
Credit Outstandings which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Loans) and (c) the
aggregate principal amount of all Swingline Loans (for this purpose, using the
U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars) then
outstanding (exclusive of Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans).


 


“Aggregate U.S. Borrower
Exposure” shall mean, at any time, the sum of (a) the aggregate principal
amount of all U.S. Borrower Revolving Loans (including the Face Amount of all
Bankers’ Acceptance Loans incurred by a U.S. Borrower) outstanding at such time
(for this purpose, using the U.S. Dollar Equivalent of amounts not denominated
in U.S. Dollars), (b) the aggregate amount of all Letter of Credit Outstandings
(for this purpose, using the U.S. Dollar Equivalent of amounts not denominated
in U.S. Dollars) at such time in respect of Letters of Credit issued for the
account of any U.S. Borrower (exclusive of such Letter of Credit 


 


4

















 


Outstandings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of U.S. Borrower Revolving Loans or U.S. Borrower
Swingline Loans) and (c) the aggregate principal amount of all U.S. Borrower
Swingline Loans (for this purpose, using the U.S. Dollar Equivalent of amounts
not denominated in U.S. Dollars) outstanding at such time (exclusive of U.S.
Borrower Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of U.S.
Borrower Revolving Loans).


 


“Aggregate U.S. Facility Exposure”
shall mean, at any time, the sum of (a) the aggregate principal amount of all
U.S. Facility Revolving Loans (including the Face Amount of all U.S. Facility
Bankers’ Acceptance Loans) outstanding at such time (for this purpose, using
the U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars), (b) the
aggregate amount of all U.S. Facility Letter of Credit Outstandings (for this
purpose, using the U.S. Dollar Equivalent of amounts not denominated in U.S.
Dollars)
at such time in respect of U.S. Facility Letters of Credit issued for the
account of any U.S. Borrower (exclusive of such U.S. Facility Letter of Credit
Outstandings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of U.S. Facility Revolving Loans or
U.S. Facility Swingline Loans) and (c) the aggregate principal amount of all
U.S. Facility Swingline Loans (for this purpose, using the U.S. Dollar
Equivalent of amounts not denominated in U.S. Dollars) outstanding at such time
(exclusive of U.S. Facility Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
U.S. Facility Revolving Loans).


 


“Agreement” shall mean
this ABL Credit Agreement.


 


“Anti-Terrorism Laws”
shall have the meaning provided in Section 8.24(a).


 


“Applicable Commitment Fee Percentage”
initially shall mean a percentage per annum equal to 0.75%. From and after each
Start Date to and including the applicable End Date, the Applicable Commitment
Fee Percentage (hereinafter, the “Adjustable Applicable Commitment Fee
Percentage”) shall be that commitment percentage set forth below opposite
the Historical Unutilized Commitment for such Start Date, as determined by the
Administrative Agent:


 


	
  Level

  	
   

  	
  Historical Unutilized

  Commitment

  	
   

  	
  Commitment Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Greater
  than 50% of Total Commitments as then in effect

  	
   

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Less
  than or equal to 50% of Total Commitments as then in effect

  	
   

  	
  0.50

  	
  %

  



 


The Adjustable Applicable Commitment Fee
Percentage so determined, shall apply, except as set forth in the immediately
succeeding sentence, from the relevant Start Date to


 


5

















 


the applicable
End Date.  Notwithstanding anything to
the contrary contained above in this definition, (i) at all times prior to the
first Start Date occurring after the Funding Date, the Adjustable Applicable
Commitment Fee Percentage shall be maintained at Level I above (ii) from and
after the most recent Incremental Commitment Date for any Incremental
Commitment Agreement pursuant to which the Applicable Commitment Fee
Percentages and Adjustable Applicable Commitment Fee Percentages have been
increased above the Applicable Commitment Fee Percentages and the Adjustable
Applicable Commitment Fee Percentages in effect immediately prior to such
Incremental Commitment Date, each of the Applicable Commitment Fee Percentages
and the Adjustable Applicable Commitment Fee Percentages shall be increased to
those respective percentages per annum set forth in the applicable Incremental
Commitment Agreement and (iii) from and after the
Extension Date, with respect to any Extended U.S. Facility Loans and Canadian
Facility Loans, the Applicable Commitment Fee Percentage and Adjustable
Applicable Commitment Fee Percentage specified for such Extended U.S. Facility
Loans and Canadian Facility Loans in the applicable definitive documentation
thereof.


 


“Applicable Eligible
Jurisdiction” shall mean (i) in the case of Eligible U.S. Accounts, the
United States or Canada, (ii) in the case of Eligible U.S. Inventory, the
United States, and (iii) in the case of Eligible Canadian Accounts or Eligible
Canadian Inventory, Canada.


 


“Applicable Margin”
initially shall mean a percentage per annum equal to (i) in the case of
Revolving Loans maintained as (A) Base Rate Loans or Canadian Prime Rate Loans,
2.50% and (B) Eurodollar Loans or Bankers’ Acceptance Loans, 3.50%; and (ii) in
the case of Swingline Loans, 2.50%.  From
and after each Start Date to and including the applicable End Date, the
Applicable Margins for such Loans (hereinafter, the “Adjustable Applicable
Margins”) shall be those set forth below opposite the Historical Excess
Availability for such Start Date, as determined by the Administrative Agent:


 


	
  Level

  	
   

  	
  Historical Excess

  Availability

  	
   

  	
  Revolving 

  Loans Maintained as

  Eurodollar Loans or

  Bankers’ Acceptance

  Loans

  	
   

  	
  Revolving Loans and

  Swingline Loans

  Maintained as

  Base Rate Loans or

  Canadian Prime Rate Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Greater
  than or equal to 67% of Total Commitments as then in effect

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Less
  than 67% of Total Commitments but greater than or equal to 34% of Total
  Commitments as then in effect

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  



 


6

















 


	
  Level

  	
   

  	
  Historical Excess

  Availability

  	
   

  	
  Revolving 

  Loans Maintained as

  Eurodollar Loans or

  Bankers’ Acceptance

  Loans

  	
   

  	
  Revolving Loans and

  Swingline Loans

  Maintained as

  Base Rate Loans or

  Canadian Prime Rate Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  Less
  than 34% of Total Commitments as then in effect

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  



 


The Historical Excess Availability used in
a determination of Adjustable Applicable Margins shall be determined upon receipt by the
Administrative Agent of the
Borrowing Base Certificate pursuant to Section 9.04(i), in
the case of each Start Date occurring after the initial Start Date, for
the last month of any fiscal quarter of Holdings (i.e., by the 20th day following each of March 31, June 30, September
30 and December 31 of each fiscal year). 
The Adjustable Applicable Margins so determined shall apply, except as
set forth in the immediately succeeding sentence, from the relevant Start Date
to the applicable End Date, at which time, if no Borrowing Base Certificate has
been delivered to the Administrative Agent, the Adjustable Applicable Margins
shall be those that correspond to a Historical Excess Availability at Level III
(such Adjustable Applicable Margins as so determined, the “Highest
Adjustable Applicable Margins”) until such time when a Borrowing Base
Certificate is delivered, at which time the Adjusted Applicable Margins shall
be re-determined as set forth above. 
Notwithstanding anything to the contrary contained above in this
definition, (i) subject to clause (ii) below, to and including the date that
occurs 90 days following the Funding Date, the Adjustable Applicable Margins
shall be maintained at Level II above, (ii) at all times during which there
shall exist any Event of Default the Adjustable Applicable Margins shall be
maintained at the Highest Adjustable Applicable Margins, (iii) from and after
the most recent Incremental Commitment Date for any Incremental Commitment
Agreement pursuant to which the Applicable Margins and Adjustable Applicable
Margins have been increased above the Applicable Margins and the Adjustable
Applicable Margins in effect immediately prior to such Incremental Commitment
Date, each of the Applicable Margins and the Adjustable Applicable Margins
shall be increased to those respective percentages per annum set forth in the
applicable Incremental Commitment Agreement and (iv) from and
after the Extension Date, with respect to any Extended U.S. Facility Loans and
Canadian Facility Loans, the Applicable Margins and Adjustable Applicable
Margins specified for such Extended U.S. Facility Loans and Canadian Facility
Loans in the applicable definitive documentation thereof.


 


“Asset Exchange” shall mean any
transfer of operating properties or assets by Holdings or any of its
Subsidiaries to any Person in which at least 75% of the consideration received
by the transferor consists of operating properties or assets of comparable use.


 


“Asset Sale” shall mean the sale,
transfer or other disposition (including any casualty or condemnation) by
Holdings or any Subsidiary of Holdings to any Person other than a Loan Party
or, other than for the purposes of the definition of Significant Asset Sale, a
Wholly-Owned Subsidiary of Holdings of (a) any capital stock in any Person, (b)
substantially all the assets of any geographic or other division or line of
business of Holdings or any of its Subsidiaries or (c) any real property or a
portion of any real property or any other asset or assets 


 


7

















 


(excluding any
assets manufactured, constructed or otherwise produced or purchased for sale to
others in the ordinary course of business and any Permitted Investments) of
Holdings or any Subsidiary of Holdings; provided that none of the
following shall constitute an “Asset Sale” for purposes of this
Agreement:  (i) the sale of inventory in
the ordinary course of business, (ii) any sale, transfer or other disposition
having a value not in excess of $5,000,000, (iii) any sale of assets in
connection with any Permitted Timber Financing, (iv) the sale of assets (other
than Collateral) securing any Indebtedness permitted hereunder (other than the
Loans), if and to the extent such Indebtedness shall be repaid, redeemed or
repurchased in full with the proceeds of such asset sale (or any other payment
made contemporaneously therewith) and (v) any issuance of capital stock by
Holdings.


 


“Assignment and Assumption
Agreement” shall mean an Assignment and Assumption Agreement substantially
in the form of Exhibit H.


 


“Attributable Indebtedness” shall
mean, with respect to any Sale/Leaseback Transaction that does not result in a
Capital Lease, at any date of determination, the product of (a) the net
proceeds from such Sale/Leaseback Transaction and (b) a fraction, the numerator
of which is the number of full years of the term of the lease relating to the
property involved in such Sale/Leaseback Transaction (without regard to any
options to renew or extend such term) remaining at the date of the making of such computation and the
denominator of which is the number of full years of the term of such lease
(without regard to any options to renew or extend such term) measured from the
first day of such term.


 


“Authorized Officer”
shall mean, with respect to (a) delivering Notices of Borrowing, Notices of
Conversion/Continuation and similar notices, any person or persons that has or
have been authorized by the board of directors of the respective Borrower to
deliver such notices pursuant to this Agreement and that has appropriate
evidence of incumbency and signatures on file with the Administrative Agent,
the Swingline Lender or the respective Issuing Lender, (b) delivering financial
information and officer’s certificates pursuant to this Agreement, a Financial
Officer of Holdings, and (c) any other matter in connection with this Agreement
or any other Loan Document, any Responsible Officer of Holdings or the respective
Loan Party.


 


“Availability Condition”
shall mean (a) in the case of determining whether a Dominion Period is in
effect, the greater of (i) $96,250,000 and (ii) 17.5% of the Total Commitment
as then in effect, and (b) in the case of determining whether a Compliance
Period is in effect, the greater of (i) $82,500,000 and (ii) 15% of the Total
Commitment as then in effect.


 


“Available Currency”
shall mean U.S. Dollars and Canadian Dollars.


 


“B/A Discount Proceeds”
shall mean, in respect of any Bankers’ Acceptance or Draft to be purchased by a
Lender on any date pursuant to Section 2.01(a) and Schedule 1.01(b),
the difference between (i) the result (rounded to the nearest whole Canadian
cent, and with one-half of one Canadian cent being rounded up) calculated on
such day by dividing the aggregate Face Amount of such Bankers’ Acceptance or
Draft by the sum of one plus the product of (x) the Reference Discount
Rate (expressed as a decimal) applicable to such Bankers’ Acceptance or Draft
multiplied by (y) a fraction, the numerator of which is the number of days in
the term of such Bankers’ Acceptance or Draft and the denominator of which is
365 (with such


 


8

















 


product
being rounded up or down to the fifth decimal place and with .000005 being
rounded up), and (ii) the applicable Drawing Fee.


 


“B/A Equivalent Note”
shall have the meaning provided in Schedule 1.01(b).


 


“B/A Instruments” shall
mean, collectively, Bankers’ Acceptances, Drafts and B/A Equivalent Notes, and,
in the singular, any one of them.


 


“B/A Lender” shall mean
any Lender that is a bank listed in Schedule I or II to the Bank Act
(Canada)  as amended and that is not a
Non-B/A Lender.


 


“Bankers’ Acceptance” shall mean
each U.S. Facility Bankers’ Acceptance and each Canadian Facility Bankers’
Acceptance.


 


“Bankers’ Acceptance Loans” shall
mean each U.S. Facility Bankers’ Acceptance Loan and each Canadian Facility
Bankers’ Acceptance Loan.


 


“Bankruptcy Code” shall
have the meaning provided in the recitals to this Agreement.


 


“Bankruptcy Court”
shall have the meaning provided in the recitals to this Agreement.


 


“Bankruptcy Proceedings”
shall have the meaning provided in the recitals to this Agreement.


 


“Base Rate” shall mean,
at any time, the highest of (i) the Prime Lending Rate at such time, (ii) 1/2
of 1% in excess of the overnight Federal Funds Rate at such time and (iii) the
sum of (x) the Eurodollar Rate with a one-month Interest Period commencing on
such day (calculated without giving effect to the rounding requirement set
forth in the definition of Eurodollar Rate) plus (y) 1%.


 


“Base Rate Loan” shall
mean (a) each U.S. Dollar Denominated Swingline Loan and (b) each U.S. Dollar
Denominated Revolving Loan designated or deemed designated as such by the relevant
Borrower of such U.S. Dollar Denominated Revolving Loan at the time of the
incurrence thereof or conversion thereto.


 


“Board” shall mean the
Board of Governors of the Federal Reserve System of the United States.


 


“Borrower” and “Borrowers”
shall have the meaning provided in the preamble of this Agreement.


 


“Borrower Obligations” shall mean (i)
all U.S. Facility Obligations owing by any U.S. Borrower, (ii) all Canadian
Facility Obligations owing by any U.S. Borrower, and/or (iii) all Canadian
Facility Obligations owing by any Canadian Borrower, as applicable.


 


9
















 


“Borrowing” shall mean the borrowing
of one Type of Loan of a single Tranche denominated in a single Available
Currency by a Borrower from all the Lenders having Commitments of the
respective Tranche (or from the Swingline Lender in the case of Swingline Loans)
on a given date (or resulting from a conversion or conversions on such date)
having in the case of Eurodollar Loans the same Interest Period, provided that
Base Rate Loans of a single Tranche incurred pursuant to Section 2.10(b) shall
be considered part of the related Borrowing of Eurodollar Loans of the
respective Tranche.


 


“Borrowing Base” shall mean the
Canadian Borrowing Base, the U.S. Borrowing Base and/or the Total Borrowing
Base, as applicable.


 


“Borrowing
Base Certificate” shall mean (x) with respect to borrowing base
certificates delivered prior to the delivery of the Funding Date Borrowing Base
Certificate, a certificate substantially in the form (with adjustments to
exclude any real property or equipment) of the most recent borrowing base certificate
delivered prior to the date hereof pursuant to the requirements set forth in
the Prior Credit Agreement (or such other form as agreed between the
Co-Collateral Agents and Holdings) and (y) with respect to the Funding
Date Borrowing Base Certificate and each borrowing base certificate delivered
(or required to be delivered) thereafter, a certificate substantially in the
form of Exhibit J hereto (with supporting calculations in
reasonable detail) executed and certified as accurate and
complete by a Financial Officer of Holdings on behalf of Holdings.


 


“Business Day” shall
mean (a) for all purposes other than as covered by clauses (b) and (c) below,
any day except Saturday, Sunday and any day which shall be in New York, New
York, a legal holiday or a day on which banking institutions are authorized or
required by law or other government action to close, (b) with respect to
all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (a) above and which is also a day for trading by and between banks
in U.S. dollar deposits in the London interbank eurodollar market and (c) with
respect to all notices and determinations in connection with, and payments of
principal (or, Face Amount, as applicable) and interest on, Canadian Dollar
Denominated Loans, any day which is a Business Day described in clause (a) above
and which is also a day which is not a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close in Toronto, Ontario.


 


“CAM” shall have the meaning
provided in Section 16.01(a).


 


“CAM Exchange” shall have the
meaning provided in Section 16.01(b).


 


“CAM Exchange Date” shall have the
meaning provided in Section 16.01(c).


 


“CAM Percentage” shall have the
meaning provided in Section 16.01(d).


 


“Canadian Bankruptcy Court” shall have the
meaning provided in the recitals to this Agreement.


 


10

















 


“Canadian Benefit Plans”
shall mean all employee benefit plans of any nature or kind whatsoever (other
than the Canadian Pension Plans) that are maintained or contributed to by SSC
Canada or any other Canadian Subsidiary of Holdings.


 


“Canadian Borrower” and
“Canadian Borrowers” shall have the meaning provided in the preamble of
this Agreement.


 


“Canadian Borrower Canadian
Facility Revolving Loan” shall have the meaning provided in Section 2.01(a).


 


“Canadian Borrower Canadian
Facility Revolving Note” shall have the meaning provided in Section 2.05(a).


 


“Canadian Borrower Canadian
Facility Swingline Loan” shall have the meaning provided in Section 2.01(b).


 


“Canadian Borrower Canadian
Facility Swingline Note” shall have the meaning provided in Section 2.05(a).


 


“Canadian Borrower Loans”
shall mean each Canadian Borrower Revolving Loan and each Canadian Borrower
Swingline Loan.


 


“Canadian Borrower
Obligations” shall mean all Obligations owing to the Administrative Agent,
the Security Agent, any Co-Collateral Agent, any Issuing Lender or any Lender
by any Canadian Borrower.


 


“Canadian Borrower Revolving Loan”
shall mean each Revolving Loan borrowed by a Canadian Borrower.


 


“Canadian Borrower Swingline Loan”
shall mean each Swingline Loan borrowed by a Canadian Borrower.


 


“Canadian
Borrowing Base”  shall mean, at the time of any
determination, an amount equal to the sum of the U.S. Dollar amount (for this
purpose, using the U.S. Dollar Equivalent of amounts not denominated in U.S.
Dollars), without duplication, of (a) 85% of Eligible Canadian Accounts at
such time plus (b) the lesser of (i) 65% of Eligible Canadian
Inventory at such time and (ii) 85% of the Net Orderly Liquidation Value
of Eligible Canadian Inventory at such time (in each case with respect to clauses
(i) and (ii) with any Eligible Canadian Inventory to be valued at the
lower of cost (determined on a first-in, first-out basis in accordance with
GAAP) or market value thereof (net of any intercompany profit)), minus (c) the
sum (without duplication) of (i) the aggregate amount of Canadian
Qualified Secured Hedging Agreement Reserves for all Canadian Qualified Secured
Hedging Agreements, (ii) the aggregate amount of Canadian Qualified
Secured Cash Management Agreement Reserves for all Canadian Qualified Secured
Cash Management Agreements, (iii) the Canadian Priority Payables Reserve
and (iv) the amount of the Reserves in such amounts and with respect to
such matters, as the Co-Collateral Agents in their Permitted Discretion may
establish from time to time.  The
Canadian Borrowing Base at any time shall be determined by reference to the
most recent Borrowing Base Certificate delivered to the Administrative Agent
pursuant to Section 9.04(i) of this Agreement.


 


11

















 


The
Co-Collateral Agents shall have the right (but no obligation) to review such
computations and if, in their Permitted Discretion, such computations have not
been calculated in accordance with the terms of this Agreement, the
Co-Collateral Agents shall have the right, to correct any such errors in such
manner as they shall determine in their Permitted Discretion and the
Co-Collateral Agents will notify Holdings promptly after making any such
correction.


 


“Canadian Collection
Account” shall mean each account established at a Canadian Collection Bank
subject to a Control Agreement into which funds shall be transferred as
provided in Section 5.03(c).


 


“Canadian Collection Banks”
shall have the meaning provided in Section 5.03(c).


 


“Canadian Debtor Entities”
shall have the meaning provided in the recitals to this Agreement.


 


“Canadian Dilution Reserve” shall
mean, at any date, (i) the amount by which the Dilution Ratio of Eligible
Canadian Accounts exceeds five percent (5%) multiplied by (ii) the
Eligible Canadian Accounts on such date.


 


“Canadian Dollar
Denominated Loans” shall mean each Loan denominated in Canadian Dollars at
the time of the incurrence thereof.


 


“Canadian Dollar
Denominated Revolving Loans” shall mean each Revolving Loan denominated in
Canadian Dollars at the time of the incurrence thereof.


 


“Canadian Dollar
Denominated Swingline Loans” shall mean each Swingline Loan denominated in
Canadian Dollars at the time of the incurrence thereof.


 


“Canadian Dollars” and “Cdn.$”
shall mean freely transferable lawful money of Canada (expressed in Canadian
dollars).


 


“Canadian Facility Bankers’ Acceptance”
shall mean a Canadian Facility Draft drawn by a Borrower and accepted by a
Canadian Facility Lender pursuant to Section 2.01(a) and Schedule
1.01(b).


 


“Canadian Facility Bankers’ Acceptance
Loans” shall mean (i) the creation of Canadian Facility Bankers’
Acceptances or (ii) the creation and purchase of completed Canadian Facility
Drafts and, if requested by a Non-B/A Lender, the exchange of such Canadian
Facility Drafts for B/A Equivalent Notes, in each case as contemplated in Section 2.01(a) and
Schedule 1.01(b).


 


“Canadian Facility Commitment” shall
mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule
1.01(a) directly below the column entitled “Canadian Facility
Revolving Commitment”, as same may be (x) reduced from time to time or
terminated pursuant to Sections 4.02, 4.03 and/or 11, as
applicable, (y) adjusted from time to time as a result of assignments to
or from such Lender pursuant to Section 2.13 or 13.04(b), or
(z) increased from time to time pursuant to Section 2.14.  In addition, the Canadian
Facility Commitment of each Lender shall include each of its Initial Canadian
Facility Commitment, and,


 


12

















 


subject to the consent of such Lender, any Extended Canadian Facility
Commitment of such Lender.  As of the Closing
Date, the aggregate amount of Canadian Facility Commitments of the Canadian
Facility Lenders is U.S. $100,000,000.


 


“Canadian Facility Draft” shall
mean, at any time, either a depository bill within the meaning of the
Depository Bills and Notes Act (Canada) as amended, or a bill of exchange,
within the meaning of the Bills of Exchange Act (Canada) as amended, drawn by a
Borrower in Canadian Dollars on a Canadian Facility Lender and bearing such
distinguishing letters and numbers as such Canadian Facility Lender may
determine, but which at such time has not been completed or accepted by such
Canadian Facility Lender.


 


“Canadian Facility Lenders” shall
mean the Lenders having Canadian Facility Commitments (or, after the
termination of all Canadian Facility Commitments, outstanding Individual
Canadian Facility Exposure).


 


“Canadian Facility Letter of Credit”
shall have the meaning provided in Section 3.01(a).


 


“Canadian Facility Letter of Credit
Exposure” shall mean, at any time, the aggregate amount of all Canadian
Facility Letter of Credit Outstandings at such time in respect of Canadian
Facility Letters of Credit issued for the account of any Borrower. The Canadian Facility Letter of
Credit Exposure of any Lender at any time shall be its Canadian Facility
RL Percentage of the total Canadian Facility Letter of Credit Exposure
at such time.


 


“Canadian Facility Letter of Credit
Outstandings” shall mean, at any time, the sum of (a) the Stated
Amount of all outstanding Canadian Facility Letters of Credit at such time and (b) the
aggregate amount of all Unpaid Drawings in respect of all Canadian Facility
Letters of Credit at such time.


 


“Canadian Facility Obligations”
shall mean all Loan Document Obligations owing to any Lender Creditor to repay
principal of, interest on, and all other amounts with respect to, all Canadian
Facility Revolving Loans, Canadian Facility Swingline Loans, Canadian Facility
Letters of Credit, and all other Loan Document Obligations (including, without
limitation, all fees, indemnities, taxes and other obligations) pursuant to
this Agreement and each other Loan Document in connection with the Canadian
Facility Commitments.


 


“Canadian Facility Revolving Loan”
shall have the meaning provided in Section 2.01(a).


 


“Canadian Facility Revolving Note”
shall have the meaning provided in Section 2.05(a).


 


“Canadian Facility RL Percentage” of
any Canadian Facility Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Canadian Facility Commitment of such
Canadian Facility Lender at such time and the denominator of which is the Total
Canadian Facility Commitment at such time, provided that if the Canadian
Facility RL Percentage of any Canadian Facility Lender is to be determined
after the Total Canadian Facility Commitment has been terminated, then the
Canadian Facility RL Percentages of such Canadian


 


13

















 


Facility
Lender shall mean a fraction (expressed as a percentage) the numerator of which
is such Lender’s Individual Canadian Facility Exposure at such time and the
denominator of which is the Aggregate Canadian Facility Exposure at such time, provided
that in the case of Section 2.18 when a Defaulting Lender shall
exist, “Canadian Facility RL Percentage” shall mean the percentage of the Total
Canadian Facility Commitments (disregarding any Defaulting Lender’s Canadian Facility
Commitment) represented by such Lender’s Canadian Facility Commitment.


 


“Canadian Facility Swingline Exposure”
shall mean, at any time, the aggregate principal amount of all Canadian
Facility Swingline Loans (for this purpose, using the U.S. Dollar Equivalent of
amounts not denominated in U.S. Dollars) outstanding at such time. The Canadian Facility Swingline
Exposure of any Lender at any time shall be its Canadian Facility RL
Percentage of the total Canadian Facility Swingline
Exposure at such time.


 


“Canadian Facility Swingline Loan”
shall have the meaning provided in Section 2.01(b).


 


“Canadian Facility Swingline Note”
shall have the meaning provided in Section 2.05(a).


 


“Canadian GAAP” shall
mean generally accepted accounting principles in Canada, as recommended from
time to time by the Canadian Institute of Chartered Accountants, applied on a
consistent basis.


 


“Canadian Guarantee and Collateral Agreement” shall mean the Canadian Guarantee and Collateral Agreement, among
the Canadian Borrowers, the Canadian Subsidiaries of Holdings party thereto and
the Security Agent, for the benefit of the Secured Parties, substantially in
the form of Exhibit N hereto with such modifications thereto as the
Security Agent may agree.


 


“Canadian Guarantors”
shall mean and include each Canadian Borrower (in its capacity as a guarantor
under the Canadian Guarantee and Collateral Agreement) and each Canadian
Subsidiary Guarantor.


 


“Canadian Loan Parties”
shall mean each Canadian Borrower and each Canadian Subsidiary Guarantor.


 


“Canadian Loan Party
Obligations” shall mean (i) all Canadian Borrower Obligations, (ii) all
Hedging Obligations owing to Hedging Creditors by any Canadian Loan Party, (iii) all
Cash Management Services Obligations owing to Cash Management Creditors by any
Canadian Loan Party, and (iv) any guarantees of the obligations described
in clause (i), (ii) or (iii) hereof by the Loan Parties (including
the U.S. Loan Parties) pursuant to the Guarantee and Collateral Agreement or
Canadian Guarantee and Collateral Agreement or pursuant to any other Loan
Document.


 


“Canadian Pension Plans”
shall mean each plan that is considered to be a pension plan for the purposes
of the ITA or any applicable pension benefits standards statute and/or
regulation in Canada and that is established, maintained or contributed to by
SSC Canada or any other Canadian Subsidiary of Holdings for its current or
former employees.


 


14

















 


“Canadian Perfection
Certificate” shall mean the Canadian Perfection Certificate in the form
thereof included in Exhibit D-2 or any other form approved by the
Administrative Agent, as the same may be supplemented from time to time
pursuant to Section 9.10(c) or otherwise.


 


“Canadian Prime Rate”
shall mean, for any day, the rate of interest per annum expressed on the basis
of a 365-day year equal to the greater of (i) the per annum rate of
interest quoted or established as the “prime rate” of DB Canada (or similar
entity of a successor Administrative Agent hereunder) which it quotes or
establishes for such day as its reference rate of interest in order to
determine interest rates for commercial loans made in Canadian Dollars in
Canada to its Canadian borrowers and (ii) the average rate for Canadian
Dollar bankers’ acceptances having a term of 30 days that appears on Reuters
Screen CDOR Page (or such other page as may be selected by DB Canada
(or similar entity of a successor Administrative Agent hereunder) as a
replacement page for such bankers’ acceptances if such screen is not
available) at approximately 10:00 A.M. (Toronto time) on such day plus
1%, in each instance, as of such day, adjusted automatically with each quoted
or established change in such rate, all without the necessity of any notice to
any Borrower or any other Person. Any change in the Canadian Prime Rate due to
a change in the “prime rate” or the average rate for Canadian Dollar bankers’
acceptances shall be effective as of the opening of business on the effective
day of such change in the “prime rate” or the average rate for Canadian Dollar
bankers’ acceptances, respectively.


 


“Canadian Prime Rate Loans”
shall mean (a) each Canadian Dollar Denominated Swingline Loan and (b) each
Canadian Dollar Denominated Revolving Loan during the period which it bears
interest at a rate determined by reference to the Canadian Prime Rate.


 


“Canadian Priority Payables”
shall mean, at any time, with respect to the Canadian Borrowing Base:


 


(a)           the amount past
due and owing by any Canadian Loan Party (or any other Person for which any
Canadian Loan Party has joint and several liability), or the accrued amount for
which each Canadian Loan Party has an obligation whether to remit to a
Governmental Authority or other Person pursuant to any applicable law, rule or
regulation, in respect of (i) pension fund obligations, (ii) employment
insurance, (iii) goods and services taxes, sales taxes, employee income
taxes and other taxes payable or to be remitted or withheld, (iv) workers’compensation,
(v) wages, salaries, commission or compensation, including vacation pay,
and (vi) other like charges and demands; in each case in respect of which
any Governmental Authority or other Person may claim a security interest,
hypothecation, prior claim, trust or other claim or Lien ranking or capable of
ranking in priority to or pari  passu with one or more of the
Liens granted pursuant to the Security Documents; and


 


(b)           the aggregate
amount of any other liabilities of the Canadian Loan Parties (or any other
Person for which the Canadian Loan Parties have joint and several liability) (i) in
respect of which a trust has been or may be imposed on Collateral of any
Canadian Loan Party to provide for payment or (ii) which are secured by a
security interest, hypothecation, prior claim, pledge, charge, right, or claim
or other Lien on any Collateral of any Canadian Loan Party, in each case
pursuant to any applicable law, rule or regulation and which trust,
security interest, hypothecation, prior claim, pledge, charge, right, claim or
other Lien ranks or is capable of


 


15

















 


ranking in priority to or pari
passu with one or more of the Liens granted in the Security Documents.


 


“Canadian Priority Payables
Reserve” shall mean, on any date of determination for the Canadian
Borrowing Base, a reserve established from time to time by the Co-Collateral
Agents in their Permitted Discretion in such amount as the Co-Collateral Agents
may reasonably determine in respect of Canadian Priority Payables of the
Canadian Loan Parties.


 


“Canadian Proceedings”
shall have the meaning provided in the recitals to this Agreement.


 


“Canadian Qualified Secured Cash
Management Agreement Reserve” shall mean a reserve established by the
Co-Collateral Agents from time to time in respect of a Canadian Qualified
Secured Cash Management Agreement, which reserve shall be in an amount equal to
the reserve agreed upon from time to time by the applicable Cash Management
Creditor and Holdings and notified to, and so long as
Excess Availability (after giving effect to such reserve) is less than 35% of
the Total Commitment then in effect at the time such reserve is created or
increased shall be agreed upon by, the Co-Collateral Agents in writing with respect to
such Canadian Qualified Secured Cash Management Agreement in accordance with Section 13.21
(it being understood and agreed that a reserve with respect to a Canadian
Qualified Secured Cash Management Agreement (i) may only be decreased with
the consent of the Cash Management Creditor party to such Canadian Qualified
Secured Cash Management Agreement and (ii) may only be created or
increased with the consent of Holdings and, so long as Excess Availability is
less than 35% of the Total Commitment then in effect at the time any such
reserve is created or increased, the Co-Collateral Agents (in each case in
clauses (i) and (ii) following written notice to the Co-Collateral
Agents)).


 


“Canadian Qualified Secured Cash
Management Agreements” shall mean each Qualified Secured Cash Management
Agreement between a Cash Management Creditor (as determined at the time such
Secured Cash Management Agreement is designated as a Qualified Secured Cash
Management Agreement without regard to whether such Person is currently a
Lender or an affiliate thereof) and a Canadian Loan Party.


 


“Canadian Qualified Secured Hedging
Agreement” shall mean any Qualified Secured Hedging Agreement between a
Hedging Creditor (as determined at the time such Secured Hedging Agreement is
designated as a Qualified Secured Hedging Agreement without regard to whether
such Person is currently a Lender or an affiliate thereof) and a Canadian Loan
Party.


 


“Canadian Qualified Secured Hedging
Agreement Reserve” shall mean a reserve established by the Co-Collateral
Agents from time to time in respect of a Canadian Qualified Secured Hedging
Agreement, which reserve shall be in the amount of the aggregate U.S. Dollar
Equivalent marked to market exposure thereunder as calculated from time to time
by the Hedging Creditor party to such Canadian Qualified Secured Hedging
Agreement (which calculation may be disputed by Holdings) in accordance with
GAAP (based on the valuation methodology agreed between Holdings and the
Hedging Creditor party to such Canadian Qualified Secured Hedging Agreement)
and notified to the Co-Collateral Agents (and


 


16

















 


acknowledged
by the Administrative Agent) (A) at the time such Secured Hedging
Agreement is designated as a Qualified Secured Hedging Agreement and (B) from
time to time thereafter, in each case, in accordance with Section 13.21
(it being understood and agreed that a reserve with respect to a Canadian
Qualified Secured Hedging Agreement (i) may only be decreased below the
marked to market exposure thereunder with the consent of the Hedging Creditor
party to such Canadian Qualified Secured Hedging Agreement and (ii) may
only be created or increased so long as (x) an Event of Default exists or (y) the
aggregate amount of all Qualified Secured Hedging Agreement Reserves exceeds
(or would exceed following creation of, or increase in, such reserve)
$100,000,000, with the consent of the Co-Collateral Agents (in each case in
clauses (i) and (ii) following written notice to the Co-Collateral
Agents)).


 


“Canadian Secured Obligations” shall
mean and include (a) all Loan Document Obligations owing by any Canadian
Loan Party, (b) all Hedging Obligations owing by any Canadian Loan Party, (c) all
Cash Management Services Obligations owing by any Canadian Loan Party, and (d) all
amounts paid (or incurred) by any Indemnified Party as to which such
Indemnified Party has the right to reimbursement by a Canadian Loan Party under
Section 13.01 or any indemnity contained in any Security Document;
it being acknowledged and agreed that the “Canadian Secured Obligations” shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or any Security Document or extended from time to
time after the date of this Agreement or any Security Document.


 


“Canadian Security Documents” shall
mean the Canadian Guarantee and Collateral Agreement, the Quebec Security
Documents and the other similar security agreements, instruments and documents
executed and delivered pursuant to Section 9.09 governed by
Canadian law (or the laws of any province of Canada).


 


“Canadian Subsidiary”
of any Person shall mean any Subsidiary of such Person incorporated or
organized in Canada or any province or territory thereof.


 


“Canadian Subsidiary
Guarantors” shall mean each Canadian Subsidiary of Holdings that is a
Material Subsidiary (other than any Canadian Borrowers), whether existing on
the Closing Date or established, created or acquired after the Closing Date, in
each case unless and until such time as the respective Canadian Subsidiary is
released from all of its obligations  under the Security Documents to which it is a
party in accordance with the terms and provisions thereof.


 


“Capital Expenditures”
shall mean, with respect to any Person, all expenditures by such Person which
should be capitalized in accordance with GAAP and, without duplication, the
amount of the principal portion of all Capitalized Lease Obligations incurred
by such Person.


 


“Capital Lease” shall
have the meaning provided in the definition of the term “Capital Lease
Obligations”.


 


“Capital Lease Obligations”
of any Person shall mean the obligations of such Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof (each, a “Capital Lease”),
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of


 


17

















 


such
Person under GAAP.  For the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time, determined in accordance with GAAP.


 


“Cash Management Agreement”
shall mean any arrangement for the provision of Cash Management Services.


 


“Cash Management Creditors”
shall mean, collectively, each Lender, each Term Loan Lender and/or any
affiliate thereof that has entered into one or more Secured Cash Management
Agreements, even if (i) in the case of a Lender, the respective Lender
subsequently ceases to be a Lender under this Agreement for any reason and (ii) in the case of a
Term Loan Lender, the respective Term Loan Lender subsequently ceases to be a
Term Loan Lender under the Term Loan Facility for any reason, together with
such Lender’s, Term Loan Lender’s or such affiliate’s successors and assigns,
if any.


 


“Cash Management Services”
shall mean (i) cash management
services, including treasury, depository, overdraft, electronic funds transfer
and other cash management arrangements and (ii) commercial credit card and
merchant card services.


 


“Cash
Management Services Obligations” shall mean and include, as to any Loan
Party, any and all obligations of the Loan Parties
to the Cash Management Creditors, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with any Secured Cash Management Agreements, whether such Secured Cash
Management Agreement is now in existence or hereinafter arising (including,
without limitation, all obligations, liabilities and indebtedness of each Loan
Party in its capacity as a Guarantor under the Guarantee and Collateral
Agreement or Canadian Guarantee and Collateral Agreement, to which it is a party, in respect of the Secured Cash Management
Agreements), provided that the obligations of the Loan Parties with respect to
commercial credit card and merchant card services shall not exceed an aggregate
principal amount of $10,000,000.


 


“Cash Proceeds” shall
mean, with respect to any Asset Sale, cash, cash equivalents or marketable
securities received from such Asset Sale, including any insurance or
condemnation proceeds and proceeds received by way of deferred payment pursuant
to a note receivable or otherwise (other than the portion of such deferred
payment constituting interest, which shall be deemed not to constitute Cash
Proceeds).


 


“CERCLA” shall have the
meaning provided in Section 8.15(a)(iv).


 


“Change in Control”
shall mean, and be deemed to have occurred, if (a) (x) on or prior to
the Funding Date, a majority of the seats (other than vacant seats) on the
board of directors of SSCC or SSCE shall at any time be occupied by persons who
were neither (i) nominated by the board of directors of SSCC or SSCE, as
the case may be, nor (ii) appointed by directors so nominated; other than
seats filled either on or shortly after the Funding Date and specifically
contemplated by the Plan of Reorganization or (y) after the Funding Date,
a majority of the seats (other than vacant seats) on the board of directors of
Holdings shall at any time be occupied by persons who were not (i) members
of the board of directors of Holdings on the


 


18

















 


Funding
Date (or appointed shortly thereafter as specifically contemplated by the Plan
of Reorganization), (ii) nominated by the board of directors of Holdings
after the Funding Date or (iii) appointed by the directors referred to in
clause (y)(i) or (ii) after the Funding Date, (b) on or at any
time after the Funding Date, any person or group (within the meaning of Rule 13d-5
of the Securities and Exchange Act of 1934, as in effect on the date hereof)
shall own, directly or indirectly, beneficially or of record, shares
representing more than 35% of the aggregate ordinary voting power represented
by the issued and outstanding capital stock of Holdings; or (c) at any
time prior to the Funding Date, SSCC shall cease to own, directly or
indirectly, beneficially and of record, 100% of the issued and outstanding
capital stock of SSCE.


 


“Closing Date” shall mean April 15,
2010.


 


“Co-Collateral Agent”
and “Co-Collateral Agents” shall mean Deutsche Bank AG New York Branch,
JP Morgan Chase Bank, N.A. and General Electric Capital Corporation in their
capacity as co-collateral agents pursuant to this Agreement.


 


“Code” shall mean the
United States Internal Revenue Code of 1986, as amended from time to time, and
any final or temporary regulations promulgated and in effect thereunder.  Section references to the Code are to
the Code, as in effect at the date of this Agreement and any subsequent
provisions of the Code, amendatory thereof, supplemental thereto or substituted
therefor.


 


“Collateral” shall mean
any and all assets and properties of the Loan Parties that are required to be
subject to Liens (whether Term Priority Collateral or ABL Priority Collateral)
securing any of the Obligations, including all “Collateral” (as defined in (a) prior
to the Funding Date, the Guarantee and Collateral Agreement attached hereto as Exhibit M
and the Canadian Guarantee and Collateral Agreement attached hereto as Exhibit N
and (b) on and after the Funding Date, the Guarantee and Collateral
Agreement and Canadian Guarantee and Collateral Agreement), and the Mortgaged
Properties.


 


“Collateral Access
Agreement” shall mean any landlord waiver or other agreement, in form and
substance satisfactory to the Co-Collateral Agents, between the Security Agent
and any third party (including any bailee, consignee, customs broker or other
similar Person) in possession of any Collateral or any landlord mortgagee of
any Loan Party for any real  property where any Collateral is located, as such landlord waiver or
other agreement may be amended, restated or otherwise modified from time to time.


 


“Collateral and Guarantee
Requirement” shall mean, at any time, the requirement that:


 


(a) the
Administrative Agent shall have received from each U.S. Borrower, each U.S.
Subsidiary Guarantor, each of other Persons required to become a U.S. Loan Party
and the other parties thereto either (i) counterparts of each of the
Guarantee and Collateral Agreement, the Intercreditor Agreement and the other
Security Documents (other than the Canadian Security Documents), duly executed
and delivered on behalf of such parties or (ii) in the case of any Person
that is required to become a U.S. Loan Party after the Funding Date, joinder
instruments in the form or forms specified in the Guarantee and Collateral
Agreement, the Intercreditor


 


19
















 


Agreement
or the other Security Documents (other than the Canadian Security Documents), as applicable,
under which such Loan Party becomes a party to the applicable Guarantee and
Collateral Agreement, the Intercreditor Agreement or the other Security Documents
(other than the Canadian Security Documents), as applicable, duly
executed and delivered on behalf of such Loan Party;


 


(b) the Administrative Agent shall
have received from each Canadian Borrower, each Canadian Subsidiary Guarantor,
each of the other Persons required to become a Canadian Loan Party and the
other parties thereto either (i) counterparts of each of the Canadian Guarantee and Collateral Agreement and the
other Canadian Security Documents, duly executed and delivered on behalf of
such parties or (ii) in the case of any Person that is required to become
a Canadian Loan Party after the Funding Date, joinder instruments in the form
or forms specified in the Canadian Guarantee and Collateral Agreement or the
other Canadian Security Documents, as applicable, under which such Canadian
Loan Party becomes a party to the applicable Canadian Guarantee and Collateral Agreement or the
other Canadian Security Documents, as applicable, duly executed and delivered
on behalf of such Canadian Loan Party;


 


(c) all Equity Interests
in (x) each Domestic Subsidiary of Holdings that is a Material Subsidiary,
(y) SSC Canada (or, if applicable, each Foreign Subsidiary of Holdings
that owns, directly or indirectly, any Equity Interests of SSC Canada and the
Equity Interests of which are owned directly by one or more U.S. Loan Parties)
and (z) each other Foreign Subsidiary of Holdings that is a Material
Subsidiary and Equity Interests of which are owned directly by one or more U.S.
Loan Parties shall have been pledged pursuant to, and to the extent required
by, the Guarantee and Collateral Agreement and, in the case of Equity Interests
in any Foreign Subsidiary of Holdings, if requested by the Administrative
Agent, a Foreign Pledge Agreement (provided that the U.S. Loan Parties
shall not be required to pledge more than 65% of the issued and outstanding
voting Equity Interests of SSC Canada or any other Foreign Subsidiary of
Holdings), and the Prior Agent or the Security Agent shall have received
certificates or other instruments (to the extent issuable, including by
amending any applicable governing documents, in certificate form) representing
all such Equity Interests, together with undated stock powers or other
instruments of transfer with respect thereto endorsed in blank;


 


(d) all Equity Interests in each
Canadian Loan Party which are owned directly by a Canadian Loan Party shall have been pledged pursuant to, and
to the extent required by, the Canadian Guarantee and Collateral Agreement, and the
Security Agent shall have received certificates or other instruments (to the
extent issuable, including by amending any applicable governing documents, in
certificate form) representing all such Equity Interests, together with undated
stock powers or other instruments of transfer with respect thereto endorsed in
blank;


 


(e) (i) all
Indebtedness (including amounts owed in connection with the intercompany
settlements with respect to collections from accounts receivable and inventory
of U.S. Loan Parties deposited into accounts of Canadian Loan Parties and other
intercompany receivables) of Holdings and each other Subsidiary of Holdings
that is owing to any U.S. Loan Party shall be evidenced by a promissory note
and shall have been pledged pursuant to the Guarantee and Collateral Agreement
and (ii) all Indebtedness of any other Person that is owing to any U.S.
Loan Party and is evidenced by a promissory note (other than Indebtedness in a
principal amount of less than $5,000,000, so long as the aggregate principal
amount of


 


20

















 


Indebtedness
not pledged under this exclusion does not exceed $10,000,000) shall have been
pledged pursuant to the Guarantee and Collateral Agreement, and in each case,
the Prior Agent or the Security Agent shall have received all such promissory
notes, together with undated instruments of transfer with respect thereto
endorsed in blank;


 


(f)  the Administrative
Agent shall have received a lender’s title insurance policy insuring that each
Mortgage relating to any Mortgaged Property constitutes a first lien on such
Mortgaged Property (subject to any Lien expressly permitted by Section 10.02
or otherwise agreed to by the Administrative Agent and other than as provided
in the Intercreditor Agreement), and the Administrative Agent shall have
received such other documents relating to Mortgaged Properties as reasonably
requested in writing by the Administrative Agent (including adequate flood
insurance coverage);


 


(g)  all documents and
instruments, including UCC and PPSA financing statements, required by
applicable law or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create the Liens intended to be created by the
Security Documents and perfect such Liens to the extent required by, and with
the priority required by, the Security Documents, shall have been filed,
registered or recorded or delivered to the Administrative Agent for filing,
registering or recording and all filing, registration, stamping or recording
duty or other fee shall have been paid (at the expense of the Borrowers); and


 


(h)  with respect to each
deposit account of any Loan Party (other than Excluded Accounts) and each
securities account and commodities account maintained by any Loan Party with
any depositary bank, securities intermediary or commodity intermediary, the
Administrative Agent shall have received a counterpart, duly executed and
delivered by the applicable Loan Party and such depositary bank, securities
intermediary or commodity intermediary, as the case may be, of a Control
Agreement (which Control Agreements may also be for the benefit of the Term
Loan Agent or Permitted Notes Agent (as defined in the Intercreditor
Agreement)); provided that so long as no Dominion Period then exists no
such Control Agreement shall be required to be entered into pursuant to this
clause (h) until the later of (A) the date that is 60 days after
the Funding Date (or such later date as agreed in writing by the Administrative Agent in
its sole discretion, or, with respect to any extension of the period for
compliance with this paragraph beyond 90 days from the date that is 60 days
after the Funding Date, as agreed in writing by the Co-Collateral Agents in
their sole discretion) and (B) in the case of deposit accounts, securities
accounts and commodities accounts opened after the Funding Date, at the time of
the establishment of the respective deposit account, securities account or
commodities account, as the case may be (or such later date as agreed to in
writing by the Administrative Agent in its sole discretion).


 


Notwithstanding the foregoing
provisions of this definition or anything in this Agreement or any Loan
Document to the contrary, (a) the foregoing definition shall not require
the creation or perfection of pledges of or security interests in, or the
obtaining of title insurance, legal opinions or other deliverables with respect
to, particular assets of the Loan Parties, if, and for so long as the
Administrative Agent, in consultation with Holdings, determines that the burden
or cost of creating or perfecting such pledges or security interests in such
assets, or obtaining such title insurance, legal opinions or other deliverables
in respect of such assets (taking into account any adverse tax consequences to
Holdings and its Affiliates (including the


 


21

















 


imposition
of withholding or other material taxes)), shall be excessive in relation to the
value of the security to be afforded thereby, (b) if the Administrative
Agent reasonably determines that Holdings shall have used commercially
reasonable efforts to procure and deliver, but shall nevertheless be unable to
deliver, any Mortgage (or any Mortgage related documents) that is required to
be delivered in order to satisfy the foregoing requirements, such delivery
shall not be a condition precedent to the Funding Date, but shall be required
to be accomplished by such later date as the Administrative Agent shall
reasonably determine, (c) in no event shall the Collateral include any
asset if, to the extent and for so long as the grant of a Lien thereon to
secure the Obligations is prohibited by any applicable law, regulation or
contract (other than to the extent that any such prohibition would be rendered
ineffective pursuant to any other applicable law) or would result in material
and adverse tax consequences.


 


“Collection Accounts”
shall mean, collectively, the U.S. Collection Accounts and the Canadian
Collection Accounts.


 


“Commingled Inventory”
shall mean Inventory of any Loan Party that is commingled (whether pursuant to
a consignment (as defined in Section 9-102 of the UCC), a toll
manufacturing agreement or otherwise) with Inventory of another Person (other
than another Loan Party) at a location owned or leased by a Loan Party to the
extent that such Inventory of such Loan Party is not readily identifiable.


 


“Commitment” shall mean any of the
commitments of any Lender, i.e., a U.S. Facility Commitment, a Canadian
Facility Commitment, an Extended U.S. Facility Commitment or an
Extended Canadian Facility Commitment.


 


“Commitment Fees” shall
have the meaning provided in Section 4.01(a).


 


“Compliance Period”
shall mean any period (x) commencing on the date on which the Excess
Availability is less than the Availability Condition and (y) ending on the
first date thereafter on which the Excess Availability has been equal to or
greater than the Availability Condition for 45 consecutive days.


 


“Confidential Information”
shall mean all information and data, including, without limitation, technical,
business, marketing and financial information, disclosed to the Agents (or any
of them), any Issuing Lender or any Lender by Holdings or any of its
Subsidiaries in connection with this Agreement, any other Loan Document or any
of the Transactions, whether tangible, intangible, electronic, verbal or
written form or by observation and all memoranda, summaries, samples, notes,
analyses, compilations, studies, or other documents prepared by the Agents (or
any of them), any Issuing Lender or any Lender which contain, reflect or are
derived from such information and/or data; provided however, the term “Confidential Information”
shall not include information or data which (a) is, or becomes, generally
available other than as a result of a disclosure by the respective Agent,
Issuing Lender or Lender in violation of any Loan Document, (b) is, or
becomes, available to an Agent, any Issuing Lender or Lender on a
non-confidential basis from a source other than Holdings or any of its
Subsidiaries or its representatives, provided that such source is not,
and was not, actually known by such Agent, Issuing Lender or Lender, as the
case may be, to be prohibited from transmitting such information or data by any
contractual, fiduciary or other legal obligation of


 


22

















 


confidentiality
to Holdings or any of its Subsidiaries, or (c) was available to an Agent,
an Issuing Lender or a Lender on a non-confidential basis prior to disclosure
by Holdings or any of its Subsidiaries or their respective representatives.


 


“Confidential Information
Memorandum” shall mean the Confidential Information Memorandum of SSCC
dated February 2010.


 


“Confirmation Order”
shall have the meaning provided in Section 6.02(j).


 


“Consolidated EBITDA” shall mean,
for any
period, Consolidated Net Income for such period, plus:


 


(a) without duplication
and to the extent deducted in determining such Consolidated Net Income, the sum
of:


 


(i) Consolidated
Interest Expense for such period;


 


(ii) provision for taxes
based on income, profits or losses (determined on a consolidated basis) during
such period;


 


(iii) all amounts
attributable to depreciation, depletion and amortization of intangibles for
such period;


 


(iv) any extraordinary
charges or extraordinary losses for such period;


 


(v) any Non-Cash
Charges for such period;


 


(vi) restructuring
charges for such period relating to current or anticipated future cash
expenditures, including restructuring costs related to closure or consolidation
of facilities, in an aggregate amount not to exceed in any fiscal year
$25,000,000; provided that commencing in the fiscal year beginning on January 1,
2011, such maximum aggregate amount of restructuring charges shall be increased
by the amount, if positive, by which $25,000,000 exceeds the amount of such
restructuring charges in the immediately preceding fiscal year, but not to
exceed $18,750,000;


 


(vii) cash fees, costs,
expenses, commissions or other cash charges incurred during such period in
connection with this Agreement, the Term Loan Facility Documents, the
Bankruptcy Proceedings, the Plan of Reorganization and the transactions
contemplated by the foregoing, including in connection with the termination or
settlement of executory contracts, professional and accounting fees, costs and
expenses, management incentive, employee retention or similar plans (in each
case to the extent such plan is approved by the U.S. Bankruptcy Court), and
litigation and settlements (but excluding interest and fees accruing after the
Funding Date hereunder or under the Term Loan Facility) in an aggregate amount
for all periods after December 31, 2009, not in excess of $65,000,000; and


 


23

















 


(viii) deferred
financing fees (and any write-offs thereof);


 


provided that, to the
extent not reflected in Consolidated Net Income for the period in which such
cash payment is made, any cash payment made with respect to any Non-Cash
Charges added back in computing Consolidated EBITDA for any prior period pursuant
to clause (v) above (or that would have been added back had this Agreement
been in effect during such prior period) shall be subtracted in computing
Consolidated EBITDA for the period in which such cash payment is made; and minus


 


(b) without duplication
and to the extent included in determining such Consolidated Net Income:


 


(i) any extraordinary
gains for such period; and


 


(ii) any non-cash gains
for such period (excluding any non-cash gain to the extent it represents the
reversal of an accrual or reserve for a potential cash item that reduced
Consolidated EBITDA in any prior period);


 


in each case of clauses (a) and
(b), determined on a consolidated basis in accordance with GAAP; provided
further, that Consolidated EBITDA for any period shall be calculated so
as to exclude (without duplication of any adjustment referred to above) the
effect of:


 


(A) the cumulative
effect of any changes in GAAP or accounting principles applied by management;


 


(B) any gain or loss
for such period that represents after-tax gains or losses attributable to any
sale, transfer or other disposition or abandonment of assets by SSCC, the
Borrower or any of the Subsidiaries, other than dispositions or sales of
inventory and other dispositions in the ordinary course of business;


 


(C) any income or loss
for such period attributable to the early extinguishment of Indebtedness or
accounts payable;


 


(D) any non-cash gains
or losses on foreign currency derivatives and any foreign currency transaction
non-cash gains or losses and any foreign currency exchange translation gains or
losses that arise on consolidation of integrated operations;


 


(E) any re-evaluation
of inventory or other assets or any liabilities due to “fresh-start” accounting
adjustments upon the Borrower’s emergence from the Bankruptcy Proceedings; and


 


(F) mark-to-market
adjustments in the valuation of derivative obligations resulting from the
application of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities.


 


Notwithstanding the foregoing, for purposes hereof,
Consolidated EBITDA for each of the fiscal quarters ended March 31, 2009, June 30,
2009, September 30, 2009 and


 


24

















 


December 31, 2009,
shall be $131,268,000, $144,331,000, $121,329,000 and $97,932,000,
respectively.


 


“Consolidated Fixed Charge Coverage Ratio”
shall mean, for any period, the ratio of (a) (i) the Consolidated
EBITDA of Holdings and its Subsidiaries for such period plus (ii) to
the extent not included in clause (a)(i) above cash interest income for
such period minus (iii) the sum of (A) the aggregate amount of
all Capital Expenditures made by Holdings and its Subsidiaries during such
period (other than Capital Expenditures to the extent financed with equity net
cash proceeds, asset sale net cash proceeds, condemnation net cash proceeds,
insurance net cash proceeds or Indebtedness but including Capital Expenditures
to the extent financed with proceeds of Loans) plus (B) the amount
of all cash payments during such period made by Holdings and its Subsidiaries
in respect of income taxes (net of cash income tax refunds during such period)
(excluding such cash payments related to asset sales not in the ordinary course
of business) plus (C) without duplication of any amounts included
in clause (B) above, the aggregate amount of all cash Restricted Payments
paid by Holdings during such period, to (b) Consolidated Fixed Charges for
such period.  The Consolidated Fixed
Charge Coverage Ratio shall be determined on a pro forma basis as and to the
extent provided in Section 1.04.


 


“Consolidated Fixed Charges” shall mean, for
any period, the sum of (a) cash Consolidated Interest Expense of Holdings
and its Subsidiaries for such period plus (b) the scheduled principal
payments made during such period on all Indebtedness for borrowed money and
Capital Leases of Holdings and its Subsidiaries for such period net of the cash
proceeds of (i) any other Indebtedness permitted by Section 10.01
(other than the proceeds of Loans), (ii) any issuance of Equity Interests
by Holdings and (iii) any asset sale permitted by Section 10.13,
in each case, to the extent such proceeds are used to make such payment, plus
(c) (i) actual cash pension funding payments made with respect to
pension funding obligations for such period, minus (ii) the profit
and loss statement charge (or benefit) with respect to such pension funding
obligations for such period.


 


“Consolidated Interest Expense” shall mean, for
any period, the interest expense (other than for the purposes of Consolidated
Fixed Charges, net of interest income on Permitted Investments) of Holdings and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, excluding any fees and expenses payable or amortized
during such period by Holdings and its Subsidiaries in connection with the
amortization of deferred debt issuance costs. 
For purposes of the foregoing, interest expense shall be determined
after giving effect to any net payments made or received by Holdings and its
Subsidiaries with respect to Hedging Agreements, but excluding any gain or loss
recognized under GAAP that results from the mark-to-market valuation of any
Hedging Agreement.


 


“Consolidated Leverage Ratio” shall mean, on
any date of determination, the ratio obtained by dividing (a) Indebtedness
of Holdings and its Subsidiaries on such date by (b) Consolidated EBITDA
for the period of twelve consecutive months most recently ended prior to such
date.


 


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


 


25

















 


calculation (a) the
net gains (or losses) associated with the sale of any asset not in the ordinary
course of business, (b) any income or gains associated with or resulting
from the purchase or acquisition of Term Loans by Holdings or any Subsidiary of
Holdings, (c) the income (or loss) of any Subsidiary of Holdings that is
not wholly owned by Holdings to the extent such income (or loss) is
attributable to the noncontrolling interest in such Subsidiary, (d) the
income (or loss) of any Person accrued prior to the date it becomes (or, for
pro forma purposes, is deemed to have become) a Subsidiary of Holdings or is
merged into or consolidated with Holdings or any of its Subsidiaries or the
date that Person’s assets are acquired by Holdings or any of its Subsidiaries
and (e) the effect of any re-evaluation of inventory or other assets or
any liabilities due to “fresh-start” accounting adjustments upon Holdings’
emergence from the Bankruptcy Proceedings.


 


“Control” of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.  “Controlling” and “Controlled”
shall have meanings correlative thereto.


 


“Control Agreement” shall mean, with
respect to any deposit account, securities account or commodities account
maintained by any Loan Party, a control agreement in form and substance
reasonably satisfactory to the Administrative Agent, duly executed and
delivered by such Loan Party and the depositary bank, the securities intermediary or commodity
intermediary, as the case may be, with which such account is maintained.


 


“Core Canadian
Concentration Account” shall have the meaning provided in Section 5.03(d).


 


“Core Concentration
Accounts” shall mean, collectively, the Core U.S. Concentration Accounts
and the Core Canadian Concentration Accounts.


 


“Core U.S. Concentration
Account” shall have the meaning provided in Section 5.03(d).


 


“Credit Account” shall
have the meaning provided in Section 5.03(g).


 


“Credit Event” shall
mean the making of any Loan or the issuance, amendment, extension or renewal of
any Letter of Credit (other than any amendment, extension or renewal that does not
increase the maximum Stated Amount of such Letter of Credit).


 


“DB Canada” shall mean
Deutsche Bank AG, Canada Branch, in its individual capacity, and any successor
corporation thereto by merger, consolidation or otherwise acting in respect of
its Canadian banking business.


 


“DB Canadian Account”
shall have the meaning provided in Section 5.03(f).


 


“DB U.S. Account” shall
have the meaning provided in Section 5.03(e).


 


“DBNY” shall mean
Deutsche Bank AG New York Branch, in its individual capacity, and any successor
corporation by merger, consolidation or otherwise.


 


26

















 


“Debtor Relief Law” shall mean
the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.


 


“Default” shall mean
any event, act or condition which with notice or lapse of time, or both, would
constitute an Event of Default.


 


“Defaulting Lender”
shall mean, at any time of determination thereof, any Lender that (i) has
failed to fund any portion of the Revolving Loans, participations in Letter of
Credit Outstandings or participations in Swingline Loans required to be funded
by it hereunder (including its obligations under Section 2.01(a) or
(c), Section 2.04 or Section 3), (ii) has
otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder, (iii) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding
or a takeover (in receivership or similar proceeding) by a Governmental
Authority, (iv) does not meet a capital adequacy or liquidity requirement
applicable to such Lender as determined by the relevant Governmental Authority
or (v) has notified Holdings, any Issuing Lender, the Swingline Lender
and/or the Administrative Agent of any of the foregoing (including any
notification of its intent not to comply with its funding obligations described
in preceding clause (i)); provided that for purposes of Section 2.01
with respect to Swingline Loans, Section 3 and any documentation
entered into pursuant to the Letter of Credit Back-Stop Arrangements only, the
term “Defaulting Lender” shall also include (a) any Lender with an
affiliate that (x) either (A) Controls such Lender or (B) is
under common Control with such Lender and (y) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding or a takeover by a
Governmental Authority or does not meet a capital adequacy or liquidity
requirement applicable to such affiliate as determined by the relevant Governmental
Authority, (b) any Lender that previously constituted a “Defaulting
Lender” under this Agreement, unless such Lender has ceased to constitute a
“Defaulting Lender” for a period of at least 90 consecutive days, and (c) any
Lender that (x) one of the Swingline Lender, any Issuing
Lender, the Fronting Lender or the Administrative Agent and (y) at least
one other Lender, believes in good faith has defaulted, and has
notified Holdings and the Administrative Agent of such belief (although no such
notice shall be required following an Event of Default), has defaulted (which
default is continuing) in its obligations under any other credit facility to
which such Lender is a party.


 


“Deposit Account” shall
mean a demand, time, savings, passbook or like account with a bank, savings and
loan association, credit union or like organization.


 


“Designated Obligations”
shall have the meaning provided in Section 16.01(e).


 


“Dilution
Factors” shall mean, without duplication, with respect to any
period, the aggregate amount of all bad debt write-downs, discounts, credits,
returns, rebates, and other dilutive items.


 


“Dilution
Ratio” shall mean, at any date, as to the Accounts owned by any
Person, the amount (expressed as a percentage) that is the result of dividing
the U.S. Dollar aggregate


 


27

















 


amount (for
this purpose, using the U.S. Dollar Equivalent of amounts not denominated in
U.S. Dollars) of (a) the applicable Dilution Factors for the twelve (12)
most recently ended fiscal months with respect to such Person’s Accounts, by (b) such
Person’s total gross sales with respect to their Accounts for the twelve (12)
most recently ended fiscal months.


 


“Dilution Reserve” shall mean, in
the case of the Canadian Borrowing Base, the Canadian Dilution Reserve, and in
the case of the U.S. Borrowing Base, the U.S. Dilution Reserve.


 


“Discharge” shall, prior to the
Funding Date, have the meaning assigned to such term in the form of
Intercreditor Agreement attached as Exhibit F hereto, and after the
Funding Date, have the meaning assigned to such term in the Intercreditor
Agreement.


 


“Disclosure Statement”
shall have the meaning provided in the recitals to this Agreement.


 


“Documentation Agents”
shall mean General Electric Capital Corporation, Banc of America Securities,
LLC and Wells Fargo Capital Finance, LLC, in their capacities as Documentation
Agents in respect of the credit facilities hereunder, and any successors
thereto.


 


“Domestic” when used
in reference to any item, shall mean that such item is within the United States
or any State thereof (including the District of Columbia).


 


“Domestic Subsidiary”
of any Person shall mean any Subsidiary of such Person organized under the laws
of the United States or any State thereof (including the District of Columbia).


 


“Dominion Period” shall
mean any period (i) commencing on the date on which (x) an Event of
Default has occurred and is continuing or (y) the Excess Availability is
less than the Availability Condition for three (3) consecutive Business
Days and (ii) ending on the first date thereafter on which (x) no
Event of Default exists and (y) the Excess Availability has been equal to
or greater than the Availability Condition for forty-five (45) consecutive
days; provided that, notwithstanding paragraph (ii) above, at any
time more than two Dominion Periods have existed during the immediately
preceding twelve (12) month period, a Dominion Period shall be deemed to exist
at such time.


 


“Draft” shall mean each
U.S. Facility Draft and each Canadian Facility Draft.


 


“Drawing” shall have
the meaning provided in Section 3.05(b).


 


“Drawing Date” shall
mean the date on which a Draft is drawn.


 


“Drawing Fee” shall
mean, in respect of a Draft drawn by a Borrower hereunder and accepted by a B/A
Lender or a Draft (or B/A Equivalent Note exchanged therefor) purchased by a
Non-B/A Lender, a fee calculated on the Face Amount of such Draft (or B/A
Equivalent Note exchanged therefor) at a rate per annum equal to the Applicable
Margin for Bankers’ Acceptance Loans on the Drawing Date of such Draft (or B/A
Equivalent Note exchanged


 


28

















 


therefor).  Drawing Fees shall be calculated on the basis
of the term to maturity of the Draft (or B/A Equivalent Note exchanged therefor)
and a year of 365 days.


 


“Eligible
Accounts” shall mean, at any time, the Accounts created by a Loan
Party in the ordinary course of its business, that arise out of its sale of
goods (other than promotional products not held for sale) or rendition of
services, but excluding any Account:


 


(a)                                  which is not subject to a
first priority perfected Lien in favor of the Security Agent for the benefit of
the Secured Parties pursuant to the relevant Security Documents;


 


(b)                                 which is subject to any Lien other
than (i) a Lien in favor of the Security Agent for the benefit of the
Secured Parties pursuant to the relevant Security Documents, (ii) a Lien
(if any) permitted by Section 10.02 which is junior in priority to
the Lien in favor of the Security Agent for the benefit of the Secured Parties
pursuant to the relevant Security Documents, and (iii) an unregistered
Lien in respect of Canadian Priority Payables that are not yet due and payable;


 


(c)                                  which (i) is unpaid more
than 90 days after the date of the original invoice therefor, other than
Accounts unpaid more than 90 days, but not more than 120 days, after the
original invoice date up to an aggregate amount for all Borrowing Bases not
exceeding $20,000,000, or (ii) has been written off on the books of the
Loan Party or otherwise designated as uncollectible (in determining the
aggregate unpaid amount owing from each Account Debtor with respect to Accounts
that are unpaid more than 90 days after the original invoice therefore, such
aggregate amount shall be reduced to give effect to any credits extended by, or
amounts owing from, the Loan Parties to such Account Debtor);


 


(d)                                 which is owing by an Account
Debtor for which more than 50% of the Accounts owing from such Account Debtor
and its Affiliates to the Loan Parties are ineligible pursuant to clause (c) of
this definition;


 


(e)                                  which is owing by an Account
Debtor to the extent the aggregate amount of Accounts owing from such Account
Debtor and its Affiliates to the Loan Parties exceeds 15% of the aggregate amount
of Eligible Accounts of the Loan Parties;


 


(f)                                    with respect to which any
covenant, representation, or warranty contained in this Agreement or in the
Security Documents has been breached or is not true in any material respect;


 


(g)                                 which (i) does
not arise from the sale of goods or performance of services in the ordinary
course of business, (ii) is not evidenced by an invoice or other
documentation reasonably satisfactory to the Co-Collateral Agents which has
been sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon any Loan Party’s completion of any further performance, (v) represents
a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis, or (vi) relates
to payments of interest (but only that portion of the Account relating
thereto);


 


29
















 


(h)                                 for which the goods giving
rise to such Account have not been shipped to the Account Debtor or for which
the services giving rise to such Account have not been performed by a Loan
Party or if such Account was invoiced more than once;


 


(i)                                     which is owed by an Account
Debtor which has (i) applied for, suffered, or consented to the
appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had
possession of all or a material part of its property taken by any receiver,
custodian, trustee or liquidator, (iii) filed, or had filed against it,
any request or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or
involuntary case under any state, provincial or federal bankruptcy laws (other
than post-petition accounts payable by an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code or is subject to a proceeding
under the CCAA or other applicable Insolvency Law and is acceptable to the
Co-Collateral Agents in their Permitted Discretion), (iv) admitted in
writing its inability, or is generally unable to, pay its debts as they become
due, (v) become insolvent, or (vi) ceased operation of its business;


 


(j)                                     which is owed by any Account
Debtor which has sold all or a substantially all of its assets;


 


(k)                                  which is owed by an Account
Debtor which (i) does not maintain its chief executive office or have
material business operations in the U.S. or Canada or (ii) is not
organized and existing under applicable law of the U.S. or Canada or, in either
case any political subdivision thereof, unless, in either case, such Account is
backed by an irrevocable letter of credit acceptable to the Co-Collateral
Agents in their Permitted Discretion which is in the possession of, has been
assigned to and is directly drawable by, the Security Agent;


 


(l)                                     which is owed in any currency
other than Dollars or Canadian Dollars;


 


(m)                               (A) with respect to the
U.S. Borrowing Base, which is owed by (i) the government (or any department,
agency, public corporation, or instrumentality thereof) of any country other
than the U.S. unless such Account is backed by an irrevocable letter of credit
acceptable to the Co-Collateral Agents in their Permitted Discretion which is
in the possession of the Security Agent, or (ii) the federal government of
the U.S., or any department, agency, public corporation, or instrumentality
thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31
U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to
perfect the Lien of the Security Agent for the benefit of the Secured Parties
in such Account, have been complied with to the Co-Collateral Agents’
reasonable satisfaction; and (B) with respect to the Canadian Borrowing
Base, which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than
Canada unless such Account is backed by an irrevocable letter of credit
acceptable to the Co-Collateral Agents in their Permitted Discretion which is
in the possession of the Security Agent, or (ii) the government of Canada,
or any department, agency, public corporation, or instrumentality thereof,
unless the Financial Administration Act (Canada) or similar provincial or
territorial legislation or municipal ordinance of similar purpose, in each case
as amended, and any other steps necessary to perfect the Lien of the Security
Agent for the benefit of the Secured Parties in such Account have been complied
with to the Co-Collateral Agents’ reasonable satisfaction;


 


30

















 


(n)                                 which is owed by any Affiliate
of any Loan Party or any employee, officer, director or agent of any Loan Party
or Affiliate of any Loan Party thereof;


 


(o)                                 which is owed by an Account
Debtor or any Affiliate of such Account Debtor to which any Loan Party is
indebted, but only to the extent such Account Debtor or Affiliate has or has
asserted a right of setoff, or has disputed its obligation to pay all or any
portion of the Account, or such Account is subject to any security, deposit,
progress payment, retainage or other similar advance made by or for the benefit
of an Account Debtor, in each case to the extent thereof;


 


(p)                                 which is subject to any counterclaim,
deduction, defense, setoff or dispute but only to the extent of any such
counterclaim, deduction, defense, setoff or dispute;


 


(q)                                 which is evidenced by any
promissory note, chattel paper, or instrument or subject to a payment plan so
long as such payment plan could result in such Accounts being ineligible
pursuant to clause (c) of this definition;


 


(r)                                    (x) with respect to which
such Loan Party has made any agreement with the Account Debtor (i) for any
reduction thereof (but only to the extent of such reductions from time to time
that are not already reflected in the calculation of the face value of each
respective invoice related thereto), or (ii) for any adjustment,
extension, compromise or settlement thereof (but only to the extent of such adjustment,
extension, compromise or settlement, as the case may be, from time to time that
are not already reflected in the calculation of the face value of each
respective invoice related thereto), except for adjustments, extensions,
compromises and settlements made in the ordinary course of business for prompt
payment (and not related to the creditworthiness of the Account Debtor), or (y) any
Account which was partially paid and any newly created Account related to the
unpaid portion of such partially paid Account;


 


(s)                                  which does not comply in all
material respects with the requirements of all applicable laws and regulations,
whether federal, state, provincial or local, including without limitation the
Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board;


 


(t)                                    which is for goods that have
been sold under a purchase order or pursuant to the terms of a contract or
other agreement or understanding (written or oral) that indicates or purports
that any Person other than such Loan Party has or has had an ownership interest
in such goods, or which indicates any party other than such Loan Party as payee
or remittance party;


 


(u)                                 Accounts with respect to which
any return, rejection or repossession of any of the merchandise giving rise to
such Account has occurred, but only to the extent of the value of the goods
returned, rejected or repossessed;


 


(v)                                 Accounts that are not payable
to a Loan Party;


 


(w)                               Accounts with respect to which
the agreements evidencing such Accounts are not governed by the laws of a
jurisdiction which is an Applicable Eligible Jurisdiction for the Accounts of a
Loan Party, or the laws of such other jurisdiction acceptable to the
Co-Collateral Agents in their Permitted Discretion;


 


31

















 


(x)                                   Accounts to the extent
representing goods and services tax, value added tax and provincial sales tax,
in each case that has not yet been paid to the applicable Government Authority
or has not been Reserved for; or


 


(y)                                 Accounts that are
otherwise unacceptable to the Co-Collateral Agents in their Permitted
Discretion.


 


Except as otherwise set forth above, the
amount of an Eligible Account shall be determined based on the face amount of
such Account; provided that the face amount of an Account may, in the
Co-Collateral Agents’ Permitted Discretion, be reduced by, without duplication,
to the extent not reflected in such face amount, (i) the amount of all
discounts (which may at the Co-Collateral Agents’ option, be calculated on
shortest terms), claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges, other allowances or sales or
excise taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such Accounts at
such time (including any amount that such Loan Party may be obligated to rebate
to an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) and (ii) the aggregate amount of all cash received in
respect of such Account but not yet applied by such Loan Party to reduce the
amount of such Account.


 


“Eligible Canadian Accounts”
shall mean the Eligible Accounts owned by the Canadian Loan Parties.


 


“Eligible Canadian
Inventory” shall mean the Eligible Inventory owned by the Canadian Loan
Parties.


 


“Eligible
Inventory” means, at any time, the Inventory of the Loan Parties,
but excluding any Inventory:


 


(a)                                  which is not
subject to a first priority perfected Lien in favor of the Security Agent for
the benefit of the Secured Parties pursuant to the relevant Security Documents;


 


(b)                                 which is
subject to any Lien other than (i) a Lien in favor of the Security Agent
for the benefit of the Secured Parties pursuant to the relevant Security Documents,
(ii) a Lien (if any) permitted by Section 10.02 which is
junior in priority to the Lien in favor of the Security Agent for the benefit
of the Secured Parties pursuant to the relevant Security Documents, and (iii) an
unregistered Lien in respect of Canadian Priority Payables that are not yet due
and payable;


 


(c)                                  which is
determined, based on the Loan Parties’ historical practices and procedures, in
each case, which are reasonably acceptable to the Co-Collateral Agents, slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable
at prices approximating at least the cost of such Inventory in the ordinary
course of business or unacceptable due to age, type, category or quantity;


 


(d)                                 with respect to
which any covenant, representation, or warranty contained in this Agreement or
the Security Documents has been breached or is not true in any material


 


32

















 


respect and which does not
conform in any material respect to all standards imposed by any Governmental
Authority;


 


(e)                                  in which any
Person other than such Loan Party shall (i) have any direct or indirect
ownership, interest or title to such Inventory or (ii) be indicated on any
purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein;


 


(f)                                    which
constitutes spare or replacement parts, subassemblies, packaging supplies and
shipping material, manufacturing supplies, samples, prototypes, displays or
display items, bill-and-hold goods, goods that are returned or marked for
return, defective or damaged goods, goods held on consignment, or goods which
are not of a type held for sale in the ordinary course of business, including,
but not limited to, chemicals, starches, ink and adhesives (other than fuels in
the Co-Collateral Agents’ Permitted Discretion);


 


(g)                                 which is not
located in an Applicable Eligible Jurisdiction, or the laws of such other
jurisdiction acceptable to the Co-Collateral Agents in their Permitted
Discretion, or is in transit (other than (i) between locations in an
Applicable Eligible Jurisdiction controlled by Loan Parties, to the extent
included in current perpetual inventory reports of any Loan Party or (ii) from
an Account Debtor of a Loan Party to a location in an Applicable Eligible
Jurisdiction controlled by such Loan Party so long as a Reserve has been
established by the Co-Collateral Agents in their Permitted Discretion (or a
contra account is established to reduce the amount owed by such Account Debtor)
for the accounts payable of such Loan Party with respect to such inventory in
transit);


 


(h)                                 which (i) is
located in any location leased by a Loan Party unless (A) the lessor has
delivered to the Security Agent a Collateral Access Agreement or (B) a
Rent Reserve with respect to such facility has been established by the
Co-Collateral Agents in their Permitted Discretion or (ii) which is
located at an owned location subject to a mortgage or other security interest
in favor of a creditor other than the Security Agent, the Permitted Notes Agent
or the Term Loan Agent or is located in any third party warehouse or other
storage facility or is in the possession of a bailee unless (A) such
mortgagee, warehouseman or bailee has delivered to the Security Agent a
Collateral Access Agreement and such other documentation as the Co-Collateral
Agents may require in their Permitted Discretion or (B) a Rent Reserve or
other Reserve has been established by the Co-Collateral Agents in their
Permitted Discretion;


 


(i)                                     which is being
processed offsite at a third party location or outside processor, or is
in-transit to or from said third party location or outside processor;


 


(j)                                     which is a
discontinued product or component thereof;


 


(k)                                  which is the
subject of a consignment by such Loan Party as consignor;


 


(l)                                     which contains
or bears any intellectual property rights licensed to such Loan Party unless
the Co-Collateral Agents are satisfied that the Security Agent may sell or
otherwise dispose of such Inventory without (i) infringing the rights of
such licensor, (ii) violating any contract with such licensor, or (iii) incurring
any liability with respect to payment of royalties other than royalties
incurred pursuant to sale of such Inventory under the current licensing
agreement;


 


33

















 


(m)                               which is not
reflected in a current inventory report of such Loan Party (unless such
Inventory is reflected in a report to the Co-Collateral Agents as “in transit”
Inventory);


 


(n)                                 for which
reclamation rights have been asserted by the seller;


 


(o)                                 consists of
goods that have been returned or rejected by the buyer and are not in salable
condition;


 


(p)                                 is Commingled
Inventory;


 


(q)                                 is not covered
by casualty insurance as required by the terms of this Agreement;


 


(r)                                    consists of
Hazardous Materials or goods (other than fuels) that can be transported or sold
only with licenses that are not readily available;


 


(s)                                  any portion of
the cost of such Inventory is attributable to intercompany profit between any
Loan Party and any of its Affiliates (but only to the extent of such portion);
or


 


(t)                                    is otherwise unacceptable to the Co-Collateral
Agents in their Permitted Discretion.


 


“Eligible Transferee”
shall mean and include a commercial bank, an insurance company, a finance company,
a financial institution, any fund that invests in loans or any other “accredited
investor” (as defined in Regulation D of the Securities Act); provided
that an Eligible Transferee shall exclude individuals and Holdings and its
Subsidiaries and Affiliates.


 


“Eligible U.S. Accounts”
shall mean the Eligible Accounts owned by the U.S. Loan Parties.


 


“Eligible U.S. Inventory”
shall mean the Eligible Inventory owned by the U.S. Loan Parties.


 


“End Date” shall mean, in respect of
any Start Date, (a) for purpose of the definition of Applicable Commitment
Fee Percentage, the last day of the fiscal quarter of Holdings in which such
Start Date occurred and (b) for purposes of the definition of Applicable
Margin, the last day of
a fiscal month of Holdings during which the Administrative Agent received a
Borrowing Base Certificate pursuant to Section 9.04(i) with
respect to the last month of a fiscal quarter of Holdings during which such
Start Date occurred.


 


“Environmental Laws” shall mean all
current and future federal, state, provincial, local and foreign laws, rules or
regulations, codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other requirements of
Governmental Authorities or the common law, relating to health, safety, or
pollution or protection of the environment, natural resources, the climate or
threatened or endangered species, including laws relating to emissions,
discharges, Releases or threatened releases of, or exposure to, pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or wastes


 


34

















 


into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances, or wastes, or underground storage tanks and emissions or
releases therefrom.


 


“Equity Interests” shall mean the
shares of capital stock, partnership interests, membership interests,
beneficial interests or other ownership interests, whether voting or nonvoting,
in, or interests in the income or profits of, a Person, and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any
of the foregoing.


 


“ERISA” shall mean the Employee Retirement Income Security Act of 1974,
or any successor statute, as the same may be amended from time to time, and the
regulations promulgated and rulings issued thereunder.


 


“ERISA Affiliate” shall mean any
trade or business (whether or not incorporated) that, together with Holdings,
is treated as a single employer under Section 414(b) or 414(c) of
the Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.


 


“ERISA Event” shall mean (a) any
“reportable event”, as defined in Section 4043 of ERISA with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) a
failure by any Plan to satisfy the minimum funding standard within the meaning
of Section 412 of the Code or Section 302 of ERISA, applicable to
such Plan, in each case whether or not waived; (c) the filing pursuant to Section 412(d) of
the Code or Section 303(c) of ERISA or Section 412(c) of
the Code or Section 302(c) of ERISA, of an application for a waiver
of the minimum funding standard with respect to any Plan, (d) a determination
that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of
ERISA or Section 430(i)(4) of the Code); (e) the incurrence by
Holdings, any Loan Party or any of their respective ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any
Plan; (f) the receipt by Holdings, any Loan Party or any of their
respective ERISA Affiliates from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the incurrence by Holdings, any Loan Party or
any of their respective ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (h) the
receipt by Holdings, any Loan Party or any of their respective ERISA Affiliates
of any notice, or the receipt by any Multiemployer Plan from Holdings, any Loan
Party or any their respective ERISA Affiliates of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA or in endangered or critical status, within the meaning
of Section 432 of the Code or Section 305 of ERISA; (i) the
occurrence of a non-exempt “prohibited transaction” (as defined in Section 4975
of the Code or Section 406 of ERISA) with respect to which Holdings, any
Loan Party or any of their respective ERISA Affiliates is a “disqualified person”
(as defined in Section 4975 of the Code) or a “party in interest” (as
defined in Section 406 of ERISA) or could otherwise be liable; or (j) any
other event or condition with respect to a Plan or Multiemployer Plan that
could result in liability of Holdings, any Loan Party or any of their
respective ERISA Affiliates.


 


35

















 


“Eurodollar Loan” shall
mean each U.S. Dollar Denominated Loan designated as such by the Borrower of
such U.S. Dollar Denominated Loan at the time of the incurrence thereof or
conversion thereto bearing interest at a rate determined by reference to the
Eurodollar Rate.


 


“Eurodollar Rate” shall
mean (a) the rate appearing on Reuters Screen Libor 01 (or on any
successor or substitute page of such screen, or any successor to or
substitute for such screen, providing rate quotations comparable to those
currently provided on such page of such screen, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
applicable Interest Determination Date, as the rate for dollar deposits with a
maturity comparable to such Interest Period, divided by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).


 


“Event of Default”
shall have the meaning provided in Section 11.01.


 


“Excess Availability”
shall mean, as of any date of determination, an amount equal to (a) the
lesser of (i) the Total Commitment at such time and (ii) the Total
Borrowing Base at such time minus (b) the Aggregate Exposure at
such time.


 


“Exchange Act” shall
mean the Securities and Exchange Act of 1934, as amended.


 


“Excluded Accounts”
shall mean (i) any disbursement deposit account the funds in which are
used solely for the payment of salaries and wages, employee benefits, workers’
compensation and similar expenses or that has an ending daily balance of zero, (ii) trust
accounts for the benefit of directors, officers or employees and (iii) deposit
accounts, the daily balance in which does not at any time exceed $3,500,000 for
all such accounts, provided, however, that, notwithstanding the
above, an account shall not be an Excluded Account if (x) a Control
Agreement over such account is entered into for the benefit of the Term Loan
Agent or (y) such account is a Core Concentration Account or a Collection
Account.


 


“Excluded Subsidiaries” shall mean,
collectively, Timber Capital Holdings LLC, a Delaware limited liability
company, and Timber Note Holdings LLC, a Delaware limited liability company.


 


“Executive Order” shall
have the meaning provided in Section 8.24(a).


 


“Existing Letters of Credit”
shall have the meaning provided in Section 3.01(a)(B).


 


“Expenses” shall mean
all present and future reasonable out-of-pocket expenses incurred by or on
behalf of the Administrative Agent, the Security Agent or the Co-Collateral
Agents in connection with this Agreement, any other Loan Document or otherwise
in its capacity


 


36

















 


as
the Administrative Agent under this Agreement, a Co-Collateral Agent under the
Loan Documents or the Security Agent under any Security Document under this
Agreement, whether incurred heretofore or hereafter, which expenses shall
include, without limitation, the expenses set forth in Section 13.01.


 


“Extended
Canadian Facility Commitment” shall have the meaning provided in Section 2.19(c).


 


“Extended Loan”
shall mean each Revolving Loan and each Swingline Loan pursuant to an Extended
U.S. Facility Commitment or Extended Canadian Facility Commitment.


 


“Extended
Revolving Loan Maturity Date” shall mean, with respect to any Extended
Loan, or Extended U.S. Facility Commitment or Extended Canadian Facility
Commitment, the
date occurring on the first anniversary of the Initial Revolving Loan Maturity
Date.


 


“Extended U.S.
Facility Commitment” shall have the meaning provided in Section 2.19(c).


 


“Extension”
shall have the meaning provided in Section 2.19(a).


 


“Extension
Offer” shall have the meaning provided in Section 2.19(a).


 


“Face Amount” shall
mean, in respect of a Draft, Bankers’ Acceptance or B/A Equivalent Note, as the
case may be, the amount payable to the holder thereof on its maturity.  The Face Amount of any Bankers’ Acceptance
Loan shall be equal to the aggregate Face Amounts of the underlying Bankers’
Acceptances, B/A Equivalent Notes or Drafts, as the case may be.


 


“Facing Fee” shall have
the meaning provided in Section 4.01(c).


 


“Fair Market Value”
shall have the meaning provided in Section 9.09(d).


 


“Federal Funds Rate”
shall mean, for any period, a fluctuating interest rate equal for each day
during such period to the weighted average of the rates on overnight Federal
Funds transactions with members of the Federal Reserve System arranged by
Federal Funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.


 


“Fees” shall mean all
amounts payable pursuant to or referred to in Section 4.01.


 


“Financial Officer”
of any Person shall mean the chief executive officer, the chief operating
officer, the chief financial officer, principal accounting officer, treasurer,
controller or assistant treasurer of such Person.


 


37

















 


“Foreign” when used
in reference to any item, shall mean that such item is not Domestic.


 


“Foreign Lender” shall mean any
Lender that is organized under the laws of a jurisdiction other than in which
the applicable Borrower is resident for tax purposes.


 


“Foreign Pledge Agreement”
shall mean a pledge or charge agreement granting a Lien on Equity Interests in
a Foreign Subsidiary of Holdings to secure any Secured
Obligations, governed by the law of the jurisdiction of organization of such
Foreign Subsidiary and in form and substance reasonably satisfactory to the
Administrative Agent.


 


“Foreign Subsidiary” shall mean
Smurfit-Stone Puerto Rico and, as to any Person, any Subsidiary of such Person
that is not a Domestic Subsidiary of such Person.


 


“Fronting Lender” shall
mean DBNY, in its individual capacity or any Person serving as a successor
Administrative Agent hereunder, in its individual capacity as a Fronting
Lender.


 


“Funding Date” shall have the
meaning provided in Section 13.10(b).


 


“Funding Date Borrowing Base
Certificate” shall have the meaning provided in Section 6.02(n).


 


“Funding Date Merger” shall have the
meaning provided in the recitals to this Agreement.


 


“GAAP” shall mean
generally accepted accounting principles in the United States, applied on a
consistent basis.


 


“Governmental Authority” shall mean
any Federal, state, provincial, regional, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.


 


“Guarantee” of or by any Person
shall mean any obligation, contingent or otherwise (whether or not denominated
as a guarantee), of such Person guaranteeing any Indebtedness of any other
Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (b) to
purchase property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment of such Indebtedness or (c) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness; provided, however, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary
course of business.  The amount of any
Guarantee at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guarantee (or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof).


 


38

















 


“Guarantee and Collateral Agreement”
shall mean the Guarantee and Collateral Agreement, among Holdings, the
Borrowers, the Domestic Subsidiaries of Holdings party thereto and the Security
Agent, for the benefit of the Secured Parties, substantially in the form of Exhibit M
hereto with such modifications thereto as the Security Agent may agree.


 


“Guarantors” shall mean
and include each U.S. Guarantor and each Canadian Guarantor.


 


“Hazardous Materials” shall have the
meaning provided in Section 8.15(a)(iv).


 


“Hedging Agreement” shall mean any
agreement with respect to any swap, forward, future or derivative transaction
or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for payments only
on account of services provided by current or former directors, officers,
employees or consultants of Holdings or its Subsidiaries shall be a Hedging
Agreement.


 


“Hedging Creditors”
shall mean, collectively, each Lender, each Term Loan Lender and/or any
affiliate thereof that has entered into one or more Secured Hedging Agreements,
even if (i) in the case of a Lender, the respective Lender subsequently
ceases to be a Lender under this Agreement for any reason and (ii) in the
case of a Term Loan Lender, the respective Term Loan Lender subsequently ceases
to be a Term Loan Lender under the Term Loan Facility for any reason, together
with such Lender’s, such Term Loan Lender’s or such affiliate’s successors and
assigns, if any.


 


“Hedging Obligations”
shall mean and include, as to any Loan Party, all obligations, liabilities and
indebtedness owing by such Loan Party to the Hedging Creditors, whether now existing
or hereafter incurred under, arising out of or in connection with any Secured
Hedging Agreement, whether such Secured Hedging Agreement is now in existence
or hereinafter arising (including, without limitation, all obligations,
liabilities and indebtedness of each Loan Party in its capacity as a Guarantor
under the Guarantee and Collateral Agreement or Canadian Guarantee and
Collateral Agreement, as the case may be, to which it is a party, in respect of
the Secured Hedging Agreements).


 


“Highest Adjustable
Applicable Margins” shall have the meaning provided in the definition of
Applicable Margin.


 


“Historical
Excess Availability” shall mean (a) for the purposes of the definition
of Applicable Margin (i) in the case of the first Start Date occurring after
the Funding Date, an amount equal to (x) the sum of each day’s Excess
Availability during the period commencing on the Funding Date and ending on the
last day of the fiscal month of Holdings for which the Administrative Agent was
required prior to such first Start Date to receive a Borrowing Base Certificate
pursuant to Section 9.04(i) divided by (y) the
number of days in the period commencing on the Funding Date and ending on the
last day of the fiscal month of Holdings for which the Administrative Agent was
required prior to such first Start Date to receive a


 


39
















 


Borrowing Base
Certificate pursuant to Section 9.04(i) and (ii) in the
case of each Start Date thereafter, an amount equal to (x) the sum of each
day’s Excess Availability during the most recently ended fiscal quarter of
Holdings divided by (y) the number of days in such fiscal quarter
of Holdings, and (b) in the case of the definition of Payment Conditions,
with respect to any action or proposed action, an amount equal to (i) the
sum of each day’s Excess Availability during the one hundred and eighty (180)
consecutive day period immediately preceding such action or proposed action divided
by (ii) one hundred and eighty (180). 
In the case of clause (b) only, Excess Availability shall be
determined on a pro forma basis as if such action or proposed action and any
Loans incurred (or to be incurred), Letters of Credit issued (or to be issued)
or Indebtedness repaid (or to be repaid) in connection with such action or
proposed action had occurred or been incurred, issued or repaid, as the case
may be, on the first day of the one hundred and eighty (180) day period
immediately preceding such action or proposed action.


 


“Historical Unutilized Commitment”
shall mean, on any date of determination, an amount equal to (a) in the
case of the first Start Date occurring after the Funding Date, (i) the sum
of each day’s Total Unutilized Commitment during the period commencing on the
Funding Date and ending on the day immediately preceding such first Start Date divided
by (ii) the number of days in the period commencing on the Funding
Date and ending on the day immediately preceding such first Start Date and (b) in
the case of each Start Date thereafter, (i) the sum of each day’s Total
Unutilized Commitment during the most recently ended fiscal quarter of Holdings
divided by (ii) the number of days in such fiscal quarter of
Holdings.


 


“Holdings” shall mean,
prior to the Funding Date Merger, SSCC, and, from and after the effectiveness
of the Funding Date Merger, shall mean SSCE which shall change its name to “Smurfit-Stone
Container Corporation” upon the effectiveness of such merger.


 


“Incremental Commitment”
shall mean, for any Lender, any Commitment provided by such Lender after the
Funding Date in an Incremental Commitment Agreement delivered pursuant to Section 2.14;
it being understood, however, that on each date upon which an Incremental
Commitment of any Lender becomes effective, such Incremental Commitment of such
Lender shall be added to (and thereafter become a part of) the applicable
Commitment of such Lender for all purposes of this Agreement as contemplated by
Section 2.14.


 


“Incremental Commitment
Agreement” shall mean each Incremental Commitment Agreement in
substantially the form of Exhibit K (appropriately completed, and
with such modifications as may be reasonably satisfactory to the Administrative
Agent) executed and delivered in accordance with Section 2.14.


 


“Incremental Commitment
Date” shall mean each date upon which an Incremental Commitment under an
Incremental Commitment Agreement becomes effective as provided in Section 2.14(b).


 


“Incremental Commitment
Requirements” shall mean, with respect to any provision of an Incremental
Commitment on a given Incremental Commitment Date, the satisfaction of each of
the following conditions on the Incremental Commitment Date of the respective
Incremental Commitment Agreement:  (i) no
Default or Event of Default exists or would exist after giving effect thereto; (ii) all
of the representations and warranties contained in 


 


40

















 


the
Loan Documents shall be true and correct in all material respects at such time
(unless stated to relate to a specific earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date); (iii) the delivery by Holdings to the
Administrative Agent of an acknowledgment, in form and substance reasonably
satisfactory to the Administrative Agent and executed by each Loan Party,
acknowledging that such Incremental Commitment and all Revolving Loans
subsequently incurred, and Letters of Credit issued, as applicable, pursuant to
such Incremental Commitment shall constitute Obligations under the Loan
Documents and secured on a pari passu basis with the Obligations under
the Security Documents; (iv) the delivery by Holdings to the
Administrative Agent of an opinion, in form and substance reasonably
satisfactory to the Administrative Agent, from counsel to Holdings reasonably
satisfactory to the Administrative Agent and dated such date, covering such
customary matters incident to the transactions contemplated thereby as the
Administrative Agent may reasonably request; (v) the delivery by each Loan
Party to the Administrative Agent of such other officers’ certificates, board
of director (or equivalent governing body) resolutions and evidence of good
standing (to the extent available under applicable law) as the Administrative
Agent shall reasonably request; (vi) the incurrence of Revolving Loans in
an aggregate principal amount equal to the Total Commitment (including such
Incremental Commitment then being obtained) shall be permitted at such time
under the Intercreditor Agreement, the Term Loan Facility Documents and any
other indenture, loan agreement or other agreement with respect to Material
Indebtedness; and (vii) Holdings shall have delivered a certificate
executed by an Authorized Officer of Holdings, certifying to the best of such
officer’s knowledge, compliance with the requirements of preceding clauses (i),
(ii) and (vi) and containing the calculations (in reasonable detail)
required by preceding clause (vi).


 


“Incremental Lender”
shall have the meaning provided in Section 2.14(b).


 


“Incremental Security Documents”
shall have
the meaning provided in Section 2.14(b).


 


“Incurrence Test” shall have the
meaning provided in Section 10.01.


 


“Indebtedness” of any Person shall
mean, without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to assets
purchased by such Person, (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (excluding (i) trade
accounts payable and accrued expenses arising in the ordinary course of
business and (ii) any contingent earnout or other contingent payment
obligation incurred in connection with an acquisition permitted hereunder (but
only to the extent that such obligation has not become fixed)), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed by such Person (and in the event such Person
has not assumed or otherwise become liable for payment of such obligation, the
amount of Indebtedness under this clause (e) shall be the
lesser of the amount of such obligation and the fair market value of such
property), (f) all Guarantees by such Person, (g) all Capital Lease
Obligations of such Person, (h) all net obligations of such Person in
respect of Hedging Agreements (such net obligations to be equal at 


 


41

















 


any time to
the termination value of such Hedging Agreements or other arrangements that
would be payable by or to such Person at such time) and (i) all
obligations of such Person as an account party to reimburse any bank or any
other Person in respect of letters of credit. 
The Indebtedness of any Person shall include the Indebtedness of any
partnership in which such Person is a general partner, except to the extent
such Indebtedness is expressly non-recourse to such Person.


 


“Indemnified Person” shall have the meaning provided in Section 13.01(a).


 


“Individual Canadian Facility Exposure”
of any Lender shall mean, at any time, the sum of (a) the aggregate
principal amount of all Canadian Facility Revolving Loans made by such Lender
(and the aggregate principal amount of all Specified Foreign Currency Loans
with respect to Canadian Facility Revolving Loans in which participations have
been acquired by such Lender pursuant to Section 15) and then
outstanding (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars), (b) such Lender’s Canadian Facility RL
Percentage in the aggregate principal amount of all Canadian Facility Swingline
Loans (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars) then outstanding and (c) such Lender’s
Canadian Facility RL Percentage in the aggregate amount of all Canadian
Facility Letter of Credit Outstandings at such time.  For purposes of this definition, the amount
of Canadian Facility Revolving Loans made by the Fronting Lender shall be
reduced by the aggregate amount of Specified Foreign Currency Participations
therein purchased by the other Lenders in such Canadian Facility Revolving
Loans pursuant to Section 15.


 


“Individual Exposure”
of any Lender shall mean, at any time, the sum of (a) such Lender’s
Individual U.S. Facility Exposure at such time and (b) such Lender’s
Individual Canadian
Facility Exposure at such time.


 


“Individual U.S. Facility
Exposure” of any Lender shall mean, at any time, the sum of (a) the
aggregate principal amount of all U.S. Facility Revolving Loans made by such
Lender (and the aggregate principal amount of all Specified Foreign Currency
Loans with respect to U.S. Facility Revolving Loans in which participations
have been acquired by such Lender pursuant to Section 15) and then
outstanding (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars), (b) such Lender’s U.S. Facility RL
Percentage in the aggregate principal amount of all U.S. Facility Swingline
Loans (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars) then outstanding and (c) such Lender’s U.S.
Facility RL Percentage in the aggregate amount of all U.S. Facility Letter of
Credit Outstandings at such time.  For
purposes of this definition, the amount of U.S. Facility Revolving Loans made
by the Fronting Lender shall be reduced by the aggregate amount of Specified
Foreign Currency Participations therein purchased by the other Lenders in such
U.S. Facility Revolving Loans pursuant to Section 15.


 


“Initial Canadian Facility Commitment”
shall mean, with respect to each Lender, the Canadian Facility Commitments of such
Lender (excluding such Lender’s Extended Canadian Facility Commitment).


 


“Initial Revolving Loan Maturity Date”
shall mean the date occurring on the fourth anniversary of the Funding Date.


 


42

















 


“Initial U.S. Facility Commitment”
shall mean, with respect to each Lender, the U.S. Facility Commitments of such
Lender (excluding such Lender’s Extended U.S. Facility Commitment).


 


“Insolvency Law” shall mean, to the
extent applicable, (a) Title 11 of the United States Code, (b) the
Bankruptcy and Insolvency Act (Canada), (c) the Companies’ Creditors
Arrangement Act (Canada), and (d) any similar Federal, provincial, state,
local or foreign bankruptcy or insolvency law, in each case as now constituted or hereafter amended
or enacted.


 


“Intercreditor Agreement” shall mean an
Intercreditor Agreement among Holdings, the other U.S. Loan Parties, the
Administrative Agent, the Term Loan Agent and, if applicable, one or more
Senior Representatives for holders of Permitted Second Lien Notes,
substantially in the form of Exhibit E hereto with such
modifications thereto that are not materially adverse to the Lenders as the
Administrative Agent may agree.


 


“Interest Coverage Ratio” shall
mean, on the date of any incurrence of Indebtedness or any other event,
including any change in interest rates applicable to existing Indebtedness
resulting from a modification or amendment to the documents governing such
Indebtedness, in respect of which the Incurrence Test is to be satisfied (the “Test
Date”), the ratio of (a) aggregate amount of Consolidated EBITDA for
the then most recent four fiscal quarters for which financial statements have
been delivered immediately prior to such date (the “Four Quarter Period”)
to (b) the aggregate Consolidated Interest Expense for such Four Quarter
Period.  In making the foregoing
calculation, (A) pro forma effect shall be given to any Indebtedness
incurred or repaid (including any Indebtedness irrevocably called for
redemption) during the period (the “Reference Period”) commencing on the
first day of the Four Quarter Period and ending on the Test Date (other than
Indebtedness incurred or repaid hereunder or under any similar arrangement
except to the extent commitments hereunder or thereunder, as the case may be,
(or under any predecessor or successor revolving credit or similar arrangement
in effect on the last day of such Four Quarter Period) are permanently
reduced), in each case as if such Indebtedness had been incurred or repaid on
the first day of such Reference Period; (B) Consolidated Interest Expense
attributable to interest on any Indebtedness (whether existing or being
incurred) computed on a pro forma basis and bearing a floating interest rate
shall be computed as if the rate in effect on the Test Date (taking into
account any Hedging Agreement applicable to such Indebtedness if such Hedging
Agreement has a remaining term in excess of 12 months or, if shorter, at least
equal to the remaining term of such Indebtedness) had been the applicable rate
for the entire period; (C) pro forma effect shall be given to Asset Sales
and Permitted Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Sale) that occur during such Reference
Period as if they had occurred and such proceeds had been applied on the first
day of such Reference Period; and (D) pro forma effect shall be given to
asset sales and permitted acquisitions (including giving pro forma effect to
the application of proceeds of any asset sale) that have been made by any
Person that has become a U.S. Loan Party or has been merged with or into
Holdings or any U.S. Loan Party during such Reference Period and that would
have constituted Asset Sales or Permitted Acquisitions had such transactions
occurred when such Person was a U.S. Loan Party as if such asset sales or
permitted acquisitions were Asset Sales or Permitted Acquisitions that occurred
on the first day of such Reference Period; provided that to the extent
that clause (C) or (D) of this sentence requires that pro forma
effect be given to an Asset Sale or Permitted Acquisition, such pro forma 


 


43

















 


calculation
shall be based upon the four full fiscal quarters immediately preceding the
Test Date of the Person, or division or line of business of the Person, that is
acquired or disposed for which financial information is available.


 


“Interest Determination
Date” shall mean, with respect to any Eurodollar Loan, the second Business
Day prior to the commencement of any Interest Period relating to such
Eurodollar Loan.


 


“Interest Period” shall
have the meaning provided in Section 2.09.


 


“Inventory” shall mean “inventory”
as such term is defined in Article 9 of the UCC or the PPSA, as
applicable.


 


“Inventory Reserves” shall mean reserves against Inventory
equal to the sum of the following:


 


(a)           a reserve for shrink, or discrepancies that arise
pertaining to inventory quantities on hand between the Loan Parties’ perpetual
accounting system and physical counts of the inventory in accordance with the
Loan Parties’ historical accounting procedures and is acceptable to the
Co-Collateral Agents in their Permitted Discretion;


 


(b)           a revaluation reserve whereby capitalized favorable
variances shall be deducted from Eligible Inventory and unfavorable variances
shall not be added to Eligible Inventory;


 


(c)           a lower of the cost or market reserve for any differences
between a Loan Party’s actual cost to produce any Inventory versus the selling
price of such Inventory to third parties, determined on a product line basis;
and


 


(d)           any other reserve established by the Co-Collateral Agents
in their Permitted Discretion, from time to time.


 


“Investment” shall mean, as applied
to any Person (the “investor”), any direct or indirect purchase or other
acquisition by the investor of, or a beneficial interest in, stock or other
securities of any other Person, including any exchange of equity securities for
Indebtedness, or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by the
investor to any other Person, including all Indebtedness and accounts
receivable owing to the investor from such other Person that did not arise from
sales or services rendered to such other Person in the ordinary course of the
investor’s business.  Except for any
Investment described in the immediately succeeding sentence, the amount of any
Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment minus
any amounts (a) realized upon the disposition of assets comprising an
Investment (including the value of any liabilities assumed by any Person other
than Holdings, any Borrower or any Subsidiary of Holdings in connection with
such disposition), (b) constituting repayments of Investments that are
loans or advances or (c) constituting cash returns of principal or capital
thereon (including any dividend, redemption or repurchase of 


 


44

















 


equity that is
accounted for, in accordance with GAAP, as a return of principal or
capital).  For purposes of this
Agreement, the redemption, purchase or other acquisition for value by any
Subsidiary of Holdings of any shares of its capital stock from a Person other
than Holdings, any Borrower or any other Subsidiary of Holdings shall be deemed
to be an “Investment” by such Subsidiary in its shares of capital stock.


 


“IP Security Agreements” shall have
the meaning set forth in (a) prior to the Funding Date, the Guarantee and
Collateral Agreement attached hereto as Exhibit M and (b) on
and after the Funding Date, the Guarantee and Collateral Agreement.


 


“IRS” shall mean the U.S. Internal
Revenue Service.


 


“Issuing Lender” shall
mean each of DBNY (except as otherwise provided in Section 12.09),
JPMCB and any other Lender reasonably acceptable to the Administrative Agent
and Holdings which agrees to issue Letters of Credit hereunder.  Any Issuing Lender may, in its discretion,
arrange for one or more Letters of Credit to be issued by one or more Affiliates
of such Issuing Lender (and such Affiliate shall be deemed to be an “Issuing
Lender” for all purposes of the Loan Documents); provided that, if the Extension is
effected in accordance with Section 2.19, then on the occurrence of
the Initial Revolving Maturity Date, each Issuing Lender shall have the right
to resign as such on, or on any date within twenty (20) Business Days after,
the Initial Revolving Maturity Date, upon not less than ten (10) days’
prior written notice thereof to Holdings and the Administrative Agent and, in
the event of any such resignation and upon the effectiveness thereof, the
resigning Issuing Lender shall retain all of its rights hereunder and under the
other Loan Documents as Issuing Lender with respect to all Letters of Credit
theretofore issued by it (which Letters of Credit shall remain outstanding in
accordance with the terms hereof until their respective expirations) but shall
not be required to issue any further Letters of Credit hereunder.  If at any time and for any reason (including
as a result of resignations as contemplated by the last proviso to the
preceding sentence), an Issuing Lender has resigned in such capacity in
accordance with the preceding sentence and no Issuing Lenders exist at such
time, then no Person shall be an Issuing Lender hereunder obligated to issue
Letters of Credit unless and until (and only for so long as) a Lender (or
Affiliate of a Lender) reasonably satisfactory to the Administrative Agent and
Holdings agrees to act as Issuing Lender hereunder.


 


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


 


“Joinder Agreement”
shall mean a Joinder Agreement substantially in the form of Exhibit I
(appropriately completed).


 


“JPMCB” shall mean
JPMorgan Chase Bank, N.A., in its individual capacity, and any successor
corporation by merger, consolidation or otherwise.


 


“Judgment Currency”
shall have the meaning provided in Section 13.20.


 


“Judgment Currency
Conversion Date” shall have the meaning provided in Section 13.20.


 


45

















 


“L/C Supportable
Obligations” shall mean (i) obligations of Holdings or any of its
Subsidiaries with respect to workers compensation, surety bonds and other
similar statutory obligations and (ii) such other obligations of Holdings
or any of its Subsidiaries as are permitted to exist pursuant to the terms of
this Agreement (other than obligations in respect of (x) the Term Loan
Facility, (y) any Indebtedness that is subordinated in right of payment to
the Obligations or (z) any Equity Interests issued by Holdings).


 


“Lead Arrangers” shall
mean Deutsche Bank Securities Inc. J.P. Morgan Securities Inc., GE Capital Markets, Inc.,
Banc of America Securities LLC and Wells Fargo Capital Finance, LLC, in their
capacities as Joint Lead Arrangers in respect of the credit facilities
hereunder, and any successors thereto.


 


“Lender” shall mean
each financial institution listed on Schedule 1.01(a), as well as any
Person that becomes a “Lender” hereunder pursuant to Section 2.13, Section 2.14
or Section 13.04(b).


 


“Lender Creditors”
shall mean, collectively, the Lenders, each Issuing Lender, the Swingline
Lender, the Fronting Lender, the Administrative Agent, the Co-Collateral Agents
and the Security Agent.


 


“Letter of Credit”
shall mean each U.S. Facility Letter of Credit and each Canadian Facility
Letter of Credit.


 


“Letter of Credit Back-Stop
Arrangements” shall have the meaning provided in Section 2.18.


 


“Letter of Credit Exposure” shall
mean the sum of (i) the U.S. Facility Letter of Credit Exposure plus
(ii) the Canadian Facility Letter of Credit Exposure.


 


“Letter of Credit Fee”
shall have the meaning provided in Section 4.01(b).


 


“Letter of Credit
Outstandings” shall mean, at any time, the sum of all U.S. Facility Letter
of Credit Outstandings and Canadian Facility Letter of Credit Outstandings.


 


“Letter of Credit Request”
shall have the meaning provided in Section 3.03(a).


 


“Lien” shall mean, with respect to
any asset, (a) any mortgage, deed of trust, lien, pledge, assignment for
security, hypothecation, prior claim (within the meaning of the Civil Code of
Quebec) encumbrance, charge or security interest in, on or of such asset and (b) the
interest of a vendor or a lessor under any conditional sale agreement, Capital
Lease or title retention agreement relating to such asset.


 


“Loan” shall mean each
Revolving Loan, each Swingline Loan and each Extended Loan.


 


“Loan Document Obligations”
shall mean and include, as to any Loan Party, all Obligations of such Loan Party
to the Lender Creditors, whether now existing or hereafter incurred under,
arising out of, or in connection with, each Loan Document to which such Loan 


 


46

















 


Party
is a party (including, without limitation, in the event such Loan Party is a
Guarantor, all such obligations, liabilities and indebtedness of such Loan
Party in its capacity as a Guarantor under the Guarantee and Collateral
Agreement or Canadian Guarantee and Collateral Agreement to which it is a party)
(except to the extent consisting of Hedging Obligations or Cash Management
Services Obligations).


 


“Loan Documents” shall
mean this Agreement, the Guarantee and Collateral Agreement, each Canadian
Security Agreement, each Foreign Pledge Agreement, each Mortgage, the
Intercreditor Agreement, and, after the execution and delivery thereof pursuant
to the terms of this Agreement, each Incremental Commitment Agreement, each
Note, each Joinder Agreement and each other Security Document.


 


“Loan Party” shall mean
each U.S. Loan Party and each Canadian Loan Party.


 


“Majority Lenders” of
any Tranche shall mean those Non-Defaulting Lenders which would constitute the
Required Lenders under, and as defined in, this Agreement if all outstanding
Obligations of the other Tranches under this Agreement were repaid in full and
all Commitments with respect thereto were terminated.


 


“Mandatory Borrowing”
shall have the meaning provided in Section 2.01(c).


 


“Margin Stock” shall have the meaning given such term
under Regulation U.


 


“Material Adverse Effect” shall mean
(a) a materially adverse effect on the business, operations, properties or
financial condition of Holdings and its Subsidiaries, taken as a whole, or (b) material
impairment of the rights of or benefits available to the Lenders under any Loan
Document.


 


“Material Contract” shall mean any
contract to which Holdings, any other Borrower or any of the Subsidiaries of Holdings is or becomes a party that
provides for payments by or to Holdings, any other Borrower or any of
their respective Subsidiaries in excess of $50,000,000 per year and that has a term in excess
of twelve months.


 


“Material Indebtedness” shall mean
Indebtedness (other than the Loan Document Obligations), or obligations in
respect of one or more Hedging Agreements, of any one or more of Holdings, any other Borrower and their
respective Subsidiaries in an aggregate principal amount exceeding
$30,000,000.


 


“Material Subsidiary” shall mean
each Subsidiary of Holdings now existing or hereafter acquired or formed and each
successor thereto that (a) for the most recent period of four consecutive
fiscal quarters of Holdings accounted (on a consolidated basis with its
Subsidiaries) for more than 5% of the consolidated revenues of Holdings, (b) as at the end of such
fiscal quarter, was (on a consolidated basis with its Subsidiaries) the owner
of more than 5% of the consolidated assets of Holdings, as shown on the consolidated
financial statements of Holdings for such fiscal quarter or (c) is irrevocably
designated as a Material Subsidiary in a writing by a Loan Party to the
Administrative Agent; provided that no Excluded Subsidiary shall be
deemed to be a Material Subsidiary.  Schedule
1.01(c) sets forth each Subsidiary that is a Material Subsidiary on
and as of the Closing Date.


 


47

















 


“Maturity Date” shall mean the Revolving Loan
Maturity Date or the Swingline Expiry Date, as the case may be.


 


“Maximum Canadian Facility Letter of Credit Amount”
shall mean $37,500,000.


 


“Maximum Canadian Facility Swingline Amount”
shall mean $20,000,000.


 


“Maximum U.S. Facility Letter of Credit Amount”
shall mean $112,500,000.


 


“Maximum U.S. Facility Swingline Amount” shall
mean $45,000,000.


 


“Minimum Borrowing Amount”
shall mean (a) for Base Rate Loans and Canadian Prime Rate Loans (in each
case, other than Swingline Loans), U.S.$500,000, (b) for Eurodollar Loans,
U.S.$500,000, (c) for Bankers’ Acceptance Loans, U.S.$500,000 and (d) for
Swingline Loans, U.S.$100,000; provided that during a Dominion Period
there shall be no Minimum Borrowing Amount with respect to (a) and (d) above.


 


“Minimum
Extension Condition” shall have the meaning provided in Section 2.19(d).


 


“Moody’s” shall mean
Moody’s Investors Service, Inc.


 


“Mortgaged Properties” shall mean (i) each
parcel (or adjoining parcels) of real property (including any real property
fixtures thereon) owned by a U.S. Loan Party on the Closing Date and specified
on Schedule 1.01(d), and (ii) each After-Acquired Mortgage Property
with respect to which a Mortgage is granted pursuant to Section 9.09.


 


“Mortgages” shall mean (a) the
mortgages, deeds of trust, assignments of leases and rents, modifications and
other security documents with respect to Mortgaged Properties or delivered
pursuant to Section 9.09. 
Each Mortgage shall be substantially in the form of Exhibit O,
or otherwise in form and substance reasonably satisfactory to the
Administrative Agent.


 


“Multiemployer Plan” shall mean a
multiemployer plan as defined in Section 4001(a)(3) of ERISA that has
been maintained, sponsored or contributed to by (or to which there is or may be
an obligation to contribute to by) Holdings or an ERISA Affiliate within
the preceding five plan years.


 


“NAIC” shall mean the
National Association of Insurance Commissioners.


 


“Net Cash Proceeds” shall mean (a) with
respect to any Asset Sale, the Cash Proceeds therefrom, net of (i) costs
of sale (including payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than Loans and
borrowings under the Term Loan Facility) required to be repaid under the terms
thereof as a result of such Asset Sale), (ii) if such Asset Sale includes
the sale or transfer of assets included in the ABL Priority Collateral and pledged
to secure the Obligations, any Cash Proceeds therefrom equal to the book value
of the inventory, receivables or other ABL Priority Collateral included in such
sale or transfer, (iii) taxes paid or reasonably estimated to be payable
in the year such Asset 


 


48

















 


Sale occurs or
in the following year as a result thereof and (iv) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations and any purchase price adjustments associated with
such Asset Sale (provided that, to the extent and at the time any such
amounts are released from such reserve, such amounts shall constitute Net Cash
Proceeds); and (b) with respect to any issuance of debt or equity securities,
the cash proceeds thereof, net of underwriting commissions or placement fees
and expenses directly incurred in connection therewith.


 


“Net Orderly Liquidation Value”
shall mean the “net orderly liquidation value” determined by an unaffiliated
valuation company reasonably acceptable to the Co-Collateral Agents after
performance of an inventory valuation to be done at the Co-Collateral Agents’
request and the Borrowers’ expense, less the amount estimated by such valuation
company for marshalling, reconditioning, carrying, and sales expenses
designated to maximize the resale value of such Inventory and assuming that the
time required to dispose of such Inventory is customary with respect to such
Inventory and expressed as a percentage of the net book value of such
Inventory.


 


“Non-B/A Lender” shall
mean any Lender which is unwilling or unable to create Bankers’ Acceptances by
accepting Drafts and which has identified itself as a “Non-B/A Lender” by
written notice to the Administrative Agent and Holdings.


 


“Non-Cash Charges” shall mean any
non-cash charges or losses, including (a) any impairment charge or asset
write-off or write-down related to intangible assets (including goodwill),
long-lived assets and investments in debt and equity securities pursuant to
GAAP, (b) long-term incentive plan accruals and any non-cash expenses
resulting from the grant of stock options or other equity-based incentives to
any director, officer or employee of Holdings, any other Borrower or any
Subsidiary of Holdings and (c) any non-cash charges or losses resulting
from the application of purchase accounting; provided that Non-Cash
Charges shall not include additions to bad debt reserves or bad debt expense.


 


“Non-Defaulting Lender”
shall mean each Lender other than a Defaulting Lender; provided, however,
solely for purposes of Section 4.01(a), a Lender that is a
Defaulting Lender solely under clause (iii), (iv) or (v) (but, in the
case of such clause (v), only to the extent relating to either clause (iii) or
(iv)) of the definition thereof shall be treated as a Non-Defaulting Lender and
not as a Defaulting Lender.


 


“Non-Wholly-Owned
Subsidiary” shall mean, as to any Person, each Subsidiary of such Person
which is not a Wholly-Owned Subsidiary of such Person.


 


“Note” shall mean each
U.S. Facility Revolving Note, each U.S. Borrower Canadian Facility Revolving
Note, each Canadian Borrower Canadian Facility Revolving Note, the U.S.
Facility Swingline Note, the U.S. Borrower Canadian Facility Swingline Note and
the Canadian Borrower Canadian Facility Swingline Note.


 


“Notice of Borrowing”
shall have the meaning provided in Section 2.03(a).


 


“Notice of
Conversion/Continuation” shall have the meaning provided in Section 2.06.


 


49

















 


“Notice Office” shall
mean (i) for credit notices, the office of the Administrative Agent
located at 60 Wall Street, NYC60-0208, 2nd Floor, New York, New York
10005-2858, Attention:  Erin Morrissey,
Telephone No.: (212) 250-1765, Telecopier No.: (212) 797-5690, and email:  erin.morrissey@db.com and (ii) for
operational notices, the office of the Administrative Agent located at 5022
Gate Parkway, Suite 200, Jacksonville, Florida 32256, Attention:  Jennifer Fass, Telephone No.: (904) 527-6394,
Telecopier No.: (904) 494-6853, and e-mail: 
jennifer.fass@db.com; provided that in the case of all Borrowings
of Canadian Borrower Revolving Loans denominated in Canadian Dollars, a copy of
such notice also shall be delivered simultaneously to DB Canada located at 199
Bay Street, Suite 4700, Commerce Court West, P.O. Box 263, Toronto,
Ontario, Canada M5L 1E9, Attention: 
Marcellus Leung, Telephone No.: (416) 682-8252, and Telecopier No.:
(416) 682-8484; or (in either case) such other office or person as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.


 


“Obligation Currency”
shall have the meaning provided in Section 13.20.


 


“Obligations” shall
mean all amounts owing to the Administrative Agent, the Security Agent, the
Co-Collateral Agents, any Issuing Lender, the Swingline Lender or any Lender
pursuant to the terms of this Agreement or any other Loan Document (other than
the Intercreditor Agreement), including, without limitation, all amounts in
respect of any principal (or Face Amount, as applicable), premium (if any),
interest (including any interest accruing subsequent to the filing of a
petition in bankruptcy, reorganization or similar proceeding at the rate
provided for in this Agreement, whether or not such interest is an allowed
claim under any such proceeding or under applicable state, federal or foreign
law), penalties, fees, expenses (including Expenses), indemnifications,
reimbursements (including Unpaid Drawings with respect to Letters of Credit),
damages and other liabilities, and guarantees in each case of the foregoing
amounts.


 


“Participant” shall
have the meaning provided in Section 3.04(a).


 


“Participating Specified
Foreign Currency Lender” shall have the meaning provided in Section 15.01.


 


“Patriot Act” shall
have the meaning provided in Section 13.17.


 


“Payment Conditions”
shall mean that at the time of each action or proposed action and after giving
effect thereto:


 


(i)            each of the following conditions are
satisfied:  (a) no Default or an
Event of Default shall have occurred and be continuing, (b) Excess
Availability (on the date of such action or proposed action after giving effect
to any Loans incurred (or to be incurred) or Letters of Credit issued (or to be
issued) on such date in connection with such action or proposed action) and
Historical Excess Availability, calculated on a pro forma basis in accordance
with the definition thereof, shall exceed the greater of (A) $137,500,000
and (B) 25% of the Total Commitment as then in effect, (c) Holdings
shall have a Consolidated Fixed Charge Coverage Ratio of not less than
1.10:1.00 for the Test 


 


50
















 


Period
then most recently ended for which financial statements are available
calculated on a pro forma basis in accordance with Section 1.04 as
if such action or proposed action had occurred on the first day of such Test
Period, and (d) Holdings shall have delivered to the Administrative Agent
a certificate of an Authorized Officer of Holdings certifying as to compliance
with preceding clauses (a) through (c) and demonstrating (in
reasonable detail) the calculations required by preceding clauses (b) and
(c); or


 


(ii)           each of the following conditions are
satisfied:  (a) no Default or an
Event of Default shall have occurred and be continuing, (b) Excess
Availability (on the date of such action or proposed action after giving effect
to any Loans incurred (or to be incurred) or Letters of Credit issued (or to be
issued) on such date in connection with such action or proposed action) and
Historical Excess Availability, in each case, calculated on a pro forma basis
in accordance with the definition thereof, shall exceed the greater of (A) $275,000,000
and (B) 50% of the Total Commitment as then in effect, and (c) Holdings
shall have delivered to the Administrative Agent a certificate of an Authorized
Officer of Holdings certifying as to compliance with preceding clauses (a) and
(b) and demonstrating (in reasonable detail) the calculations required by
preceding clause (b).


 


“Payment Office” shall
mean (i) except as provided in clause (ii) below, the office of the
Administrative Agent located at 60 Wall Street, New York, New York 10005 and (ii) in
the case of all payments with respect to Canadian Dollar Denominated Revolving
Loans, the office of DB Canada located at 199 Bay Street, Suite 4700,
Commerce Court West, P.O. Box 263, Toronto, Ontario, Canada M5L 1E9, or
(in either case) such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.


 


“PBGC” shall mean the Pension
Benefit Guaranty Corporation referred to and defined in ERISA or any successor
thereto.


 


“Perfection Certificate”
shall mean each of the U.S. Perfection Certificate and the Canadian Perfection
Certificate.


 


“Permitted Acquisition” shall have
the meaning provided in Section 10.05(f).


 


“Permitted
Discretion” shall mean a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment, following either (x) consultation with the Borrowers or
(y) two (2) Business Days’ advance notice to the Borrowers.


 


“Permitted Investments”
shall mean any of the following:


 


(a)           any evidence of Indebtedness,
maturing not more than one year after the acquisition thereof, issued by the
United States of America or Canada, or any instrumentality or agency thereof
and guaranteed fully as to principal, interest and premium, if any, by the
United States of America or Canada;


 


51

















 


(b)           any certificate of deposit, banker’s
acceptance or time deposit (including Eurodollar time deposits), maturing not
more than one year after the date of purchase, issued or guaranteed by or
placed with (i) the Administrative Agent or any bank providing Cash
Management Services to Holdings or any of its Subsidiaries or (ii) a
commercial banking institution that has long-term debt rated “A2” or higher by
Moody’s Investors Service, Inc. (“Moody’s”) or “A” or higher by
Standard & Poor’s Ratings Services (“S&P”) and which has a
combined capital and surplus of not less than $500,000,000;


 


(c)           commercial paper (i) maturing
not more than 270 days after the date of purchase and (ii) issued by
a corporation (other than a Loan Party or any Affiliate of a Loan Party) with a
rating, at the time as of which any determination thereof is to be made, of
“P-1” or higher by Moody’s or “A-1” or higher by S&P (or equivalent rating
in the case of a Permitted Investment made by a Foreign Subsidiary of
Holdings);


 


(d)           investments in fully collateralized
repurchase agreements with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered
into with any bank or trust company meeting the qualifications specified in
clause (b) above;


 


(e)           demand deposits with any bank or
trust company;


 


(f)            money market funds substantially all
the assets of which are comprised of securities of the types described in
clauses (a) through (e) above; and


 


(g)           in the case of the Foreign
Subsidiaries of Holdings, short-term investments comparable to the foregoing.


 


“Permitted Liens” shall mean, with
respect to any Person, any of the following:


 


(a) Liens for taxes, assessments or
other governmental charges or levies not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued, provided
that (i) any proceedings commenced for the enforcement of such Liens shall
have been duly suspended and (ii) full provision for the payment of all such taxes known to such Person
has been made on the books of such Person if and to the extent required by
GAAP;


 


(b) mechanics’, materialmen’s, carriers’,
warehousemen’s, landlord’s and similar Liens arising by operation of law and in
the ordinary course of business and securing obligations of such Person that
are not overdue for a period of more than 60 days or are being contested
in good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for the
enforcement of such Liens shall have been duly suspended and (ii) full
provision for the payment of such Liens has been made on the books of such
Person if and to the extent required by GAAP;


 


(c) Liens arising in connection with
workers’ compensation, unemployment insurance, old age pensions and social
security benefits that are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in the case of
any such contest (i) any proceedings commenced for the enforcement of such
Liens shall have 


 


52

















 


been duly
suspended and (ii) full provision for the payment of such Liens has been
made on the books of such Person if and to the extent required by GAAP;


 


(d) (i) Liens incurred or
deposits made in the ordinary course of business to secure the performance of
bids, tenders, statutory obligations, fee and expense arrangements with
trustees and fiscal agents (exclusive of obligations incurred in connection
with the borrowing of money or the payment of the deferred purchase price of
property) and (ii) Liens securing surety, indemnity, performance, appeal
and release bonds, in the case of either clause (i) or (ii),
securing such obligations in an amount outstanding at any time not to exceed
individually or in the aggregate $100,000,000, provided that full
provision for the payment of all such obligations has been made on the books of
such Person if and to the extent required by GAAP;


 


(e) imperfections of title,
restrictive covenants, rights of way, easements, servitudes, mineral interest
reservations, reservations made in the grant from the Crown, municipal and
zoning ordinances, general real estate taxes and assessments not yet delinquent
and other encumbrances on real property that (i) do not arise out of the
incurrence of any Indebtedness for money borrowed and (ii) do not
interfere with or impair in any material respect the utility, operation, value
or marketability of the real property on which such Lien is imposed;


 


(f) the rights of collecting banks or
other financial institutions having a right of setoff, revocation, refund or
chargeback with respect to money or instruments on deposit with or in the
possession of such financial institution;


 


(g) leases or subleases granted to
others not interfering in any material respect with the business of Holdings or
any Subsidiary of Holdings and any interest or title of a lessor under any
lease (whether a Capital Lease or an operating lease) permitted by this
Agreement or the Security Documents;


 


(h) Liens on accounts receivable for
which attempts at collection have been undertaken by a third party authorized
by the Person owning such accounts receivable;


 


(i) Liens arising from the granting of
a license to enter into or use any asset of Holdings or any Subsidiary of
Holdings to any Person in the ordinary course of business of Holdings or any
Subsidiary of Holdings that does not interfere in any material respect with the
use or application by Holdings or any Subsidiary of Holdings of the asset
subject to such license;


 


(j) Liens attaching solely to cash
earnest money deposits made by Holdings or any Subsidiary of Holdings in
connection with any letter of intent or purchase agreement entered into it in
connection with an acquisition permitted hereunder;


 


(k) Liens arising from precautionary
UCC financing statements (or analogous personal property security filings or
registrations in other jurisdictions) regarding operating leases;


 


(l) Liens on insurance policies and proceeds thereof to secure
premiums thereunder; and


 


53

















 


(m) Liens arising out of judgments or
awards in respect of which an appeal or proceeding for review is being
diligently prosecuted, provided that (i) a stay of execution
pending such appeal or proceeding for review has been obtained and (ii) full
provision for the payment of such Liens has been made on the books of such
Person if and to the extent required by GAAP.


 


For the purposes of the Security Documents
and Section 8.17, “Permitted Liens” shall also be deemed to include
the Liens permitted by Sections 10.02(a)(ii), (iii), (iv),
(v), (vi), (vii), (ix), (x), (xii), (xiii),
(xiv) and (xv).  Any
reference in any of the Loan Documents (other than the Intercreditor Agreement)
to a Permitted Lien is not intended to and shall not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone,
any Lien created by any of the Loan Documents to any Permitted Lien.


 


“Permitted Notes” shall mean Permitted Second Lien Notes
or Permitted Unsecured Notes.


 


“Permitted Refinancing Indebtedness”
shall mean, with respect to Holdings, any Borrower or any Subsidiary of
Holdings, any refinancing, refunding, renewal or extension of any Indebtedness,
in whole or in part, of such Person from time to time; provided that (a) the
principal amount (or accreted value, if applicable) or, in the case of any
revolving facility, the commitments thereunder, thereof does not exceed the
principal amount (or accreted value, if applicable) or in the case of any
revolving facility, the commitments thereunder, (except as otherwise permitted
under Section 10.01(f)) of the Indebtedness so modified,
refinanced, refunded, renewed or extended (the “Refinanced Debt”) except
by an amount equal to unpaid accrued interest and premium thereon plus other
reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder, (b) the
Indebtedness resulting from such refinancing, refunding, renewal or extension
(the “Refinancing Debt”) has a final maturity date the same as or later
than the final maturity date of, and, other than in the case of a revolving
facility, has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Refinanced Debt, (c) at the time
thereof, no Event of Default shall have occurred and be continuing, (d) to
the extent such Refinanced Debt is subordinated in right of payment to the
Obligations, such Refinancing Debt is subordinated in right of payment to the
Obligations on terms, when taken as a whole, at least as favorable to the
Lenders as those contained in the documentation governing the Refinanced Debt, (e) if
the Refinanced Debt is secured, the Refinancing Debt shall be unsecured or
secured only by assets that secured such Refinanced Debt; provided that
if the Refinanced Debt is the Term Loan Facility, such Refinancing Debt may be
secured by any assets or properties of Holdings or any Domestic Subsidiary or
Canadian Subsidiary of Holdings which also secures the Obligations, (f) the
terms and conditions (including, if applicable, as to collateral but excluding
as to subordination, interest rate, redemption premium and other pricing
provisions) of any such Refinancing Debt, taken as a whole, are not materially
less favorable to the Loan Parties or the Lenders than the terms and conditions
of the Refinanced Debt; provided that, in respect of any Refinancing
Debt in an aggregate principal amount of $75,000,000 or greater, a certificate
of a Responsible Officer of Holdings delivered to the Administrative Agent at
least five Business Days prior to the incurrence of such Indebtedness, together
with a reasonably detailed description of the material terms and conditions of
such Refinancing Debt or drafts of the 


 


54

















 


documentation
relating thereto, stating that Holdings or the Subsidiary of Holdings incurring
such Indebtedness has determined in good faith that such terms and conditions
satisfy the foregoing requirement of this clause (f) shall be conclusive
evidence that such terms and conditions satisfy the foregoing requirement
unless the Administrative Agent notifies Holdings within such five Business Day
period that it disagrees with such determination (including a reasonable
description of the basis upon which it disagrees) and (g) unless each
Domestic Subsidiary and Canadian Subsidiary of Holdings that is a primary
obligor or guarantor in respect of such Refinancing Debt was also a primary
obligor or guarantor in respect of the Refinanced Debt, all the Domestic
Subsidiaries and Canadian Subsidiaries of Holdings that are primary obligors or
guarantors of such Refinancing Debt shall be Loan Parties; provided  further,
that (A) if the proceeds of revolving loans are used to repurchase or
redeem any Indebtedness, within 90 days of such repurchase or redemption,
Holdings or any Subsidiary of Holdings may incur Indebtedness otherwise meeting the
requirements of this definition (as if such new Indebtedness were used to
refinance such repurchased or redeemed Indebtedness) to repay such revolving
loans and (B) if the proceeds of Indebtedness meeting the requirements of
this definition cannot be immediately applied to refinance existing
Indebtedness, then, unless such proceeds are held by Holdings or a Subsidiary
of Holdings pending such refinancing, they may be used to temporarily prepay
revolving loans or other revolving debt, which then may be redrawn to refinance
such Indebtedness within 90 days of such prepayment, provided that the
Co-Collateral Agents in their Permitted Discretion may establish a Reserve in
an amount equal to the amount the Loans are prepaid pursuant to this
sub-paragraph (B).  Notwithstanding
anything to the contrary in clause (f) above, with respect to
Refinanced Debt that is the Term Loan Facility, the terms and conditions as to
collateral of the Refinancing Debt shall be deemed to be not materially less
favorable to the Loan Parties or the Lenders than the terms as to collateral of
the Refinanced Debt if the Refinancing Debt (i) is secured by collateral
meeting the requirements of clause (e) above and (ii) is subject to
substantially the same intercreditor arrangements as set forth in and
contemplated by the Intercreditor Agreement (for the avoidance of doubt with
the Secured Parties benefiting from a first priority security interest in the
ABL Priority Collateral, provided that any differing terms or terms with
respect to assets or property of Canadian Subsidiaries of Holdings (if any) are
agreed to by the Administrative Agent.


 


“Permitted Second Lien Notes” shall
mean secured Indebtedness incurred by Holdings and issued under an indenture or
similar governing instrument in a registered public offering or a Rule 144A
or other private placement transaction in the form of one or more series of second lien
secured notes; provided  that
(i) such Indebtedness is secured by (A) the Term Priority Collateral
on a second lien, subordinated basis to the obligations in respect of the Term
Facility and on a senior basis to the Obligations and (B) the ABL Priority
Collateral of the U.S. Loan Parties on a third lien, subordinated basis to the
Obligations, and is not secured by any property or assets of Holdings, any Borrower or
any Subsidiary of Holdings (including any Foreign Subsidiary of
Holdings)
other than the Collateral; (ii) such Indebtedness does not mature
or have scheduled amortization or other required payments of principal prior to
the date that is ninety-one (91) days after the later of (A) the Latest
Maturity Date (as defined in the Term Loan Credit Agreement) at the time such
Indebtedness is incurred and (B) the Extended Revolving Loan Maturity
Date, (iii) the security agreements relating to such Indebtedness are
substantially the same as the Security Documents (other than the Canadian
Security Documents) (with such differences as are reasonably satisfactory to
the Administrative Agent), (iv) such Indebtedness is not guaranteed by any
Subsidiaries other than the U.S. Guarantors, (v) such Indebtedness and the



 


55

















 


indenture or
other governing instrument applicable thereto does not contain covenants,
events of default, or other terms and conditions that, when taken as a whole,
are more restrictive to the Loan Parties than the terms of this Agreement, and (vi) a
Senior Representative acting on behalf of the holders of such Indebtedness pursuant to the indenture or
other instrument governing such Indebtedness shall have become party to the
Intercreditor Agreement (or a successor intercreditor agreement having the same
terms as the Intercreditor Agreement or such other terms reasonably acceptable
to the Administrative Agent).  Permitted
Second Lien Notes will include any Registered Equivalent Notes issued in exchange
therefor.


 


“Permitted Timber Financing” shall
mean any financing transaction by Holdings or any Subsidiary of Holdings
secured by timber or timberland, or a Sale/Leaseback Transaction in which the
subject property consists of timber or timberland, in each case owned by such
Person for more than 90 days immediately prior to such financing transaction or
Sale/Leaseback Transaction, so long as such financing transaction or
Sale/Leaseback Transaction (a) does not have a final maturity or final
payment date in respect thereof on or prior to the later of (A) the Latest
Maturity Date (as defined in the Term Loan Credit Agreement) then in effect or
a Weighted Average Life to Maturity shorter than the number of days to the
maturity of the Term Loan Facility and (B) the Extended Revolving Loan
Maturity Date, (b) results in the Net Cash Proceeds to any Loan Party in
excess of 60% of the fair market value (determined, as of the date of such
financing transaction or Sale/Leaseback Transaction, on the basis of an assumed
arms-length sale of such property, by a nationally recognized appraisal or
valuation firm experienced in valuing timber or timberland) of the timber or
timberland that is the subject property of such financing transaction or
Sale/Leaseback Transaction and (c) contains covenants no more restrictive
than those contained in this Agreement (except that covenants that relate
solely to the subject property may be more restrictive).


 


“Permitted Unsecured Notes” shall
mean unsecured Indebtedness
incurred by Holdings and issued under an indenture or similar governing instrument
in a registered public offering or a Rule 144A or other private placement
transaction in
the form of one or more series of senior unsecured or unsecured subordinated
notes; provided that (i) such Indebtedness does not mature
or have scheduled amortization or other required payments of principal prior to
the date that is ninety-one (91) days after the later of (A) the Latest
Maturity Date (as defined in the Term Loan Credit Agreement) at the time such
Indebtedness is incurred and (B) the Extended Revolving Loan Maturity
Date, (ii) such Indebtedness is not guaranteed by any Subsidiary of
Holdings other than the Guarantors, (iii) if such Indebtedness is
subordinated, it and any Guarantees thereof shall be subordinated to the
Obligations and the obligations under the Term Loan Facility, in the case
of capital markets subordinated debt, on customary market terms then applying
to similar capital markets offerings or placement of subordinated debt, or
otherwise, on a basis reasonably satisfactory to the Administrative Agent, (iv) such
Indebtedness and the indenture or other governing instrument applicable thereto
does not contain covenants, events of default, or other terms and conditions
that, when taken as a whole, are more restrictive to the Loan Parties than the
terms of this Agreement, and (v) such Indebtedness is not secured by any
Lien on any property or assets of Holdings, any Borrower or any Subsidiary of
Holdings (including any Foreign Subsidiary of Holdings).  Permitted Unsecured Notes will include any
Registered Equivalent Notes issued in exchange therefor.


 


56

















 


“Person” shall mean an
individual, partnership, corporation (including a business trust), joint stock
company, estate, trust, limited liability company, unlimited liability company,
unincorporated association, joint venture or other entity or Governmental
Authority.


 


“Plan” shall mean any employee
pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA that is maintained, sponsored or contributed to by (or to which there is
or may be an obligation to contribute to by) Holdings or an ERISA Affiliate
within the preceding five plan years.


 


“Plan of Reorganization” shall have
the meaning provided in the recitals to this Agreement.


 


“PPSA” shall mean the
Personal Property Security Act (Ontario); provided that, if perfection
or the effect of perfection or non-perfection or the priority of any security
interest in any Collateral is governed by a Personal Property Security Act as
in effect in a Canadian jurisdiction other than Ontario, or the Civil Code of
Quebec, “PPSA” means the Personal Property Security Act as in effect from time
to time in such other jurisdiction or the Civil Code of Quebec, as applicable,
for purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority in such Collateral.


 


“Primary
Obligations” shall have the meaning specified in Section 11.02(a).


 


“Primary
U.S. Loan Party Obligations” shall have the meaning specified in Section 11.02(a).


 


“Prime Lending Rate”
shall mean the rate which the Administrative Agent announces from time to time
as its prime lending rate, the Prime Lending Rate to change when and as such
prime lending rate changes.  The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer by the Administrative Agent,
which may make commercial loans or other loans at rates of interest at, above
or below the Prime Lending Rate.


 


“Prior Agent” shall
have the meaning provided in the Intercreditor Agreement.


 


“Prior Credit Agreement”
shall mean that certain Amended and Restated Credit Agreement, dated as of February 25,
2009, among Holdings, certain subsidiaries of Holdings party thereto, the
lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and
collateral agent and JPMorgan Chase Bank, N.A., Toronto Branch as Canadian
administrative agent and Canadian collateral agent (as amended through and
including the Closing Date).


 


“Pro
Rata Share” shall have the meaning specified in Section 11.02(a).


 


“Projections”
shall mean the projections that were prepared by or on behalf of Holdings in
connection with this Agreement and provided to the Administrative Agent on March 23,
2010 (and delivered by the Administrative Agent to the Lenders).


 


57

















 


“Qualified Secured Cash Management
Agreement Reserve” shall mean, with respect to a Secured Cash Management
Agreement that is a Qualified Secured Cash Management Agreement, the Canadian
Qualified Secured Cash Management Agreement Reserve and the U.S. Qualified
Secured Cash Management Agreement Reserve in respect of such Secured Cash
Management Agreement.


 


“Qualified Secured Cash
Management Agreements” shall have the meaning provided in Section 13.21.


 


“Qualified Secured Cash Management
Services Obligations” shall mean, with respect to a Secured Cash Management
Agreement that is a Qualified Secured Cash Management Agreement, Cash
Management Services Obligations under such Secured Cash Management Agreement; provided
that, at any time, the aggregate amount of the Qualified Secured Cash
Management Services Obligations under such Secured Cash Management Agreement
shall not exceed the aggregate amount of the Qualified Secured Cash Management
Agreement Reserve in respect of such Secured Cash Management Agreement at such
time (as such amount is reduced by the aggregate amount of payments in respect
of such Qualified Secured Cash Management Services Obligations pursuant to Section 11.02);
provided further that if the aggregate amount of Qualified Secured Cash
Management Services Obligations under such Secured Cash Management Agreement
(determined without giving effect to the immediately preceding proviso) at any
time exceeds the aggregate amount of the Qualified Secured Cash Management
Agreement Reserve in respect of such Secured Cash Management Agreement at such
time (as such amount is reduced by the aggregate amount of payments in respect
of such Qualified Secured Cash Management Services Obligations pursuant to Section 11.02),
then such excess amount shall constitute other Cash Management Services
Obligations (and, accordingly, Tertiary Obligations) hereunder.


 


“Qualified Secured Hedging Agreement
Reserve” shall mean, with respect to a Secured Hedging Agreement that is a
Qualified Secured Hedging Agreement, the Canadian Qualified Secured Hedging
Agreement Reserve and the U.S. Qualified Secured Hedging Agreement Reserve in
respect of such Secured Hedging Agreement.


 


“Qualified Secured Hedging
Agreements” shall have the meaning provided in Section 13.21.


 


“Qualified Secured Hedging Obligations” shall mean, with respect to
a Secured Hedging Agreement that is a Qualified Secured Hedging Agreement,
Hedging Obligations under such Secured Hedging Agreement; provided that,
at any time, the aggregate amount of the Qualified Secured Hedging Obligations
with respect to such Secured Hedging Agreement shall not exceed the aggregate
Qualified Secured Hedging Agreement Reserve in respect of such Secured Hedging
Agreement at such time (as such amount is reduced by the aggregate amount of payments
in respect of such Qualified Secured Hedging Obligations pursuant to Section 11.02);
provided further that if the aggregate amount of Qualified Secured
Hedging Obligations with respect to such Secured Hedging Agreement (determined
without giving effect to the immediately preceding proviso) at any time exceeds
the aggregate Qualified Secured Hedging Agreement Reserve in respect of such
Secured Hedging Agreement at such time (as such amount is reduced by the
aggregate amount of payments in respect of such Qualified Secured Hedging 


 


58

















 


Obligations
pursuant to Section 11.02), then such excess amount shall
constitute other Hedging Obligations (and, accordingly, Tertiary Obligations)
hereunder.


 


“Quarterly Payment Date”
shall mean the last Business Day of each March, June, September and December occurring
after the Funding Date.


 


“Quebec Secured Obligations”
shall have the meaning provided in Section 12.12.


 


“Quebec Security Documents” shall mean each hypothecation,
bond and other security document executed and delivered by the Canadian Loan
Parties, in form and substance reasonably acceptable to the Administrative
Agent, as may be necessary for the purpose of creating and preserving in the
Province of Quebec the Liens on ABL Priority Collateral located in Quebec.


 


“Real Properties” shall mean each
parcel of real property identified on Schedule 8.19, together with
all fixtures thereon, and each other parcel of real property acquired and owned
by Holdings or any Domestic Subsidiary of Holdings after the Closing Date,
together with all fixtures thereon.


 


“Reference Discount Rate”
shall mean, in respect of any Bankers’ Acceptances or completed Drafts to be
purchased by a Lender pursuant to Section 2.01(a) and Schedule
1.01(b), (i) by a Schedule I chartered bank, the arithmetic average of
the discount rates (calculated on an annual basis and rounded to the nearest
one-hundredth of 1%, with five-thousandths of 1% being rounded up) for the
appropriate term as quoted on Reuters Screen CDOR Page (or such other page as
may be selected by DB Canada as a replacement page for such Bankers’
Acceptances if such screen is not available) at 10:00 A.M. (Toronto time);
and (ii) by any other Lender, the lesser of (A) the rate specified in
(i) plus 0.10% and (B) the discount rate (calculated on an
annual basis and rounded to the nearest one-hundredth of 1%, with
five-thousandths of 1% being rounded up) quoted by DB Canada at 10:00 A.M.
(Toronto time) as the discount rate at which DB Canada would purchase, on the
relevant Drawing Date, its own bankers’ acceptances or Drafts having an
aggregate Face Amount equal to, and with a term to maturity the same as, the
Bankers’ Acceptances or Drafts, as the case may be, to be acquired by such Lender
on such Drawing Date.


 


“Register” shall have
the meaning provided in Section 13.15.


 


“Registered Equivalent Notes” shall
mean, with respect to any notes originally issued in a Rule 144A or other
private placement transaction under the Securities Act of 1933, substantially
identical notes (having the same Guarantees, if any) issued in a dollar for
dollar exchange therefor pursuant to an exchange offer registered with the
Securities and Exchange Commission.


 


“Regulation H” shall mean Regulation
H of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.


 


“Regulation T” shall mean Regulation
T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.


 


59
















 


“Regulation U” shall mean Regulation U of the
Board as from time to time in effect and all official rulings and
interpretations thereunder or thereof.


 


“Regulation X” shall mean Regulation X of the
Board as from time to time in effect and all official rulings and
interpretations thereunder or thereof.


 


“Release” shall mean any actual or
threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment or within any
building, structure, facility or fixture.


 


“Rent
Reserve” shall mean with respect to any facility, warehouse,
distribution center or depot where any Inventory subject to Liens arising by
operation of law is located and with respect to which no Collateral Access
Agreement is in effect, a reserve equal to (a) in the case of any leased
location, three (3) months’ (or such longer period as the Co-Collateral
Agents determine in their Permitted Discretion as it will take to liquidate ABL
Priority Collateral at such location) gross rent at such facility, warehouse,
distribution center or depot, and (b) in the case of any other such
location, an amount determined by the Co-Collateral Agents in their Permitted
Discretion in respect of the liabilities owed to the applicable bailee or
warehouseman.


 


“Replaced Lender” shall
have the meaning provided in Section 2.13.


 


“Replacement Lender”
shall have the meaning provided in Section 2.13.


 


“Required Lenders”
shall mean, at any time, Non-Defaulting Lenders the sum of whose Commitments
(or, after the termination of all Commitments, outstanding Individual
Exposures) at such time represents at least a majority of the Total Commitment
in effect at such time less the Commitments of all Defaulting Lenders
(or, after the termination of all Commitments, the sum of then total
outstanding Individual Exposures of all Non-Defaulting Lenders, at such time).


 


“Reserves”
shall mean Dilution Reserves, Inventory Reserves, Rent Reserves and any other
reserves established by the Co-Collateral Agents in their Permitted Discretion,
in all cases without duplication and reserving for such items that have not
already been taken into account in the calculation of the applicable Borrowing
Base (including through the categories of ineligible items set forth in the
definitions of “Eligible Accounts” and “Eligible Inventory”) (including,
without limitation, reserves for accrued and unpaid interest on the Secured
Obligations, reserves for contingent liabilities of any Loan Party, reserves
for uninsured losses of any Loan Party, reserves for uninsured, underinsured,
un-indemnified or under-indemnified liabilities or potential liabilities with
respect to any litigation, reserves for freight costs related to Eligible
Inventory in transit, and reserves for taxes, fees, assessments, and other
governmental charges) with respect to the Collateral or any Loan Party (other
than any Qualified Secured Cash Management Agreement Reserve and any Qualified
Secured Hedging Agreement Reserve).


 


“Responsible Officer” of any Person
shall mean the chief executive officer, chief operating officer, president, any
Financial Officer or any vice president of such Person and any other officer or
similar official thereof responsible for the administration of the obligations of
such Person in respect of this Agreement.


 


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“Restricted Payment” shall mean (a) any
dividend or other distribution, direct or indirect, on account of any Equity
Interests of Holdings or any of its Subsidiaries, now or hereafter outstanding,
except (i) any dividend payable solely in shares or other Equity Interests
of such class of Equity Interests to the holders of such Equity Interests, (ii) any
dividend or distribution made by any Subsidiary of Holdings ratably to the
holders of the capital stock of such Subsidiary and (iii) any dividend
or distribution made or paid to Holdings or any Subsidiary of Holdings, and (b) any
redemption, retirement, sinking fund or similar payment, purchase, exchange or
other acquisition for value, direct or indirect, of any Equity Interests of
Holdings or any of its Subsidiaries, now or hereafter outstanding, except for
any such redemption, retirement, sinking fund or similar payment, purchase,
exchange or other acquisition for value (i) payable only to a Loan Party
or payable from a Foreign Subsidiary of Holdings to another Foreign Subsidiary
of Holdings or (ii) of any minority Equity Interests of a Subsidiary of
Holdings that is not wholly owned which are held by Persons that are not
Affiliates of Holdings.


 


“Returns” shall have
the meaning provided in Section 8.12.


 


“Revolver Facilities”
shall have the meaning provided in Section 16.01(f).


 


“Revolving Credit Obligations”
shall, prior to the Funding Date, have the meaning assigned to such term in the
form of Intercreditor Agreement attached as Exhibit F hereto, and
after the Funding Date, have the meaning assigned to such term in the
Intercreditor Agreement.


 


“Revolving Loan” shall
have the meaning provided in Section 2.01(a).


 


“Revolving Loan Maturity
Date” shall mean (a) with respect to any Loans,
Initial U.S. Facility Commitments or Initial Canadian Facility Commitments (or
any portions thereof) that have not been extended pursuant to Section 2.19,
the Initial
Revolving Loan Maturity Date and (b) with respect to any Extended
Loans, Extended U.S. Facility Commitment or Extended Canadian Facility
Commitment, the Extended Revolving Loan Maturity Date.


 


“Revolving Note” shall
have the meaning provided in Section 2.05(a).


 


“RL Percentage” of any
Lender at any time shall mean a fraction (expressed as a percentage) the
numerator of which is the Commitments of such Lender at such time and the
denominator of which is the Total Commitment at such time, provided that
if the RL Percentage of any Lender is to be determined after the Total
Commitment has been terminated, then the RL Percentages of such Lender shall
mean a fraction (expressed as a percentage) the numerator of which is such
Lender’s Individual Exposure at such time and the denominator of which is the
Aggregate Exposure at such time, provided that in the case of Section 2.18
when a Defaulting Lender shall exist, “RL Percentage” shall mean the percentage
of the total Commitments (disregarding any Defaulting Lender’s Commitment)
represented by such Lender’s Commitment.


 


“S&P” shall mean
Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.


 


“Sale/Leaseback Transaction” shall
mean an arrangement, direct or indirect, whereby Holdings or any of its
Subsidiaries shall sell or transfer any property, real or personal,


 


61

















 


used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent
or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property sold or transferred.


 


“Secondary Obligations”
shall have the meaning specified in Section 11.02(a).


 


“Secondary U.S. Loan Party
Obligations” shall have the meaning specified in Section 11.02(a).


 


“Section 5.04(b)(ii) Certificate”
shall have the meaning provided in Section 5.04(b)(ii).


 


“Secured Cash Management
Agreements” shall mean each Cash Management Agreement entered into by a
Loan Party with any Lender, any Term Loan Lender or any affiliate thereof (even
if (i) in the case of a Lender, the respective Lender subsequently ceases
to be a Lender under this Agreement for any reason and (ii) in the case of a Term Loan
Lender, the respective Term Loan Lender subsequently ceases to be a Term Loan
Lender under the Term Loan Facility for any reason) the obligations of which
have been designated pursuant to Section 13.21 as being treated as “Cash
Management Services Obligations” so long as such Lender, such Term Loan Lender
or such affiliate participates in such Secured Cash Management Agreement.


 


“Secured Hedging Agreements”
shall mean each Hedging Agreement entered into by a Loan Party with any Lender,
any Term Loan Lender or any affiliate thereof (even if (i) in the case of
a Lender, the respective Lender subsequently ceases to be a Lender under this
Agreement for any reason and (ii) in the case of a Term Loan Lender, the
respective Term Loan Lender subsequently ceases to be a Term Loan Lender under
the Term Loan Facility for any reason) the obligations of which have been
designated pursuant to Section 13.21 as being treated as “Hedging
Obligations” so long as such Lender, such Term Loan Lender or such
affiliate participates in such Hedging Agreement.


 


“Secured Obligations”
shall mean the Canadian Secured Obligations or the U.S. Secured Obligations, as
the context requires.


 


“Secured Parties” shall
mean, collectively, (i) the Lender Creditors, (ii) the Hedging
Creditors, (iii) the Cash Management Creditors, (iv) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (v) the successors and assigns of each of the foregoing.


 


“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


 


“Security Agent” shall
mean Deutsche Bank AG New York Branch in its capacity as security agent for the
Secured Parties pursuant to the Security Documents, and shall include any
successor to the Security Agent as provided in Section 12.09.


 


“Security Documents” shall mean the
Mortgages, the Guarantee and Collateral Agreement, the Canadian Security
Documents, the IP Security Agreements and each of the security agreements and
other instruments and documents executed and delivered pursuant to


 


62

















 


Section 9.09 or the Letter of Credit
Back-Stop Arrangements; provided, that any cash collateral or other agreements
entered into pursuant to the Letter of Credit Back-Stop Arrangements shall
constitute “Security Documents” solely for purposes of (x) Sections
8.02 and (y) the term “Loan Documents” as used in Sections 10.01(a),
10.02(a)(ii), 10.12 and 13.01.


 


“Senior Managing Agents” shall mean
The Bank of Nova Scotia and Regions Bank, in their capacities as Senior
Managing Agents in respect of the credit facilities hereunder, and any
successors thereto.


 


“Senior Representative” shall mean,
with respect to any series of Permitted Second Lien Notes, the trustee,
administrative agent, collateral agent, security agent or similar agent
under the indenture or agreement pursuant to which such Indebtedness is issued,
incurred or otherwise obtained, as the case may be, and each of their
successors in such capacities.


 


“Settlement Date” shall
have the meaning provided in Section 2.04(b)(i).


 


“Significant Asset Sale”
shall mean each Asset Sale (without giving effect to clauses (ii) and (iii) of
the provisio of such definition) which includes ABL
Priority Collateral with a value in excess of $35,000,000.


 


“Smurfit-Stone Puerto Rico” shall
mean Smurfit-Stone Puerto Rico, Inc., a Delaware corporation that is
qualified to do business in the Commonwealth of Puerto Rico.  For purposes of this Agreement, Smurfit-Stone Puerto Rico shall be deemed
to be a Foreign Subsidiary.


 


“Specified Foreign Currency
Funding Capacity” at any date of determination, for any Lender, shall mean
the ability of such Lender to fund Revolving Loans denominated in Canadian
Dollars, as set forth in the records of the Administrative Agent pursuant to
the receipt by the Administrative Agent of a notification in writing by such
Lender to the Administrative Agent within three (3) Business Days prior to
such Lender becoming a Lender hereunder.


 


“Specified Foreign Currency
Loan” shall have the meaning provided in Section 15.01.


 


“Specified Foreign Currency
Participation” shall have the meaning provided in Section 15.01.


 


“Specified Foreign Currency
Participation Fee” shall have the meaning provided in Section 15.06.


 


“Specified Foreign Currency
Participation Settlement” shall have the meaning provided in Section 15.02(a).


 


“Specified Foreign Currency
Participation Settlement Amount” shall have the meaning provided in Section 15.02(b).


 


“Specified Foreign Currency
Participation Settlement Date” shall have the meaning provided in Section 15.02(a).


 


63

















 


“Specified Foreign Currency
Participation Settlement Period” shall have the meaning provided in Section 15.02(a).


 


“SSC Canada” shall mean
Smurfit-Stone Container Canada Inc., a corporation continued under the
Companies Act
(Nova Scotia) (or the newly organized Subsidiary or Subsidiaries that acquire
the assets of Smurfit-Stone Container Canada Inc. pursuant to the Plan of
Reorganization).


 


“SSCC” shall have the meaning
provided in the preamble of this Agreement. 
Each reference herein to SSCC shall, on and after the Funding Date and
the Funding Date Merger, be deemed a reference to Holdings as the corporation surviving the Funding Date
Merger.


 


“SSCE” shall have the meaning
provided in the preamble of this Agreement.


 


“Start Date” shall mean (a) for
purposes of the definition of Applicable Commitment Fee Percentage, the first
day of each fiscal quarter of Holdings (commencing with the first fiscal
quarter of Holdings ending after the Funding Date) and (b) for purposes of
the definition of Applicable Margin, (i) the date that occurs 91 days
following the Funding Date and (ii) thereafter, the first day of each
fiscal month of Holdings immediately after the receipt by the Administrative
Agent of a Borrowing Base Certificate with respect to the last month of a
fiscal quarter of Holdings (commencing with the first full fiscal quarter of
Holdings ending after the Funding Date) pursuant to Section 9.04(i).


 


“Stated Amount” of each
Letter of Credit shall mean, at any time, the maximum amount available to be
drawn thereunder (in each case determined without regard to whether any
conditions to drawing could then be met); provided that the “Stated
Amount” of each Letter of Credit denominated in Canadian Dollars shall be, on
any date of calculation, the U.S. Dollar Equivalent of the maximum amount
available to be drawn in the respective currency thereunder (determined without
regard to whether any conditions to drawing could then be met).


 


“Subsidiary” shall mean, with respect to
any Person, any corporation, partnership, association or other business entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership or membership interests are, at the time any determination
is being made, owned, controlled or held by, or otherwise Controlled by, such
Person or one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person.   Unless otherwise qualified, all references to
a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of Holdings.


 


“Subsidiary Guarantor”
shall mean each U.S. Subsidiary Guarantor and each Canadian Subsidiary
Guarantor.


 


“Supermajority Lenders”
shall mean those Non-Defaulting Lenders which would constitute the Required
Lenders under, and as defined in, this Agreement, if the reference to “a
majority” contained therein were changed to “80.0%”.


 


64

















 


“Swingline Expiry Date”
shall mean that date which is five Business Days prior to the Revolving Loan
Maturity Date.


 


“Swingline Exposure” shall mean the
sum of (i) the U.S. Facility Swingline Exposure plus (ii) the
Canadian Facility Swingline Exposure.


 


“Swingline Lender”
shall mean the Administrative Agent, in its capacity as Swingline Lender
hereunder; provided that, if the Extension is effected
in accordance with Section 2.19, then on the occurrence of the Initial Revolving Maturity
Date, the Swingline Lender at such time shall have the
right to resign as Swingline Lender on, or on any date within twenty (20)
Business Days after, the Initial Revolving Maturity Date,
upon not less than ten (10) days’ prior written notice thereof to Holdings
and the Administrative Agent and, in the event of any such resignation and upon
the effectiveness thereof, the applicable Borrowers shall repay any outstanding
Swingline Loans made by the respective entity so resigning and such entity
shall not be required to make any further Swingline Loans hereunder. If at any
time and for any reason (including as a result of resignations as contemplated
by the proviso to the preceding sentence), the Swingline Lender has resigned in
such capacity in accordance with the preceding sentence, then no Person shall
be the Swingline Lender hereunder obligated to make Swingline Loans unless and
until (and only for so long as) a Lender (or Affiliate of a Lender) reasonably
satisfactory to the Administrative Agent or Holdings agrees to act as the
Swingline Lender hereunder.


 


“Swingline Loan” shall
have the meaning provided in Section 2.01(b).


 


“Swingline Note” shall
have the meaning provided in Section 2.05(a).


 


“Syndication Agent”
shall mean J.P. Morgan Securities Inc., in its capacity as Syndication Agent in
respect of the credit facilities hereunder, and any successors thereto.


 


“Tax Benefit” shall have the meaning
provided in Section 5.04(d).


 


“Taxes” shall have the
meaning provided in Section 5.04(a).


 


“Term Loan Agent” shall mean
JPMorgan Chase Bank, N.A., as administrative agent under the Term Loan
Facility, or any successor or replacement administrative agent.


 


“Term Loan Credit Agreement” shall
mean the Credit Agreement, dated as of February 22, 2010, among SSCC,
SSCE, the lenders party thereto and JPMorgan Chase Bank, N.A., as the
administrative agent, or any successor administrative agent appointed
thereunder, in an initial aggregate principal amount of up to $1,200,000,000,
as the same may be increased pursuant to incremental commitments thereunder in
compliance with Section 10.01(f).


 


“Term Loan Credit Obligations” shall
prior to the Funding Date, have the meaning assigned to such term in the form
of Intercreditor Agreement attached as Exhibit F hereto, and after
the Funding Date, have the meaning assigned to such term in the Intercreditor
Agreement.


 


65

















 


“Term Loan Facility” shall mean (a) the
Term Loan Credit Agreement or (b) any credit facility constituting Permitted
Refinancing Indebtedness of the facility in clause (a), including any
subsequent incremental financing thereunder in compliance with Section 10.01(f).


 


“Term Loan Facility Documents” shall
mean all agreements and other documents evidencing or governing the Term Loan
Facility or any Permitted Refinancing Indebtedness of the Term Loan Facility
(other than, for the avoidance of doubt, this Agreement or the Intercreditor
Agreement) or providing for any guarantee, security interests or other right in
respect thereof.


 


“Term Loan Lender” shall mean, at
any time, each “Lender” under (and as defined in) the Term Loan Facility.


 


“Term Loans” shall mean, at any
time, each “Loan” under (and as defined in) the Term Loan Facility.


 


“Term Priority Collateral” shall,
prior to the Funding Date, have the meaning assigned to the term “Non-ABL
Collateral” in the form of Intercreditor Agreement attached as Exhibit E
hereto, and after the Funding Date, have the meaning assigned to the term “Non-ABL
Collateral” in the Intercreditor Agreement.


 


“Term Sweep Account” shall, prior to
the Funding Date, have the meaning assigned to the term “Non-ABL Sweep Account”
in the form of Intercreditor Agreement attached as Exhibit E
hereto, and after the Funding Date, have the meaning assigned to the term “Non-ABL
Sweep Collateral Account” in the Intercreditor Agreement.


 


“Tertiary Obligations”
shall have the meaning specified in Section 11.02(a).


 


“Test Period” shall
mean, on any date of determination, (i) other than during a Compliance
Period, the period of four consecutive fiscal quarters of Holdings then last
ended and (ii) during a Compliance Period, each period of 12 consecutive
fiscal months of Holdings then last ended, in each case taken as one accounting
period.


 


“Total Borrowing Base”
shall mean, as of any date of determination, the sum of the Canadian Borrowing
Base and the U.S. Borrowing Base, in each case, at such date.


 


“Total Canadian Facility
Commitment” shall mean, at any time, the sum of the Canadian Facility
Commitments of each of the Lenders at such time.


 


“Total Commitment”
shall mean, at any time, the sum of the Commitments of each of the Lenders at
such time.


 


“Total Unutilized Canadian
Facility Commitment” shall mean, at any time, an amount equal to (a) the
Total Canadian Facility Commitment in effect at such time minus (b) the
Aggregate Canadian Facility Exposure at such time.


 


“Total Unutilized
Commitment” shall mean, at any time, an amount equal to (a) the Total
Commitment in effect at such time minus (b) the Aggregate Exposure
at such time.


 


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“Total Unutilized U.S.
Facility Commitment” shall mean, at any time, an amount equal to (a) the
Total U.S. Facility Commitment in effect at such time minus (b) the
Aggregate U.S. Facility Exposure at such time.


 


“Total U.S. Facility
Commitment” shall mean, at any time, the sum of the U.S. Facility
Commitments of each of the Lenders at such time.


 


“Tranche” shall mean
the respective facility and commitments utilized in making Loans hereunder, (a) with
there initially being four separate Tranches, i.e., U.S. Facility
Revolving Loans, U.S. Facility Swingline Loans, Canadian Facility Revolving
Loans and Canadian Facility Swingline Loans (collectively,
the “Initial Tranches” and, each an “Initial Tranche”) and (b) after
giving effect to the Extension pursuant to Section 2.19, any group
of Extended Loans pursuant to Extended U.S. Facility Commitments or Extended
Canadian Facility Commitments, as the case may be, extended, directly or
indirectly, from the same Initial Tranche and having the same Revolving Loan
Maturity Date, interest rate and fees; provided that for
purposes of Sections 2.13, 13.04(b), 13.12(a) and (b) and
the definition of “Majority Lenders”, (i) U.S. Facility Revolving Loans
and U.S. Facility Swingline Loans shall be deemed to constitute part of a
single “Tranche” and (ii) Canadian Facility Revolving Loans and Canadian
Facility Swingline Loans shall be deemed to constitute part of a single “Tranche”.


 


“Transactions” shall have the
meaning provided in Section 8.02.


 


“Type” shall mean the
type of Loan determined with regard to the interest option applicable thereto, i.e.,
whether a Base Rate Loan, a Eurodollar Loan, a Canadian Prime Rate Loan or a
Bankers’ Acceptance Loan.


 


“UCC” shall mean the
Uniform Commercial Code as from time to time in effect in the relevant
jurisdiction.


 


“United States” and “U.S.”
shall each mean the United States of America.


 


“Unpaid Drawing” shall
have the meaning provided in Section 3.05(a).


 


“Unutilized Commitment”
shall mean, with respect to any Lender at any time, the sum of (i) to the
extent such Lender is a U.S. Facility Lender, such Lender’s U.S. Facility
Commitment at such time minus the sum of (a) the aggregate
outstanding principal amount of all U.S. Facility Revolving Loans (taking the
U.S. Dollar Equivalent of any such U.S. Facility Revolving Loans denominated in
a currency other than U.S. Dollars) made by such Lender at such time plus
(b) such Lender’s U.S. Facility RL Percentage of the U.S. Facility Letter
of Credit Outstandings at such time (taking the U.S. Dollar Equivalent of any
U.S. Facility Letter of Credit denominated in a currency other than U.S.
Dollars), and (ii) to the extent such Lender is a Canadian Facility
Lender, such Lender’s Canadian Facility Commitment at such time minus
the sum of (a) the aggregate outstanding principal amount of all Canadian
Facility Revolving Loans (taking the U.S. Dollar Equivalent of any such
Canadian Facility Revolving Loans denominated in a currency other than U.S.
Dollars) made by such Lender at such time plus (b) such Lender’s
Canadian Facility RL Percentage of the Canadian Facility Letter of Credit
Outstandings at such time (taking the U.S. Dollar Equivalent of any Canadian Facility
Letter of Credit denominated in a currency other than U.S. Dollars).


 


67

















 


“U.S. Bankruptcy Court” shall have
the meaning provided in the recitals to this Agreement.


 


“U.S. Borrower” and “U.S.
Borrowers” shall have the meaning provided in the preamble of this
Agreement.


 


“U.S. Borrower Canadian
Facility Revolving Loan” shall have the meaning provided in Section 2.01(a).


 


“U.S. Borrower Canadian
Facility Revolving Note” shall have the meaning provided in Section 2.05(a).


 


“U.S. Borrower Canadian
Facility Swingline Loan” shall have the meaning provided in Section 2.01(b).


 


“U.S. Borrower Canadian
Facility Swingline Note” shall have the meaning provided in Section 2.05(a).


 


“U.S. Borrower Loans”
shall mean each U.S. Borrower Revolving Loan and each U.S. Borrower Swingline
Loan.


 


“U.S. Borrower Obligations”
shall mean all Obligations owing to the Administrative Agent, the Security
Agent, any Co-Collateral Agent, any Issuing Lender or any Lender by any U.S.
Borrower.


 


“U.S. Borrower Revolving
Loan” shall mean each Revolving Loan borrowed by a U.S. Borrower.


 


“U.S. Borrower Swingline
Loan” shall mean each Swingline Loan borrowed by a U.S. Borrower.


 


“U.S.
Borrowing Base”  shall mean, at the time of any
determination, an amount equal to the sum of the U.S. Dollar amount (for this
purpose, using the U.S. Dollar Equivalent of amounts not denominated in U.S.
Dollars), without duplication, of (a) 85% of Eligible U.S. Accounts at
such time plus (b) the lesser of (i) 65% of Eligible U.S. Inventory
at such time and (ii) 85% of the Net Orderly Liquidation Value of Eligible
U.S. Inventory at such time (in each case with respect to clauses (i) and (ii) with
any Eligible U.S. Inventory to be valued at the lower of cost (determined on a
first-in, first-out basis in accordance with GAAP) or market value thereof (net
of any intercompany profit)), minus (c) the sum (without
duplication) of (i) the aggregate amount of U.S. Qualified Secured Hedging
Agreement Reserves for all U.S. Qualified Secured Hedging Agreements, (ii) the
aggregate amount of U.S. Qualified Secured Cash Management Agreement Reserves
for all U.S. Qualified Secured Cash Management Agreements and (iii) the
amount of the Reserves, in such amounts and with respect to such matters, as
the Co-Collateral Agents in their Permitted Discretion may establish from time
to time with respect to the U.S. Borrowing Base.  The U.S. Borrowing Base at any time shall be
determined by reference to the most recent Borrowing Base Certificate delivered
to the Administrative Agent pursuant to Section 5.04(i) of
this Agreement.  The Co-Collateral Agents
shall have the right (but no obligation) to review such computations and if, in
their Permitted Discretion, such


 


68

















 


computations
have not been calculated in accordance with the terms of this Agreement, the
Co-Collateral Agents shall have the right, to correct any such errors in such
manner as they shall determine in their Permitted Discretion and the
Co-Collateral Agents will notify Holdings promptly after making any such
correction.


 


“U.S. Collection Account”
shall mean each account established at a U.S. Collection Bank subject to a
Control Agreement into which funds shall be transferred as provided in Section 5.03(b).


 


“U.S. Collection Banks”
shall have the meaning provided in Section 5.03(b).


 


“U.S. Debtor Entities” shall have
the meaning provided in the recitals to this Agreement.


 


“U.S. Dilution Reserve” shall mean, at any date, (i) the amount
by which the Dilution Ratio of U.S. Eligible Accounts exceeds five percent (5%)
multiplied by (ii) the Eligible U.S. Accounts on such date.


 


“U.S. Dollar Denominated
Loans” shall mean each Loan denominated in U.S. Dollars at the time of the
incurrence thereof.


 


“U.S. Dollar Denominated
Revolving Loans” shall mean each Revolving Loan denominated in U.S. Dollars
at the time of the incurrence thereof.


 


“U.S. Dollar Denominated
Swingline Loans” shall mean each Swingline Loan denominated in U.S. Dollars
at the time of the incurrence thereof.


 


“U.S. Dollar Equivalent”
of an amount denominated in a currency other than U.S. Dollars shall mean, at
any time for the determination thereof, the amount of U.S. Dollars which could
be purchased with the amount of such currency involved in such computation at
the spot exchange rate therefor as quoted by the Administrative Agent as of
11:00 A.M. (New York time) on the date two Business Days prior to the date
of any determination thereof, for purchase on such date (or on the date of the
respective unreimbursed payment under a Letter of Credit denominated in a
currency other than U.S. Dollars as provided in Sections 3.04(c) and
3.05(a), as the case may be); provided that for purposes of (x) determining
compliance with Sections 2.01(c), 2.01(d), 3.02, 5.02(a),
7.01 and 7.03 and (y) calculating Fees pursuant to Section 4.01
(except Fees which are expressly required to be paid in a currency other than
U.S. Dollars pursuant to Section 4.01), the U.S. Dollar Equivalent
of any amounts denominated in a currency other than U.S. Dollars shall be
revalued on each Credit Event or loan repricing date using the spot exchange
rates therefor as quoted on Bloomberg (or, if same does not provide such
exchange rates, on such other basis as is reasonably satisfactory to the
Administrative Agent) on the immediately preceding Business Day, provided,
however, that at any time, if the Aggregate Exposure (for the purposes
of the determination thereof, using the U.S. Dollar Equivalent as recalculated
based on the spot exchange rate therefor as quoted on Bloomberg (or, if
same does not provide such exchange rates, on such other basis as is reasonably
satisfactory to the Administrative Agent) on the respective date of
determination pursuant to this exception) would exceed 85% of the Total
Commitment or the Total Borrowing Base, then in the sole discretion of the
Administrative Agent or at the request of the Required Lenders, the U.S. Dollar


 


69
















 


Equivalent
shall be reset based upon the spot exchange rates on such date as quoted on Bloomberg
(or, if same does not provide such exchange rates, on such other basis as is
reasonably satisfactory to the Administrative Agent), which rates shall remain
in effect until the date of a Credit Event or loan repricing or such earlier
date, if any, as the rate is reset pursuant to this proviso.  Notwithstanding anything to the contrary
contained in this definition, at any time that a Default or an Event of Default
then exists, the Administrative Agent may revalue the U.S. Dollar Equivalent of
any amounts outstanding under the Loan Documents in a currency other than U.S.
Dollars on any date in its sole discretion in accordance with the foregoing
methodology.


 


“U.S. Dollars” or “$” shall
mean lawful currency of the United States.


 


“U.S. Facility Bankers’ Acceptance”
shall mean a U.S. Facility Draft drawn by a U.S. Borrower and accepted by a
U.S. Facility Lender pursuant to Section 2.01(a) and Schedule 1.01(b).


 


“U.S. Facility Bankers’ Acceptance Loans”
shall mean (i) the creation of U.S. Facility Bankers’ Acceptances or (ii) the
creation and purchase of completed U.S. Facility Drafts and, if requested by a
Non-B/A Lender, the exchange of such U.S. Facility Drafts for B/A Equivalent
Notes, in each case as contemplated in Section 2.01(a) and Schedule
1.01(b).


 


“U.S. Facility Commitment” shall
mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule
1.01(a) directly below the column entitled “U.S. Facility Revolving
Commitment”, as same may be (x) reduced from time to time or terminated
pursuant to Sections 4.02, 4.03 and/or 11, as applicable, (y) adjusted
from time to time as a result of assignments to or from such Lender pursuant to
Section 2.13 or 13.04(b), or (z) increased from time to
time pursuant to Section 2.14. 
In addition, the U.S. Facility Commitment of each
Lender shall include each of its Initial U.S. Facility Commitment, and, subject
to the consent of such Lender, any Extended U.S. Facility Commitment of such
Lender.  As of the Closing Date, the
aggregate amount of U.S. Facility Commitments of the U.S. Facility Lenders is
U.S. $550,000,000.


 


“U.S. Facility Draft” shall mean, at
any time, either a depository bill within the meaning of the Depository Bills
and Notes Act (Canada) as amended, or a bill of exchange, within the meaning of
the Bills of Exchange Act (Canada) as amended, drawn by a U.S. Borrower in
Canadian Dollars on a U.S. Facility Lender and bearing such distinguishing letters
and numbers as such U.S. Facility Lender may determine, but which at such time
has not been completed or accepted by such U.S. Facility Lender.


 


“U.S. Facility Lenders”
shall mean the Lenders having U.S. Facility Commitments (or, after the
termination of all U.S. Facility Commitments, outstanding Individual U.S.
Facility Exposure).


 


“U.S. Facility Letter of Credit”
shall have the meaning provided in Section 3.01(a).


 


“U.S. Facility Letter of Credit Exposure”
shall mean, at any time, the aggregate amount of all U.S. Facility Letter of
Credit Outstandings at such time in respect of U.S. Facility


 


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Letters of
Credit issued for the account of any U.S. Borrower. The U.S. Facility Letter of Credit
Exposure of any Lender at any time shall be its U.S. Facility RL
Percentage of the total U.S. Facility Letter of Credit Exposure
at such time.


 


“U.S. Facility Letter of Credit
Outstandings” shall mean, at any time, the sum of (a) the Stated
Amount of all outstanding U.S. Facility Letters of Credit at such time and (b) the
aggregate amount of all Unpaid Drawings in respect of all U.S. Facility Letters
of Credit at such time.


 


“U.S. Facility Obligations” shall
mean all Loan Document Obligations owing to any Lender Creditor to repay
principal of, interest on, and all other amounts with respect to, all U.S.
Facility Revolving Loans, U.S. Facility Swingline Loans, U.S. Facility Letters
of Credit, and all other Loan Document Obligations (including, without
limitation, all fees, indemnities, taxes and other obligations) pursuant to
this Agreement and each other Loan Document in connection with the U.S.
Facility Commitments.


 


“U.S. Facility Revolving
Loan” shall have the meaning provided in Section 2.01(a).


 


“U.S. Facility Revolving
Note” shall have the meaning provided in Section 2.05(a).


 


“U.S. Facility RL Percentage” of any
U.S. Facility Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the U.S. Facility Commitment of such
Lender at such time and the denominator of which is the Total U.S. Facility
Commitment at such time, provided that if the U.S. Facility RL Percentage of
any U.S. Facility Lender is to be determined after the Total U.S. Facility
Commitment has been terminated, then the U.S. Facility RL Percentages of such
U.S. Facility Lender shall mean a fraction (expressed as a percentage) the
numerator of which is such U.S. Facility Lender’s Individual U.S. Facility
Exposure at such time and the denominator of which is the Aggregate U.S.
Facility Exposure at such time, provided that in the case of Section 2.18
when a Defaulting Lender shall exist, “U.S. Facility RL Percentage” shall mean
the percentage of the Total U.S. Facility Commitments (disregarding any
Defaulting Lender’s U.S. Facility Commitment) represented by such Lender’s U.S.
Facility Commitment.


 


“U.S. Facility Swingline Exposure”
shall mean, at any time, the aggregate principal amount of all U.S. Facility
Swingline Loans (for this purpose, using the U.S. Dollar Equivalent of amounts
not denominated in U.S. Dollars) outstanding at such time. The U.S. Facility Swingline
Exposure of any Lender at any time shall be its U.S. Facility RL Percentage of
the total U.S.
Facility Swingline Exposure at such time.


 


“U.S. Facility Swingline
Loan” shall have the meaning provided in Section 2.01(b).


 


“U.S. Facility Swingline
Note” shall have the meaning provided in Section 2.05(a).


 


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“U.S. Guarantors” shall
mean and include each U.S. Borrower (in its capacity as a guarantor under the
Guarantee and Collateral Agreement) and each U.S. Subsidiary Guarantor.


 


“U.S. Loan Parties”
shall mean Holdings, each other U.S. Borrower and each U.S. Guarantor.


 


“U.S. Loan Party
Obligations” shall mean (i) all U.S. Borrower Obligations, (ii) all
Hedging Obligations owing to Hedging Creditors by any U.S. Loan Party, (iii) all
Cash Management Services Obligations owing to Cash Management Creditors by any
U.S. Loan Party, and (iv) any guarantees of the obligations described in
clause (i), (ii) or (iii) hereof by the U.S. Loan Parties pursuant to
the Guarantee and Collateral Agreement or pursuant to any other Loan Document.


 


“U.S. Perfection
Certificate” shall mean the U.S. Perfection Certificate in the form thereof
included in Exhibit D-1 or any other form approved by the
Administrative Agent, as the same may be supplemented from time to time
pursuant to Section 9.10(c) or otherwise.


 


“U.S. Proceedings” shall have the
meaning provided in the recitals to this Agreement.


 


“U.S. Qualified Secured Cash Management
Agreement Reserve” shall mean a reserve established by the Co-Collateral
Agents from time to time in respect of a U.S. Qualified Secured Cash
Management Agreement, which reserve shall be in an amount equal to the reserve
agreed upon from time to time by the applicable Cash Management Creditor,
Holdings and notified to, and so long as Excess Availability (after giving
effect to such reserve) is less than 35% of the Total Commitment then in effect
at the time such reserve is created or increased shall be agreed upon by, the
Co-Collateral Agents in writing with respect to such U.S. Qualified Secured Cash
Management Agreement in accordance with Section 13.21 (it being
understood and agreed that a reserve with respect to a U.S. Qualified Secured Cash
Management Agreement (i) may be only be decreased with the consent of the
Cash Management Creditor party to such U.S. Qualified Secured Cash
Management Agreement and (ii) may be only be created or increased with the
consent of Holdings and, so long as Excess Availability (after giving effect to
such reserve) is less than 35% of the Total Commitment then in effect at the
time any such reserve is created or increased, the Co-Collateral Agents (in
each case in clauses (i) and (ii) following written notice to the
Co-Collateral Agents)).


 


“U.S. Qualified Secured Cash Management
Agreements” shall mean each Qualified Secured Cash Management Agreement
between a Cash Management Creditor (as determined at the time such Secured Cash
Management Agreement is designated as a Qualified Secured Cash Management
Agreement without regard to whether such Person is currently a Lender or an
affiliate thereof) and any Loan Party.


 


“U.S. Qualified Secured Hedging
Agreement” shall mean any Qualified Secured Hedging Agreement between a
Hedging Creditor (as determined at the time such Hedging Agreement is
designated as a Qualified Secured Hedging Agreement without regard to whether
such Person is currently a Hedging Creditor) and any Loan Party.


 


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“U.S. Qualified Secured Hedging
Agreement Reserve” shall mean a reserve established by the Co-Collateral
Agents from time to time in respect of a U.S. Qualified Secured Hedging
Agreement, which reserve shall be in the amount of the aggregate U.S. Dollar
Equivalent marked to market exposure thereunder as calculated from time to time
by the Hedging Creditor party to such U.S. Qualified Secured Hedging Agreement
(which calculation may be disputed by Holdings) in accordance with GAAP (based
on the valuation methodology agreed between Holdings and the Hedging Creditor
party to such U.S. Qualified Secured Hedging Agreement) and notified to the
Co-Collateral Agents (and acknowledged by the Administrative Agent) (A) at
the time such Secured Hedging Agreement is designated as a Qualified Secured
Hedging Agreement and (B) from time to time thereafter, in each case, in
accordance with Section 13.21 (it being understood and agreed that
a reserve with respect to a U.S. Qualified Secured Hedging Agreement (i) may
only be decreased below the marked to market exposure thereunder with the
consent of the Hedging Creditor party to such U.S. Qualified Secured Hedging
Agreement and (ii) may only be created or increased so long as (x) an
Event of Default exists or (y) the aggregate amount of all Qualified
Secured Hedging Agreement Reserves exceeds (or would exceed following creation
of, or increase in, such reserve) $100,000,000, with the consent of the
Co-Collateral Agents (in each case in clauses (i) and (ii) following
written notice to the Co-Collateral Agents)).


 


“U.S. Secured Obligations”
shall mean and include (a) all Loan Document Obligations owing by any Loan
Party, (b) all Hedging Obligations owing by any Loan Party, (c) all
Cash Management Services Obligations owing by any Loan Party, and (d) all
amounts paid (or incurred) by any Indemnified Party as to which such
Indemnified Party has the right to reimbursement under Section 13.01
or any indemnity contained in any Security Document; it being acknowledged and
agreed that the “U.S. Secured Obligations” shall include extensions of credit
of the types described above, whether outstanding on the date of this Agreement
or any Security Document or extended from time to time after the date of this
Agreement or any Security Document.


 


“U.S. Subsidiary Guarantors”
shall mean (a) each Domestic Subsidiary of Holdings that is a Material
Subsidiary (other than any U.S. Borrowers), whether existing on the Closing
Date or established, created or acquired after the Closing Date, and (b) each
Subsidiary of Holdings (other than any U.S. Borrowers), which guarantees
obligations under the Term Loan Facility Documents, whether existing on the
Closing Date or established, created or acquired after the Closing Date, in
each case unless and until such time as the respective Domestic Subsidiary is
released from all of its obligations under the Security Documents to which it
is a party in accordance with the terms and provisions thereof.


 


“Weekly Borrowing Base
Period” shall mean any period (i) during the occurrence and
continuance of an Event of Default or (ii) (x) commencing on the date
on which the Excess Availability is less than the greater of (A) $110,000,000
and (B) 20% of the Total Commitment as then in effect and (y) ending
on the first date thereafter on which the Excess Availability has been equal to
or greater than the greater of (A) $110,000,000 and (B) 20% of the
Total Commitment as then in effect for 45 consecutive days.


 


“Weighted Average Life to Maturity”
shall mean, when applied to any Indebtedness at any date, the number of years
obtained by dividing:  (i) the sum
of the products


 


73

















 


obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated
to the nearest one-twelfth) that will elapse between such date and the making
of such payment; by (ii) the then outstanding principal amount of such
Indebtedness.


 


“Wholly-Owned Canadian
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is a Canadian Subsidiary of such Person.


 


“Wholly-Owned Domestic
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is a Domestic Subsidiary of such Person.


 


“Wholly-Owned Foreign
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is a Foreign Subsidiary of such Person.


 


“Wholly-Owned Subsidiary”
shall mean, as to any Person, (i) any corporation 100% of whose capital
stock is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability
company, unlimited liability company, association, joint venture or other
entity in which such Person and/or one or more Wholly-Owned Subsidiaries of
such Person has a 100% equity interest at such time (other than, in the case of
a Foreign Subsidiary of Holdings with respect to the preceding clauses (i) and
(ii), directors’ qualifying shares and/or other nominal amounts of shares
required to be held by Persons other than Holdings and its Subsidiaries under
applicable law).


 


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


 


1.02.     References to “UCC”.  Where the context so requires, (i) any
term defined herein by reference to the “UCC” shall also have any extended,
alternative or analogous meaning given to such term in applicable Canadian
personal property security and other laws (including, without limitation, the
Personal Property Security Act of each province or territory of Canada, the
Securities Transfer Act of each province of Canada, the Civil Code of Quebec,
the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act
(Canada)), in all cases for the extension, preservation or betterment of the
security and rights of the Administrative Agent, and (ii) all references
herein to a financing statement, continuation statement, amendment or
termination statement shall be deemed to refer also to the analogous documents
used under applicable Canadian personal property security laws.


 


1.03.     Terms Generally.  The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms
defined.  Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  Unless the context shall otherwise require,
all references herein to Sections, Exhibits and Schedules shall be deemed to be
references to Sections of, and Exhibits and Schedules to, this Agreement, and
the words “herein”, “hereof” and “hereunder”, and words of similar import,


 


74

















 


shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof.  Other than
as specifically set forth in this Agreement, each reference to any Loan
Document or any other document or agreement shall be deemed to be a reference
to such Loan Document, document or agreement as amended, restated (including any
amendment and restatement thereof), waived, supplemented, modified, extended or
renewed from
time to time in accordance with the provisions hereof and thereof.


 


1.04.     Pro Forma Calculations.  For the purposes of (i) the Interest
Coverage Ratio and the Consolidated Fixed Charge Coverage Ratio, upon the occurrence
of any Permitted Acquisition, and (ii) the Consolidated Fixed Charge
Coverage Ratio, upon the occurrence of any Significant Asset Sale or any action
or proposed action pursuant to Payment Conditions, in each case, the applicable
calculation shall be made with respect to the applicable period (and, to the
extent applicable, subsequent periods) on a pro forma basis after giving effect
to such Permitted Acquisition, Significant Asset Sale or action or proposed
action pursuant to Payment Conditions, as the case may be (including, without
duplication, in respect of any Permitted Acquisition (a) all pro forma
adjustments permitted or required by Article 11 of Regulation S-X under
the Securities Act of 1933, as amended, and (b) pro forma adjustments for
cost savings (net of continuing associated expenses) to the extent such cost
savings are factually supportable and have been realized or are reasonably
expected to be realized within 12 months following such Permitted Acquisition, provided
that such cost savings shall be set forth in a reasonably detailed certificate
of an Authorized Officer of Holdings), using, for purposes of making such
calculations, the historical financial statements of all entities or assets so
acquired or to be acquired and the consolidated financial statements of
Holdings and its Subsidiaries, which shall be reformulated as if such Permitted
Acquisition or Significant Asset Sale, and any other Permitted Acquisitions or
Significant Asset Sales that have been consummated during the period, had been
consummated at the beginning of such period. 
In addition, solely for purposes of determining the Consolidated Fixed
Charge Coverage Ratio, any Indebtedness incurred or repaid in connection with
any Permitted Acquisition or Significant Asset Sale and any other Permitted
Acquisitions or Significant Asset Sales that have been consummated during the
period shall be assumed to have been incurred or repaid at the beginning of
such period.


 


1.05.     Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
Holdings notifies the Administrative Agent that it requests an amendment to any
provision hereof to eliminate the effect of any change occurring in GAAP or
policies used to prepare the audited financial statements of Holdings referred
to in Section 8.05(a) for the fiscal year ended December 31,
2009 or in the application thereof on the operation of such provision (or if
the Administrative Agent notifies Holdings that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.  Notwithstanding any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to herein shall be made, without giving effect to any election under Statement
of Financial Accounting Standards 159 (or any other Financial Accounting
Standard having a similar result or effect) to value any


 


75

















 


Indebtedness
or other liabilities of Holdings, the Borrowers or any of their respective
Subsidiaries at “fair value”, as defined therein.  Any references herein to consolidated or
other financial information of Holdings and its Subsidiaries shall be deemed,
on and after the Funding Date and the consummation of the Funding Date Merger,
to refer to Holdings and its Subsidiaries.


 


1.06.     Interpretation Québec.  For purposes of any assets of any Canadian
Loan Party located in the Province of Québec or charged by any deed of hypothec
(or any other Loan Document) and for all other purposes pursuant to which the
interpretation or construction of a Loan Document may be subject to the laws of
the Province of Québec or a court or tribunal exercising jurisdiction in the
Province of Québec, (i) “personal property” shall be deemed to include “movable
property”, (ii) “real property” shall be deemed to include “immovable
property”, (iii) “tangible property” shall be deemed to include “corporeal
property”, (iv) “intangible property” shall be deemed to include “incorporeal
property”, (v) “security interest”, “mortgage” and “lien” shall be deemed
to include a “hypothec”, (vi) all references to filing, registering or
recording under the Uniform Commercial Code or the PPSA shall be deemed to
include publication under the Civil Code of Québec,
(vii) all references to “perfection” of or “perfected” liens or security
interest shall be deemed to include a reference to an “opposable” or “set up”
lien or hypothec as against third parties, (viii) any “right of offset”, “right
of set-off” or similar expression shall be deemed to include a “right of
compensation”, (ix) “goods” shall be deemed to include “corporeal movable
property” other than chattel paper, documents or title, instruments, money and
securities, and (x) an “agent” shall be deemed to include a “mandatary”.


 


SECTION 2.  Amount and Terms of Credit.


 


2.01.     The Commitments.  (a)  Subject to and upon the terms and
conditions set forth herein (including, without limitation, the conditions set
forth in Sections 6 and 7), (A) each U.S. Facility Lender
with a U.S. Facility Commitment severally agrees to make, at any time and from
time to time on or after the Funding Date and prior to the Revolving Loan
Maturity Date, a revolving loan or revolving loans to any U.S. Borrower (on a
joint and several basis with the other U.S. Borrowers) (each, a “U.S.
Facility Revolving Loan” and, collectively, the “U.S. Facility Revolving
Loans”) and (B) each Canadian Facility Lender with a Canadian Facility
Commitment severally agrees to make, at any time and from time to time on or
after the Funding Date and prior to the Revolving Loan Maturity Date, (x) a
revolving loan or revolving loans to any U.S. Borrower (on a joint and several
basis with the other U.S. Borrowers) (each, a “U.S. Borrower Canadian
Facility Revolving Loan” and, collectively, the “U.S. Borrower Canadian
Facility Revolving Loans”) and (y) a revolving loan or revolving loans
to any Canadian Borrower (on a joint and several basis with the other Canadian
Borrowers) (each, a “Canadian Borrower Canadian Facility Revolving Loan”
and, collectively, the “Canadian Borrower Canadian Facility Revolving Loans”
and, together with the U.S. Borrower Canadian Facility Revolving Loans, each, a
“Canadian Facility Revolving Loan” and, collectively, the “Canadian
Facility Revolving Loans” and, together with the U.S. Facility Revolving
Loans, each, a “Revolving Loan” and, collectively, the “Revolving
Loans”), which Revolving Loans:


 


(i)            shall be made and maintained in an Available Currency;


 


76

















 


(ii)           except as hereafter provided, shall, at the option of the
applicable Borrowers, be incurred and maintained as, and/or converted into, one
or more Borrowings of (x) Base Rate Loans, Canadian Prime Rate Loans or
Eurodollar Loans, or (y) (A) in the case of a B/A Lender, Bankers’
Acceptances in Canadian Dollars by acceptance and purchase thereof on the terms
and conditions provided for herein and in Schedule 1.01(b) or (B) in
the case of a Non-B/A Lender, completed Drafts in Canadian Dollars purchased
and, at the request of the Non-B/A Lender, exchanged for B/A Equivalent Notes,
in each case on the terms and conditions provided for herein and in Schedule
1.01(b); provided that, except as otherwise specifically provided in
Section 2.10(b), all Revolving Loans made as part of the same
Borrowing shall at all times consist of Revolving Loans of the same Type;


 


(iii)          may be repaid and reborrowed in accordance with the
provisions hereof;


 


(iv)          shall not be made (and shall not be required to be made) by
any such Lender in any instance where the incurrence thereof (after giving
effect to the use of the proceeds thereof on the date of the incurrence thereof
to repay any amounts theretofore outstanding pursuant to this Agreement) would
cause (x) in the case of U.S. Facility Revolving Loans, (A) the
Individual U.S. Facility Exposure of such U.S. Facility Lender to exceed the
amount of its U.S. Facility Commitment at such time or (B) the Aggregate
U.S. Facility Exposure to exceed the Total U.S. Facility Commitment at such
time or (y) in the case of Canadian Facility Revolving Loans, (A) the
Individual Canadian Facility Exposure of such Canadian Facility Lender to
exceed the amount of its Canadian Facility Commitment at such time or (B) the
Aggregate Canadian Facility Exposure to exceed the Total Canadian Facility
Commitment at such time; and


 


(v)           to the extent denominated in Canadian Dollars and required
to be made by a Participating Specified Foreign Currency Lender, shall, subject
to Section 15, be made by the Fronting Lender.


 


(b)           Subject to and upon the terms and
conditions set forth herein (including, without limitation, the conditions set
forth in Sections 6 and 7), the Swingline Lender agrees to make,
at any time and from time to time on or after the Funding Date and prior to the
Swingline Expiry Date (A) in respect of the U.S. Facility Commitments, a
revolving loan or revolving loans to any U.S. Borrower (on a joint and several
basis with the other U.S. Borrowers) (each, a “U.S. Facility Swingline Loan”
and, collectively, the “U.S. Facility Swingline Loans”) and (B) in
respect of the Canadian Facility Commitments, (x) a revolving loan or
revolving loans to any U.S. Borrower (on a joint and several basis with the
other U.S. Borrowers) (each, a “U.S. Borrower Canadian Facility Swingline
Loan” and, collectively, the “U.S. Borrower Canadian Facility Swingline
Loans”) and (y) a revolving loan or revolving loans to any Canadian
Borrower (on a joint and several basis with the other Canadian Borrowers)
(each, a “Canadian Borrower Canadian Facility Swingline Loan” and,
collectively, the “Canadian Borrower Canadian Facility Swingline Loans”
and, together with the U.S. Borrower Canadian Facility Swingline Loans, each, a
“Canadian Facility Swingline Loan” and, collectively, the “Canadian
Facility Swingline Loans” and, together with the U.S. Facility Swingline
Loans, each, a “Swingline Loan” and, collectively, the “Swingline
Loans”), which Swingline Loans:


 


77

















 


(i)            shall be made and maintained in an Available Currency;


 


(ii)           shall be made and maintained as Base Rate Loans or
Canadian Prime Rate Loans;


 


(iii)          may be repaid and reborrowed in accordance with the
provisions hereof;


 


(iv)          shall not be made (and shall not be required to be made) by
the Swingline Lender in any instance where the incurrence thereof (after giving
effect to the use of the proceeds thereof on the date of the incurrence thereof
to repay any amounts theretofore outstanding pursuant to this Agreement) would cause
(x) in the case of U.S. Facility Swingline Loans, the Aggregate U.S.
Facility Exposure to exceed the Total U.S. Facility Commitment at such time or (y) in
the case of Canadian Facility Swingline Loans, the Aggregate Canadian Facility
Exposure to exceed the Total Canadian Facility Commitment at such time; and


 


(v)           shall not exceed in aggregate principal amount at any time
outstanding (x) in the case of U.S. Facility Swingline Loans, the Maximum
U.S. Facility Swingline Amount or (y) in the case of Canadian Facility
Swingline Loans, the Maximum Canadian Facility Swingline Amount.


 


(c)           The Swingline Lender (x) may, in
its sole discretion, on any Business Day, and (y) shall, on the
penultimate Business Day of each week, give notice to the Lenders under a Tranche
that the Swingline Lender’s outstanding Swingline Loans under such Tranche
shall be funded with one or more Borrowings of Revolving Loans under such
Tranche to be made to, and maintained by, the Borrower of the outstanding
Swingline Loan under such Tranche being funded by such Revolving Loan (or any
other Borrower jointly and severally liable with such Borrower under such
Tranche) in the same currency as the outstanding Swingline Loan under such
Tranche being funded by such Revolving Loan (provided that such notice
shall be deemed to have been automatically given upon the occurrence of a
Default or an Event of Default under Section 11.01(g) or (h) or
upon the exercise of any of the remedies provided in the last paragraph of Section 11.01),
in which case one or more Borrowings of Revolving Loans under a Tranche
constituting Base Rate Loans (in the case of Swingline Loans under such Tranche
denominated in U.S. Dollars) or Revolving Loans under a Tranche constituting
Canadian Prime Rate Loans (in the case of Swingline Loans under such Tranche
denominated in Canadian Dollars), in each case, to be made to, and maintained
by, the Borrower of the outstanding Swingline Loan under such Tranche being
funded by such Revolving Loan (or any other Borrower jointly and severally
liable with such Borrower under such Tranche) in the same currency as the
outstanding Swingline Loan under such Tranche being funded by such Revolving
Loan (each such Borrowing, a “Mandatory Borrowing”), shall be made on
the immediately succeeding Business Day by all Lenders under such Tranche pro
rata based on each such Lender’s U.S. Facility RL Percentage or Canadian
Facility RL Percentage, as the case may be (determined before giving effect to
any termination of the Commitments under such Tranche pursuant to the last
paragraph of Section 11.01) and the proceeds thereof shall be
applied directly by the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans under such Tranche; provided that such
Revolving Loans which are denominated in Canadian Dollars and are required to
be made by a Participating Specified Foreign Currency Lender shall,


 


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subject to Section 15,
be made by the Fronting Lender.  Each
Lender under a Tranche hereby irrevocably agrees to make Revolving Loans under
such Tranche to the applicable Borrower upon one Business Day’s notice pursuant
to each Mandatory Borrowing in the amount and currency and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing
may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether
any conditions specified in Section 7 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such
Mandatory Borrowing, and (v) the amount of any Borrowing Base or the Total
U.S. Facility Commitment or Total Canadian Facility Commitment, as applicable,
at such time.  In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding, corporate action or other step taken under any Insolvency Law
with respect to any Borrower, then each Lender under a Tranche hereby agrees
that it shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from any
Borrower under such Tranche on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline
Loans under such Tranche as shall be necessary to cause such Lenders to share
in such Swingline Loans ratably based upon their respective U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be (determined
before giving effect to any termination of the Commitments under such Tranche
pursuant to the last paragraph of Section 11.01), provided
that (x) all interest payable on the Swingline Loans under such Tranche
shall be for the account of the Swingline Lender until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay the Swingline Lender interest on the principal
amount of the participation purchased for each day from and including the day
upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, (A) in the case of a
Mandatory Borrowing constituting Revolving Loans denominated in U.S. Dollars,
at the overnight Federal Funds Rate for the first three days and at the
interest rate otherwise applicable to such Revolving Loans denominated in U.S.
Dollars, in each case maintained as Base Rate Loans hereunder for each day
thereafter, and (B) in the case of a Mandatory Borrowing constituting
Revolving Loans denominated in Canadian Dollars, at the cost to the
Administrative Agent of acquiring the overnight funds in Canadian Dollars for
the first three days and at the interest rate otherwise applicable to such
Revolving Loans denominated in Canadian Dollars, in each case maintained as
Canadian Prime Rate Loans hereunder for each day thereafter.


 


(d)           Notwithstanding anything to the
contrary in Section 2.01(a) or (b), Section 7.03
or elsewhere in this Agreement, the Co-Collateral Agents shall have the right
to establish Reserves in such amounts, and with respect to such matters, as the
Co-Collateral Agents in their Permitted Discretion shall deem necessary or
appropriate, against any Borrowing Base (with any establishment of or increase
in Reserves to reduce such then existing Borrowing Base, as applicable, in an
amount equal to such Reserves and any elimination of or reduction in any
Reserves to increase such then existing Borrowing Base, as applicable, in an
amount equal to such Reserves).  The
Co-Collateral Agents shall promptly notify Holdings of the establishment of any
new Reserve or any increase or decrease to an existing Reserve.


 


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(e)           In the event that the Borrowers are
unable to comply with the conditions precedent to the making of Revolving Loans
set forth in Section 7 (including, without limitation, the
Borrowing Base limitations set forth in Section 7.03), the Lenders
under any Tranche, subject to the immediately succeeding proviso, hereby
authorize the Administrative Agent, for the account of the Lenders under a
Tranche, to make U.S. Facility Revolving Loans to any U.S. Borrower (on a joint
and several basis with the other U.S. Borrowers), U.S. Borrower Canadian
Facility Revolving Loans to any U.S. Borrower (on a joint and several basis
with the other U.S. Borrowers) and/or Canadian Borrower Canadian Facility
Revolving Loans to any Canadian Borrower (on a joint and several basis with the
other Canadian Borrowers) solely in the event that the Administrative Agent in
its Permitted Discretion deems necessary or desirable (A) to preserve or
protect the Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations, or (C) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
without limitation, documented Expenses and Fees which are invoiced in
reasonable detail; provided that such Revolving Loans may only be made
as Base Rate Loans or Canadian Prime Rate Loans, respectively, as determined by
the Administrative Agent (each, an “Agent Advance”), for a period
commencing on the date the Administrative Agent first receives a Notice of
Borrowing requesting an Agent Advance until the earliest of (x) the
twentieth Business Day after such date, (y) the date the respective
Borrowers are again able to comply with the applicable Borrowing Base
limitations and the conditions precedent to the making of Revolving Loans, or
obtain an amendment or waiver with respect thereto and (z) the date the
Required Lenders instruct the Administrative Agent to cease making Agent
Advances (in each case, the “Agent Advance Period”); provided  further
that the Administrative Agent shall not make any Agent Advance to the extent
that at the time of the making of such Agent Advance, (I) the amount of
such Agent Advance when added to the aggregate outstanding amount of all other
Agent Advances (w) made to, if such Agent Advance is a U.S. Borrower
Revolving Loan, the U.S. Borrowers at such time (for this purpose, using the
U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars), would
exceed 5% of the U.S. Borrowing Base at such time, (x) made to, if such
Agent Advance is a Canadian Borrower Revolving Loan, the Canadian Borrowers at
such time (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars), would exceed 5% of the Canadian Borrowing Base at
such time, (y) if such Agent Advance is a U.S. Facility Revolving Loan,
that are U.S. Facility Revolving Loans (for this purpose, using the U.S. Dollar
Equivalent of amounts not denominated in U.S. Dollars), would exceed 5% of the
Total U.S. Facility Commitment at such time or (z) if such Agent Advance
is a Canadian Facility Revolving Loan, that are Canadian Facility Revolving
Loans (for this purpose, using the U.S. Dollar Equivalent of amounts not
denominated in U.S. Dollars), would exceed 5% of the Total Canadian Facility
Commitment at such time (each, an “Agent Advance Amount”) or (II) the
amount of such Agent Advance (after giving effect to thereto) would cause (x) if
such Agent Advance is a U.S. Facility Revolving Loan, (A) the Individual U.S. Facility Exposure of
any U.S. Facility Lender to exceed the amount of such U.S. Facility Lender’s U.S. Facility Commitment
at such time or (B) the Aggregate U.S. Facility Exposure to
exceed the Total U.S. Facility Commitment at such time
or (y) if such Agent Advance is a Canadian Facility Revolving Loan, (A) the
Individual Canadian Facility Exposure of any Canadian
Facility Lender to exceed the amount of such Canadian Facility Lender’s
Canadian Facility Commitment at such time or (B) the Aggregate
Canadian Facility Exposure to exceed the Total Canadian Facility Commitment
at such time.  Agent Advances may be made
by the Administrative Agent in its sole discretion and no Borrower shall


 


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have any right whatsoever to
require that any Agent Advances be made, provided that the Administrative Agent
shall promptly notify Holdings following the occurrence of an Agent
Advance.  Agent Advances will be subject
to periodic settlement with the applicable Lenders pursuant to Section 2.04(b).


 


(f)            If the Initial Revolving Loan
Maturity Date shall have occurred at a time when Extended U.S. Facility
Commitments or Extended Canadian Facility Commitments are in effect, then on
the Initial Revolving Loan Maturity Date all then outstanding Swingline Loans
shall be repaid in full on such date (and there shall be no adjustment to the
participations in such Swingline Loans as a result of the occurrence of such
Initial Revolving Loan Maturity Date); provided that, if on the
occurrence of the Initial Revolving Loan Maturity Date (after giving effect to
any repayments of Revolving Loans and any reallocation of Letter of Credit
participations as contemplated in Section 3.07), there shall exist
sufficient unutilized Extended U.S. Facility Commitments or Extended Canadian
Facility Commitments, as the case may be, so that the respective outstanding
Swingline Loans could be incurred pursuant the Extended U.S. Facility
Commitments or Extended Canadian Facility Commitments, as the case may be,
which will remain in effect after the occurrence of the Initial Revolving Loan
Maturity Date, then there shall be an automatic adjustment on such date of the
participations in such Swingline Loans and same shall be deemed to have been
incurred solely pursuant to the Extended U.S. Facility Commitments or Extended
Canadian Facility Commitments, as the case may be, and such Swingline Loans
shall not be so required to be repaid in full on the Initial Revolving Loan
Maturity Date.


 


2.02.     Minimum Amount of Each Borrowing.  The aggregate principal amount of each Borrowing
of Loans of a specific Type shall not be less than the Minimum Borrowing Amount
applicable to such Type of Loans.  More
than one Borrowing may occur on the same date, but at no time shall there be
outstanding more than (x) ten (10) Borrowings of Eurodollar Loans (or
such greater number of Borrowings of Eurodollar Loans as may be agreed to from
time to time by the Administrative Agent) in the aggregate for all Loans or (y) five
(5) different maturity dates in the aggregate for all outstanding Bankers’
Acceptance Loans (or such greater number of maturity dates as may be agreed to
from time to time by the Administrative Agent).


 


2.03.     Notice of Borrowing.  (a)  Whenever a Borrower desires to
incur (i) Eurodollar Loans or Bankers’ Acceptance Loans hereunder, such
Borrower shall give the Administrative Agent at the Notice Office at least
three Business Days’ prior notice of each Eurodollar Loan or Bankers’
Acceptance Loan to be incurred hereunder and (ii) Base Rate Loans
(including Agent Advances, but excluding Swingline Loans and Revolving Loans
made pursuant to a Mandatory Borrowing) or Canadian Prime Rate Loans (including
Agent Advances, but excluding Swingline Loans and Revolving Loans made pursuant
to a Mandatory Borrowing or to the extent resulting from automatic conversions
of Bankers’ Acceptance Loans as provided in Schedule 1.01(b)) hereunder,
such Borrower shall give the Administrative Agent at the Notice Office at least
one Business Day’s prior notice (or such shorter period as agreed to by the Administrative
Agent in its sole discretion) of each Base Rate Loan or Canadian Prime Rate
Loan to be incurred hereunder; provided that any such notice shall be
deemed to have been given on a certain day only if given before 12:00 Noon (New
York City time) on such day, in the case of Revolving Loans.  Each such notice (each, a “Notice of
Borrowing”), except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall be in writing, or by telephone


 


81

















 


promptly confirmed in writing, in the form of Exhibit A-1,
appropriately completed to specify:  (i) the
aggregate principal amount or Face Amount, as the case may be, of the Loans to
be incurred pursuant to such Borrowing (stated in the Available Currency), (ii) the
date of such Borrowing (which shall be a Business Day), (iii) in the case
of a Borrowing of Revolving Loans, whether the Revolving Loans made pursuant to
such Borrowing constitute Agent Advances (it being understood that the
Administrative Agent shall be under no obligation to make such Agent Advance), (iv) in
the case of U.S. Dollar Denominated Revolving Loans, whether the Revolving
Loans being incurred pursuant to such Borrowing are to be initially maintained
as Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and
if, Eurodollar Loans, the initial Interest Period to be applicable thereto, (v) in
the case of Canadian Dollar Denominated Revolving Loans, whether the Revolving
Loans being incurred pursuant to such Borrowing shall consist of Canadian Prime
Rate Loans or Bankers’ Acceptance Loans and, if Bankers’ Acceptance Loans, the
term thereof (which shall comply with the requirements of Schedule 1.01(b))
and (vi) whether
the Loans being incurred pursuant to such Borrowing shall constitute U.S.
Facility Revolving Loans or Canadian Facility Revolving Loans.  Except in the case of Agent Advances, the
Administrative Agent shall promptly give each Lender under a Tranche notice of
such proposed Borrowing under such Tranche, of such Lender’s proportionate
share thereof and of the other matters required by the immediately preceding
sentence to be specified in the Notice of Borrowing.


 


(b)           Whenever a Borrower desires to incur
Swingline Loans hereunder, such Borrower shall give the Swingline Lender no
later than 1:00 P.M. (New York City time) on the date that a Swingline
Loan is to be incurred, written notice or telephonic notice promptly confirmed
in writing of each Swingline Loan to be incurred hereunder.  Each such notice shall be irrevocable and
specify in each case (A) the date of Borrowing (which shall be a Business
Day), (B) the aggregate principal amount of the Swingline Loans to be
incurred pursuant to such Borrowing (stated in the Available Currency) and (C) whether
the Swingline Loans being incurred pursuant to such Borrowing shall constitute
U.S. Facility Swingline Loans or Canadian Facility Swingline Loans.


 


(c)           Mandatory Borrowings shall be made
upon the notice specified in Section 2.01(c), with each Borrower
irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of
the Mandatory Borrowings as set forth in Section 2.01(a).


 


(d)           Without in any way limiting the
obligation of any Borrower to confirm in writing any telephonic notice of any
Borrowing or prepayment of Loans, the Administrative Agent or the Swingline
Lender, as the case may be, may act without liability upon the basis of
telephonic notice of such Borrowing or prepayment, as the case may be, believed
by the Administrative Agent or the Swingline Lender, as the case may be, in
good faith to be from an Authorized Officer of such Borrower, prior to receipt
of written confirmation.  In each such
case, such Borrower hereby waives the right to dispute the Administrative Agent’s
or the Swingline Lender’s record of the terms of such telephonic notice of such
Borrowing or prepayment of Loans, as the case may be, absent manifest error.


 


2.04.     Disbursement of Funds.  (a)  No later than 1:00 P.M. (New
York City time) on the date specified in each Notice of Borrowing (or (x) in
the case of Swingline Loans, no later than 4:00 P.M. (New York City time)
on the date specified pursuant to Section 2.03(b)


 


82

















 


or (y) in the case of Mandatory Borrowings, no later than 1:00 P.M.
(New York City time) on the date specified in Section 2.01(a)),
each Lender under the respective Tranche, subject to Section 15,
will make available its pro  rata portion (determined in
accordance with Section 2.07) of each such Borrowing under such
Tranche requested to be made on such date. 
All such amounts will be made available in U.S. Dollars (in the case of
U.S. Dollar Denominated Loans) or in Canadian Dollars (in the case of Canadian
Dollar Denominated Loans), as the case may be, and in immediately available
funds at the Payment Office, and the Administrative Agent will make available
to the relevant Borrower or Borrowers at the Payment Office the aggregate of
the amounts so made available by the Lenders under the respective Tranche (or in
the case of Swingline Loans, the Swingline Lender will make available the full
amount thereof).  Unless the
Administrative Agent shall have been notified by any Lender under the
respective Tranche prior to the date of Borrowing under such Tranche that such
Lender does not intend to make available to the Administrative Agent such
Lender’s portion of any Borrowing under such Tranche to be made on such date,
the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the relevant Borrower or Borrowers a
corresponding amount.  If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent’s demand therefor, the
Administrative Agent shall promptly notify the relevant Borrower or Borrowers,
and the relevant Borrower or Borrowers shall promptly (but no later than one
Business Day following such notice) pay such corresponding amount to the
Administrative Agent.  The Administrative
Agent also shall be entitled to recover on demand from such Lender or the
relevant Borrower or Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the relevant Borrower
or Borrowers until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, the overnight Federal Funds Rate (or, in the case of Canadian
Dollar Denominated Loans, the cost to the Administrative Agent of acquiring
overnight funds in Canadian Dollars) for the first three days and at the
interest rate otherwise applicable to such Loans for each day thereafter and (ii) if
recovered from the relevant Borrower or Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 2.08.  Nothing in this Section 2.04(a) shall
be deemed to relieve any Lender under a Tranche from its obligation to make
Loans hereunder under such Tranche or to prejudice any rights which any
Borrower may have against any Lender under a Tranche as a result of any failure
by such Lender to make Loans hereunder under such Tranche.  Notwithstanding this Section 2.04(a) and
subject to the provisions of Section 15, (x) the Fronting
Lender shall be obligated to make each Participating Specified Foreign Currency
Lender’s pro rata portion of a Specified Foreign Currency
Loan and (y) each Participating Specified Foreign Currency Lender shall
not be obligated to make its pro rata portion of a Specified
Foreign Currency Loan.


 


(b)           Agent Advances made pursuant to Section 2.01(c) shall
be subject to periodic settlement as follows:


 


(i)            The amount of each Lender’s U.S. Facility RL Percentage
or Canadian Facility RL Percentage, as the case may be, of Revolving Loans
shall be computed


 


83

















 


weekly (or more frequently in the Administrative
Agent’s sole discretion) and shall be adjusted upward or downward on the basis
of the amount of outstanding Revolving Loans under such Tranche as of 5:00 P.M.
(New York City time) on the last Business Day of each week, or such other
period specified by the Administrative Agent (each such date, a “Settlement
Date”).  The applicable Lenders under
a Tranche shall transfer to the Administrative Agent, or the Administrative
Agent shall transfer to the applicable Lenders under a Tranche, such amounts as
are necessary so that (after giving effect to all such transfers) the amount of
Revolving Loans under a Tranche made by each Lender under such Tranche shall be
equal to such Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of the aggregate amount of Revolving Loans
under such Tranche outstanding as of such Settlement Date.  If a notice from the Administrative Agent of
any such necessary transfer is received by a Lender on or prior to 12:00 Noon (New
York City time) on any Business Day, then such Lender shall make transfers
described above in immediately available funds no later than 3:00 P.M.
(New York City time) on the day such notice was received; and if such notice is
received by a Lender after 12:00 Noon (New York City time) on any Business Day,
such Lender shall make such transfers no later than 1:00 P.M. (New York
City time) on the next succeeding Business Day. 
The obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to, or without
representation or warranty by, the Administrative Agent.  Each of the Administrative Agent and each
Lender agrees and the Lenders agree to mark their respective books and records
on each Settlement Date to show at all times the dollar amount of their
respective U.S. Facility RL Percentage or Canadian Facility RL Percentage, as
the case may be, of the outstanding Revolving Loans under such Tranche on such
date.  The provisions of this Section 2.04(b) with
respect to Specified Foreign Currency Loans of a Participating Specified
Foreign Currency Lender shall be subject to the terms of Section 15.


 


(ii)           To the extent that the settlement described in preceding
clause (i) shall not yet have occurred with respect to any particular
Settlement Date, upon any repayment of Revolving Loans under a Tranche by any
Borrower prior to such settlement, the Administrative Agent may apply such
amounts repaid directly to the amounts that would otherwise be made available
by the Administrative Agent pursuant to this Section 2.04(b) under
such Tranche.


 


(iii)          Because the Administrative Agent on behalf of the Lenders
under a Tranche may be advancing and/or may be repaid Revolving Loans under
such Tranche prior to the time when such Lenders will actually advance and/or
be repaid such Revolving Loans, interest with respect to such Revolving Loans
shall be allocated by the Administrative Agent to each such Lender and the
Administrative Agent in accordance with the amount of such Revolving Loans
actually advanced by and repaid to each such Lender and the Administrative
Agent and shall accrue from and including the date such Revolving Loans are so
advanced to but excluding the date such Revolving Loans are either repaid by
the U.S. Borrowers or the Canadian Borrowers, as the case may be, in accordance
with the terms of this Agreement or actually settled by the Administrative
Agent or the applicable Lender as described in this Section 2.04(b).


 


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2.05.     Notes.  (a)  Each U.S. Borrower’s joint and
several obligation under a Tranche and each Canadian Borrower’s joint and
several obligation under a Tranche, as the case may be, to pay the principal
of, and interest on, the Loans under such Tranche made by each Lender under
such Tranche shall be evidenced in the Register maintained by the
Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Lender, also be evidenced (i) in the case of U.S. Facility
Revolving Loans, by a promissory note duly executed and delivered by each U.S.
Borrower substantially in the form of Exhibit B-1, with blanks
appropriately completed in conformity herewith (each, a “U.S. Facility
Revolving Note” and, collectively, the “U.S. Facility Revolving Notes”),
(ii) in the case of U.S. Borrower Canadian Facility Revolving Loans, by a
promissory note duly executed and delivered by each U.S. Borrower substantially
in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each, a “U.S. Borrower Canadian Facility Revolving Note”
and, collectively, the “U.S. Borrower Canadian Facility Revolving Notes”),
(iii) in the case of Canadian Borrower Canadian Facility Revolving Loans,
by a promissory note duly executed and delivered by each Canadian Borrower
substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each, a “Canadian Borrower Canadian
Facility Revolving Note” and, collectively, the “Canadian Borrower
Canadian Facility Revolving Notes” and, together with the U.S. Borrower Canadian
Facility Revolving Notes, the “Canadian Facility Revolving Notes” and,
together with the U.S. Facility Revolving Notes, the “Revolving Notes”),
(iv) in the case of U.S. Facility Swingline Loans, by a promissory note
duly executed and delivered by each U.S. Borrower substantially in the form of Exhibit B-2,
with blanks appropriately completed in conformity herewith (each, a “U.S.
Facility Swingline Note” and, collectively, the “U.S. Facility Swingline
Notes”), (v) in the case of U.S. Borrower Canadian Facility Swingline
Loans, by a promissory note duly executed and delivered by each U.S. Borrower
substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each, a “U.S. Borrower Canadian Facility
Swingline Note” and, collectively, the “U.S. Borrower Canadian Facility
Swingline Notes”), and (vi) in the case of Canadian Borrower Canadian
Facility Swingline Loans, by a promissory note duly executed and delivered by
each Canadian Borrower substantially in the form of Exhibit B-2,
with blanks appropriately completed in conformity herewith (each, a “Canadian
Borrower Canadian Facility Swingline Note” and, collectively, the “Canadian
Borrower Canadian Facility Swingline Notes” 
and, together with the U.S. Borrower Canadian Facility Revolving Notes,
the “Canadian Facility Swingline Notes” and, together with the U.S.
Facility Swingline Notes, the “Swingline Notes”).


 


(b)           Each Lender under a Tranche will note
on its internal records the amount of each Loan under such Tranche made by it
and each payment in respect thereof and prior to any transfer of any of its
Notes under such Tranche will endorse on the reverse side thereof the
outstanding principal amount of Loans under such Tranche evidenced thereby.  Failure to make any such notation or any
error in such notation shall not affect any Borrower’s obligations in respect
of such Loans.


 


(c)           Notwithstanding anything to the
contrary contained above in this Section 2.05 or elsewhere in this
Agreement, Notes in respect of a Tranche shall only be delivered to Lenders
under such Tranche which at any time specifically request the delivery of such
Notes.  No failure of any Lender to
request, obtain, maintain or produce a Note evidencing its Loans to any
Borrower shall affect, or in any manner impair, the obligations of any Borrower
to pay the Loans (and all related Obligations) incurred by such Borrower which
would otherwise


 


85

















 


be evidenced thereby in
accordance with the requirements of this Agreement, and shall not in any way
affect the security or guaranties therefor provided pursuant to any Loan
Document.  Any Lender which does not have
a Note evidencing its outstanding Loans shall in no event be required to make
the notations otherwise described in preceding clause (b).  At any time when any Lender under a Tranche
requests the delivery of a Note under such Tranche to evidence any of its Loans
under such Tranche, each of the respective Borrowers shall promptly execute and
deliver to the respective Lender, at such Borrowers’ expense, the requested
Note in the appropriate amount or amounts to evidence such Loans.


 


(d)           If requested by a Lender following an
Extension, the applicable Borrowers shall promptly provide such Lender with the
applicable Notes (substantially in the form set forth in Section 2.05(a) with
such amendments thereto to reflect the Extension).


 


2.06.     Conversions.  (a)  Each Borrower shall have the option
to convert, on any Business Day, all or a portion equal to at least the Minimum
Borrowing Amount of the outstanding principal amount of U.S. Dollar Denominated
Loans made to it pursuant to one or more Borrowings (so long as of the same
Tranche) of one or more Types of U.S. Dollar Denominated Revolving Loans into a
Borrowing (of the same Tranche) of another Type of U.S. Dollar Denominated
Revolving Loan; provided that, (i) except as otherwise provided in Section 2.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Eurodollar Loans being converted and no
such partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing
to less than the Minimum Borrowing Amount applicable thereto, (ii) following
notice by the Administrative Agent or the Required Lenders to Holdings during
the continuation of any Default or Event of Default (although no such notice
shall be required following an Event of Default under Section 11.01(g) or
(h)), Base Rate Loans may not be converted into Eurodollar Loans, and (iii) no
conversion pursuant to this Section 2.06 shall result in a greater
number of Borrowings of Eurodollar Loans than is permitted under Section 2.02.  Each such conversion shall be effected by the
relevant Borrower (of U.S. Dollar Denominated Revolving Loan being converted)
by giving the Administrative Agent at the Notice Office prior to 12:00 Noon
(New York City time) at least (i) in the case of conversions of Base Rate
Loans into Eurodollar Loans, three Business Days’ prior notice and (ii) in
the case of conversions of Eurodollar Loans into Base Rate Loans, one Business
Day’s prior notice (each, a “Notice of Conversion/Continuation”), in
each case in the form of Exhibit A-2, appropriately completed to
specify the U.S. Dollar Denominated Revolving Loans to be so converted, the
Borrowing or Borrowings pursuant to which such U.S. Dollar Denominated Loans
were incurred and, if to be converted into Eurodollar Loans, the Interest
Period to be initially applicable thereto. 
The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its U.S. Dollar Denominated Revolving
Loans.


 


(b)           Conversions of Bankers’ Acceptance
Loans (so long as of the same Tranche) into Canadian Prime Rate Loans (of the
same Tranche) shall be made in the circumstances, and to the extent, provided
in Schedule 1.01(b).  Except as
provided in Schedule 1.01(b), Bankers’ Acceptance Loans shall not
be permitted to be converted into Canadian Prime Rate Loans prior to the
maturity date of the respective Bankers’ Acceptance or B/A Equivalent Note, as
the case may be.


 


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(c)           Each Borrower shall have the option
to convert on any Business Day occurring on or after the Funding Date, all or a
portion at least equal to the Minimum Borrowing Amount of the outstanding
principal amount of Canadian Prime Rate Loans made to such Borrower pursuant to
one or more Borrowings (so long as of the same Tranche) of Canadian Dollar
Denominated Revolving Loans into a Borrowing or Borrowings (of the same
Tranche) of Bankers’ Acceptance Loans; provided that (i) following
notice by the Administrative Agent or the Required Lenders to Holdings during
the continuation of any Default or Event of Default (although no such notice
shall be required following an Event of Default under Section 11.01(g) or
(h)), Canadian Prime Rate Loans may not be converted into Bankers’
Acceptance Loans and (ii) Borrowings of Bankers’ Acceptance Loans
resulting from this Section 2.06 shall be limited in number as
provided in Section 2.02. 
Each such conversion shall be effected by the relevant Borrower (of
Canadian Dollar Denominated Revolving Loan being converted), by giving the
Administrative Agent at the Notice Office, prior to 12:00 Noon (New York City
time), at least three Business Days prior to the date of the proposed
conversion, a Notice of Conversion/Continuation specifying the Canadian Dollar
Denominated Revolving Loans maintained as Canadian Prime Rate Loans to be so
converted into Bankers’ Acceptance Loans, the Borrowing or Borrowings pursuant
to which such Canadian Dollar Denominated Revolving Loans were made and the
term of the proposed Borrowing of Bankers’ Acceptance Loans (which, in each
case, shall comply with the requirements of Schedule 1.01(b)).  The Administrative Agent shall give each
Lender prompt notice of any such proposed conversion affecting any of its
Canadian Dollar Denominated Revolving Loans maintained as Canadian Prime Rate
Loans.


 


2.07.     Pro Rata Borrowings.  Except as provided in Section 15,
all Borrowings of U.S. Facility Revolving Loans and Canadian Facility Revolving Loans (including U.S.
Borrower Revolving Loans and Canadian Borrower Revolving Loans) under this
Agreement shall be incurred from the Lenders under such Tranche pro rata
on the basis of their U.S. Facility Commitments and Canadian Facility
Commitments, as the case may be, provided that all
Mandatory Borrowings under a Tranche shall be incurred from the Lenders under
such Tranche pro rata on the basis of their U.S. Facility RL Percentage or
Canadian Facility RL Percentages, as the case may be.  It is understood that no Lender shall be
responsible for any default by any other Lender of its obligation to make Loans
hereunder and that each Lender under such Tranche shall be obligated to make
the Loans under such Tranche provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.


 


2.08.     Interest.  (a)  (x) The U.S. Borrowers jointly and
severally agree to pay interest in respect of the unpaid principal amount of
each U.S. Facility Loan, (y) the U.S. Borrowers jointly and severally
agree to pay interest in respect of the unpaid principal amount of each U.S.
Borrower Canadian Facility Revolving Loan and U.S. Borrower Canadian Facility
Swingline Loan and (y) the Canadian Borrowers jointly and severally agree
to pay interest in respect of the unpaid principal amount of each Canadian
Borrower Canadian Facility Revolving Loan and Canadian Borrower Canadian
Facility Swingline Loan, in each case:


 


(A)          Maintained as a Base
Rate Loan, in each case, from the date of Borrowing thereof until the earlier
of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 2.06
or 2.09,


 


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as
applicable, at a rate per annum which shall be equal to the sum of the relevant
Applicable Margin plus the Base Rate, each as in effect from time to
time.


 


(B)           Maintained as a
Eurodollar Loan, in each case, from the date of Borrowing thereof until the
earlier of (i) the maturity thereof (whether by acceleration or otherwise)
and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 2.06, 2.09 or 2.10, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the relevant Applicable Margin as in
effect from time to time during such Interest Period plus the Eurodollar
Rate for such Interest Period.


 


(C)           Maintained as a
Canadian Prime Rate Loan (including with respect to any Bankers’ Acceptance
Loan converted into a Canadian Prime Rate Loan pursuant to Schedule 1.01(b)),
in each case, from the date of Borrowing thereof (or, in the circumstances
described in the immediately preceding parenthetical, from the date of
conversion of such respective Bankers’ Acceptance Loan into a Canadian Prime
Rate Loan) until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Canadian Prime
Rate Loan to a Bankers’ Acceptance Loan pursuant to Schedule 1.01(b), at
a rate per annum which shall be equal to the sum of the relevant Applicable
Margin plus the Canadian Prime Rate, each as in effect from time to
time.


 


(b)           Overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan and any other
overdue amount payable hereunder and under any other Loan Document, by
acceleration or otherwise, shall, in each case, bear interest at a rate per
annum equal to the rate which is two percent (2.0%) in excess of the otherwise
applicable rate of interest then borne by the applicable borrowing (or, if any
such amount does not relate to a borrowing under this Agreement, the rate which
is 2% in excess of the rate otherwise applicable to Base Rate Loans from time
to time).  Interest that accrues under
this Section 2.08(b) shall be payable on demand.


 


(c)           Accrued (and theretofore unpaid)
interest shall be payable (i) in respect of each Base Rate Loan, quarterly
in arrears on each Quarterly Payment Date, (ii) in respect of each
Canadian Prime Rate Loan, quarterly in arrears on each Quarterly Payment Date, (iii) in
respect of each Eurodollar Rate Loan, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iv) in respect of each Loan (other than Bankers’
Acceptance Loans), (x) on the date of any repayment or prepayment thereof
(on the amount prepaid or repaid) (except that repayments and prepayments of
Base Rate Loans or Canadian Prime Rate Loans, in each case, under a Tranche
shall not be required to be accompanied by a payment of accrued, and
theretofore unpaid, interest thereon, unless either all outstanding Loans of
such Type under such Tranche are being repaid or prepaid or the Total
Commitment under such Tranche has terminated or will be terminated concurrently
with such repayment or prepayment), (y) at maturity (whether by
acceleration or otherwise) and (z) after such maturity, on demand.


 


(d)           Upon each Interest Determination
Date, the Administrative Agent shall determine the Eurodollar Rate for each
Interest Period applicable to the respective Eurodollar Loans and shall
promptly notify the respective Borrowers and the Lenders thereof.  Each such


 


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determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto.


 


2.09.     Interest Periods.  At the time any Borrower gives any Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the
initial Interest Period applicable thereto) or prior to 12:00 Noon (New
York City time) on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), such Borrower shall have the right to elect the
interest period (each, an “Interest Period”) applicable to such Eurodollar Loan, which
Interest Period shall, at the option of such Borrower, be (i) a one or two
week period to the extent agreed to by all Lenders with Loans and/or
Commitments under the relevant Tranche, (ii) a one, two, three or six
month period or (iii) a nine or twelve month period to the extent agreed
to by all Lenders with Loans and/or Commitments under the relevant Tranche, provided
that (in each case):


 


(a)           all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;


 


(b)           the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including, the date
of any conversion thereto from a Base Rate Loan) and each Interest Period
occurring thereafter in respect of such Eurodollar Loan shall commence on the
day on which the next preceding Interest Period applicable thereto expires;


 


(c)           if any Interest Period for a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;


 


(d)           if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; provided, however,
that if any Interest Period for a Eurodollar Loan would otherwise expire on a
day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;


 


(e)           unless the Required Lenders otherwise agree, no Interest
Period may be selected at any time when a Default or an Event of Default is
then in existence; and


 


(f)            no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the Maturity Date for
such Tranche of Loans.


 


With respect to any Loans
under a Tranche maintained as Eurodollar Loans, at the end of any
Interest Period applicable to a Borrowing thereof, the relevant Borrower may
elect to split the respective Borrowing into two or more Borrowings (of the
same Tranche) of the same Type or combine two or more Borrowings (of the same
Tranche) of the same Type into a single Borrowing (of the same tranche), in
each case, by having the relevant Borrower give notice thereof together with
its election of one or more Interest Periods, in each case so long as each


 


89
















 


resulting
Borrowing (x) has an Interest Period which complies with the foregoing
requirements of this Section 2.09 and (y) does not cause a
violation of the requirements of Section 2.02.  If by 12:00 Noon (New York City time) on the
third Business Day prior to the expiration of any Interest Period applicable to
a Borrowing of Eurodollar Loans, any Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, such Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.


 


2.10.     Increased Costs, Illegality, etc.  (a)  In the event that any Lender shall
have determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clauses (i) and
(iv) below, may be made only by the Administrative Agent):


 


(i)            on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the applicable
interbank market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of the
respective Eurodollar Rate; or


 


(ii)           at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder (and deemed by
such Lender to be material) with respect to any Eurodollar Loan because of (x) any
change since the Closing Date in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order, guideline
or request (other than with respect to any Tax, which shall be governed solely
by Section 5.04), such as, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar Rate,
and/or (y) other circumstances arising since the Closing Date affecting
such Lender, the interbank eurodollar market or the position of such Lender in
such market; or


 


(iii)          at any time, that the making or continuance of any
Eurodollar Loan has been made unlawful by any law or governmental rule,
regulation or order adopted or changed after the Closing Date which materially
and adversely affects the applicable eurodollar; or


 


(iv)          at any time that there is no market for Bankers’
Acceptances by reason of circumstances affecting the Canadian money market
generally or the relevant Available Currency (other than U.S. Dollars) is not
available in sufficient amounts, in either case as determined in good faith by
the Administrative Agent, acting reasonably;


 


then, and in any such event, such Lender (or the
Administrative Agent, in the case of clauses (i) and (iv) above)
shall promptly give notice (by telephone promptly confirmed in writing) to the
affected Borrowers and, except in the case of clauses (i) and (iv) above,
to the Administrative Agent, of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders or in
the case of clauses (ii) and (iii) each other affected Lender).  Thereafter (w) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until


 


90

















 


such time as the Administrative Agent notifies
Holdings and the Lenders that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or Notice
of Conversion/Continuation given by any Borrower with respect to Eurodollar
Loans which have not yet been incurred (including by way of conversion) shall
be deemed rescinded by such Borrower, (x) in the case of clause (ii) above,
the U.S. Borrowers (jointly and severally) and/or the Canadian Borrowers
(jointly and severally) agree to pay to such Lender, upon such Lender’s written
request therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Lender in
its reasonable discretion shall determine) as shall be required to compensate
such Lender for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
such Lender, showing in reasonable detail the basis for the calculation
thereof, submitted to the respective Borrowers by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties hereto),
(y) in the case of clause (iii) above, the respective Borrower or
Borrowers shall take one of the actions specified in Section 2.10(b) as
promptly as possible and, in any event, within the time period required by law
and (z) in the case of clause (iv) above, and as provided in Schedule
1.01(b), Bankers’ Acceptance Loans or other Revolving Loans in the relevant
Available Currency (exclusive of any such Revolving Loans which have
theretofore been funded) shall no longer be available until such time as the
Administrative Agent notifies the affected Borrowers and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion/Continuation with
respect to Bankers’ Acceptance Loans or such other Revolving Loans given by the
respective Borrowers which have not been incurred (including by way of
conversion) shall be deemed rescinded by such Borrowers.


 


(b)           At any time that any Eurodollar Loan
is affected by the circumstances described in Section 2.10(a)(ii),
the affected Borrower may, and in the case of a Eurodollar Loan affected by the
circumstances described in Section 2.10(a)(iii), the affected
Borrower shall, either (i) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel such Borrowing by giving the
Administrative Agent telephonic notice (confirmed in writing) on the same date
that such Borrower was notified by the affected Lender or the Administrative
Agent pursuant to Section 2.10(a)(ii) or (iii), or (ii) if
the affected Eurodollar Loan is then outstanding, upon at least three Business
Days’ written notice to the Administrative Agent, require the affected Borrower
to convert such Eurodollar Loan into a Base Rate Loan (which conversion, in the
case of the circumstance described in Section 2.10(a)(iii), shall
occur no later than the last day of the Interest Period then applicable to such
Eurodollar Loan or such earlier day as shall be required by applicable law); provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this Section 2.10(b).


 


(c)           If any Lender determines that after
the Closing Date the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any Governmental
Authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender based on the existence of
such Lender’s Commitment hereunder or its obligations hereunder, by an amount
deemed by such Lender to be material, then Holdings agrees to pay to such
Lender, upon


 


91

















 


its written demand therefor,
such additional amounts as shall be required to compensate such Lender or such
other corporation on an after-tax basis for the increased cost to such Lender
or such other corporation or the reduction in the rate of return to such Lender
or such other corporation as a result of such increase of capital.  In determining such additional amounts, each
Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable; provided that such Lender’s
determination of compensation owing under this Section 2.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto.  Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.10(c),
will give prompt written notice thereof to Holdings, which notice shall show in
reasonable detail the basis for calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish Holdings’
obligations to pay additional amounts pursuant to this Section 2.10(c) upon
the subsequent receipt of such notice.


 


2.11.     Compensation.  The applicable Loan Parties (grouped by
Borrowing Base), jointly and severally agree to compensate each Lender, upon
its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Lender to fund its Eurodollar Loans or Bankers’ Acceptance
Loans but excluding loss of anticipated profits) which such Lender may
sustain:  (a) if for any reason
(other than a default by such Lender or the Administrative Agent) a Borrowing
of, or conversion from or into, Eurodollar Loans or Bankers’ Acceptance
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion/Continuation (whether or not withdrawn by the respective
Borrower or Borrowers or deemed withdrawn pursuant to Section 2.10(a));
(b) if any prepayment or repayment (including any prepayment or repayment
made pursuant to Section 5.01, Section 5.02 or as a
result of an acceleration of the Loans pursuant to Section 11.01)
or conversion of any of its Eurodollar Loans or Bankers’ Acceptance
Loans occurs on a date which is not the last day of an Interest Period or
maturity date, as applicable, with respect thereto; (c) if any prepayment
of any of its Eurodollar Loans is not made on any date specified in a notice
of prepayment given by the respective Borrowers; or (d) as a consequence
of (i) any other default by the respective Borrowers to repay Eurodollar Loans or Bankers’
Acceptance Loans when required by the terms of this Agreement or any Note held
by such Lender or (ii) any election made pursuant to Section 2.10(b).


 


2.12.     Lending Offices and Affiliate Lenders
for Loans in Available Currency.  (a)  Each Lender may at any time or from
time to time designate, by written notice to the Administrative Agent to the
extent not already reflected on Schedule 13.03, one or more lending
offices (which, for this purpose, may include Affiliates of the respective
Lender) for the various Loans in the Available Currency made, and Letters of
Credit participated in, by such Lender (including, without limitation, by
designating a separate lending office (or Affiliate) to act as such with
respect to such Loans and Letter of Credit Outstandings); provided that,
for designations made after the Closing Date, to the extent such designation
shall result in increased costs under Section 2.10, 3.06 or 5.04
in excess of those which would be charged in the absence of the designation of
a different lending office (including a different Affiliate of the respective
Lender), then the Borrowers shall not be obligated to pay such excess increased
costs (although if such designation results in increased costs, the Borrowers
shall be obligated to pay the costs 


 


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which would have applied in the absence of such designation and any
subsequent increased costs of the type described above resulting from changes
after the date of the respective designation). 
Except as provided in the immediately preceding sentence, each lending
office and Affiliate of any Lender designated as provided above shall, for all
purposes of this Agreement and the other Loan Documents, be treated in the same
manner as the respective designating Lender (and shall be entitled to all
indemnities and similar provisions in respect of its acting as such hereunder).


 


(b)           Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or
(iii), Section 2.10(c), Section 3.06 or Section 5.04
with respect to such Lender, it will, if requested by Holdings, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans or Letters of Credit affected by such
event; provided that such designation is made on such terms that such
Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Section. 
Nothing in this Section 2.12(b) shall affect or
postpone any of the obligations of any Borrower or the right of any Lender
provided in Sections 2.10, 3.06 and 5.04.


 


2.13.     Replacement of Lenders.  (a)  If any Lender becomes a Defaulting
Lender, (b) upon the occurrence of any event giving rise to the operation
of Section 2.10(a)(ii) or (iii), Section 2.10(c),
Section 3.06 or Section 5.04 with respect to any Lender
which results in such Lender charging to any Borrower increased costs in excess
of those being generally charged by the other Lenders, (c) in the case of
a refusal by a Lender to consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b) or (d) in the case of the
rejection (or deemed rejection) by a Lender of the Extension under Section 2.19(a) which
Extension has been accepted under Section 2.19(a) by the
Required Lenders, Holdings shall have the right, in accordance with Section 13.04(b),
if no Default or Event of Default then exists or would exist after giving
effect to such replacement, to replace such Lender (the “Replaced Lender”)
with one or more other Eligible Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the “Replacement
Lender”) and each of which shall be reasonably acceptable to the
Administrative Agent, Swingline Lender, Fronting Lending (unless such Person
will not be a Participating Specified Foreign Currency Lender) and any Issuing
Lender; provided that:


 


(i)            at the time of any replacement pursuant to this Section 2.13,
the Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable
pursuant to said Section 13.04(b) to be paid by the Borrowers
or, if otherwise agreed, the Replacement Lender) pursuant to which the
Replacement Lender shall acquire the entire Commitment and all outstanding
Revolving Loans (other than Bankers’ Acceptance Loans) and all participations
in Letters of Credit by, the Replaced Lender and, in connection therewith,
shall pay to (i) the Replaced Lender in respect thereof an amount equal to
the sum of (A) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans (other than Bankers’ Acceptances and B/A Equivalent
Notes) of the respective Replaced Lender with respect to which such Replaced
Lender is being replaced, (B) an amount equal to the Face Amount of any
outstanding B/A Instrument of the respective Replaced Lender in satisfaction of
the obligations of the Borrower to repay the B/A Instrument on


 


93

















 


the maturity thereof, (C) an amount equal to
all Unpaid Drawings (if any) that have been funded by (and not reimbursed to)
such Replaced Lender, together with all then unpaid interest with respect
thereto at such time and (D) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 4.01,
(ii) each Issuing Lender an amount equal to such Replaced Lender’s U.S.
Facility RL Percentage or Canadian Facility RL Percentage, as the case may be,
of any Unpaid Drawing relating to Letters of Credit issued by such Issuing
Lender under such Tranche (which at such time remains an Unpaid Drawing) to the
extent such amount was not theretofore funded by such Replaced Lender and (iii) the
Swingline Lender an amount equal to such Replaced Lender’s U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be, of any
Mandatory Borrowing under such Tranche to the extent such amount was not
theretofore funded by such Replaced Lender to the Swingline Lender; and


 


(ii)           all obligations of the Borrowers then owing to the
Replaced Lender (other than those specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid, but including all amounts, if any, owing under Section 2.11
shall be paid in full to such Replaced Lender concurrently with such
replacement) shall be paid in full to such Replaced Lender concurrently with
such replacement.


 


(b)           Upon receipt by the Replaced Lender of all amounts
required to be paid to it pursuant to this Section 2.13, the
Administrative Agent shall be entitled (but not obligated) and authorized to
execute an Assignment and Assumption Agreement on behalf of such Replaced
Lender, and any such Assignment and Assumption Agreement so executed by the
Administrative Agent and the Replacement Lender shall be effective for purposes
of this Section 2.13 and Section 13.04.  Upon the execution of the respective
Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the
Register by the Administrative Agent pursuant to Section 13.15 and,
if so requested by the Replacement Lender, delivery to the Replacement Lender
of the appropriate Note or Notes executed by the relevant Borrowers, (x) the
Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 2.10, 2.11, 3.06, 5.04, 12.06, 13.01
and 13.06), which shall survive as to such Replaced Lender and (y) the
U.S.
Facility RL Percentage or Canadian Facility RL Percentage shall be
automatically adjusted at such time to give effect to such replacement.


 


2.14.     Incremental Commitments.  (a)  Holdings shall have the right, in
consultation and coordination with the Administrative Agent as to all of the
matters set forth below in this Section 2.14, but without requiring
the consent of the Administrative Agent (except as otherwise provided in this Section 2.14)
or the Lenders, to request at any time and from time to time after the Funding
Date and prior to the Revolving Loan Maturity Date that one or more Lenders
(and/or one or more other Persons which are Eligible Transferees and which will
become Lenders) provide Incremental Commitments and, subject to the applicable
terms and conditions contained in this Agreement and the relevant Incremental
Commitment Agreement, make Revolving Loans and participate in Letters of Credit
and Swingline Loans pursuant thereto; provided that (i) no Lender
shall be obligated to provide an Incremental Commitment,


 


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and until such time, if any, as such Lender has agreed in its sole
discretion to provide an Incremental Commitment and executed and delivered to
the Administrative Agent, Holdings and the other Borrowers an Incremental
Commitment Agreement as provided in clause (b) of this Section 2.14,
such Lender shall not be obligated to fund any Revolving Loans in excess of its
U.S. Facility Commitment or Canadian Facility Commitment, as applicable, (if
any) or participate in any Letters of Credit or Swingline Loans in excess of
its U.S. Facility RL Percentage or Canadian Facility RL Percentage, as
applicable, in each case, as in effect prior to giving effect to such
Incremental Commitment provided pursuant to this Section 2.14, (ii) any
Lender (including any Person which is an Eligible Transferee who will become a
Lender) may so provide an Incremental Commitment without the consent of the
Administrative Agent or any other Lender; provided that any Person that
is not a Lender prior to the effectiveness of its Incremental Commitment shall
require the consent of the Administrative Agent, each Issuing Lender, the
Swingline Lender and the Fronting Lender (unless such Person will not be a
Participating Specified Foreign Currency Lender) (which consents shall not be
unreasonably withheld or delayed) to provide an Incremental Commitment pursuant
to this Section 2.14, (iii) the aggregate amount of each
request (and provision therefor) for Incremental Commitments shall be in a
minimum aggregate amount for all Lenders which provide an Incremental
Commitment pursuant to a given Incremental Commitment Agreement pursuant to
this Section 2.14 (including Persons who are Eligible Transferees
and will become Lenders) of at least $25,000,000 (or such lesser amount that is
acceptable to the Administrative Agent), (iv) the aggregate amount of all
Incremental Commitments permitted to be provided pursuant to this Section 2.14
shall not exceed in the aggregate $150,000,000, (v) Holdings shall not
increase the Commitments pursuant to this Section 2.14 more than 3
times in the aggregate, (vi) if the Applicable Commitment Fee Percentage
and/or Applicable Margins with respect to Commitments to be provided or Loans
to be incurred pursuant to an Incremental Commitment shall be higher in any
respect than those applicable to any other Commitments or Loans, the Applicable
Commitment Fee Percentage and/or Applicable Margins, as the case may be, for
the other Commitments and Loans and extension of credit hereunder shall be
automatically increased as and to the extent needed to eliminate any
deficiencies in accordance with the definition of “Applicable Commitment Fee
Percentage” or “Applicable Margin” contained herein (such increase, the “Additional
Commitment Fee” or “Additional Margin”, as the case may be), (vii) each Incremental
Commitment Agreement shall specifically designate the Tranche of the
Incremental Commitments being provided thereunder, (viii) all Revolving
Loans of a Borrower incurred pursuant to an Incremental Commitment (and all
interest, fees and other amounts payable thereon) shall be Obligations under
this Agreement and the other applicable Loan Documents and shall be secured by the
relevant Security Documents, and guaranteed under the Guarantee and Collateral
Agreement and/or Canadian Guarantee and Collateral Agreement, on a pari  passu
basis with all other Loans of such Borrower secured by each relevant Security
Document and guaranteed under the Guarantee and Collateral Agreement and/or
Canadian Guarantee and Collateral Agreement, and (ix) each Lender
(including any Person which is an Eligible Transferee who will become a Lender)
agreeing to provide an Incremental Commitment pursuant to an Incremental
Commitment Agreement shall, subject to the satisfaction of the relevant
conditions set forth in this Agreement, participate in Swingline Loans and
Letters of Credit pursuant to Sections 2.01(b) and 3.04,
respectively, and make Revolving Loans as provided in Section 2.01(a),
in each case, under the U.S. Facility Commitment or Canadian Facility
Commitment, as applicable, and such Revolving Loans shall constitute U.S.
Facility


 


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Revolving Loans or Canadian Facility Revolving Loans, as the case may
be, for all purposes of this Agreement and the other applicable Loan Documents.


 


(b)           At the time of the provision of
Incremental Commitments pursuant to this Section 2.14, (I) Holdings,
each other Borrower, each Guarantor, the Administrative Agent and each such
Lender or other Eligible Transferee which agrees to provide an Incremental
Commitment (each, an “Incremental Lender”) shall execute and deliver to
Holdings and the Administrative Agent an Incremental Commitment Agreement,
appropriately completed (with the effectiveness of the Incremental Commitment
provided therein to occur on the date set forth in such Incremental Commitment
Agreement, which date in any event shall be no earlier than the date on which (i) all
fees required to be paid in connection therewith at the time of such
effectiveness shall have been paid, (ii) all Incremental Commitment
Requirements have been satisfied, (iii) all conditions set forth in this Section 2.14
shall have been satisfied and (iv) all other conditions precedent that may
be set forth in such Incremental Commitment Agreement shall have been
satisfied) and (II) Holdings, each other Borrower, each Guarantor, the
Security Agent and each Incremental Lender (as applicable) shall execute and
deliver to the Administrative Agent and the Security Agent such additional
Security Documents and/or amendments to the Security Documents as the
Administrative Agent may reasonably request which are necessary to ensure that
all Loans incurred pursuant to the Incremental Commitments and any Additional
Commitment Fee and/or Additional Margin are secured by each relevant Security
Document (the “Incremental Security Documents”).  The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Commitment
Agreement and, at such time, Schedule 1.01(a) shall be deemed
modified to reflect the Incremental Commitments of such Incremental Lenders.


 


(c)           It is understood and agreed that the
Incremental Commitments provided by an Incremental Lender or Incremental
Lenders, as the case may be, pursuant to each Incremental Commitment Agreement
shall constitute part of, and be added to, the U.S. Facility Commitment and/or
the Canadian Facility Commitment, as the case may be, and each Incremental
Lender shall constitute a U.S. Facility Lender and/or Canadian Facility Lender,
as applicable, for all purposes of this Agreement and each other applicable
Loan Document.


 


(d)           At the time of any provision of
Incremental Commitments pursuant to this Section 2.14, each
Borrower shall, in coordination with the Administrative Agent, repay
outstanding Revolving Loans of certain of the Lenders, and incur additional
Revolving Loans from certain other Lenders (including the Incremental Lenders),
in each case to the extent necessary so that all of the U.S. Facility Lenders
and/or Canadian Lenders, as applicable, participate in each outstanding
Borrowing of each Tranche of Revolving Loans pro  rata on the
basis of their respective Commitments (after giving effect to any increase in
the Total Commitment pursuant to this Section 2.14) and with the
Borrowers being obligated to pay to the respective Lenders any costs of the
type referred to in Section 2.11 in connection with any such
repayment and/or Borrowing.


 


2.15.     Interest Act (Canada); Criminal Rate of
Interest; Nominal Rate of Interest.  (a)  Notwithstanding anything to the
contrary contained in this Agreement or in any other Loan Document, solely to
the extent that a court of competent jurisdiction finally determines that the
calculation or determination of interest or any fee payable by the Canadian
Borrowers in respect


 


96

















 


of the Canadian Borrower Obligations pursuant to this Agreement and the
other Loan Documents shall be governed by or subject to the laws of any
province of Canada or the federal laws of Canada, in no event shall the
aggregate “interest” (as defined in Section 347 of the Criminal Code,
R.S.C. 1985, c. C-46, as the same shall be amended, replaced or re-enacted from
time to time) payable by the Canadian Borrowers to the Administrative Agent or
any Lender Creditor under this Agreement or any other Loan Document exceed the
effective annual rate of interest on the “credit advanced” (as defined in that
section) under this Agreement or such other Loan Document lawfully permitted
under that section and, if any payment, collection or demand pursuant to this
Agreement or any other Loan Document in respect of “interest” (as defined in
that section) is determined to be contrary to the provisions of that section,
such payment, collection or demand shall be deemed to have been made by mutual
mistake of the Administrative Agent, the Lenders and the Canadian Borrowers and
the amount of such payment or collection shall be refunded by the
Administrative Agent and the Lenders to the Canadian Borrowers.  For the purposes of this Agreement and each
other Loan Document to which any Canadian Borrowers are a party, the effective
annual rate of interest payable by the Canadian Borrowers shall be determined
in accordance with generally accepted actuarial practices and principles over
the term of the loans on the basis of annual compounding for the lawfully
permitted rate of interest and, in the event of dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by and for the account
of the Canadian Borrowers will be conclusive for the purpose of such
determination in the absence of evidence to the contrary.


 


(b)           For the purposes of the Interest Act
(Canada) and with respect to Canadian Borrowers only:


 


(i)            whenever any interest or fee payable by the Canadian
Borrowers is calculated using a rate based on a year of 360 days or 365 days,
as the case may be, the rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (x) the applicable rate
based on a year of 360 days or 365 days, as the case may be, (y) multiplied
by the actual number of days in the calendar year in which such rate is to be ascertained
and (z) divided by 360 or 365, as the case may be; and


 


(ii)           all calculations of interest payable by the Canadian
Borrowers under this Agreement or any other Loan Document are to be made on the
basis of the nominal interest rate described herein and therein and not on the
basis of effective yearly rates or on any other basis which gives effect to the
principle of deemed reinvestment of interest. 
The parties hereto acknowledge that there is a material difference
between the stated nominal interest rates and the effective yearly rates of
interest and that they are capable of making the calculations required to
determine such effective yearly rates of interest.


 


(c)           The parties hereto acknowledge and
agree that clauses (a) and (b) of this Section 2.15 only
apply to the Canadian Borrowers and shall not otherwise reduce or effect the
obligations of the U.S. Borrowers under this Agreement to pay the full amount
of the Obligations of such U.S. Borrowers in accordance with the terms of this
Agreement (including to reimburse the Administrative Agent and the applicable
Lenders for any amounts refunded by the Administrative Agent or any Lender to
the Canadian Borrowers pursuant to clause (a) of this Section 2.15).


 


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2.16.     Provisions Regarding Bankers’
Acceptances, Drafts, etc.  The
parties hereto agree that the provisions of Schedule 1.01(b) shall
apply to all Bankers’ Acceptances, Bankers’ Acceptance Loans, Drafts and B/A
Equivalent Notes created hereunder, and that the provisions of Schedule 1.01(b) shall
be deemed incorporated by reference into this Agreement as if such provisions
were set forth in their entirety herein.


 


2.17.     Holdings as Agent for Borrowers.  Each Borrower hereby irrevocably appoints
Holdings as its agent and attorney-in-fact for all purposes under this
Agreement and each other Loan Document, which appointment shall remain in full
force and effect unless and until the Administrative Agent shall have received
prior written notice signed by the respective appointing Borrower that such
appointment has been revoked.  Each
Borrower hereby irrevocably appoints and authorizes Holdings (i) to
provide the Administrative Agent with all notices with respect to Loans and
Letters of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement or any other Loan Document and (ii) to
take such action as Holdings deems appropriate on its behalf to exercise such
other powers as are reasonably incidental thereto to carry out the purposes of
this Agreement and the other Loan Documents. 
It is understood that the handling of the Credit Account and the
Collateral of the respective Borrowers in a combined fashion (i.e., the
U.S. Borrowers in a combined fashion and the Canadian Borrowers in a combined
fashion), as more fully set forth herein, is done solely as an accommodation to
the Borrowers in order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner and at their request, and
that the Lenders shall not incur liability to any Borrower as a result
hereof.  Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Credit Account and
the Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the
consolidated group.  To induce the Agents
and the Lenders to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify each Agent and each Lender and hold
each Agent and each Lender harmless against any and all liability, expense,
loss or claim of damage or injury, made against any Agent or any Lender by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Credit Account and Collateral of the Borrowers as
provided in this Agreement or (b) the Agents’ and the Lenders’ relying on
any instructions of Holdings, or (c) any other action taken by the Agents
or the Lenders hereunder or under the other Loan Documents, except that the
Borrowers will have no liability to any Lender or any Agent with respect to any
such liability, expense, loss or claim of damage or injury to the extent the
same has been finally determined by a court of competent jurisdiction to have
resulted from the gross negligence, or willful misconduct of such Lender or
such Agent, as the case may be.


 


2.18.     Defaulting Lenders. Notwithstanding
any provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is
a Defaulting Lender:


 


(a)           if any U.S. Facility Swingline
Exposure or U.S. Facility Letter of Credit Exposure exists at the time a Lender
becomes a Defaulting Lender then:


 


(i)            all or any part of such U.S. Facility Swingline Exposure
and U.S. Facility Letter of Credit Exposure shall be reallocated among the U.S.
Facility Lenders that are Non-Defaulting Lenders in accordance with their
respective U.S. Facility


 


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RL Percentages but only to
the extent (x) the sum of all U.S. Facility Lenders’ that are
Non-Defaulting Lenders Individual U.S. Facility Exposures plus such Defaulting
Lender’s U.S. Facility Swingline Exposure and U.S. Facility Letter of Credit
Exposure does not exceed the total of all Non-Defaulting Lenders’ U.S. Facility
Commitments, (y) immediately following the reallocation to a U.S. Facility
Lender that is a Non-Defaulting Lender, the Individual U.S. Facility Exposure
of such U.S. Facility Lender does not exceed its U.S. Facility Commitment at
such time and (z) the conditions set forth in Section 7 are
satisfied at such time;


 


(ii) if the
reallocation described in clause (i) above cannot, or can only partially,
be effected, the applicable Borrowers shall within one (1) Business Day
following notice by the Administrative Agent (x) first, prepay such U.S.
Facility Swingline Exposure and (y) second, cash collateralize in a manner
reasonably satisfactory to the applicable Issuing Lender such Defaulting Lender’s
U.S. Facility Letter of Credit Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) in aggregate amount equal to
100% of such Defaulting Lender’s U.S. Facility Letter of Credit Exposure for so
long as such U.S. Facility Letter of Credit Exposure is outstanding (such
arrangements, together with the arrangements set forth in Section 2.18(c)(ii) (the
“Letter of Credit Back-Stop Arrangements”);


 


(iii)  the applicable
Borrowers shall not be required to pay any fees to such Defaulting Lender
pursuant to Section 4.01(b) with respect to such Defaulting
Lender’s U.S. Facility Letter of Credit Exposure;


 


(iv)          if the U.S. Facility Letter of Credit Exposure of the
Non-Defaulting Lenders is reallocated pursuant to this Section 2.18(a),
then the fees payable to the Lenders pursuant to Section 4.01(b) shall
be adjusted in accordance with such Non-Defaulting Lenders’ U.S. Facility RL
Percentages; and


 


(v)           if any Defaulting Lender’s U.S. Facility Letter of Credit
Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.18(a),
then, without prejudice to any rights or remedies of any Issuing Lender or any
Lender hereunder, all letter of credit fees payable under Section 4.01(b) with
respect to such Defaulting Lender’s U.S. Facility Letter of Credit Exposure
shall be payable to each Issuing Lender until such U.S. Facility Letter of
Credit Exposure is cash collateralized and/or reallocated;


 


(b)           if any Canadian Facility
Swingline Exposure or Canadian Facility Letter of Credit
Exposure exists at the time a Lender becomes a Defaulting Lender then:


 


(i)            all or any part of such Canadian Facility Swingline
Exposure and Canadian Facility Letter of Credit Exposure shall be reallocated among
the Canadian Facility Lenders that are Non-Defaulting Lenders in accordance
with their respective Canadian Facility RL Percentages but only to the extent (x) the
sum of all Canadian Facility Lenders’ that are Non-Defaulting Lenders
Individual


 


99
















 


Canadian Facility Exposures plus such Defaulting Lender’s Canadian
Facility Swingline Exposure and Canadian Facility Letter of Credit Exposure
does not exceed the total of all Non-Defaulting Lenders’ Canadian Facility
Commitments, (y) immediately following the reallocation to a Canadian
Facility Lender that is a Non-Defaulting Lender, the Individual Canadian
Facility Exposure of such Canadian Facility Lender does not exceed its Canadian
Facility Commitment at such time and (z) the conditions set forth in Section 7
are satisfied at such time;


 


(ii) if the reallocation described in clause (i) above
cannot, or can only partially, be effected, the applicable Borrowers shall
within one (1) Business Day following notice by the Administrative Agent (x) first,
prepay such Canadian Facility Swingline Exposure and (y) second, cash
collateralize in a manner reasonably satisfactory to the applicable Issuing
Lender such Defaulting Lender’s Canadian Facility Letter of Credit Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in aggregate amount equal to 100% of such Defaulting Lender’s Canadian Facility
Letter of Credit Exposure for so long as such Canadian Facility Letter of
Credit Exposure is outstanding (such arrangements, the “Letter
of Credit Back-Stop Arrangements”);


 


(iii)  the applicable Borrowers shall not be required to pay any
fees to such Defaulting Lender pursuant to Section 4.01(b) with
respect to such Defaulting Lender’s Canadian Facility Letter of Credit
Exposure;


 


(iv)          if the Canadian
Facility Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated
pursuant to this Section 2.18(b), then the fees payable to the
Lenders pursuant to Section 4.01(b) shall be adjusted in
accordance with such Non-Defaulting Lenders’ Canadian Facility RL Percentages;
and


 


(v)           if any Defaulting
Lender’s Canadian Facility Letter of Credit Exposure is neither cash
collateralized nor reallocated pursuant to this Section 2.18(b),
then, without prejudice to any rights or remedies of any Issuing Lender or any
Lender hereunder, all letter of credit fees payable under Section 4.01(b) with
respect to such Defaulting Lender’s Canadian Facility Letter of Credit Exposure
shall be payable to each Issuing Lender until such Canadian Facility Letter of
Credit Exposure is cash collateralized and/or reallocated;


 


(c)           so long as any U.S. Facility Lender
is a Defaulting Lender, the Swingline Lender shall not be required to fund any
U.S. Facility Swingline Loan and no Issuing Lender shall be required to issue,
amend or increase any U.S. Facility Letter of Credit, unless it is satisfied
that the related exposure will be 100% covered by the U.S. Facility Commitments
of the Non-Defaulting Lenders and/or cash collateral will be provided by the
applicable Borrowers in accordance with Section 2.18(a), and
participating interests in any such newly issued or increased U.S. Facility
Letter of Credit or newly made U.S. Facility Swingline Loan shall be allocated
among U.S. Facility Lender that are Non-Defaulting Lenders in a manner
consistent with Section 2.18(a)(i) (and Defaulting Lenders
shall not participate therein); and


 


100

















 


(d)           so long as any Canadian Facility
Lender is a Defaulting Lender, the Swingline Lender shall not be required to
fund any Canadian Facility Swingline Loan and no Issuing Lender shall be
required to issue, amend or increase any Canadian Facility Letter of Credit,
unless it is satisfied that the related exposure will be 100% covered by the Canadian
Facility Commitments of the Non-Defaulting Lenders and/or cash collateral will
be provided by the applicable Borrowers in accordance with Section 2.18(b),
and participating interests in any such newly issued or increased Canadian
Facility Letter of Credit or newly made Canadian Facility Swingline Loan shall
be allocated among Canadian Facility Lender that are Non-Defaulting Lenders in
a manner consistent with Section 2.18(b)(i) (and Defaulting
Lenders shall not participate therein).


 


In the event that
the Administrative Agent, the Borrowers, each Issuing Lender and
the Swingline Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then
the Swingline Exposure and Letter of Credit Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitments and on such
date such Lender shall purchase at par such of the Loans of the other Lenders
(other than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
U.S. Facility RL Percentage or Canadian Facility RL Percentage, as the case may
be.


 


2.19.        Extensions of Loans and Commitments.


 


(a)        Notwithstanding anything to the contrary
in this Agreement, subject to the terms of this Section 2.19, the
Borrowers may extend the maturity date, and otherwise modify the terms of each
of the Tranches, or any portion thereof (including, without limitation, by
increasing the interest rate or fees payable in respect of any Loans and/or
Commitments applicable to a Tranche, or any portion thereof (and related
outstandings) (the “Extension”) pursuant to a written offer (the “Extension
Offer”) made by Holdings to all Lenders, in each case on a pro rata basis under
each Tranche (based on the aggregate outstanding principal amount of the
respective outstanding Loans and unfunded Commitments of such Tranche) and on
the same terms to each such Lender.  In connection
with the Extension, Holdings will provide notification to the Administrative
Agent (for distribution to the Lenders), not earlier than 18 months and not
later than 6 months prior to the Initial Revolving Loan Maturity Date of the
requested Extension and new Extended Revolving Loan Maturity Date.  In connection with the Extension, each
Lender of the applicable Tranche, acting in its sole and
individual discretion, wishing to participate in the Extension shall,
prior to the date (the “Notice Date”) that is 30 days after
delivery of notice by the Administrative Agent to such Lender,
provide the Administrative Agent with a written notice thereof in a form
reasonably satisfactory to the Administrative Agent.  Any Lender that does not respond to the
Extension Offer by the Notice Date shall be deemed to have rejected such
Extension. The Administrative Agent shall promptly notify
Holdings of each Lender’s determination under this Section 2.19(a). The
election of any Lender to agree to the Extension shall not obligate any other
Lender to so agree.  After giving effect to the
Extension, the U.S. Facility Commitments and Canadian Facility Commitments so
extended shall cease to be a part of the Tranche they were a part of
immediately prior to the Extension and shall be a new Tranche hereunder.


 


(b)           Holdings shall have the
right to replace each Lender that shall have rejected (or be deemed to have
rejected) the Extension under Section 2.19(a) with, and add as



 


101

















 


“Lenders” under this
Agreement in place thereof, one or more Replacement Lenders as provided in Section 2.13;
provided that each of such Replacement Lenders shall enter into an
Assignment and Assumption Agreement pursuant to which such Replacement Lender
shall, effective as of a closing date selected by the Administrative Agent in
consultation with Holdings (which shall occur no later than 30 days following
the Notice Date and shall occur on the same date as the effectiveness of the
Extension as to the Lenders which have consented thereto pursuant to Section 2.19(a)),
undertake the U.S. Facility Commitment and Canadian Facility Commitment of such
Replaced Lender (and, if any such Replacement Lender is already a Lender, its
U.S. Facility Commitment and Canadian Facility Commitment shall be in addition
to such Lender’s U.S. Facility Commitment and Canadian Facility Commitment
hereunder on such date).


 


(c)           The Extension shall be subject to the
following:


 


(i)            no Default or Event of Default shall have occurred and be
continuing at the time any offering document in respect of the Extension Offer
is delivered to the Lenders and at the time of the Extension;


 


(ii)           (A) except as to interest rates, utilization fees,
unused fees and final maturity, the U.S. Facility Commitment of any U.S.
Facility Lender extended pursuant to the Extension (the “Extended U.S.
Facility Commitment”), and the related outstandings, shall be a U.S.
Facility Commitment (or related outstandings, as the case may be) with the same
terms as the original U.S. Facility Commitments (and related outstandings); provided
that, subject to the provisions of Sections 3.07 and 2.01(f) to
the extent dealing with Swingline Loans and Letters of Credit which mature or
expire after the Initial Revolving Loan Maturity Date, all U.S. Facility
Swingline Loans and U.S. Facility Letters of Credit shall be participated in on
a pro  rata basis by all U.S. Facility Lenders with U.S. Facility
Commitments and/or Extended U.S. Facility Commitments in accordance with their
U.S. Facility RL Percentages (and except as provided in Sections 3.07
and 2.01(f), without giving effect to changes thereto on the Initial
Revolving Loan Maturity Date with respect to U.S. Facility Swingline Loans and
U.S. Facility Letters of Credit theretofore incurred or issued) and all
borrowings under U.S. Facility Commitments and repayments thereunder shall be
made on a pro rata basis (except for (x) payments of interest and fees at
different rates on Extended U.S. Facility Commitments (and related
outstandings) and (y) repayments required upon any Revolving Loan Maturity
Date of any Tranche of U.S. Facility Commitments or Extended U.S. Facility
Commitments); and


 


(B) except as to interest rates, utilization fees, unused fees and
final maturity, the Canadian Facility Commitment of any Canadian Facility
Lender extended pursuant to the Extension (the “Extended Canadian Facility
Commitment”), and the related outstandings, shall be a Canadian Facility
Commitment (or related outstandings, as the case may be) with the same terms as
the original Canadian Facility Commitments (and related outstandings); provided
that, subject to the provisions of Sections 3.07 and 2.01(f) to
the extent dealing with Canadian Facility Swingline Loans and Canadian Facility
Letters of Credit which mature or expire after the Initial Revolving Loan
Maturity Date, all Swingline Loans and Letters of Credit shall be participated
in on a pro  rata basis by all Canadian Facility Lenders with
Canadian Facility Commitments 


 


102

















 


and/or
Extended Canadian Facility Commitments in accordance with their Canadian
Facility RL Percentages (and except as provided in Sections 3.07 and 2.01(f),
without giving effect to changes thereto on the Initial Revolving Loan Maturity
Date with respect to Canadian Facility Swingline Loans and Canadian Facility
Letters of Credit theretofore incurred or issued) and all borrowings under
Canadian Facility Commitments and repayments thereunder shall be made on a pro
rata basis (except for (x) payments of interest and fees at different
rates on Extended Canadian Facility Commitments (and related outstandings) and (y) repayments
required upon any Revolving Loan Maturity Date of any Tranche of Canadian
Facility Commitments or Extended Canadian Facility Commitments);


 


(iii)          (A) if the aggregate principal amount of U.S. Facility
Commitments in respect of which U.S. Facility Lenders shall have accepted the
Extension Offer shall exceed the maximum aggregate principal amount of U.S.
Facility Commitments offered to be extended by Holdings pursuant to the
Extension Offer, then the U.S. Facility Commitments of such U.S. Facility
Lenders shall be extended ratably up to such maximum amount based on the
respective principal amounts (but not to exceed actual holdings of record) with
respect to which such U.S. Facility Lenders have accepted the Extension Offer;
and


 


(B) if the aggregate
principal amount of Canadian Facility Commitments in respect of which Canadian
Facility Lenders shall have accepted the Extension Offer shall exceed the maximum
aggregate principal amount of Canadian Facility Commitments offered to be
extended by Holdings pursuant to the Extension Offer, then the Canadian
Facility Commitments of such Canadian Facility Lenders shall be extended
ratably up to such maximum amount based on the respective principal amounts
(but not to exceed actual holdings of record) with respect to which such
Canadian Facility Lenders have accepted the Extension Offer;


 


(iv)          all documentation in respect of the Extension shall be
consistent with the foregoing, and all written communications by the Borrowers
under the applicable Tranche generally directed to the Lenders under such
Tranche in connection therewith shall be in form and substance consistent with
the foregoing and otherwise reasonably satisfactory to the Administrative
Agent;


 


(v)           the Minimum Extension Condition shall be satisfied; and


 


(vi)          the Extension shall not become effective unless, on the
proposed effective date of the Extension, (x) the Borrowers shall deliver
to the Administrative Agent a certificate of an Authorized Officer of each Loan
Party dated the applicable date of the Extension and executed by an Authorized
Officer of such Loan Party certifying and attaching the resolutions adopted by
such Loan Party approving or consenting to such extension and (y) the
conditions set forth in Section 7 shall be satisfied (with all
references in such Section to any Credit Event being deemed to be
references to the Extension on the applicable date of the Extension) and the
Administrative Agent shall have received a certificate to that effect dated the
applicable date of the Extension and executed by a Financial Officer of each
Borrower.


 


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(d)           With respect to the Extension
consummated by the Borrowers pursuant to this Section 2.19, (i) the
Extension shall not constitute voluntary or mandatory payments or prepayments
for purposes of Sections 5.01, 5.02, 5.03, 13.02 or
13.06, (ii) the Extension Offer shall contain a condition (a “Minimum
Extension Condition”) to consummating the Extension that (x) at least
60% of the aggregate amount of the U.S. Facility Commitments in effect
immediately prior to the Initial Revolving Loan Maturity Date (unless another
amount is agreed to by the Administrative Agent) and (y) at least 60% of
the aggregate amount of the Canadian Facility Commitments in effect immediately
prior to the Initial Revolving Loan Maturity Date (unless another amount is
agreed to by the Administrative Agent), shall, in each case, be in effect
immediately following the Initial Revolving Loan Maturity Date, (iii) if
the amount extended is less than the Maximum U.S. Facility Letter of Credit
Amount, the Maximum U.S. Facility Letter of Credit Amount shall be reduced upon
the date that is five (5) Business Days prior to the Initial Revolving
Loan Maturity Date (to the extent needed so that the Maximum U.S. Facility
Letter of Credit Amount does not exceed the aggregate U.S. Facility Commitment
which would be in effect after the Initial Revolving Loan Maturity Date), and,
if applicable, the Borrowers under such Tranche shall cash collateralize
obligations under any issued U.S. Facility Letters of Credit in an amount equal
to 100% of the Stated Amount of such U.S. Facility Letters of Credit, (iv) if
the amount extended is less than the Maximum Canadian Facility Letter of Credit
Amount, the Maximum Canadian Facility Letter of Credit Amount shall be reduced
upon the date that is five (5) Business Days prior to the Initial
Revolving Loan Maturity Date (to the extent needed so that the Maximum Canadian
Facility Letter of Credit Amount does not exceed the aggregate Canadian
Facility Commitment which would be in effect after the Initial Revolving Loan
Maturity Date), and, if applicable, the Borrowers under such Tranche shall cash
collateralize obligations under any issued Canadian Facility Letters of Credit
in an amount equal to 100% of the Stated Amount of such Canadian Facility
Letters of Credit, (v) if the amount extended is less than the Maximum
U.S. Facility Swingline Amount, the Maximum U.S. Facility Swingline Amount
shall be reduced upon the date that is five (5) Business Days prior to the
Initial Revolving Loan Maturity Date (to the extent needed so that the Maximum
U.S. Facility Swingline Amount does not exceed the aggregate U.S. Facility
Commitment which would be in effect after the Initial Revolving Loan Maturity
Date), and, if applicable, the Borrowers under such Tranche shall prepay any
outstanding U.S. Swingline Loans, and (vi) if the amount extended is less
than the Maximum Canadian Facility Swingline Amount, the Maximum Canadian
Facility Swingline Amount shall be reduced upon the date that is five (5) Business
Days prior to the Initial Revolving Loan Maturity Date (to the extent needed so
that the Maximum Canadian Facility Swingline Amount does not exceed the
aggregate Canadian Facility Commitment which would be in effect after the
Initial Revolving Loan Maturity Date), and, if applicable, the Borrowers under
such Tranche shall prepay any outstanding Canadian Swingline Loans.  The Administrative Agent and the Lenders
hereby consent to the Extension and the other transactions contemplated by this
Section 2.19 (including, for the avoidance of doubt, payment of any
interest or fees in respect of any Extended U.S. Facility Commitments and
Extended Canadian Facility Commitments on the such terms as may be set forth in
the Extension Offer) and hereby waive the requirements of any provision of this
Credit Agreement (including, without limitation, Sections 5.01, 5.02,
5.03, 13.02 or 13.06) or any other Loan Document that may
otherwise prohibit the Extension or any other transaction contemplated by this Section 2.19,
provided that such consent shall not be deemed to be an acceptance of
the Extension Offer.


 


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(e)           The Lenders hereby irrevocably
authorize the Administrative Agent to enter into amendments to this Credit
Agreement and the other Loan Documents with the Borrowers as may be necessary
in order establish new Tranches or sub-Tranches in respect of U.S. Facility
Commitments and Canadian Facility Commitments so extended and such technical
amendments as may be necessary in connection with the establishment of such new
Tranches or sub-Tranches, in each case on terms consistent with this Section 2.19.  Notwithstanding the foregoing, the
Administrative Agent shall have the right (but not the obligation) to seek the
advice or concurrence of the Required Lenders with respect to any matter
contemplated by this Section 2.19 and, if the Administrative Agent
seeks such advice or concurrence, the Administrative Agent shall be permitted
to enter into such amendments with the Borrowers in accordance with any
instructions actually received by such Required Lenders and shall also be
entitled to refrain from entering into such amendments with the Borrowers
unless and until it shall have received such advice or concurrence; provided,
however, that whether or not there has been a request by the
Administrative Agent for any such advice or concurrence, all such amendments
entered into with the Borrowers by the Administrative Agent hereunder shall be
binding and conclusive on the Lenders. 
Without limiting the foregoing, in connection with the Extension, the
respective Loan Parties shall (at their expense) amend (and the Administrative
Agent is hereby directed to amend) any Mortgage that has a maturity date prior
to the Extended Revolving Loan Maturity Date so that such maturity date is
extended to the Extended Revolving Loan Maturity Date (or such later date as
may be advised by local counsel to the Administrative Agent).


 


(f)            In connection with the Extension,
Holdings shall provide the Administrative Agent at least ten (10) Business
Days’ (or such shorter period as may be agreed by the Administrative Agent)
prior written notice thereof, and shall agree to such procedures, if any, as
may be reasonably established by, or reasonably acceptable to, the
Administrative Agent, in each case acting reasonably to accomplish the purposes
of this Section 2.19.


 


SECTION 3.  Letters of Credit.


 


3.01.     Letters of Credit.  (a)  (A) Subject to and upon the
terms and conditions set forth herein (including, without limitation, the
conditions set forth in Section 7), a Borrower may request that an
Issuing Lender issue, at any time and from time to time on and after the
Funding Date and prior to the 30th day prior to the Revolving Loan Maturity
Date, (i) in
the case of a request for a Letter of Credit in respect of the U.S. Facility
Commitments, for the joint and several account of the U.S. Borrowers (each such
letter of credit, a “U.S. Facility Letter of Credit” and, collectively,
the “U.S. Facility Letters of Credit”), (ii) in the case of a
request for a Letter of Credit by a U.S. Borrower in respect of the Canadian
Facility Commitments, for the joint and several account of the U.S. Borrowers
(each such letter of credit, a “U.S. Borrower Canadian Facility Letter of
Credit” and, collectively, the “U.S. Borrower Canadian Facility Letters
of Credit”) and (iii) in the case of a request for a Letter of Credit
by a Canadian Borrower in respect of the Canadian Facility Commitments, for the
joint and several account of the Canadian Borrowers (each such letter of
credit, a “Canadian Borrower Canadian Facility Letter of Credit” and,
collectively, the “Canadian Borrower Canadian Facility Letters of Credit”
and, together with the U.S. Borrower Canadian Facility Letters of Credit, the “Canadian
Facility Letters of Credit” and, together with the U.S. Facility Letters of
Credit, the “Letters of Credit”), and, in each case, for the
benefit of (x) any holder (or any trustee, agent or other similar 


 


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representative for any such holders) of L/C Supportable Obligations, an irrevocable
standby letter of credit, in a form customarily used by such Issuing Lender or
in such other form as is reasonably acceptable to such Issuing Lender, and (y) sellers
of goods to Holdings or any of its Subsidiaries, an irrevocable trade letter of
credit, in a form customarily used by such Issuing Lender or in such other form
as has been approved by such Issuing Lender (although without limiting the
joint and several nature of the U.S. Borrowers’ or the Canadian Borrowers’
obligations, as the case may be, in respect of the Letters of Credit, any
particular Letter of Credit may name only one or more of the U.S. Borrowers or
the Canadian Borrowers, as the case may be, as the applicant or obligor therein
and, at the direction of such respective Borrower(s), may be issued for the
benefit of one or more Subsidiaries of Holdings).  Unless agreed to by an Issuing Lender in
respect of a Letter of Credit issued by such Issuing Lender, each Letters of
Credit shall only provide for payment at sight.


 


(B)           Schedule 3.01(a) contains a description of
letters of credit that were originally issued pursuant to the Prior Credit
Agreement and which remain outstanding on the Closing Date (and setting forth,
with respect to each such letter of credit, (i) the name of the issuing
lender, (ii) the letter of credit number, (iii) the name(s) of
the account party or account parties, (iv) the stated amount, (v) the
currency in which the letter of credit is denominated, (vi) the name of
the beneficiary, (vii) the expiry date and (viii) whether such letter
of credit constitutes a standby letter of credit or a trade letter of
credit).  Each such letter of credit
which remains outstanding on the Funding Date, including any extension or
renewal thereof in accordance with the terms thereof and hereof (each, as
amended from time to time in accordance with the terms thereof and hereof, an “Existing
Letter of Credit”) shall constitute a “U.S. Facility Letter of Credit” or “Canadian Facility Letter
of Credit” as specified on Schedule 3.01(a) for all purposes
of this Agreement and shall be deemed issued on the Funding Date.  Each Existing Letter of Credit shall be
deemed to have been issued for the account of the respective Borrowers as
specified on Schedule 3.01(a).


 


(b)           Subject to and upon the terms and
conditions set forth herein (including, without limitation, the conditions set
forth in Section 7), each Issuing Lender agrees that it will, at
any time and from time to time on and after the Funding Date and prior to the
30th day prior to the Revolving Loan Maturity Date, following its receipt of
the respective Letter of Credit Request, issue for (i) in the case of a
request for a U.S. Facility Letter of Credit, for the joint and several account
of the U.S. Borrowers, (ii) in the case of a request for a Canadian
Facility Letter of Credit by a U.S. Borrower, for the joint and several account
of the U.S. Borrowers and (iii) in the case of a request for a Canadian
Facility Letter of Credit by a Canadian Borrower, for the joint and several
account of the Canadian Borrowers, and one or more Letters of Credit, in each
case as are permitted to remain outstanding hereunder without giving rise to a
Default or an Event of Default; provided that no Issuing Lender shall be
under any obligation to issue any Letter of Credit of the types described above
if at the time of such issuance:


 


(i)            any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
such Issuing Lender shall prohibit, or request that such Issuing Lender refrain
from, the issuance of letters of credit generally or such Letter of 


 


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Credit in particular or shall impose upon such
Issuing Lender with respect to such Letter of Credit any restriction or reserve
or capital requirement (for which such Issuing Lender is not otherwise
compensated hereunder) not in effect with respect to such Issuing Lender on the
date hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to such Issuing Lender as of the date hereof and
which such Issuing Lender reasonably and in good faith deems material to it and
for which such Issuing Lender is not otherwise entitled to reimbursement or
indemnification hereunder and has not received assurances satisfactory to such
Issuing Lender that it will be paid; or


 


(ii)           such Issuing Lender shall have received from any Borrower,
any other Loan Party or the Required Lenders prior to the issuance of such
Letter of Credit notice of the type described in the second sentence of Section 3.03(b).


 


3.02.     Maximum Letter of Credit Outstandings;
Currencies Final Maturities.  Notwithstanding anything to the contrary
contained in this Agreement, (a) no U.S. Facility Letter of Credit shall
be issued (or required to be issued) if the Stated Amount of such U.S. Facility
Letter of Credit, when added to the U.S. Facility Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective U.S. Facility Letter of Credit) at such time would
exceed the Maximum U.S. Facility Letter of Credit Amount, (b) no Canadian Facility
Letter of Credit shall be issued (or required to be issued) if the Stated
Amount of such Canadian Facility Letter of Credit, when added to the Canadian
Facility Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Canadian
Facility Letter of Credit) at such time would exceed the Maximum Canadian
Facility Letter of Credit Amount, (c) no U.S. Facility Letter of Credit
shall be issued (or required to be issued) at any time when the Aggregate U.S.
Facility Exposure exceeds (or would after giving effect to such issuance
exceed) the Total U.S. Facility Commitment at such time, (d) no Canadian
Facility Letter of Credit shall be issued (or required to be issued) at any
time when the Aggregate Canadian Facility Exposure exceeds (or would after
giving effect to such issuance exceed) the Total Canadian Facility Commitment
at such time, (e) the issuance of any Letter of Credit shall
be subject to the conditions set forth in this Agreement (including, without
limitation, the conditions set forth in Section 7), (f) each
Letter of Credit shall be denominated in either U.S. Dollars or Canadian
Dollars, (g) each standby Letter of Credit shall by its terms terminate on
or before the earlier of (i) the date which occurs 12 months after the
date of the issuance thereof (although any such standby Letter of Credit shall be
extendible for successive periods of up to 12 months, but, in each case, not
beyond the fifth Business Day prior to the Revolving Loan Maturity Date) and (ii) five
Business Days prior to the Revolving Loan Maturity Date and (h) each trade
Letter of Credit shall by its terms terminate on or before the earlier of (i) the
date which occurs 180 days after the date of issuance thereof and (ii) five
Business Days prior to the Revolving Loan Maturity Date.


 


3.03.     Letter of Credit Requests; Minimum
Stated Amount.  (a) 
Whenever a Borrower desires that a Letter of Credit be issued (i) in the case of a
request for a U.S. Facility Letter of Credit, for the joint and several account
of the U.S. Borrowers, (ii) in the case of a request for a Canadian
Facility Letter of Credit by a U.S. Borrower, for the joint and several account
of the U.S. Borrowers and (iii) in the case of a request for a Canadian
Facility Letter of Credit by a Canadian Borrower, for the joint and several
account of the Canadian Borrowers, and shall give the Administrative
Agent and the respective Issuing Lender at least five Business 


 


107

















 


Days’ (or such shorter period as is acceptable to such Issuing Lender)
written notice thereof (including by way of facsimile).  Each notice shall be in the form of Exhibit C,
appropriately completed (each, a “Letter of Credit Request”) and shall specify whether the
Letter of Credit being issued shall constitute a U.S. Facility Letter of Credit
or Canadian Facility Letter of Credit.


 


(b)           The making of each Letter of Credit
Request shall be deemed to be a representation and warranty by such requesting
Borrower to the Lenders of the respective Tranche that such Letter of Credit
may be issued in accordance with, and will not violate the requirements of, Section 3.02.  Unless the respective Issuing Lender has
received notice from any Borrower, any other Loan Party or the Required Lenders
before it issues a Letter of Credit that one or more of the conditions
specified in Section 6 or 7 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 3.02,
then such Issuing Lender shall, subject to the terms and conditions of this
Agreement, issue the requested Letter of Credit for the account of such
Borrower (and the U.S. Borrowers in a combined fashion, or the Canadian
Borrowers in a combined fashion, as the case may be) in accordance with such
Issuing Lender’s usual and customary practices. 
Upon the issuance of or modification or amendment to any standby Letter
of Credit, each Issuing Lender shall promptly notify the Borrower to be named
as account party therein and the Administrative Agent, in writing of such
issuance, modification or amendment and such notice shall be accompanied by a
copy of such Letter of Credit or the respective modification or amendment
thereto, as the case may be.  Promptly
after receipt of such notice the Administrative Agent shall notify the
Participants, in writing, of such issuance, modification or amendment.  On the first Business Day of each week, each
Issuing Lender shall furnish the Administrative Agent with a written (including
via facsimile) report of the daily aggregate outstandings of Letters of Credit
issued by such Issuing Lender for the immediately preceding week.


 


(c)           The initial Stated Amount of each
Letter of Credit shall not be less than $10,000 (or, in the case of a Letter of
Credit issued in a currency other than U.S. Dollars, the U.S. Dollar Equivalent
thereof) or such lesser amount as is acceptable to the respective Issuing
Lender.


 


3.04.     Letter of Credit Participations.  (a)  Immediately upon the issuance by an
Issuing Lender of any Letter of Credit under a Tranche, such Issuing Lender
shall be deemed to have sold and transferred to each Lender under such Tranche, and each such
Lender (in its capacity under this Section 3.04, a “Participant”)
shall be deemed irrevocably and unconditionally to have purchased and received
from such Issuing Lender, without recourse or warranty, an undivided interest
and participation, to the extent of such Participant’s U.S. Facility RL Percentage or
Canadian Facility RL Percentage, as the case may be, in such Letter
of Credit, each drawing or payment made thereunder and the obligations of the
U.S. Borrowers under a Tranche, or the Canadian Borrowers, as the case may be,
under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto.  Upon any
change in the Commitments under a Tranche or U.S. Facility RL Percentages or Canadian
Facility RL Percentages of the Lenders pursuant to Section 2.13, Section 2.14
or Section 13.04(b), it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings under such Tranche relating
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 3.04 to reflect the new U.S. Facility RL Percentages or Canadian
Facility RL Percentages of the assignor and assignee Lender under such Tranche, as the case may
be.


 


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(b)           In determining whether to pay under
any Letter of Credit under a Tranche, no Issuing Lender shall have any
obligation relative to the other Lenders under such Tranche other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by an
Issuing Lender under or in connection with any Letter of Credit issued by it
shall not create for such Issuing Lender any resulting liability to any
Borrower, any other Loan Party, any Lender or any other Person unless such
action is taken or omitted to be taken with gross negligence or willful
misconduct on the part of such Issuing Lender (as determined by a court of
competent jurisdiction in a final and non-appealable decision).


 


(c)           In the event that an Issuing Lender
makes any payment under any Letter of Credit under a Tranche issued by it and
the U.S. Borrowers or the Canadian Borrowers, as applicable, shall not have
reimbursed such amount in full to such Issuing Lender pursuant to Section 3.05(a),
such Issuing Lender shall promptly notify the Administrative Agent, which shall
promptly notify each Participant under such Tranche of such failure, and each
such Participant shall promptly and unconditionally pay to such Issuing Lender
the amount of such Participant’s U.S. Facility RL Percentage or Canadian
Facility RL Percentage, as the case may be, of such unreimbursed payment in
U.S. Dollars (or, in the case of any unreimbursed payment made in a currency
other than U.S. Dollars, the U.S. Dollar Equivalent of such unreimbursed
payment, as determined by the Issuing Lender on the date on which such
unreimbursed payment was made by such Issuing Lender) in immediately available
funds.  If the Administrative Agent so
notifies, prior to 12:00 Noon (New York City time) on any Business Day, any
Participant under a Tranche required to fund a payment under a Letter of Credit
under such Tranche, such Participant shall make available to the respective
Issuing Lender in U.S. Dollars (or, in the case of any unreimbursed payment
made in a currency other than U.S. Dollars, the U.S. Dollar Equivalent thereof)
such Participant’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of the amount of such payment on such Business
Day in immediately available funds.  If
and to the extent such Participant shall not have so made its U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be, of the
amount of such payment available to the respective Issuing Lender, such
Participant agrees to pay to such Issuing Lender, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to such Issuing Lender at the overnight Federal Funds
Rate (or, in the case of any unreimbursed payment made in a currency other than
U.S. Dollars, at the respective Issuing Lender’s customary rate for interbank
advances) for the first three days and at the interest rate applicable to U.S.
Dollar Denominated Revolving Loans that are maintained as Base Rate Loans for
each day thereafter.  The failure of any
Participant under a Tranche to make available to an Issuing Lender its U.S.
Facility RL Percentage or Canadian Facility RL Percentage, as the case may be,
of any payment under any Letter of Credit under such Tranche issued by such
Issuing Lender shall not relieve any other Participant under such Tranche of
its obligation hereunder to make available to such Issuing Lender its U.S.
Facility RL Percentage or Canadian Facility RL Percentage, as the case may be,
of any payment under any Letter of Credit under such Tranche on the date
required, as specified above, but no Participant under such Tranche shall be
responsible for the failure of any other Participant under such Tranche to make
available to such Issuing Lender such other Participant’s U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be, of any such
payment.


 


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(d)           Whenever an Issuing Lender receives a
payment of a reimbursement obligation as to which it has received any payments
from the Participants pursuant to clause (c) above, such Issuing Lender
shall pay to each such Participant which has paid its applicable U.S. Facility
RL Percentage or Canadian Facility RL Percentage thereof, in U.S. Dollars (or,
in the case of any unreimbursed payment made in a currency other than U.S.
Dollars, the U.S. Dollar Equivalent thereof) and in same day funds, an amount
equal to such Participant’s share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants in respect of such participation) of the principal amount of
such reimbursement obligation and interest thereon accruing after the purchase
of the respective participations.


 


(e)           Upon the request of any Participant
under a Tranche, each Issuing Lender shall furnish to such Participant copies
of any standby Letter of Credit under such Tranche issued by it and such other
documentation as may reasonably be requested by such Participant.


 


(f)            The obligations of the Participants
under a Tranche to make payments to each Issuing Lender with respect to Letters
of Credit under such Tranche shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:


 


(i)            any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;


 


(ii)           the existence of any claim, setoff, defense or other right
which Holdings or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, any Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between Holdings
or any Subsidiary of Holdings and the beneficiary named in any such Letter of
Credit);


 


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


 


(iv)          the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents; or


 


(v)           the occurrence of any Default or Event of Default.


 


3.05.     Agreement to Repay Letter of Credit
Drawings.  (a)  (i) Each U.S. Borrower,
in the case of a U.S. Facility Letter of Credit, hereby jointly and severally agrees,
(ii) each U.S. Borrower, in the case of a Canadian Facility Letter of
Credit issued for the account of a U.S. Borrower, hereby jointly and severally
agrees and (iii) each Canadian Borrower, in the case of a Canadian
Facility Letter of Credit issued for the account of a Canadian Borrower, hereby
jointly and severally agrees, in each case, to reimburse each Issuing
Lender, by making 


 


110

















 


payment to the Administrative Agent in U.S. Dollars (or, in the case of
any unreimbursed payment made in a currency other than U.S. Dollars, the U.S.
Dollar Equivalent of such payment or disbursement as determined by the
respective Issuing Lender on the date of such payment or disbursement) in
immediately available funds at the Payment Office, for any payment or
disbursement made by such Issuing Lender under any Letter of Credit issued by
it for the account of such U.S. Borrower or Canadian Borrower, as applicable
(each such amount (or the U.S. Dollar Equivalent thereof, as the case may be),
so paid until reimbursed by such U.S. Borrower, or such Canadian Borrower, as
applicable, an “Unpaid Drawing”), not later than one Business Day
following receipt by any such U.S. Borrower or any such Canadian Borrower, as
the case may be, of notice of such payment or disbursement (provided
that no such notice shall be required to be given if a Default or an Event of
Default under Section 11.01(g) or (h) shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrowers)), with interest on the amount
so paid or disbursed by such Issuing Lender, to the extent not reimbursed prior
to 12:00 Noon (New York City time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date such
Issuing Lender was reimbursed by such U.S. Borrower or such Canadian Borrower,
as applicable, at a rate per annum equal to the Base Rate as in effect from
time to time plus the Applicable Margin as in effect from time to time
for U.S. Dollar Denominated Revolving Loans that are maintained as Base Rate
Loans; provided, however, to the extent such amounts are not
reimbursed prior to 12:00 Noon (New York City time) on the third Business Day
following the receipt by any such U.S. Borrower or any such Canadian Borrower,
as applicable, of notice of such payment or disbursement or following the
occurrence of a Default or an Event of Default under Section 11.01(g) or
(h), interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Lender (and until reimbursed by such U.S. Borrower or
such Canadian Borrower, as applicable, at a rate per annum equal to the Base
Rate as in effect from time to time plus the Applicable Margin for U.S.
Dollar Denominated Revolving Loans that are maintained as Base Rate Loans as in
effect from time to time plus 2%, with such interest to be payable on
demand.  Each Issuing Lender shall give
the U.S. Borrower or the Canadian Borrowers, or as the case may be, prompt
written notice of each Drawing under any Letter of Credit issued by it for the
account of such U.S. Borrower or such Canadian Borrower, as the case may be; provided
that the failure to give any such notice shall in no way affect, impair or
diminish the obligations of any such Borrower hereunder.


 


(b)           The joint and several obligations of
such U.S. Borrowers or such Canadian Borrowers, as the case may be, under this Section 3.05
to reimburse each Issuing Lender with respect to drafts, demands and other
presentations for payment under Letters of Credit issued by it (each, a “Drawing”)
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which Holdings, any Borrower or any other Subsidiary of
Holdings may have or have had against any Lender under the respective Tranche
(including in its capacity as an Issuing Lender or as a Participant under such
Tranche), including, without limitation, any defense based upon the failure of
any drawing under a Letter of Credit to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that no Borrower
shall be obligated to reimburse any Issuing Lender for any wrongful payment
made by such Issuing Lender under a Letter of Credit issued by it as a result
of acts or omissions constituting willful misconduct or gross negligence on the



 


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part of such Issuing Lender
(as determined by a court of competent jurisdiction in a final and
non-appealable decision).


 


3.06.     Increased Costs.  If at any time after the Closing Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any Participant
with any request or directive by the NAIC or by any such Governmental Authority
(whether or not having the force of law), shall either (a) impose, modify
or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by any Issuing Lender or
participated in by any Participant, or (b) impose on any Issuing Lender or
any Participant any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is to
increase the cost to any Issuing Lender or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by any Issuing Lender or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters
of Credit (except with respect to any Tax, which shall be governed solely by Section 5.04),
then, upon the delivery of the certificate referred to below to the Borrowers
by any Issuing Lender or any Participant (a copy of which certificate shall be
sent by such Issuing Lender or such Participant to the Administrative Agent),
the applicable Loan Parties whose Revolving Loans are subject to such increased
costs jointly and severally agree to pay to such Issuing Lender or such
Participant such additional amount or amounts as will compensate such Issuing
Lender or such Participant for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital.  Any Issuing Lender or any Participant, upon
determining that any additional amounts will be payable to it pursuant to this Section 3.06,
will give prompt written notice thereof to the Borrowers, which notice shall
include a certificate submitted to the Borrowers by such Issuing Lender or such
Participant (a copy of which certificate shall be sent by such Issuing Lender
or such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Lender or such Participant.  The certificate required to be delivered pursuant
to this Section 3.06 shall, absent manifest error, be final and
conclusive and binding on the Borrowers.


 


Section 3.07 Extended Commitments.  If the Initial Revolving Loan Maturity Date
shall have occurred at a time when Extended U.S. Facility Commitments or
Extended Canadian Facility Commitments are in effect, then such Letters of
Credit shall automatically be deemed to have been issued (including for
purposes of the obligations of the Lenders under the applicable Tranche to
purchase participations therein and to make U.S. Facility Revolving Loans or
Canadian Facility Revolving Loans, as the case may be, and payments in respect
thereof pursuant to Sections 3.04 and 3.05) under (and ratably
participated in by Lenders under the applicable Tranche pursuant to) the
Extended U.S. Facility Commitments or Extended Canadian Facility Commitments,
as applicable, up to an aggregate amount not to exceed the aggregate principal
amount of the unutilized Extended U.S. Facility Commitments or Extended
Canadian Facility Commitments, as the case may be, thereunder at such time (it
being understood that no partial face amount of any Letter of Credit may be so
reallocated).  Except to the extent of
reallocations of participations pursuant to the prior sentence, the occurrence
of the Initial Revolving Loan Maturity Date with respect to a given Tranche of
Commitments shall have no effect upon (and shall not diminish) the percentage
participations of the Lenders under a Tranche 


 


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in any Letter
of Credit under such Tranche issued before the Initial Revolving Loan Maturity
Date.


 


SECTION 4.  Commitment Fees; Reductions of Commitment.


 


4.01.     Fees.  (a)  Holdings agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender a
commitment fee (the “Commitment Fees”) for the period from and including
the Closing Date to and including the Revolving Loan Maturity Date (or such
earlier date on which the Total Commitment has been terminated) computed at a
rate per annum equal to the Applicable Commitment Fee Percentage of the
Unutilized Commitment of such Non-Defaulting Lender as in effect from time to
time.  Accrued Commitment Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on the
date upon which the Total Commitment is terminated.


 


(b)           (i) Each U.S. Borrower, in the
case of a U.S. Facility Letter of Credit, hereby jointly and severally agrees, (ii) each
U.S. Borrower, in the case of a Canadian Facility Letter of Credit issued for
the account of a U.S. Borrower, hereby jointly and severally agrees and (iii) each
Canadian Borrower, in the case of a Canadian Facility Letter of Credit issued
for the account of a Canadian Borrower, hereby jointly and severally agrees, in
each case, to pay to the Administrative Agent for distribution to each
Non-Defaulting Lender under the respective Tranche (based on each such Lender’s
respective U.S. Facility RL Percentage or Canadian Facility RL Percentage, as
the case may be) a fee in respect of each Letter of Credit issued for the account
of such U.S. Borrower or such Canadian Borrower, as applicable (the “Letter
of Credit Fee”) for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination or expiration of
such Letter of Credit, computed at a rate per annum equal to the Applicable
Margin as in effect from time to time during such period with respect to
Revolving Loans that are maintained as Eurodollar Loans on the daily Stated
Amount of each such Letter of Credit. 
Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the first day on or after the
termination of the Total U.S. Facility Commitment or Total Canadian Facility
Commitment, as the case may be, upon which no Letters of Credit under the
respective Tranche remain outstanding.


 


(c)           (i) Each U.S. Borrower, in the
case of a U.S. Facility Letter of Credit, hereby jointly and severally agrees, (ii) each
U.S. Borrower, in the case of a Canadian Facility Letter of Credit issued for
the account of a U.S. Borrower, hereby jointly and severally agrees and (iii) each
Canadian Borrower, in the case of a Canadian Facility Letter of Credit issued
for the account of a Canadian Borrower, hereby jointly and severally agrees, in
each case, to pay to each Issuing Lender, for its own account, a facing fee in
respect of each Letter of Credit issued by it for the account of such U.S.
Borrower or such Canadian Borrower, as applicable (the “Facing Fee”) as
may have been, or are hereafter, agreed to in writing from time to time by
Holdings and such Issuing Lender.


 


(d)           (i) Each U.S. Borrower, in the
case of a U.S. Facility Letter of Credit, hereby jointly and severally agrees, (ii) each
U.S. Borrower, in the case of a Canadian Facility Letter of Credit issued for
the account of a U.S. Borrower, hereby jointly and severally agrees and (iii) each
Canadian Borrower, in the case of a Canadian Facility Letter of Credit issued
for the account of a Canadian Borrower, hereby jointly and severally agrees, in
each case, to pay to 


 


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each Issuing Lender, for its
own account, upon each payment under, issuance of, or amendment to, any Letter
of Credit issued by it for the account of such U.S. Borrower or such Canadian
Borrower, as applicable, such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which such Issuing Lender is
generally imposing in connection with such occurrence with respect to letters
of credit.


 


(e)           (i) Each U.S. Borrower, in the
case of U.S. Facility Bankers’ Acceptance Loans, hereby jointly and severally
agrees, (ii) each U.S. Borrower, in the case of Canadian Facility Bankers’
Acceptance Loans made to them, hereby jointly and severally agrees and (iii) each
Canadian Borrower, in the case of Canadian Facility Bankers’ Acceptance Loans
made to them, hereby jointly and severally agrees, in each case, to pay Drawing
Fees at the time of the incurrence (by way of acceptance, purchase or otherwise)
of each such respective Bankers’ Acceptance Loan.


 


(f)            The applicable Borrowers agree to
pay to each Agent such fees as may have been, or are hereafter, agreed to in
writing from time to time by Holdings or any of its Subsidiaries and such Agent
on the basis and to the extent set forth therein.


 


4.02.     Voluntary Termination of Unutilized
Commitments.  Upon at least
three Business Day’s prior written notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders under the applicable Tranche), the Borrowers shall have the
right, at any time or from time to time, without premium or penalty to
terminate Total
Unutilized U.S. Facility Commitment or Total Unutilized Canadian Facility
Commitment, in each case, in whole, or reduce it in part, pursuant to this Section 4.02,
in an integral multiple of $500,000 in the case of partial reductions to the Total Unutilized U.S. Facility
Commitment or Total Unutilized Canadian Facility Commitment, as the case may
be,  provided that each such reduction
shall apply proportionately to permanently reduce the Commitments under the
applicable Tranche of each Lender under such Tranche; provided  further,
that a notice of termination of the Total Unutilized Commitment in whole
delivered by a Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by such Borrower (by notice to the Administrative Agent on or prior to
the specified effective date).


 


4.03.     Mandatory Reduction of Commitments.  (a)  The Total Commitment (and the
Commitments of each Lender) shall terminate in its entirety on July 16,
2010, unless the Funding Date has occurred on or prior to such date.


 


(b)           In addition to any other mandatory
commitment reductions pursuant to this Section 4.03(b), the Total
Commitment (and the Commitments of each Lender) shall terminate in its entirety
upon the earlier of (i) the Revolving Loan Maturity Date and (ii) unless
the Required Lenders otherwise agree in writing, the date on which a Change of
Control occurs.


 


SECTION 5.  Prepayments; Payments; Taxes.


 


5.01.     Voluntary Prepayments.  Each Borrower shall have the right to prepay
the Loans made to such Borrower, without premium or penalty, in whole or in
part at any time and from time to time on the following terms and
conditions:  (i) such Borrower shall
give the 


 


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Administrative Agent prior to 12:00 Noon (New York City time) at the
Notice Office (A) at least one Business Day’s (or such shorter period as
agreed to by the Administrative Agent in its sole discretion) prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Base Rate Loans (or same day notice in the case of a prepayment of U.S.
Dollar Denominated Swingline Loans) or Canadian Prime Rate Loans (or same day
notice in the case of a prepayment of Canadian Dollar Denominated Swingline
Loans) and (B) at least three Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollars Loans, which notice (in each case) shall specify whether U.S. Facility Revolving Loans,
U.S. Facility Swingline Loans, Canadian Facility Revolving Loans or Canadian
Facility Swingline Loans shall be prepaid, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which such Eurodollar Loans were
made, and which notice the Administrative Agent shall, except in the case of
Swingline Loans, promptly transmit to each of the Lenders under the applicable
Tranche, provided that if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Total Unutilized
Commitment in whole as contemplated by Section 4.02, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 4.02; (ii) (x) each partial
prepayment of Revolving Loans pursuant to this Section 5.01 shall
be in an aggregate principal amount of at least $500,000 (or such lesser amount
as is acceptable to the Administrative Agent) and (y) each partial
prepayment of Swingline Loans pursuant to this Section 5.01 shall be
in an aggregate principal amount of at least $100,000 (or such lesser amount as
is acceptable to the Administrative Agent in any given case); provided
that if any partial prepayment of Eurodollar Loans made pursuant to any
Borrowing shall reduce the outstanding principal amount of Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, then such Borrowing may not be continued as a
Borrowing of Eurodollar Loans (and same shall automatically be converted into a
Borrowing of Base Rate Loans) and any election of an Interest Period with
respect thereto given by such Borrower shall have no force or effect; (iii) each
prepayment pursuant to this Section 5.01 in respect of any
Revolving Loans or Swingline Loans made pursuant to a Borrowing shall be
applied pro rata among such Revolving Loans or Swingline
Loans, as the case may be, provided that at the applicable Borrower’s
election in connection with any prepayment of Revolving Loans pursuant to this Section 5.01,
such prepayment shall not, so long as no Default or Event of Default then
exists, be applied to any Revolving Loan of a Defaulting Lender, and (iv) prepayments
of Bankers’ Acceptance Loans may not be made prior to the maturity date of the
underlying Bankers’ Acceptances or B/A Equivalent Notes, as the case may be.


 


5.02.     Mandatory Repayments; Cash
Collateralization.  (a) (i) On
any day on which any one or more of the following conditions shall exist, the
Borrowers shall repay the Loans (other than Bankers’ Acceptance Loans where the
underlying B/A Instrument has not matured) and/or cash collateralize
outstanding Letters of Credit (in U.S. Dollars or, to the extent any Letter of
Credit is denominated in a currency other than U.S. Dollars, in the U.S. Dollar
Equivalent thereof) and Bankers’ Acceptance Loans pursuant to clause (iii) below
in such amount as may be required to cause such conditions to cease to exist on
such day:


 


(u)           the
Aggregate U.S. Borrower Exposure at such time exceeds 100% (or, during an Agent
Advance Period, 105%) of the U.S. Borrowing Base at such time;


 


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(v)           the
Aggregate Canadian Borrower Exposure at such time exceeds 100% (or, during an
Agent Advance Period, 105%) of the Canadian Borrowing Base at such time;


 


(w)          the
Aggregate U.S. Facility Exposure at such time exceeds the Total U.S. Facility
Commitment at such time;


 


(x)            the
Aggregate Canadian Facility Exposure at such time exceeds the Total Canadian
Facility Commitment at such time;


 


(y)           the
aggregate U.S. Facility Letter of Credit Outstandings at such time exceeds the
Maximum U.S. Facility Letter of Credit Amount; and/or


 


(z)            the
aggregate Canadian Facility Letter of Credit Outstandings at such time exceeds
the Maximum Canadian Facility Letter of Credit Amount.


 


(ii)           In connection with any repayment and/or cash
collateralization required pursuant to Section 5.02(a)(i) on
any day, the Borrowers shall prepay the Loans in the following order:


 


(A)          in
the case of a repayment and/or cash collateralization required pursuant to Section 5.02(a)(i)(u) on
any day, the U.S. Borrowers shall repay on such day the principal of
outstanding U.S. Borrower Swingline Loans and, after all U.S. Borrower
Swingline Loans have been repaid in full or if no U.S. Borrower Swingline Loans
are outstanding, U.S. Borrower Revolving Loans (other than Bankers’ Acceptance
Loans where the underlying B/A Instrument has not matured) (each such repayment
shall be applied to the U.S. Facility Revolving Loans and the U.S. Borrower
Canadian Facility Revolving Loans on a pro  rata basis), in each
case in such amount as may be required to cause the conditions giving rise to
such mandatory repayment requirement to cease to exist on such day,


 


(B)           in
the case of a repayment and/or cash collateralization required pursuant to Section 5.02(a)(i)(v) on
any day, the Canadian Borrowers shall repay on such day the principal of
outstanding Canadian Borrower Swingline Loans and, after all Canadian Borrower
Swingline Loans have been repaid in full or if no Canadian Borrower Swingline
Loans are outstanding, Canadian Borrower Revolving Loans (other than Bankers’
Acceptance Loans where the underlying B/A Instrument has not matured), in each
case in such amount as may be required to cause the conditions giving rise to
such mandatory repayment requirement to cease to exist on such day,


 


(C) in the case of a repayment and/or cash
collateralization required pursuant to Section 5.02(a)(i)(w) on
any day, the U.S. Borrowers shall repay on such day the principal of
outstanding U.S. Facility Swingline Loans and, after all U.S. Facility
Swingline Loans have been repaid in full or if no U.S. Facility Swingline Loans
are outstanding, U.S. Facility Revolving Loans (other than Bankers’ Acceptance
Loans where the underlying B/A Instrument has not 


 


116

















 


matured), in each case in
such amount as may be required to cause the conditions giving rise to such
mandatory repayment requirement to cease to exist on such day, and


 


(D) in the case of a repayment and/or cash
collateralization required pursuant to Section 5.02(a)(i)(x) on
any day, the Borrowers shall repay on such day the principal of their
respective outstanding Canadian Facility Swingline Loans and, after all
Canadian Facility Swingline Loans have been repaid in full or if no Canadian
Facility Swingline Loans are outstanding, Canadian Facility Revolving Loans
(other than Bankers’ Acceptance Loans where the underlying B/A Instrument has
not matured), in each case in such amount as may be required to cause the
conditions giving rise to such mandatory repayment requirement to cease to
exist on such day.


 


(iii)          If the conditions set forth in Section 5.02(a)(i)(x) or
(y) exist or, after giving effect to the prepayment of all Loans under a
Tranche (other than Bankers’ Acceptance Loans where the underlying B/A
Instrument has not matured), the conditions set forth in Section 5.02(a)(i) continue
to exist, the respective Borrowers shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash and/or Permitted Investments equal
to 105% of the amount of such excess, such cash and/or Permitted Investments to
be held as security for all Obligations of the Borrowers to the Issuing Lenders
and the Lenders, in each case, under such Tranche hereunder in a cash
collateral account to be established by, and under the sole dominion and
control of, the Administrative Agent (and which cash and/or Permitted
Investments may, without limiting the Borrowers’ obligations in respect
thereof, be paid to and applied by such Issuing Lenders in satisfaction of the
Obligations of the Borrowers to such Issuing Lenders and/or Lenders in respect
of any Drawings made under any Letter of Credit under such Tranche issued for
the account of a Borrower or such Bankers’ Acceptance Loans under such Tranche
on the respective maturity dates thereof).


 


(b)           In addition to any other mandatory
repayments pursuant to this Section 5.02, all then outstanding
Loans shall be repaid in full and the respective Borrowers shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash and/or
Permitted Investments equal to 105% of the amount of such excess, such cash
and/or Permitted Investments to be held as security for all Obligations of the
applicable Borrower to the applicable Issuing Lenders and Lenders hereunder in
a cash collateral account to be established by, and under the sole dominion and
control of, the Administrative Agent (and which cash and/or Permitted
Investments may, without limiting the Borrowers’ obligations in respect
thereof, be paid to and applied by such Issuing Lenders and/or Lenders in
satisfaction of the Obligations of the Borrowers to such Issuing Lenders and/or
Lenders in respect of any Drawings made under any Letter of Credit issued for
the account of a Borrower or such Bankers’ Acceptance Loan on the respective
maturity dates thereof), in each case on the Initial Revolving Loan Maturity
Date (or, in the case of any Extended U.S. Facility Commitments and Extended
Canadian Facility Commitments, the Extended Revolving Loan Maturity Date).


 


(c)           In addition to any other mandatory
repayments pursuant to this Section 5.02, each Swingline Loan under
a Tranche will be repaid (for the avoidance of doubt, 


 


117

















 


such repayment may be made
with proceeds from Revolving Loans under such Tranche incurred by the same
Borrower), no later than the seventh day following the incurrence thereof; provided
that, if the seventh day is not a Business Day, such repayment shall be made on
the next succeeding Business Day.


 


5.03.     Method and Place of Payment; Deposits
and Accounts.  (a) 
Except as otherwise specifically provided herein, all payments under this
Agreement and under any Note shall be made to the Administrative Agent for the
account of the Lender or Lenders entitled thereto not later than 1:00 p.m.
(New York City time) on the date when due and shall be made in (x) U.S.
Dollars (or, in the case of any Unpaid Drawings denominated in a currency other
than U.S. Dollars, in an amount equal to the U.S. Dollar Equivalent thereof) in
immediately available funds at the Payment Office in respect of any obligation
of the Borrowers under this Agreement except as otherwise provided in the
immediately following clause (y) or (y) Canadian Dollars in
immediately available funds at the Payment Office, if such payment is made in
respect of (i) principal of, or Face Amount of, or interest on Canadian
Dollar Denominated Loans or (ii) any increased costs, indemnities or other
amounts owing with respect to Canadian Dollar Denominated Loans (including,
without limitation, pursuant to Sections 2.10, 2.11, 3.06,
5.04, 12.06, 13.01 and 13.06).  Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.


 


(b)           Each U.S. Loan Party shall, along
with the Security Agent, certain financial institutions selected by Holdings
and reasonably acceptable to the Administrative Agent (the “U.S. Collection
Banks”), and each of those banks in which each Core U.S. Concentration
Account, U.S. Collection Account and Deposit Account (other than Excluded
Accounts) are maintained by each such U.S. Loan Party, enter into, and
thereafter maintain, separate Control Agreements in respect of each such Core
U.S. Concentration Account, U.S. Collection Account and Deposit Account (other
than Excluded Accounts) in compliance with the Collateral and Guarantee
Requirements.  Each U.S. Loan Party shall
instruct all Account Debtors of the U.S. Loan Parties to remit all payments to
the applicable “P.O. Boxes” or “Lockbox Addresses” of the applicable U.S.
Collection Bank (or to remit such payments to the applicable U.S. Collection
Bank by electronic settlement) with respect to all Accounts of such Account
Debtor, which remittances shall be collected by the applicable U.S. Collection
Bank and deposited in the applicable U.S. Collection Account.  All amounts received by any U.S. Loan Party
and any U.S. Collection Bank in respect of any Account of an Account Debtor of
any U.S. Loan Party, in addition to all other cash received by any U.S. Loan
Party from any other source, shall upon receipt be deposited into a U.S.
Collection Account or a Core U.S. Concentration Account or, to the extent
permitted hereunder in the case of amounts not constituting payments in respect
of Accounts of any U.S. Loan Party, an Excluded Account or Term Sweep Account; provided
that so long as no Dominion Period then exists collections with regard to such
Accounts and with respect to inventory in an aggregate amount not to exceed
$15,000,000 during any calendar month may be deposited in Canadian depository
accounts of a Canadian Borrower so long as no later than 30 days following the
end of each such month, such collections are settled through the intercompany accounting
procedures of Holdings and its Subsidiaries.


 


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(c)           Each Canadian Loan Party shall, along
with the Security Agent, certain financial institutions selected by Holdings
and reasonably acceptable to the Administrative Agent (the “Canadian
Collection Banks”), and each of those banks in which each Core Canadian
Concentration Account, Canadian Collection Account and Deposit Account (other
than Excluded Accounts) are maintained by each such Canadian Loan Party, enter
into, and thereafter maintain, separate Control Agreements in respect of each
such Core Canadian Concentration Account, Canadian Collection Account and
Deposit Account (other than Excluded Accounts) in compliance with the
Collateral and Guarantee Requirements. 
Each Canadian Loan Party shall instruct all Account Debtors of the
Canadian Loan Parties to remit all payments to the applicable “P.O. Boxes”
or “Lockbox Addresses” of the applicable Canadian Collection Bank (or to remit
such payments to the applicable Canadian Collection Bank by electronic
settlement) with respect to all Accounts of such Account Debtor, which
remittances shall be collected by the applicable Canadian Collection Bank and
deposited in the applicable Canadian Collection Account.  All amounts received by any Canadian Loan
Party and any Canadian Collection Bank in respect of any Account of an Account
Debtor of any Canadian Loan Party, in addition to all other cash received by
any Canadian Loan Party from any other source, shall upon receipt be deposited
into a Canadian Collection Account, a Core Canadian Concentration Account or,
to the extent permitted hereunder in the case of amounts not constituting
payments in respect of Accounts of any Canadian Loan Party, an Excluded Account
or Term Sweep Account.


 


(d)           (i) All amounts deposited or
held in all of the U.S. Collection Accounts with respect to each U.S. Loan
Party and available for transfer shall be transferred by the close of business
on each Business Day into one or more accounts with the Administrative Agent or
a financial institution reasonably acceptable to the Administrative Agent (each
a “Core U.S. Concentration Account” and collectively, the “Core U.S.
Concentration Accounts”) unless such amounts are otherwise (A) required
or permitted to be applied pursuant to Section 5.02 or (B) so
long as no Dominion Period then exists, required to be retained in any U.S.
Collection Account, in each case to satisfy the payment of outstanding
obligations owing in respect of checks or similar obligations issued by any
U.S. Loan Party, provided that the aggregate amount retained in all such U.S.
Collection Accounts pursuant to this clause (B) shall not exceed that
amount (as reasonably determined by Holdings) to cover all of the aggregate amount
of all such outstanding obligations and (ii) all amounts deposited or held
in all of the Canadian Collection Accounts with respect to each Canadian Loan
Party and available for transfer shall be transferred by the close of business
on each Business Day into one or more accounts with the Administrative Agent or
a financial institution reasonably acceptable to the Administrative Agent
(each, a “Core Canadian Concentration Account” and, collectively, the “Core
Canadian Concentration Accounts”) unless such amounts are otherwise (A) required
or permitted to be applied pursuant to Section 5.02 or (B) so
long as no Dominion Period then exists, required to be retained in any Canadian
Collection Account, in each case to satisfy the payment of outstanding obligations
owing in respect of checks or similar obligations issued by any Canadian Loan
Party, provided that the aggregate amount retained in all such Canadian
Collection Accounts pursuant to this clause (B) shall not exceed that
amount (as reasonably determined by Holdings) to cover all of the aggregate
amount of all such outstanding obligations. 
Except as, and to the extent, permitted by this Section 5.03(d),
and Section 10 each Collection Account shall have a zero balance
immediately following the transfer of funds on each Business Day pursuant to
the immediately preceding sentences.  So
long as no Dominion Period then exists, the Borrowers and the other Loan
Parties shall be permitted to transfer cash from the Core Concentration
Accounts to other


 


119
















 


Deposit Accounts to be used
for working capital and general corporate purposes all subject to the
requirements of this Agreement (including this Section 5.03(d)).  If a Dominion Period exists, all collected
amounts held in the Core Concentration Accounts shall be applied as provided in
Section 5.03(e) or (f), as applicable.


 


(e)           Each Control Agreement
relating to a Core U.S. Concentration Account shall (unless otherwise agreed by
the Administrative Agent in its sole discretion) include provisions that allow,
during any Dominion Period, for all collected amounts held in such Core U.S.
Concentration Account from and after the date requested by the Administrative
Agent, to be sent by ACH or wire transfer or similar electronic transfer no
less frequently than once per Business Day to one or more accounts maintained
by the Administrative Agent at DBNY (or if DBNY is not the Administrative
Agent, at the institution designated by such successor Administrative Agent) or
an affiliate thereof (each a “DB U.S. Account”).  Subject to the terms of the respective
Security Document, all amounts received in a DB U.S. Account during the
existence of a Dominion Period shall be applied (and allocated) by the
Administrative Agent on a daily basis in the following order (in each case to
the extent the Administrative Agent has actual knowledge of the amounts owing
or outstanding as described below, and after giving effect to the application
of any such amounts constituting proceeds from any Collateral otherwise
required to be applied pursuant to the terms of the respective Security
Document during the existence of an Event of Default), subject to the
provisions of the immediately succeeding sentence (to the extent
applicable):  (1) first, to
the payment (on a ratable basis) of any outstanding Expenses actually due and
payable by any U.S. Borrower to the Administrative Agent, the Co-Collateral
Agents and the Security Agent under any of the Loan Documents; (2) second,
to the extent all amounts referred to in preceding clause (1) have been
paid in full, to pay (on a ratable basis) all outstanding Expenses actually due
and payable by any U.S. Borrower to each Issuing Lender under any of the Loan
Documents; (3) third, to the extent all amounts referred to in
preceding clauses (1) and (2) have been paid in full, to pay (on a
ratable basis) all accrued and unpaid interest actually due and payable on the
U.S. Borrower Loans and then all accrued and unpaid Fees actually due and
payable by any U.S. Borrower to the Administrative Agent, the Issuing Lenders
and the Lenders under any of the Loan Documents; (4) fourth, to the
extent all amounts referred to in preceding clauses (1) through (3),
inclusive, have been paid in full, to pay (on a ratable basis) any and all
unpaid principal of U.S. Borrower Loans and Unpaid Drawings in respect of
Letters of Credit issued for the account of a U.S. Borrower in each case which
are then actually due and payable; (5) fifth, to the extent all
amounts referred to in preceding clauses (1) through (4), inclusive, have
been paid in full, to repay or prepay outstanding U.S. Borrower Swingline Loans
and to repay or prepay all outstanding U.S. Borrower Revolving Loans advanced
by the Administrative Agent on behalf of the Lenders pursuant to Section 2.01(e);
(6) sixth, to the extent all amounts referred to in preceding
clauses (1) through (5), inclusive, have been paid in full, to repay (on a
ratable basis) the outstanding principal of U.S. Borrower Revolving Loans
(whether or not then due and payable, but excluding any outstanding Bankers’
Acceptance Loans where the underlying B/A Instrument has not matured), provided
that, with respect to each repayment of U.S. Borrower Revolving Loans required
by this Section 5.03(e)(6), so long as no Default or Event of
Default then exists and less than all outstanding U.S. Borrower Revolving Loans
would otherwise be required to be repaid pursuant hereto, the U.S. Borrowers
may designate the Types of U.S. Borrower Revolving Loans which are to be repaid
and, in the case of Eurodollar Loans which are U.S. Borrower Revolving Loans,
the specific Borrowing or Borrowings pursuant to which such Eurodollar Loans
were 


 


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made; (7) seventh,
to the extent all amounts referred to in preceding clauses (1) through
(6), inclusive, have been paid in full, but only if an Event of Default has
occurred and is continuing, to cash collateralize (on a ratable basis) all
outstanding Letters of Credit issued for the account of a U.S. Borrower and
Bankers’ Acceptance Loans which are U.S. Borrower Revolving Loans where the
underlying B/A Instrument has not matured (such cash collateral to be held by
the Administrative Agent while an Event of Default exists in a cash collateral
account to be established by, and under the sole dominion and control of, the
Administrative Agent and applied to the Obligations of the U.S. Borrowers to
the Issuing Lenders and/or Lenders in respect of any Drawings made under any
such Letters of Credit or any such Bankers’ Acceptance Loans); (8) eighth,
to the extent all amounts referred to in preceding clauses (1) through
(7), inclusive, have been paid in full, to pay (on a ratable basis) all other
outstanding Obligations of any U.S. Borrower then due and payable to the
Administrative Agent, the Co-Collateral Agents, the Security Agent and the
Lenders under any of the Loan Documents; and (9) ninth, to the U.S.
Borrowers; provided that, with respect to any payments or cash
collateralization required to be applied (or allocated) pursuant to preceding
clauses (1) through (8), in each case, to the extent the outstanding
Obligations under any such clause constitutes outstanding Obligations under
more than one Tranche, any such payments or cash collateralization shall be
applied (or allocated) under such clause to the outstanding Obligations under
each Tranche on a pro  rata basis based upon the outstanding
Obligations with respect to such Tranches under such clause.  Each U.S. Loan Party agrees that it will not
cause any proceeds of any Core Concentration Account to be otherwise
redirected.


 


(f)            Each Control Agreement
relating to a Core Canadian Concentration Account shall (unless otherwise
agreed by the Administrative Agent in its sole discretion) include provisions
that allow, during any Dominion Period, for all collected amounts held in such
Core Canadian Concentration Account from and after the date requested by the
Administrative Agent, to be sent by ACH or wire transfer or similar electronic
transfer no less frequently than once per Business Day to one or more accounts
maintained by the Administrative Agent at DBNY (or if DBNY is not the
Administrative Agent, at the institution designated by such successor
Administrative Agent) or an affiliate thereof (each a “DB Canadian Account”).  Subject to the terms of the respective
Security Document, all amounts received in a DB Canadian Account during the
existence of a Dominion Period shall be applied (and allocated) by the
Administrative Agent on a daily basis in the following order (in each case to the
extent the Administrative Agent has actual knowledge of the amounts owing or
outstanding as described below, and after giving effect to the application of
any such amounts constituting proceeds from any Collateral otherwise required
to be applied pursuant to the terms of the respective Security Document during
the existence of an Event of Default), subject to the provisions of the
immediately succeeding sentence (to the extent applicable):  (1) first, to the payment (on a
ratable basis) of any outstanding Expenses actually due and payable by any
Canadian Borrower to the Administrative Agent, the Co-Collateral Agents and the
Security Agent under any of the Loan Documents; (2) second, to the
extent all amounts referred to in preceding clause (1) have been paid in
full, to pay (on a ratable basis) all outstanding Expenses actually due and
payable by any Canadian Borrower to each Issuing Lender under any of the Loan
Documents; (3) third, to the extent all amounts referred to in
preceding clauses (1) and (2) have been paid in full, to pay (on a
ratable basis) all accrued and unpaid interest actually due and payable on the
Canadian Borrower Loans and then all accrued and unpaid Fees actually due and
payable by any Canadian Borrower to the Administrative Agent, the Issuing
Lenders and the Lenders under any of the 


 


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Loan Documents; (4) fourth,
to the extent all amounts referred to in preceding clauses (1) through
(3), inclusive, have been paid in full, to pay (on a ratable basis) any and all
unpaid principal of Canadian Borrower Loans and Unpaid Drawings in respect of
Letters of Credit issued for the account of a Canadian Borrower in each case
which are then actually due and payable; (5) fifth, to the extent
all amounts referred to in preceding clauses (1) through (4), inclusive,
have been paid in full, to repay or prepay outstanding Canadian Borrower
Swingline Loans and to repay or prepay all outstanding Canadian Borrower
Revolving Loans advanced by the Administrative Agent on behalf of the Lenders
pursuant to Section 2.01(e); (6) sixth, to the extent
all amounts referred to in preceding clauses (1) through (5), inclusive,
have been paid in full, to repay (on a ratable basis) the outstanding principal
of Canadian Borrower Revolving Loans (whether or not then due and payable, but
excluding any outstanding Bankers’ Acceptance Loans where the underlying B/A
Instrument has not matured), provided that, with respect to each
repayment of Canadian Borrower Revolving Loans required by this Section 5.03(f)(6),
so long as no Default or Event of Default then exists and less than all
outstanding Canadian Borrower Revolving Loans would otherwise be required to be
repaid pursuant hereto, the Canadian Borrowers may designate the Types of
Canadian Borrower Revolving Loans which are to be repaid and, in the case of
Eurodollar Loans which are Canadian Borrower Revolving Loans, the specific
Borrowing or Borrowings pursuant to which such Eurodollar Loans were made; (7) seventh,
to the extent all amounts referred to in preceding clauses (1) through
(6), inclusive, have been paid in full, but only if an Event of Default has
occurred and is continuing, to cash collateralize (on a ratable basis) all
outstanding Letters of Credit issued for the account of a Canadian Borrower and
Bankers’ Acceptance Loans which are Canadian Borrower Revolving Loans where the
underlying B/A Instrument has not matured (such cash collateral to be held by
the Administrative Agent while an Event of Default exists in a cash collateral
account to be established by, and under the sole dominion and control of, the
Administrative Agent and applied to the Obligations of the Canadian Borrowers
to the Issuing Lenders and/or Lenders in respect of any Drawings made under any
such Letters of Credit or Bankers’ Acceptance Loans); (8) eighth,
to the extent all amounts referred to in preceding clauses (1) through
(7), inclusive, have been paid in full, to pay (on a ratable basis) all other
outstanding Obligations of any Canadian Borrower then due and payable to the
Administrative Agent, the Co-Collateral Agents, the Security Agent and the
Lenders under any of the Loan Documents; and (9) ninth, to the
Canadian Loan Parties.  Each Canadian
Loan Party agrees that it will not cause any proceeds of any Core Canadian
Concentration Account to be otherwise redirected.


 


(g)           Without limiting the
provisions set forth in Section 13.15, the Administrative Agent
shall maintain accounts on its books in the name of each Borrower
(collectively, the “Credit Account”) in which each Borrower will be
charged with all loans and advances under each Tranche made by the Lenders to
the respective Borrower for the respective Borrower’s account, including the
Loans, the Letter of Credit Outstandings, and the Fees, Expenses and any other
Obligations relating thereto.  Each
Borrower will be credited, in accordance with this Section 5.03,
with all amounts received by the Lenders from such Borrower or from others for
its account, including, as set forth above, all amounts received by the
Administrative Agent and applied to the Obligations.  In no event shall prior recourse to any
Accounts or other Collateral be a prerequisite to the Administrative Agent’s
right to demand payment of any Obligation upon its maturity.  Further, the Administrative Agent shall have
no obligation whatsoever to perform in any respect any of the Borrowers’ or
other Loan Parties’ contracts or obligations relating to the Accounts.


 


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5.04.     Net Payments; Taxes.  (a) (i)  All payments made by the
Borrowers and the other Loan Parties hereunder and under any other Loan
Document will be made without setoff, counterclaim or other defense.


 


(ii)           Except as
provided in Section 5.04(b), all such payments will be made free
and clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding those certain taxes described in Section 13.01(a)(ii),
which shall be governed solely by the provisions of such Section, and, except as
provided in the second succeeding sentence, with respect to any Agent, any Lender or
any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (w) taxes imposed on or measured by
its net income (however denominated) and franchise taxes imposed on or measured
by its gross or net income or receipts, in each case by the jurisdiction (or
any political subdivision thereof) under the laws of which such recipient is
organized or is otherwise doing business or has a permanent establishment for
purposes of an applicable tax treaty or in which its principal office is
located, (x) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which any Borrower is located,
(y) in the case of a Foreign Lender (other than an assignee pursuant to a
request by a Borrower under Section 2.13), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Lender
becomes a party hereto (or designates a new lending office), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from a Borrower with respect to such withholding pursuant to
Section 5.04(a) and (z) any withholding tax that is attributable to
a Foreign Lender’s failure to comply with Section 5.04(b) or (c) or
providing incorrect, false or misleading statements with respect thereto) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the
respective Borrower and any other Loan Party making the respective payment or
which has guaranteed the obligations of the relevant Borrower jointly or
severally agree to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any other Loan Document, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for
herein or in such other Loan Documents. 
If, pursuant to the preceding sentence, any additional amounts are
payable in respect of Taxes, the respective Borrower and any other Loan Party
making the respective payment or which has guaranteed the obligations of the
relevant Borrower jointly and severally agree to reimburse each affected
Lender, upon the written request of such Lender, for any taxes imposed on such
Lender as a result of the payment of such additional amounts and which are
measured by the net income of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which
such Lender is organized or in which the principal office or applicable lending
office of such Lender is located and for any withholding of taxes as such
Lender shall determine are payable by, or withheld from, such Lender, in
respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Lender pursuant to this sentence.  The
respective Borrower (or other Loan Party) will furnish to the Administrative 


 


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Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by such
Borrower (or other Loan Party) or other evidence of such payment reasonably
acceptable to the Administrative Agent. 
Subject to Section 14.07, (i) the U.S. Borrowers
(jointly and severally) agree (and the applicable U.S. Subsidiary Guarantors
agree), to indemnify and hold harmless each U.S. Facility Lender and (ii) the
U.S. Borrowers (jointly and severally) or the Canadian Borrowers (jointly and
severally), as applicable, agree (and the applicable Subsidiary Guarantors
agree) to indemnify and hold harmless each Canadian Facility Lender, and, in
each case, reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.


 


(b)           Each Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes agrees to deliver to Holdings
and the Administrative Agent on or prior to the Closing Date (i) two
accurate and complete original signed copies of Internal Revenue Service Form W-8IMY,
Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) (or successor forms) certifying to such Lender’s
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made by the U.S. Borrowers under
this Agreement and under any Note, or (ii) if the Lender is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form W-8IMY, Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit L
(any such certificate, a “Section 5.04(b)(ii) Certificate”)
and (y) two accurate and complete original signed copies of Internal
Revenue Service Form W-8BEN (with respect to the portfolio interest
exemption) (or successor form) certifying to such Lender’s entitlement as of
such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made by the U.S. Borrowers under this
Agreement and under any Note.  In
addition, each Lender agrees that from time to time after the Closing Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Lender will
deliver to Holdings and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form W-8IMY, Form W-8ECI,
Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN
(with respect to the portfolio interest exemption) and a Section 5.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments by the U.S.
Borrowers under this Agreement and any Note, or such Lender shall immediately
notify Holdings and the Administrative Agent of its inability to deliver any
such Form or Certificate, in which case such Lender shall not be required
to deliver any such Form or Certificate pursuant to this Section 5.04(b).  Notwithstanding anything to the contrary
contained in Section 5.04(a)(ii), but subject to Section 13.04(b) and
the immediately succeeding sentence, (x) each U.S. Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or
other amounts payable hereunder for the account of any Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to Holdings U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and (y) each U.S.
Borrower shall not be obligated pursuant to Section 5.04(a) to
gross-up payments to be made to a Lender in 


 


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respect of income or similar
taxes imposed by the United States if (I) such Lender has not provided to
Holdings the Internal Revenue Service Forms required to be provided to Holdings
pursuant to this Section 5.04(b) or (II) in the case of a
payment, other than interest, to a Lender described in clause (ii) above,
to the extent that such forms do not establish a complete exemption from
withholding of such taxes. 
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 5.04 and except as set forth
in Section 13.04(b) and subject to Section 14.07, (i) the
U.S. Borrowers (jointly and severally) agree (and the applicable U.S.
Subsidiary Guarantors agree), to indemnify and hold harmless each U.S. Facility
Lender and (ii) the U.S. Borrowers (jointly and severally) or the Canadian
Borrowers (jointly and severally), as applicable, agree (and the applicable
Subsidiary Guarantors agree) to pay any additional amounts and to indemnify
such Lender in the manner set forth in Section 5.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Closing Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of income or similar taxes.


 


(c)           Each Canadian Facility
Lender agrees to use reasonable efforts (consistent with legal and regulatory
restrictions and subject to overall policy considerations of such Canadian
Facility Lender) to file any certificate or document or to furnish to the
relevant Canadian Borrower any information, in each case, as reasonably
requested by such Canadian Borrower that may be necessary to establish any
available exemption from, or reduction in the amount of, any Taxes; provided,
however, that nothing in this Section 5.04(c) shall
require a Canadian Facility Lender to disclose any confidential information
(including, without limitation, its tax returns or its calculations).


 


(d)           If any Borrower or Loan
Party pays any amount under this Section 5.04 to a Lender or any
other Person and such Lender determines in its sole discretion that it (or any
of its Affiliates) has actually received or realized in connection therewith
any refund or any reduction of its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a “Tax Benefit”),
such Lender shall pay to such Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Lender (or its Affiliates) as a consequence of such Tax
Benefit; provided, however, that (i) any Lender may
determine, in its sole discretion consistent with the policies of such Lender,
whether to seek a Tax Benefit; (ii) any Taxes that are imposed on a Lender
as a result of a disallowance or reduction of any Tax Benefit with respect to
which such Lender has made a payment to the Borrower pursuant to this Section 5.04(d) shall
be treated as a Tax for which the Borrower is obligated to indemnify such
Lender pursuant to this Section 5.04 without any exclusions or
defenses; (iii) nothing in this Section 5.04(d) shall
require the Lender to disclose any confidential information to the Borrower
(including, without limitation, its tax returns); and (iv) no Lender shall
be required to pay any amounts pursuant to this Section 5.04(d) at
any time which a Default or Event of Default exists.


 


(e)           Each Agent and each Lender
that is a U.S. person within the meaning of Section 7701(a)(30) of the
Code (other than any such person that is treated as a corporation for United
States federal income tax purposes) shall deliver to Holdings and the
Administrative Agent on or before the date such Person becomes a party to this
Agreement a duly completed 


 


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United States Internal
Revenue Service form W-9 (or successor form) establishing that such Person is
not subject to U.S. federal backup withholding.


 


SECTION 6.  Conditions Precedent to the Closing Date
and to the Funding Date.


 


6.01.     Conditions Precedent to the
Closing Date.  This
Agreement and the rights and obligations of the parties hereunder will become
effective on the date on which each of the following conditions has been
satisfied (or waived in accordance with Section 13.12):


 


(a)           The Administrative Agent
shall have received from each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) evidence
satisfactory to the Administrative Agent (which may include a facsimile
transmission) that such party has signed a counterpart of this Agreement as
provided in Section 13.10.


 


(b)           The Administrative Agent
shall have received a favorable written opinion of each of Winston &
Strawn LLP, U.S. counsel for the Loan Parties, substantially to the effect set
forth in Exhibit P-1, Craig A. Hunt, Senior Vice President,
Secretary and General Counsel for SSCC and SSCE, substantially to the effect
set forth in Exhibit P-2, Osler, Hoskin & Harcourt LLP,
Canadian counsel for the Loan Parties, substantially to the effect set forth in
Exhibit P-3, and Stewart McKelvey, Nova Scotia counsel for the Loan
Parties, substantially to the effect set forth in Exhibit P-4, in
each case (A) dated the Closing Date, (B) addressed to the
Administrative Agent, the Security Agent and the Lenders, and (C) covering
such customary legal matters relating to this Agreement as the Administrative
Agent shall reasonably request and with such changes as are reasonably
acceptable to the Administrative Agent. 
SSCC, SSCE and the other Borrowers hereby instruct their counsel to
deliver such opinions.


 


(c)           All legal matters incident
to this Agreement, the Borrowings and other extensions of credit hereunder and
the other Loan Documents shall be reasonably satisfactory to the Administrative
Agent and the Lenders.


 


(d)           The Administrative Agent
shall have received (i) a copy of the certificate or articles of
incorporation (or equivalent organizational documents), including all
amendments thereto, of each of SSCC, SSCE and the other Borrowers, certified as
of a recent date by the Secretary of State or other relevant Governmental
Authority of the jurisdiction of its organization, and a certificate as to the
good standing (or the equivalent thereof) of each of SSCC, SSCE and the other
Borrowers as of a recent date from such Secretary of State or other
Governmental Authority; (ii) a certificate of the Secretary or Assistant
Secretary of each of SSCC, SSCE and the other Borrowers dated the Closing Date
and certifying (A) that attached thereto is a true and complete copy of
the by-laws (or equivalent organizational documents) of SSCC, SSCE or each
other Borrower, as applicable, as in effect on the Closing Date, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of SSCC, SSCE or each other Borrower, as applicable,
authorizing the Transactions, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation (or equivalent organizational
documents) of SSCC, SSCE or each other Borrower, as applicable, have not been
amended since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer 


 


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executing this Agreement on
behalf of SSCC, SSCE or each other Borrower, as applicable (and each of the
foregoing in sub-clauses (i) and (ii) shall be in form and substance
reasonably acceptable to the Administrative Agent); (iii) a certificate of
another officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to clause (ii) above;
(iv) a certificate of the
Secretary or Assistant Secretary of Holdings dated the Closing Date and
certifying that attached thereto is a true and complete copy of the Term Loan
Credit Agreement (including all exhibits, annexes and schedules thereto) which
shall contain terms that conform to the Plan of Reorganization and are
otherwise in form and substance reasonably satisfactory to the Administrative
Agent; and (v) such other documents as the Administrative
Agent may reasonably request.


 


(e)           The Administrative Agent
shall have received a certificate, dated the Closing Date and signed by a
Financial Officer of and on behalf of Holdings, confirming compliance as of the
Closing Date with the condition precedent set forth in Section 7.01(ii) with
the same effect as if each reference to the date of a Credit Event therein were
a reference to the Closing Date.


 


(f)            The Administrative Agent
shall have received (i) management’s financial projections for SSCC and
the Subsidiaries through 2014, including but not limited to monthly projections
for 2010 (including projected monthly borrowing base levels for such year),
reflecting the Transactions and the Plan of Reorganization as disclosed in the
Disclosure Statement as of the Closing Date and including the material
assumptions on which such projections were based, in each case in form and
substance reasonably satisfactory to the Administrative Agent, and (ii) an
unaudited pro forma consolidated balance sheet of SSCC and its Subsidiaries as
of the last day of the most recent fiscal quarter for which financial
statements are publicly available, adjusted to give pro forma effect to
implementation of the Plan of Reorganization and the Transactions as if such
transactions had occurred on such date, which, in each case, shall be prepared
in good faith and based upon reasonable assumptions.


 


(g)           The U.S. Bankruptcy Court
shall have entered an order in form and substance reasonably acceptable to DBNY
and JPMCB approving Holdings and the other Borrowers’ execution, delivery and
performance of this Agreement, including the payment of fees, expenses,
indemnities and other amounts contemplated hereby, and approving as an
administrative expense claim against Holdings and the other Borrowers the
indemnification, cost reimbursement obligations and fee obligations accruing or
payable in respect of periods or events occurring on or prior to the Funding
Date.


 


(h)           The Plan of Reorganization
as reflected in the Disclosure Statement shall be in form and substance
reasonably acceptable to the Lead Arrangers.


 


(i)            On or prior to the Closing
Date, Holdings shall have provided to the Administrative Agent and the
Co-Collateral Agents (i) an appraisal of the Inventory of each Borrower
and their respective Subsidiaries from Great American Advisory & Valuation
Services, LLC and (ii) a collateral examination of the Accounts and
Inventory and related assets and liabilities of each Borrower and their
respective Subsidiaries from JPMCB and, in each case, the 


 


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results of such appraisal
and collateral examination shall be in form and substance reasonably
satisfactory to the Co-Collateral Agents.


 


(j)            On the Closing Date, the
Administrative Agent and the Co-Collateral Agents shall have received the
initial Borrowing Base Certificate.


 


(k)           The Administrative Agent
shall have received all Fees and other amounts due and payable on or prior to
the Closing Date, including, to the extent invoiced, payment or reimbursement
of all Fees and expenses (including the reasonable fees, charges and
disbursements of counsel) required to be reimbursed or paid by Holdings or any
Borrower hereunder or under any other Loan Document or in respect of the
execution and delivery of this Agreement.


 


6.02.     Conditions Precedent to the
Funding Date.  The
obligations of the Lenders hereunder to make Loans, and the obligation of each
Issuing Lender to issue Letters of Credit, on the Funding Date are subject to
the satisfaction (or waiver in accordance with Section 13.12) of
the following conditions:


 


(a)           The Administrative Agent
shall have received a favorable written opinion of each of (i) Winston &
Strawn LLP, U.S. counsel for the Loan Parties, Craig A. Hunt, Senior Vice
President, Secretary and General Counsel for SSCC and SSCE, Osler, Hoskin &
Harcourt LLP, Canadian counsel for the Loan Parties and Stewart McKelvey, Nova
Scotia counsel for the Loan Parties, and (ii) such local counsel
reasonably acceptable to the Administrative Agent, in each case (A) dated
the Funding Date, (B) addressed to the Administrative Agent, the Security
Agent and the Lenders, and (C) covering such customary legal matters
relating to the Loan Documents as the Administrative Agent shall reasonably
request and in form and substance reasonably satisfactory to the Administrative
Agent.  SSCC, SSCE and the other Loan
Parties hereby instruct their counsel to deliver such opinions.


 


(b)           The Administrative Agent
shall have received (i) a copy of the certificate or articles of
incorporation (or equivalent organizational documents), including all
amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State or other relevant Governmental Authority of the jurisdiction
of its organization, and a certificate as to the good standing (or the
equivalent thereof) of each Loan Party as of a recent date from such Secretary
of State or other Governmental Authority; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Funding Date and
certifying (A) that attached thereto is a true and complete copy of the by-laws
(or equivalent organizational documents) of such Loan Party as in effect on the
Funding Date, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the Transactions, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation (or equivalent organizational
documents) of such Loan Party have not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished pursuant
to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document on behalf of
such Loan Party (and each of the foregoing in sub-clauses (i) and (ii) shall
be in form and substance reasonably acceptable to the Administrative Agent); (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or 


 


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Assistant Secretary
executing the certificate pursuant to clause (ii) above; (iv) a
certificate of the Secretary or Assistant Secretary of each Loan Party dated
the Funding Date and certifying that attached thereto is a true and complete
copy of the material Term Loan Facility Documents (other than the Term Loan
Credit Agreement) and any amendments to the Term Loan Credit Agreement
(including all exhibits, annexes and schedules thereto) from and after the
Closing Date, in each case, which shall contain terms that conform to the Plan
of Reorganization and are otherwise in form and substance reasonably satisfactory
to the Administrative Agent; and (v) such other documents as the
Administrative Agent may reasonably request.


 


(c)           The Administrative Agent
shall have received a certificate, dated the Funding Date and signed by a
Financial Officer of and on behalf of Holdings, confirming compliance with the
conditions precedent set forth in Section 7.01.


 


(d)           The Administrative Agent
shall have received all Fees and other amounts due and payable on or prior to
the Funding Date, including, to the extent invoiced, payment or reimbursement
of all Fees and expenses (including the reasonable fees, charges and
disbursements of counsel) required to be reimbursed or paid by any Loan Party
hereunder or under any other Loan Document or in respect of the execution and
delivery of this Agreement.


 


(e)           The Administrative Agent
shall have received a notice of such Credit Event as required by Section 7.02.


 


(f)            The Collateral and Guarantee
Requirement shall have been satisfied, including with respect to each Borrower
and each Domestic Subsidiary and Canadian Subsidiary of Holdings that is a
Material Subsidiary based on the most recently available consolidated financial
statements of SSCC or that is or will be a guarantor under the Term Loan
Facility, and the requirements of the covenant set forth in Section 10.15
shall have been satisfied.  The
Administrative Agent shall have received a completed Perfection Certificate,
dated the Funding Date and duly executed by a Authorized Officer of Holdings,
together with all attachments contemplated thereby, including results of a
search of the UCC (or equivalent) filings made with respect to the Loan Parties
in the jurisdictions contemplated by the Perfection Certificate and with copies
of the financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the Liens
indicated by such financing statements (or similar document) are permitted
under Section 10.02 or have been, or substantially
contemporaneously with the Funding Date will be, released.


 


(g)           None of the Mortgaged
Properties shall be subject to any Lien other than those expressly permitted
under Section 10.02 and other encumbrances permitted by the
relevant Mortgage.


 


(h)           The Administrative Agent
shall have received copies of, or an insurance broker’s or agent’s certificate
as to coverage under, the insurance policies required by Section 9.02
and the applicable provisions of the Security Documents, each of which policies
shall be endorsed or otherwise amended to include a loss payable endorsement
with respect to the Collateral and to name the Security Agent as additional
insured, in form and substance reasonably satisfactory to the Administrative
Agent.


 


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(i)            The Administrative Agent
shall have received (i) an unaudited pro forma consolidated balance sheet
of Holdings and its Subsidiaries as of the last day of the most recent fiscal
quarter for which financial statements are publicly available, adjusted to give
pro forma effect to the implementation of the Plan of Reorganization, the
consummation of the Transactions and the funding of Term Loans under the Term
Loan Facility and any incurrence of Loans or issuance of Letters of Credit
hereunder on the Funding Date as if such transaction had occurred on such date,
which, in each case, shall be prepared in good faith and based upon reasonable
assumptions and (ii) a certificate, dated the Funding Date and signed by a
Financial Officer of Holdings, certifying that as of the Funding Date, Holdings
and its Subsidiaries have not incurred any material liabilities not reflected
in such pro forma consolidated balance sheet, other than liabilities incurred
in the ordinary course of business.


 


(j)            The U.S. Bankruptcy Court
shall have entered an order confirming the Plan of Reorganization, which order
(the “Confirmation Order”) (i) shall be in form and substance
reasonably satisfactory to DBNY and JPMCB, (ii) shall authorize this
Agreement and the Transactions and the Term Loan Facility and (iii) shall
be in full force and effect and shall not have been reversed or modified and
shall not be stayed.  The assets of SSC
Canada and Smurfit-MBI (as defined in the Plan of Reorganization) shall be
transferred to the newco(s) that will be Canadian Borrowers on the Funding
Date, which transfer shall be approved by the Canadian Bankruptcy Court
pursuant to a vesting order, sanction or other order issued by the Canadian
Bankruptcy Court, in each case, in form and substance reasonably satisfactory
to DBNY and JPMCB.  The effective date of
the Plan of Reorganization shall have occurred (and all conditions precedent
thereto as set forth therein shall have been satisfied (or shall be
concurrently satisfied) or waived pursuant to the terms of the Plan of
Reorganization) and the Funding Date Merger shall have been consummated.  Since the Closing Date, there shall have been
no amendment or modification of the terms and conditions of the Plan of
Reorganization as reflected in the Disclosure Statement on the Closing Date
(including without limitation the incurrence or continuation of Indebtedness or
Liens not specifically contemplated by the Disclosure Statement on the Closing
Date to exist after the effective date of the Plan of Reorganization) that
could reasonably be expected to adversely affect the interests of the Lenders
in any significant respect that has not been approved by the Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement, if the reference to “a majority” contained therein were changed
to “66-2/3%”.


 


(k)           The Administrative Agent
shall be reasonably satisfied that, and shall have received a certificate from
a Financial Officer of Holdings dated the Funding Date and confirming that,
following consummation of the transactions expected to occur substantially
simultaneously with the funding of the Term Loans under the Term Loan Facility
and any incurrence of Loans or issuance of Letters of Credit hereunder on the
Funding Date, no event, circumstance or condition will exist that would
constitute a Default or Event of Default hereunder had the affirmative and
negative covenants contained in Sections 9 and 10 and the Events
of Default been applicable at all times after the Closing Date, other than any
such event, condition or circumstance directly attributable to the Plan of
Reorganization as reflected in the Disclosure Statement on the Closing Date or
to changes therein not requiring approval of the applicable Lenders pursuant to
Section 6.02(j) above (it being understood that any such
non-compliance with covenants or Event of Default prior to the Funding Date
that has been cured or otherwise is not continuing as of the Funding Date (and
any noncompliance with the notification 


 


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requirements of Section 9.05
relating to any such noncompliance attributable to the Plan of Reorganization
or otherwise cured or not continuing) will not be deemed to result in a failure
of this condition).


 


(l)            After giving pro forma
effect to the implementation of the Plan of Reorganization and the transactions
contemplated thereunder, the funding of the Term Loans under the Term Loan
Facility and any incurrence of Loans or issuance of Letters of Credit hereunder
on the Funding Date, Holdings’ Consolidated Leverage Ratio for the most recent
twelve-month period for which financial statements are available, but in any
event, the most recent twelve-month period ending at least 30 days prior to the
Funding Date shall not exceed (i) 3.50 to 1.00 if the Funding Date occurs
on or prior to April 30, 2010 or (ii) 3.85 to 1.00 if the Funding
Date occurs after April 30, 2010. 
The Administrative Agent shall have received a certificate, dated the
Funding Date and signed by a Financial Officer of Holdings, certifying as to
compliance with the foregoing condition.


 


(m)          The Administrative Agent
shall have received reasonably satisfactory evidence that the conditions to the
effectiveness of the Term Loan Facility Documents shall have been (or will be),
substantially simultaneously with the Funding Date, satisfied or waived in
accordance with their terms and, on the Funding Date, Holdings shall have
received cash proceeds of $1,200,000,000 (calculated before underwriting and original
issue discounts, commissions, fees and expenses) from the incurrence of Term
Loans under the Term Loan Facility.


 


(n)           Prior to the fifth day
preceding the Funding Date (or such shorter period as may be agreed to by the
Administrative Agent in its sole discretion), the Administrative Agent and the
Co-Collateral Agents shall have received a Borrowing Base Certificate as at a
date not earlier than the date occurring on the 30th day preceding the Funding
Date (the “Funding Date Borrowing Base Certificate”).


 


(o)           On the Funding Date and
after giving effect to the incurrence of Loans, the issuance of Letters of
Credit and occurrence of all payments and transfers to be effected on or as of
the Funding Date, including all such payments and transfers contemplated by the
Plan of Reorganization, the sum of (i) Excess Availability and (ii) Holdings’
unrestricted cash and unrestricted cash equivalents shall be greater than (x) $500,000,000
if the Funding Date occurs on or prior to April 30, 2010 or (y) $450,000,000
if the Funding Date occurs after April 30, 2010.


 


(p)           The Closing Date shall have
occurred.


 


(q)           On or prior to the Funding
Date, there shall have been delivered to the Administrative Agent for the
account of each of the Lenders that has requested same the appropriate
Revolving Notes executed by the appropriate Borrowers and if requested by the
Swingline Lender, the appropriate Swingline Note executed by the appropriate
Borrowers, in each case, in the applicable amount, maturity and as otherwise
provided herein.


 


(r)            Prior to the fifth Business
Day preceding the Funding Date, the Agents shall have received from the Loan
Parties, to the extent requested, all documentation and other 


 


131

















 


information required by regulatory
authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including the Patriot Act.


 


(s)           The Administrative Agent
shall have received a solvency certificate from a Financial Officer of Holdings
in the form of Exhibit F hereto dated the Funding Date.


 


SECTION 7.  Conditions Precedent to All Credit Events.  The obligation of each Lender to make Loans
(including Loans made on the Funding Date), and the obligation of each Issuing
Lender to issue Letters of Credit (including Letters of Credit issued on the
Funding Date), is subject, at the time of the Funding Date and at the time of
each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:


 


7.01.     No Default; Representations
and Warranties.  At the time
of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein and in the other Loan Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that (x) any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date and (y) any
representation or warranty that is qualified as to “materiality”, “Material
Adverse Effect” or similar language shall be true and correct in all respects
on such date).


 


7.02.     Notice of Borrowing; Letter
of Credit Request.  (a) 
Prior to the making of each Loan (other than a Swingline Loan or a Revolving
Loan made pursuant to a Mandatory Borrowing), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section 2.03(a).  Prior to the making of each Swingline Loan,
the Swingline Lender shall have received the notice referred to in Section 2.03(b)(i).


 


(b)           Prior to the issuance of
each Letter of Credit, the Administrative Agent and the respective Issuing
Lender shall have received a Letter of Credit Request meeting the requirements
of Section 3.03(a).


 


7.03.     Borrowing Base and Commitment Limitations.  Notwithstanding anything to the contrary set
forth herein (but subject to Section 2.01(e)), it shall be a
condition precedent to each Credit Event that after giving effect thereto (and
the use of the proceeds thereof):


 


(i)            the Aggregate U.S. Borrower
Exposure would not exceed the U.S. Borrowing Base at such time;


 


(ii)           the Aggregate Canadian
Borrower Exposure would not exceed the Canadian Borrowing Base at such time;


 


(iii)          the Aggregate U.S. Facility
Exposure at such time would not exceed the Total U.S. Facility Commitment at
such time;


 


(iv)          the Aggregate Canadian
Facility Exposure at such time would not exceed the Total Canadian Facility
Commitment at such time;


 


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(v)           the aggregate U.S. Facility
Letter of Credit Outstandings would not exceed the Maximum U.S. Facility Letter
of Credit Amount; and


 


(vi)          the aggregate Canadian
Facility Letter of Credit Outstandings would not exceed the Maximum Canadian
Facility Letter of Credit Amount.


 


The acceptance of the
benefits of each Credit Event shall constitute a representation and warranty by
Holdings and the other Borrowers to the Administrative Agent and each of the
Lenders that all the conditions specified in Section 6 (with
respect to Credit Events on the Funding Date) and in this Section 7
(with respect to Credit Events on or after the Funding Date) and applicable to
such Credit Event are satisfied as of that time.


 


SECTION 8.  Representations and Warranties.  In order to induce the Lenders to enter into this
Agreement and to make the Loans, and issue (or participate in) the Letters of
Credit as provided herein, each of Holdings and the other Borrowers makes the
following representations and warranties, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and the issuance of the Letters of Credit, with the occurrence of the
Closing Date, the Funding Date and each Credit Event on or after the Funding
Date being deemed to constitute a representation and warranty that the matters
specified in this Section 8 are true and correct in all material
respects on and as of the Closing Date, the Funding Date and on the date of
each such other Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).


 


8.01.     Organization; Powers.  Each of the Loan Parties (a) is duly
organized, validly existing and in good standing (or its equivalent, to the
extent that such concept is applicable in the respective jurisdiction) under
the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its business
as now conducted, (c) is qualified to do business in every jurisdiction
where such qualification is required by the nature of its business, the
character and location of its property, business or customers, or the ownership
or leasing of its properties, except for such jurisdictions in which the
failure so to qualify, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, and (d) has the requisite power and
authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contemplated thereby to
which it is or will be a party and, in the case of each Borrower, to borrow
hereunder.


 


8.02.     Authorization; Absence of
Conflicts.  The
execution, delivery and performance by each of the Loan Parties of each of the
Loan Documents to which it is a party, the Borrowings hereunder, the use of the
proceeds of the Loans, the creation of the security interests contemplated by
the Security Documents and the other transactions contemplated by the Loan
Documents (collectively, the “Transactions”) (a) have been duly
authorized by all requisite corporate or other organizational and, if required,
stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, other than any law,
statute, rule or regulation the violation of which could not reasonably be
expected to result in a Material Adverse Effect, or of the certificate of
incorporation or other constitutive documents or by-laws (or equivalent
organizational documents) of any Loan Party or any of its Subsidiaries, (B) any
order of any 


 


133

















 


Governmental Authority or (C) any
provision of any indenture or other material agreement or other material
instrument to which any Loan Party or any of its Subsidiaries is a party or by
which any of them or any of their property is or may be bound, (ii) constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or give rise to any rights thereunder
to require any payment, repurchase or redemption to be made by any Loan Party,
or give rise to a right of, or result in, any termination, cancellation,
acceleration or right of renegotiation of any obligation thereunder, or (iii) result
in the creation or imposition of any Lien (other than any Lien created
hereunder or under the Security Documents) upon or with respect to any property
or assets now owned or hereafter acquired by any Loan Party or any of its
Subsidiaries.


 


8.03.     Enforceability.  This Agreement has been duly executed and
delivered by SSCC, SSCE and each other Borrower and constitutes, and each other
Loan Document when executed and delivered by each Loan Party that is party
thereto will constitute, a legal, valid and binding obligation of SSCC, SSCE,
each other Borrower and the other Loan Parties, as applicable, enforceable
against each of them in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and
subject to general principles of equity (whether enforcement is sought by
proceeding in equity or at law)).


 


8.04.     Governmental Approvals.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with (i) the Transactions or (ii) the
execution, delivery and performance of any Loan Document, except for (a) the
filing of UCC and PPSA financing statements and similar security or collateral
filings and registrations under applicable laws in other jurisdictions, (b) recordation
of the Mortgages, (c) filings with the United States Patent and Trademark
Office and the United States Copyright Office, (d) the entry by the
Bankruptcy Court of the Confirmation Order referred to in Section 6.02
and (e) such actions, consents, approvals, registrations and filings as
have been made or obtained and are in full force and effect.


 


8.05.     Financial Statements.  (a)  Each of SSCC and SSCE has delivered
to the Lenders its audited financial statements for the fiscal year ended December 31,
2009, together with its annual report on Form 10-K, if any, filed with the
Securities and Exchange Commission with respect to such fiscal year.  All financial statements set forth or
referred to in the materials specified in the preceding sentence were prepared
in conformity with GAAP, except, in the case of unaudited financial statements,
for the absence of footnote disclosure and for year-end audit adjustments.  All such financial statements fairly present
in all material respects the consolidated financial position of such Persons
and their respective subsidiaries as at the date thereof and the consolidated
results of operations and cash flows of such Persons and their respective
subsidiaries for each of the periods covered thereby.  Except as disclosed in such financial
statements, neither SSCC nor any of its Subsidiaries had at the date of such
financial statements any material contingent obligation, material contingent
liability or material liability for taxes, long-term lease or unusual forward
or long-term commitment or obligations to retired employees for medical or
other employee benefits that is not reflected in the foregoing financial
statements or the notes thereto.


 


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(b)           As of the Closing Date, the
Projections delivered to the Administrative Agent and the Lenders prior to the
Closing Date have been prepared in good faith and are based on reasonable
assumptions.


 


8.06.     No Material Adverse Effect.  Since December 31, 2009, other than the
commencement of the Bankruptcy Proceedings and those events and conditions in
connection with such Bankruptcy Proceedings which customarily occur as a result
of events following the commencement of a proceeding under Chapter 11 of the
Bankruptcy Code and the CCAA, there has been no event or condition that has
had, or could reasonably be expected to have, a Material Adverse Effect.


 


8.07.     Title to Properties;
Possession Under Leases.  (a) 
Except as set forth on Schedule 8.07, each of Holdings and its
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its material properties and assets, except for minor defects in title that
do not interfere in any material respect with its ability to conduct its
business as currently conducted.  All
such title to, or leasehold interest in, material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 10.02
and Liens with respect to which the Administrative Agent will receive on or
prior to the Funding Date duly executed releases and termination statements in
connection therewith.


 


(b)           Each of Holdings and the
Subsidiaries has complied with all obligations under all leases to which it is
a party and enjoys peaceful and undisturbed possession under all such leases,
except where the failure thereof could not reasonably be expected to have a
Material Adverse Effect.


 


8.08.     Subsidiaries.  Schedule 8.08 sets forth as of
the Closing Date a list of all the Subsidiaries of SSCC, their jurisdiction of
organization and the percentage ownership interest in each Subsidiary held by
SSCC or any other Subsidiary of SSCC and also identifies which Subsidiaries (i) will
be U.S. Borrowers or Canadian Borrowers on the Funding Date or (ii) are
Material Subsidiaries of Holdings as of the Closing Date.


 


8.09.     Litigation; Compliance with
Laws.  (a)  Except as set forth
in Schedule 8.09, there are no actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of SSCC or any Borrower, threatened against or affecting SSCC, any
Borrower or any of their respective Subsidiaries or any business or property of
any such Person that (i) purports to affect the legality, validity or
enforceability of any Loan Document or the Transactions or (ii) could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.


 


(b)           None of SSCC, any Borrower
and any of their respective Subsidiaries nor any of their respective properties
or assets is (i) in violation of, nor will the continued operation of
their properties and assets as currently conducted violate, any law, rule,
regulation, statute (including any zoning, building, Environmental Laws,
ordinance, code or approval or any building permits) in respect of the conduct
of its business, the relationship with its employees and the ownership of its
property or any restrictions of record or agreements affecting the Mortgaged
Properties, where such violations could reasonably be expected to have a
Material Adverse Effect or (ii) in default with respect to any judgment,
writ, injunction, decree or order 


 


135

















 


of, any Governmental
Authority, where such defaults, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.


 


8.10.     Federal Reserve Regulations.  (a)  None of SSCC, any Borrower and
their respective Subsidiaries is engaged or will engage, principally, or as one
of its important activities, in the business of purchasing or carrying Margin
Stock or extending credit for the purpose of purchasing or carrying Margin
Stock.


 


(b)           No part of the proceeds of
any Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or carrying Margin Stock
or to refund indebtedness originally incurred for such purpose or (ii) for
any purpose that entails a violation of, or is inconsistent with, the
provisions of the Regulations of the Board, including Regulation T, U or X.


 


(c)           All proceeds of the Loans
will be used by the Borrowers for working capital, capital expenditures,
Permitted Acquisitions and general corporate purposes of Holdings and its
Subsidiaries.  All Letters of Credit will
be used for the purposes described in Section 3.01(a).


 


8.11.     Investment Company Act.  None of SSCC, any Borrower or their
respective Subsidiaries is an “investment company” as defined in, or is subject
to regulation under, the Investment Company Act of 1940.


 


8.12.     Tax Returns.  Each of SSCC, any Borrower and their
respective Subsidiaries has filed or caused to be filed all Federal, foreign,
state, provincial, regional and local income and other material tax returns
(the “Returns”) required to have been filed by it or with respect to it and has
paid or caused to be paid all taxes shown to be due and payable on such returns
or on any assessments received by it or with respect to it, except taxes that
are being contested in good faith by appropriate proceedings and for which it
has set aside on its books adequate reserves in accordance with GAAP or
Canadian GAAP, as applicable.  The
Returns accurately reflect in all respects all liability for taxes of Holdings
and its Subsidiaries, as applicable, for the periods covered thereby, except
where the failure to reflect could not reasonably be expected to have a
Material Adverse Effect.


 


8.13.     No Material Misstatements.  The information provided by or on behalf of
SSCC, SSCE and each other Borrower and contained in the Confidential
Information Memorandum (including all attachments and exhibits thereto), as
supplemented, and other information furnished in writing by or on behalf of
SSCC or any Borrower to any Lead Arranger, any Agent or any Lender in
connection with the transactions contemplated herein, this Agreement and the
other Loan Documents, when taken as a whole, as of the date such information
was so furnished, does not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, when taken as a whole,
not materially misleading, provided that to the extent any such information
therein was based upon or constitutes a forecast or projection or pro forma
financial information, each of SSCC and each Borrower represents only that it
acted in good faith and utilized reasonable assumptions, due and careful
consideration and the 


 


136

















 


information actually known
to Responsible Officers of such Person at the time in the preparation of such
information.


 


8.14.     Employee Benefit Plans.  (a)  Each Plan is in compliance in all
material respects in form and operation with its terms and with the applicable
provisions of ERISA and the Code and all other applicable laws and regulations.
 No ERISA Event has occurred or could
reasonably be expected to occur that, when taken together with all the other
ERISA Events that have occurred or could reasonably be expected to occur, could
reasonably be expected to have a Material Adverse Effect.  For purposes of determining whether an ERISA
Event, by itself or together with other ERISA Events, could reasonably be
expected to have a Material Adverse Effect, the amounts to be considered
relating to a Plan’s or Multiemployer Plan’s funded status or with respect to
withdrawal liability are changes in or resulting from the following:


 


(i)            a Plan’s or Multiemployer
Plan’s funded status since the most recent valuation or other statement of
financial condition prior to the Closing Date; or


 


(ii)           withdrawal liability with
respect to a Multiemployer Plan that exceeds the most recent estimate of
withdrawal liability for such Multiemployer Plan received before the Closing
Date; provided, however, that Holdings and the Loan Parties will, and will
cause each of their respective ERISA Affiliates to, make a request from the
administrator or sponsor of such Multiemployer Plan for the notices described
in Section 101(l)(1) of ERISA at least annually not later than the
anniversary date of the date hereon.


 


(b)           The Canadian Pension Plans
are duly registered under the ITA and any other applicable laws which require
registration, have been administered in all material respects in accordance
with the ITA and such other applicable laws, and no event has occurred which
could reasonably be expected to cause the loss of such registered status.  Except as set forth on Schedule 8.14(b),
all material obligations of SSC Canada and the other Canadian Subsidiaries of
Holdings required to be performed by SSC Canada or the other Canadian Subsidiaries
of Holdings in connection with the Canadian Pension Plans and the funding
agreements therefor have been performed on a timely basis.  As of the Closing Date, there are no
outstanding disputes concerning the assets of the Canadian Pension Plans or the
Canadian Benefit Plans.  Except as set
forth on Schedule 8.14(b), no promises of benefit improvements under the
Canadian Pension Plans or the Canadian Benefit Plans have been made, except as
provided for in a collective bargaining agreement or where such improvement
could not reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 8.14(b),
all contributions or premiums required to be made or paid by SSC Canada and
each Canadian Subsidiary of Holdings to the Canadian Pension Plans or the
Canadian Benefit Plans have been made on a timely basis in accordance with the
terms of such plans and all applicable laws. 
There have been no improper withdrawals or applications of the assets of
the Canadian Pension Plans or the Canadian Benefit Plans.  Except as set forth on Schedule 8.14(b),
as of the date of the most recent actuarial valuations with Governmental
Authorities, none of the Canadian Pension Plans or the Canadian Benefit Plans
has any unfunded actuarial liabilities or solvency deficiencies (within the
meaning of the Quebec Supplemental Pension Plans Act and other applicable
laws) in an aggregate amount that could reasonably be expected to result
in a Material Adverse Effect.


 


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8.15.    Environmental and Safety
Matters.


 


(a)           Except as set forth on Schedule 8.15:


 


(i)            Each of SSCC, any Borrower
and their respective Subsidiaries has obtained all permits, licenses and other
authorizations that are required and material with respect to the operation of
the business of SSCC and the Subsidiaries, taken as a whole, under any
Environmental Law, and each such permit, license and authorization is in full
force and effect, except where the failure thereof could not reasonably be expected
to have a Material Adverse Effect.


 


(ii)           Each of SSCC, any Borrower
and their respective Subsidiaries is in compliance with all material terms and
conditions of the permits, licenses and authorizations specified in paragraph (i) above,
and also is in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in or pursuant to any Environmental Law applicable to it and its
business, assets, operations and properties, except for any noncompliance that
could not reasonably be expected to have a Material Adverse Effect.


 


(iii)          There is no civil, criminal
or administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the knowledge of SSCC or any Borrower, after inquiry, threatened
against SSCC, any Borrower or any of their respective Subsidiaries under any
Environmental Law that could reasonably be expected to result have a Material
Adverse Effect.


 


(iv)          None of SSCC, any Borrower
and their respective Subsidiaries has received notice (A) that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”)
or any comparable state law or Canadian federal or provincial law that any
hazardous substances or any pollutant or contaminant, as defined in CERCLA and
its implementing regulations, or any toxic substance, hazardous waste,
hazardous constituents, hazardous materials, asbestos or asbestos containing
material, polychlorinated biphenyls, petroleum, including crude oil and any
fractions thereof, or other wastes, chemicals, substances or materials
regulated by any Environmental Laws (collectively, “Hazardous Materials”) that
it or any of their respective predecessors in interest has used, generated,
stored, tested, handled, transported or disposed of, has been found at any site
at which any Governmental Authority or private party is conducting a remedial
investigation or other action pursuant to any Environmental Law or (B) otherwise
alleging that it has any liability, obligation or cost pursuant to any
Environmental Law, except in the cases of (A) and (B) for any such
notices that could not reasonably be expected to have a Material Adverse
Effect.


 


(v)           There have been no Releases
of Hazardous Materials at, in, on, under or from any location, and neither
SSCC, any Borrower nor any of their respective Subsidiaries has otherwise
become subject to any liability or obligation, whether contingent or otherwise,
relating to any Environmental Law, that could reasonably be expected to have a
Material Adverse Effect.


 


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(vi)          To the best knowledge of
SSCC and any Borrower, there is no asbestos in, on, or at any Real Properties
or any facility or equipment of SSCC, any Borrower or any of their respective
Subsidiaries, except to the extent that the presence of, or exposure to, such material
could not reasonably be expected to have a Material Adverse Effect.


 


(vii)         As of the Closing Date, to
the knowledge of SSCC and any Borrower, none of the Real Properties are (i) listed
or proposed for listing on the National Priorities List under CERCLA or (ii) listed
in the Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA.


 


(viii)        To the knowledge of SSCC and
any Borrower, there are no events, conditions, circumstances, activities, practices,
incidents, actions or plans that could reasonably be anticipated to interfere
with or prevent compliance with any Environmental Law, or which may give rise
to liability under any Environmental Law, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing or notice of violation, study
or investigation, based on or related to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport,
shipping or handling, the emission, discharge, release or threatened release
into the environment of, or exposure to, any Hazardous Material that could
reasonably be expected to have a Material Adverse Effect.


 


(b)           Since the date of this
Agreement, there has been no change in the status of the matters disclosed on Schedule
8.15 that, individually or in the aggregate, could reasonably be expected
to have, a Material Adverse Effect.


 


8.16.     Solvency.  Immediately after giving effect to the
Transactions to occur on the Funding Date, (a) the present fair saleable
value of the assets of Holdings and its Subsidiaries, on a consolidated basis,
will exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of
Holdings and its Subsidiaries, on a consolidated basis, as they become absolute
and mature, (b) Holdings and its Subsidiaries, on a consolidated basis,
will not have unreasonably small capital to carry out their businesses as
conducted or as proposed to be conducted, and (c) neither SSCC nor any
Borrower intends to, nor does it intend to permit any of its Subsidiaries to,
and does not believe that it or any such Subsidiary will, incur debts beyond
its ability to pay such debts as they become absolute and mature (taking into
account the timing and amounts of cash to be received by each of them or any
such subsidiary and the amounts to be payable on or in respect of its
obligations).


 


8.17.     Security Documents.  (a)  The Guarantee and Collateral
Agreement, upon execution and delivery thereof by the parties thereto, will
create in favor of the Security Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined therein) (other than vessels) and proceeds thereof and (i) when
the Pledged Collateral (as defined therein) is delivered to the Security Agent
or the Prior Agent, together with instruments of transfer duly endorsed in
blank, the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the U.S. Loan Parties in such Pledged Collateral, in each case prior and
superior in right to any other Person, other than with respect to Permitted
Liens and other than as provided in the Intercreditor


 


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Agreement with respect to Term Priority
Collateral, and (ii) when financing statements in appropriate form have
been duly filed in the offices specified on Schedule 8.17(a), the Lien
created under the Guarantee and Collateral Agreement (other than with respect
to the aforesaid Pledged Collateral) will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the U.S. Loan
Parties in such Collateral, and the proceeds thereof, to the extent perfection
can be obtained by filing UCC financing statements, in each case prior and
superior in right to any other Person, other than with respect to Permitted
Liens and other than as provided in the Intercreditor Agreement with respect to
the Term Priority Collateral.


 


(b)           When the IP Security Agreements are
duly filed with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and when financing statements in
appropriate form have been duly filed in the offices specified on Schedule 8.17(a),
the security interest created thereunder shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the U.S.
Loan Parties in the registered intellectual property described therein and
owned by the applicable U.S. Loan Parties and in which a security interest may
be perfected by filing a security agreement in the United States, in each case
prior and superior in right to any other Person, other than with respect to
Permitted Liens and other than as provided in the Intercreditor Agreement (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary to
perfect a Lien on registered trademarks, trademark applications, designs,
patents, patent applications and copyrights acquired by a Loan Party after the
Funding Date).


 


(c)           When executed and delivered, each
Canadian Security Document will be effective to create in favor of the Security
Agent for the ratable benefit of the Secured Parties a legal, valid and
enforceable security interest (or, in the case of Quebec, hypothec) in all
right, title and interest of the Canadian Loan Parties in the Collateral
described in each such Canadian Security Document and (i) when the Pledged
Collateral (as defined therein) is delivered to the Security Agent, together
with instruments of transfer duly endorsed in blank, the Canadian Guarantee and
Collateral Agreement shall constitute a fully perfected first priority Lien on,
and security interest in, all right, title and interest of the Canadian Loan
Parties in such Pledged Collateral, in each case prior and superior in right to
any other Person (other than Canadian Priority Payables), and (ii) and
when financing statements (or, in the case of Quebec, registration statements)
in appropriate form are filed in the offices specified in Schedule 8.17(a),
each such Canadian Security Document will constitute a fully perfected (or, in
the case of Quebec, opposable) security interest (or, in the case of Quebec,
hypothec) in all right, title and interest in all of the Collateral described
in such Security Document (other than, with respect to the Canadian Guarantee
and Collateral Agreement, the Pledged Collateral (as defined therein)) to the
extent perfection (or, in the case of Quebec, opposability) can be obtained by
filing PPSA financing statements (or, in the case of Quebec, registration
statements), prior and superior to the rights of any other Person, except for
rights and obligations secured by Permitted Liens (it being understood that no
representation is made under this clause (c) as to (A) any such
Collateral that is subject to a Canadian Security Document governed by the laws
of a jurisdiction other than Canada or (B) the creation, validity, perfection
(or opposability) or priority (or ranking) of any Lien to the extent that such
matters are determined under the law of a jurisdiction outside Canada).


 


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(d)           The Mortgages, upon execution and delivery thereof by the
parties thereto, will create in favor of the Administrative Agent, for the
ratable benefit of the beneficiaries named therein, a legal, valid and
enforceable Lien on all of the U.S. Loan Parties’ right, title and interest in
and to the Mortgaged Properties thereunder and the proceeds thereof, and when
the Mortgages are duly filed or registered in the appropriate recording offices
where such Mortgaged Properties are located or as otherwise reasonably
requested by the Administrative Agent, the Mortgages will constitute a fully
perfected or published Lien on, and security interest or hypothec in, all
right, title and interest of the U.S. Loan Parties in such Mortgaged Properties
and the proceeds thereof, in each case prior and superior in right to any other
Person, other than with respect to Permitted Liens or other encumbrances
permitted by the relevant Mortgage.


 


(e)           Each Security Document, other than
any Security Document referred to in the preceding paragraphs of this Section,
upon execution and delivery thereof by the parties thereto and the making of
the filings and taking of the other actions provided for therein, will be
effective under applicable law to create in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, a valid and enforceable
security interest in all rights, title and interest of the Loan Parties in the
Collateral subject thereto, prior and superior in right to any other Person,
other than with respect to Permitted Liens and other than as provided in the
Intercreditor Agreement with respect to the Term Priority Collateral.


 


8.18.     Labor Matters.  As of the Closing Date, there are no strikes
or other labor disputes against SSCC, any Borrower or any of their respective
Subsidiaries pending or, to the knowledge of SSCC or any Borrower, threatened,
except as set forth on Schedule 8.18.  The hours worked by and payment made to
employees of any Loan Party have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, where such violations could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.  The consummation of the Transactions will not
give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which SSCC, any Borrower
or any of their respective Subsidiaries is a party or by which SSCC, any
Borrower or any of their respective Subsidiaries is bound on the Closing Date.


 


8.19.     Location of Real Property.  Schedule 8.19 sets forth as of
the Closing Date all material real property owned by SSCC, any Borrower or any
of their respective Subsidiaries in the United States.  All the real property set forth on Schedule 8.19
is, as of the Closing Date, owned in fee by SSCC, any Borrower or their
respective Subsidiaries.


 


8.20.     Patents, Trademarks, etc.  Each of SSCC, any Borrower or their
respective Subsidiaries owns, or is licensed or otherwise authorized to use, all
patents, designs, trademarks, trade names, copyrights, technology, know-how and
processes, service marks and rights with respect to the foregoing that are used
in or necessary for the conduct of its business as currently conducted, except
where the lack thereof could not reasonably be expected to have a Material
Adverse Effect.  The use of such patents,
designs, trademarks, trade names, copyrights, technology, know-how, processes
and rights with respect to the foregoing by SSCC, any Borrower or their respective
Subsidiaries does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any
liability on the part of 


 


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SSCC, any Borrower or their
respective Subsidiaries that is material to SSCC, any Borrower or their
respective Subsidiaries, taken as a whole.


 


8.21.     Borrowing Base Calculation.  The calculation of the Total Borrowing Base
and each Borrowing Base (in each case, including the valuations thereunder)
pursuant to the most recent Borrowing Base Certificate delivered pursuant to Sections
6.01(j) or 9.04(i) is complete and accurate (excluding any
errors that are immaterial in nature).


 


8.22.     Accounts.  The Administrative Agent may rely, in
determining which Accounts are Eligible Accounts, on all statements and
representations made by the Loan Parties with respect thereto.  Holdings and each other Borrower hereby
warrant, on their own behalf and on behalf of the other Loan Parties, with respect
to each Account at the time it is shown as an Eligible Account in a Borrowing
Base Certificate, that such Account is an Eligible Account.


 


8.23.     Inventory.  The Administrative Agent may rely, in
determining which Inventory is Eligible Inventory, on all statements and
representations made by the Loan Parties with respect thereto.  Holdings and each other Borrower hereby
warrant, on their own behalf and on behalf of the other Loan Parties, with
respect to any Inventory at the time it is shown as being Eligible Inventory in
a Borrowing Base Certificate, that such Inventory is Eligible Inventory.


 


8.24.     Anti-Terrorism Law.  (a)  Neither Holdings nor any of its
Subsidiaries is in violation (other than immaterial, unknowing or unintentional
violations) of any legal requirement relating to any laws with respect to
terrorism or money laundering (“Anti-Terrorism Laws”), including
Executive Order No. 13224 on Terrorist Financing effective September 24,
2001 (the “Executive Order”), the Patriot Act and the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada).  Neither Holdings nor any of its Subsidiaries
and, to the knowledge of Holdings and each Borrower, no agent of Holdings or
any of its Subsidiaries acting on behalf of Holdings or any of its
Subsidiaries, as the case may be, is any of the following:


 


(i)            a Person that is listed in the annex to, or it otherwise
subject to the provisions of, the Executive Order;


 


(ii)           a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;


 


(iii)          a Person with which any Lender is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law;


 


(iv)          a Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or


 


(v)           a Person that is named as a “specially designated national
and blocked person” on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website or any
replacement website or other replacement official publication of such list.


 


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(b)           Neither Holdings nor any of its
Subsidiaries and, to the knowledge of Holdings and each Borrower, no agent of
Holdings or any of its Subsidiaries acting on behalf of Holdings or any of its
Subsidiaries, as the case may be, (i) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of a Person described in Section 8.24(a), (ii) deals
in, or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.


 


8.25.     Own Enquiries.  The Loan Parties have relied on their own
investigations and enquiries regarding the transactions contemplated by the
Loan Documents and have not relied on any information, advice or opinion
(including information, advice or opinions regarding interest rates, hedging
arrangements or exchange rates) given or offered by or on behalf of the
Administrative Agent, any other Agent or any Lender even if in answer to any
enquiry by or for it.


 


SECTION 9.  Affirmative Covenants.  Each of SSCC and each Borrower covenants and agrees
with the Administrative Agent, each other Agent and each Lender that, from and
after the Funding Date (subject to the condition precedent to the Funding Date
set forth in Section 6.02), or in the case of Section 9.04(i) only,
from and after the Closing Date, and for so long as this Agreement shall remain
in effect, or the Total Commitments or Letters of Credit remain outstanding or
the principal of or interest on any Loan, Fees or any other expenses or amounts
payable under any Loan Document shall remain unpaid, unless the Required
Lenders shall otherwise consent in writing, it will, and will cause each of
their respective Subsidiaries to:


 


9.01.     Existence; Businesses and Properties.  (a) Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal existence,
except as otherwise permitted under Section 10.05.


 


(b)           Except where the failure to do so
could not be reasonably expected to have a Material Adverse Effect, (i) do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect the rights, licenses, permits, trademarks, trade names,
privileges and franchises necessary or desirable in the normal conduct of its
business, and (ii) at all times keep and maintain all property useful and
necessary in its business in good working order and condition.


 


9.02.     Insurance.  Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is usually maintained in
the same general area by companies engaged in the same or similar businesses,
including public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the
use of any properties owned, occupied or controlled by it or the use of any
products sold by it; and maintain such other insurance as may be required by
law.  Each such policy of liability or
casualty insurance maintained by or on behalf of Loan Parties shall (i) in
the case of each liability insurance policy, name the Security Agent, on behalf
of the Secured Parties, as an additional insured thereunder, (ii) in the
case of each casualty insurance policy relating to Collateral, contain a loss
payable 


 


143

















 


clause
or endorsement that names the Security Agent, on behalf of the Secured Parties,
as the loss payee thereunder and (iii) provide for at least 30 days’
prior written notice to the Security Agent of any cancellation of such
policy.  With respect to each Mortgaged
Property that is located in an area determined by the Federal Emergency
Management Agency to have special flood hazards, the applicable Loan Party has
obtained, and will maintain, with financially sound and reputable insurance
companies, such flood insurance as is required under applicable law, including
Regulation H.


 


9.03.     Payment of Taxes.  Pay and discharge promptly prior to becoming
delinquent all material taxes, assessments and governmental charges or levies
imposed upon it or upon or in respect of its property or assets; provided,
however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge or levy so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
it shall have set aside on its books, in accordance with GAAP, adequate
reserves with respect thereto and such contest operates to suspend enforcement
of a Lien and, in the case of a Mortgaged Property or other material property
or asset, there is no material risk of forfeiture of such property.


 


9.04.     Financial Statements, Reports, etc.  Furnish to the Administrative Agent and each
Lender:


 


(a)           within 90 days after the end of
each fiscal year, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows, showing the financial
condition of Holdings and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of such
Subsidiaries during such fiscal year, all audited by Ernst & Young LLP
or other independent auditors of recognized national standing and accompanied
by an opinion of such accountants (which shall not contain any material
qualification or exception (other than “going concern” qualifications or
exceptions relating to the Bankruptcy Proceedings in such opinion with respect
to the fiscal year ended December 31, 2009) to the effect that such
consolidated financial statements fairly present in all material respects the
financial condition and results of operations of Holdings and its Subsidiaries
on a consolidated basis in accordance with GAAP;


 


(b)           within 45 days after the end of
each of the first three fiscal quarters of each fiscal year, its unaudited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows, showing the financial condition of Holdings and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries during such
fiscal quarter and the then-elapsed portion of the fiscal year (it being
understood that such information shall be in reasonable detail and certified by
a Financial Officer of Holdings as fairly presenting in all material respects
the financial condition and results of operations of Holdings and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of notes);


 


(c)           within 30 days after the commencement
of, and within 30 days after the end of each calendar month ending during, a
Compliance Period, the monthly unaudited consolidated balance sheet and related
consolidated statement of income of Holdings and its 


 


144

















 


Subsidiaries on a
consolidated basis in accordance with GAAP for such period, subject to normal
year-end audit adjustments and the absence of notes, together with a summary
list of Capital Expenditures and a calculation of Consolidated EBITDA for such
calendar month, in each case, certified by a Financial Officer of Holdings as
being prepared on a consistent basis with its accounting and bookkeeping
practices;


 


(d)           (i) concurrently with any
delivery of financial statements under paragraph (a) or (b) above,
a compliance certificate in the form of Exhibit G signed by a
Financial Officer of Holdings and on behalf of Holdings (A) certifying
that, after reasonable inquiry, to the knowledge of such Financial Officer no
Default or Event of Default has occurred or, if a Default or an Event of
Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, (B) demonstrating
compliance with the covenants contained in Sections 10.01, 10.02,
10.03, 10.04, 10.06, 10.09 and 10.16
(setting forth, for the purposes of such certificate, calculations of the
Consolidated Fixed Charge Coverage Ratio for such period irrespective of
whether a Compliance Period exists at such time) and (C)  certifying that no Material Subsidiary exists (other
than the Loan Parties) or if a Material Subsidiary (other than a Loan Party)
does exist, a description of such Material Subsidiary, in each case
at the end of such fiscal quarter or year, as the case may be;


 


(ii)           concurrently with any delivery of financial statements
under paragraph (c) above, a compliance certificate signed by a
Financial Officer of Holdings in the form of Exhibit G certifying on
behalf of Holdings in reasonable detail the calculations required to establish
whether Holdings and its Subsidiaries were in compliance with the provisions of
Section 10.16 (setting forth, for the purposes of such certificate,
calculations of the Consolidated Fixed Charge Coverage Ratio for such period),
at the end of such fiscal month;


 


(e)           concurrently with any delivery of
financial statements under paragraph (a) above, a certificate
of the accounting firm opining on such statements (which certificate may be
limited to accounting matters and disclaim responsibility for legal
interpretations) stating that during the course of their examination of such
financial statements, they obtained no knowledge of any Default or Event of
Default, except as specified in such certificate;


 


(f)            promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials (other than (i) the exhibits to registration
statements and (ii) any registration statements on Form S-8 or its
equivalent) filed by Holdings or any of its Subsidiaries with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any of or
all the functions of such Commission, or with any national securities exchange,
or distributed to any such Person’s shareholders (other than to Holdings or any
of its Subsidiaries), as the case may be;


 


(g)           in the case of Holdings, as soon as
available, and in any event no later than 60 days after the end of each
fiscal year, a consolidated annual plan, prepared in accordance with Holdings’
normal accounting procedures applied on a consistent basis, for the next fiscal
year of Holdings containing quarterly detail, including projected quarterly
borrowing base levels for such fiscal year;


 


145

















 


(h)           promptly after Holdings’ or any of
its Subsidiaries’ receipt thereof, a copy of any “management letter” received
from its certified public accountants and management’s response thereto;


 


(i)            (i) not later than 5:00 P.M.
(New York time) on or before the 20th day of each month from and after the
Closing Date (or, from and after the Funding Date, no later than the last
Business Day of each week during any period in which a Weekly Borrowing Base
Period is in effect) and (ii) within 5 Business Days following the
consummation of a Significant Asset Sale or the occurrence of a material
casualty event with respect to ABL Priority Collateral, a Borrowing Base
Certificate setting forth each Borrowing Base (in each case with supporting
calculations in reasonable detail), which shall be prepared (A) as of the
last Business Day of February, 2010 in the case of the initial Borrowing Base
Certificate on the Closing Date and (B) as of the last Business Day of the
preceding month in the case of each subsequent Borrowing Base Certificate (or,
if any such Borrowing Base Certificate is delivered weekly, as of the last
Business Day of the week preceding such delivery, in which case the calculation
thereunder with respect to Inventory shall be based upon good faith estimates
by the  Loan Parties) and, in the case of
sub-clause (ii) above, after giving effect to such event.  Each such Borrowing Base Certificate shall
include such supporting information as may be reasonably requested from time to
time by the Co-Collateral Agents;


 


(j)            at the time of delivery of any
Borrowing Base Certificate, (w) a summary aged trial balance of Accounts
by customer, (x) upon the request of the Co-Collateral Agents, a summary
of accounts payable (including detail for the top 15 vendors) indicating which
accounts payable are more than thirty (30) days past due, (y) a summary
inventory listing by category (in form and scope consistent with the form
reviewed by the Collateral Agent prior to the Closing Date, or otherwise
satisfactory in form and scope to the Co-Collateral Agents), and (z) a
reconciliation of Accounts and inventory to the general ledger and to the
Borrowing Base Certificate delivered pursuant to clause (i) of this Section 9.04;
provided, however, when a Compliance Period is in effect (A) the
information required to be delivered pursuant to the preceding clauses (w) and
(x) (other than any such delivery in respect of the last week of any month
during a Weekly Borrowing Base Period) shall be based upon each such Loan
Party’s good faith estimate and (B) in lieu of the information required to
be delivered pursuant to preceding clause (x), Holdings shall provide any
alternative detail that the Co-Collateral Agents may reasonably request that
such Loan Parties can produce with commercially reasonable efforts; provided
further that with respect to the Borrowing Base Certificates to be
delivered to the Administrative Agent and the Co-Collateral Agents prior to the
Funding Date the foregoing information shall not be required;


 


(k)           promptly following the Administrative
Agent’s request therefor, all documentation and other information that the
Administrative Agent reasonably requests on its behalf or on behalf of any
Lender in order to comply with its on-going obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including
the Patriot Act;


 


(l)            promptly from time to time, such
other information regarding the operations, business affairs, collateral and
financial condition of Holdings and its Subsidiaries, or 


 


146

















 


compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may reasonably
request; and


 


(m)          information required to be delivered
pursuant to this Section shall be deemed to have been delivered if such
information, or one or more annual or quarterly reports containing such
information (including, in the case of certifications required pursuant to
clause (b) above, the certifications accompanying any such quarterly
report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002), shall
have been posted by the Administrative Agent on an IntraLinks or similar site
to which the Lenders have been granted access or shall be available on the
website of the Securities and Exchange Commission at http://www.sec.gov.  Information required to be delivered pursuant
to this Section may also be delivered by electronic communications
pursuant to procedures approved by the Administrative Agent.


 


9.05.     Litigation and Other Notices.  Furnish to the Administrative Agent, each
other Agent and each Lender written notice of the following promptly (and in
any event within five Business Days) upon a Responsible Officer of Holdings or
any of its Subsidiaries obtaining knowledge thereof:


 


(a)           any Event of Default or Default,
specifying the nature and extent thereof and the corrective action (if any)
taken or proposed to be taken with respect thereto;


 


(b)           the filing or commencement of, or any
notice to SSCC, any Borrower or any of their Subsidiaries of the intention of
any Person to file or commence, any action, suit or proceeding (whether at law
or in equity or by or before any Governmental Authority or any arbitrator)
against SSCC, any Borrower or any Affiliate thereof (i) that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect
or (ii) with respect to any Loan Document;


 


(c)           any development that has resulted in,
or could reasonably be anticipated to result in, a Material Adverse Effect;


 


(d)           the occurrence of any ERISA Event
that, alone or together with other ERISA Events, could reasonably be expected
to result in increased liability of Holdings, any Borrower, any Loan Party, any
of their respective Subsidiaries and ERISA Affiliates in an aggregate amount
more than $30,000,000 greater than the liability as of the Closing Date
estimated in good faith with reference to the following:


 


(i)            the Plans’ and Multiemployer Plans’ funded status as of
the most recent valuation or other statement of financial condition prior to
the Closing Date; or


 


(ii)           withdrawal liability with respect to a Multiemployer Plan
as of the most recent estimate of withdrawal liability for such Multiemployer
Plan received before the Closing Date;


 


(e)           any material casualty or other
insured damage to any material portion of any Collateral (including Mortgaged
Property) or the commencement of any action or proceeding for the taking or
expropriation of any Collateral (including Mortgaged Property) or 


 


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any material part thereof or
material interest therein under power of eminent domain or by condemnation or
similar proceeding; and


 


(f)            the commencement of a Dominion
Period, a Compliance Period or a Weekly Borrowing Base Period.


 


9.06.     Maintaining Records; Access to
Properties and Inspections.  (a) Maintain
all financial records in accordance with GAAP and applicable law and permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the properties and financial records of SSCC, any Borrower and any
of their respective Subsidiaries during normal business hours and upon
reasonable notice and to make extracts from and copies of such financial
records (provided that, unless an Event of Default shall have occurred
and is continuing, no more than two such visits and inspections may be made in
any one year and provided  further that, to the extent
practicable, the Administrative Agent will coordinate any such visits and inspections
with visits and inspections arranged by the Term Loan Agent for the Term Loan
Lenders), verify Eligible Accounts and/or Eligible Inventory and permit any
representatives designated by the Administrative Agent or any Lender to discuss
at such reasonable times and at such reasonable intervals as may be reasonably
requested the affairs, finances and condition of SSCC, any Borrower or any of
their respective Subsidiaries or any properties of SSCC, any Borrower and any
of their respective Subsidiaries with any officers thereof and (in the presence
of SSCC, any Borrower or a Subsidiary of Holdings, unless a Default or Event of
Default shall have occurred and be continuing) independent accountants
therefor; provided, however, that all such visits, inspections
and inquiries shall be coordinated through the Administrative Agent.


 


(b)           Holdings will, and will cause each of
its Subsidiaries to, permit a third-party appraiser and a third-party
consultant selected by the Co-Collateral Agents (and, to the extent such
third-party appraiser is not Great American Group and/or such third-party
consultant is not KPMG LLP, reasonably satisfactory to Holdings) to, upon the
request of the Co-Collateral Agents, conduct (at the reasonable cost of the
Borrowers), (x) an appraisal of the Inventory of the Loan Parties and (y) a
collateral examination of the Inventory and Accounts of the Loan Parties, in
each case, in scope reasonably satisfactory to the Co-Collateral Agents; provided,
however, so long as no Event of Default exists, the Co-Collateral Agents
may only make up to two requests in respect of each of clause (x) and (y) above
during each fiscal year (or, during any period (A) commencing on the date
on which the Excess Availability is less than the greater of (i) 20.0% of
the Total Commitment as then in effect and (ii) $110,000,000 for a period
of five consecutive Business Days and (B) ending on the first date
thereafter on which the Excess Availability has been equal to or greater than
the greater of (i) 20.0% of the Total Commitment as then in effect and (ii) $110,000,000
for 45 consecutive days, up to three requests in respect of each of clause (x) and
(y) above during each fiscal year), in each case at the reasonable cost of
the Borrowers.


 


9.07.     Use of Proceeds.  The Borrowers will use the proceeds of the
Loans and the issuances of Letters of Credit only as provided in Section 8.10.  No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.


 


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9.08.     Compliance with Law.  Comply with the requirements of all
applicable laws (including Environmental Laws), rules, regulations and decrees,
directives and orders of any Governmental Authority that are applicable to it
or to any of its properties, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.


 


9.09.     Further Assurances.  (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing UCC and other financing statements,
registrations, mortgages and deeds of trust), that may be required under
applicable law or which the Required Lenders or the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the
validity and priority or rank of the security interests created or intended to
be created by the Security Documents. 
Holdings will provide to the Administrative Agent, from time to time
upon its reasonable request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.


 


(b)           Cause (i) each Domestic
Subsidiary and Canadian Subsidiary of Holdings that is or becomes a Material
Subsidiary, (ii) each Domestic Subsidiary and Canadian Subsidiary of
Holdings that is or becomes a direct parent of any such Material Subsidiary and
(iii) each other Domestic Subsidiary of Holdings that guarantees the
obligations under the Term Loan Facility, to, as promptly as practicable, and
in any event within 30 days after the occurrence of such event or status,
notify the Administrative Agent thereof and cause the Collateral and Guarantee
Requirements to be satisfied with respect to such Domestic Subsidiary or
Canadian Subsidiary of Holdings, as the case may be, and direct parent thereof
as, subject to the proviso in this paragraph (b), a U.S. Subsidiary Guarantor
or Canadian Subsidiary Guarantor, as the case may be, and with respect to any
Equity Interests in or Indebtedness of such Domestic Subsidiary or Canadian
Subsidiary of Holdings, as the case may be, owned by any Loan Party; provided
that, to the extent requested by the Administrative Agent, such Domestic
Subsidiary or Canadian Subsidiary, as the case may be, (x) shall be
required to execute and deliver to the Administrative Agent a Joinder Agreement
pursuant to which such Domestic Subsidiary shall become a U.S. Borrower or such
Canadian Subsidiary shall become a Canadian Borrower, as the case may be, and (y) shall
take all action in connection therewith as would otherwise have been required
to cause the Collateral and Guarantee Requirements to be satisfied as if such
Domestic Subsidiary had been a U.S. Borrower or such Canadian Subsidiary had
been a Canadian Borrower, as the case may be, on the Funding Date.


 


(c)           Subject to the final paragraph set
forth in the definition of “Collateral and Guarantee Requirement”, from time to
time, each Borrower will, at its cost and expense, promptly secure the
applicable Secured Obligations by pledging or creating, or causing to be pledged
or created, perfected security interests with respect to such of the assets and
properties of the Loan Parties as either the Administrative Agent or the
Required Lenders shall reasonably request (it being understood that, subject to
the limitations set forth in this paragraph (c), it is the intent of the
parties that the applicable Secured Obligations shall be secured by
substantially all of the assets of the U.S. Loan Parties (including real and
personal properties acquired after the Funding Date), all of the ABL Priority
Collateral of the Canadian Loan Parties and all of the Equity Interests of
Canadian Loan Parties directly held by any Canadian Loan Party; provided,
however that notwithstanding anything to the contrary set forth in this
Agreement or any other


 


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Loan Document, (i) no
leasehold mortgages or deeds of trust or fixture filings shall be required with
respect to any leasehold interest of any Loan Party and (ii) no security
interests shall be required to be pledged or created with respect to (A) properties
set forth on Schedule 9.09(c), (B) any After-Acquired Mortgage
Property that is subject to an existing mortgage (or any extension or
refinancing thereof) or any After-Acquired Mortgage Property with a Fair Market
Value of less than $5,000,000, (C) subject to paragraph (e) below,
any Real Property located in the State of New York and (D) any assets
located outside of the United States and Canada.  Such security interests and Liens will be
created under the Security Documents and other security agreements, mortgages,
deeds of trust and other instruments and documents in form and substance
reasonably satisfactory to the Administrative Agent, and each Borrower shall
deliver or cause to be delivered to the Lenders all such instruments and
documents (including customary legal opinions, title insurance policies or
title opinions and lien searches) as the Administrative Agent shall reasonably
request to evidence compliance with this paragraph (c).


 


(d)           Notwithstanding anything to the
contrary in paragraph (c) above, no security interests shall be
required to be created pursuant to paragraph (c) above by any
U.S. Loan Party with respect to any After-Acquired Mortgage Property with a
fair market value (as determined by the applicable U.S. Loan Party in its
reasonable judgment, it being understood that the purchase price shall be
indicative thereof) (the “Fair Market Value”) equal to or greater than
$5,000,000, unless and until the aggregate Fair Market Value of all items of
After-Acquired Mortgage Property with a Fair Market Value equal to or greater
than $5,000,000 and excluded pursuant to this paragraph (d) (and
not granted as security for the U.S. Secured Obligations pursuant to the next
sentence) is at least $50,000,000 in the aggregate for all U.S. Loan Parties.  On each occasion that the Fair Market Value of
all items of After-Acquired Mortgage Property described in the immediately
preceding sentence shall be at least $50,000,000, Holdings and each other U.S.
Borrower shall create, or shall cause to be created, security interests on all
such property (and not merely the portion of the property in excess of
$50,000,000) to secure the U.S. Secured Obligations (and thereafter, such
property shall be disregarded for purposes of the calculation under the
immediately preceding sentence) other than such property located in the State
of New York.


 


(e)           Upon the written request of the
Administrative Agent, Holdings shall cause a Mortgage to be granted in favor of
the Security Agent for the benefit of the Secured Parties, by the holder of any
fee title in respect of any Real Property owned by a U.S. Loan Party which is
located in the State of New York and, to the extent a Prior Agent exists, is
subject to a Lien in favor of a Prior Agent, together with title insurance
policy and such other documents relating to such Mortgage as reasonably
requested by the Administrative Agent.


 


9.10.     Information Regarding Collateral;
Deposit Accounts.  (a) Furnish
to the Administrative Agent prompt written notice of any change in (i) the
legal name of any Loan Party, as set forth in its organizational documents, (ii) the
jurisdiction of organization or the form of organization of any Loan Party
(including as a result of any merger or consolidation), (iii) the location
of the chief executive office of any Loan Party and, in the case of Canadian
Loan Parties, the location of such Canadian Loan Party’s principal place of
business, registered office, any office in which it maintains books or records
relating to Collateral (other than de-minimis portions of Collateral) owned by
it or any office or facility at which Collateral (other than de-minimis
portions of Collateral) owned by it is located (including the establishment of
any such 


 


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new
office or facility) or (iv) the organizational identification number, if
any, or, with respect to any Loan Party organized under the laws of a
jurisdiction that requires such information to be set forth on the face of a
UCC financing statement, the Federal Taxpayer Identification Number of such
Loan Party.  Each Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the UCC, the PPSA or otherwise that are required
in order for the Security Agent to continue at all times following such change
to have a valid, legal and perfected security interest in all the Collateral
owned by such Loan Party.


 


(b)           Furnish to the Administrative Agent
prompt written notice of (i) the acquisition by any U.S. Loan Party of, or
any real property otherwise becoming, a property that is required to become a
Mortgaged Property after the Funding Date and (ii) the acquisition by any
Loan Party of any other material assets after the Funding Date, other than any
assets constituting Collateral under the Security Documents in which the
Security Agent shall have a valid, legal and perfected security interest (with
the priority contemplated by the applicable Security Document) upon the
acquisition thereof.


 


(c)           Each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to Section 9.04(a), Holdings shall deliver to the Administrative
Agent a certificate executed by a Responsible Officer of Holdings setting forth
the information required pursuant to the Perfection Certificate or confirming
that there has been no change in such information since the date of the
Perfection Certificate delivered on the Funding Date or the date of the most
recent certificate delivered pursuant to this paragraph (c).


 


(d)           Cause all cash owned by each Borrower
and the other Loan Parties at any time (other than Excluded Accounts) to be
held in deposit accounts, securities accounts or commodities accounts
maintained with a Domestic or Canadian office of any depositary institution,
securities intermediary or commodity intermediary, as the case may be, in the
name of one or more Loan Parties and will, in each case as promptly as
practicable, notify the Administrative Agent of the existence of any deposit
account, securities account or commodities account maintained by a Loan Party
in respect of which a Control Agreement is required to be in effect pursuant to
clause (h) of the definition of the term “Collateral and Guarantee
Requirement” but is not yet in effect.


 


9.11.     Material Contracts.  Maintain in full
force and effect (including exercising any available renewal option), and
without amendment or modification, each Material Contract, unless the failure
so to maintain any such Material Contract (or any amendment or modification
thereto) could not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.


 


9.12.     Environmental Matters.  (a) Promptly give notice to the
Administrative Agent upon becoming aware of (i) any violation of any
Environmental Law, (ii) any material claim, inquiry, proceeding,
investigation or other action, including a request for information or a notice
of potential liability under any Environmental Law, by or from any Governmental
Authority or any third party claimant or (iii) the discovery of the
Release of any Hazardous Material at, on, under or from any of the real
properties or any facility or equipment thereat in excess of reportable or
allowable standards or levels under any Environmental Law, or in a manner or
amount that could reasonably be expected to result in material liability under
any 


 


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Environmental
Law, in each case that could reasonably be expected to have a Material Adverse
Effect.


 


(b)           Upon discovery of the presence on any
of the real properties of any Hazardous Material that is in material violation
of, or that could reasonably be expected to result in material liability under,
any Environmental Law, in each case that could reasonably be expected to have a
Material Adverse Effect, take or cause to be taken all necessary steps to
initiate and expeditiously complete all remedial, corrective and other
responsive action to the extent required pursuant to Environmental Law, and keep
the Administrative Agent reasonably informed of such actions and the results
thereof.


 


9.13.     Certain Post-Funding Collateral
Obligations.  As promptly as
practicable after the Funding Date, and in any event within the applicable time
period set forth in the definition of “Collateral and Guarantee Requirement”,
deliver all Mortgages and Control Agreements that would have been required to
be delivered on the Funding Date.


 


SECTION 10.  Negative Covenants.  Each Borrower covenants and agrees with the
Administrative Agent, each other Agent and each Lender that, from and after the
Funding Date (subject to the conditions precedent to the Funding Date set forth
in Section 6.02) and for so long as this Agreement shall remain in
effect, or the Total Commitments or Letters of Credit remain outstanding or the
principal of or interest on any Loan, Fees or any other expenses or amounts
payable under any Loan Document shall remain unpaid, unless the Required
Lenders shall otherwise consent in writing, it will not, and will not cause or
permit any of their respective Subsidiaries to:


 


10.01.           Indebtedness.  Create, incur, assume or permit to exist any
Indebtedness or Attributable Indebtedness; provided that Holdings and its Subsidiaries may incur Indebtedness if,
after giving effect to the incurrence thereof and any substantially
simultaneous application of proceeds thereof, the pro forma Interest Coverage
Ratio would be greater than 2:00 to 1.00 (such test, the “Incurrence Test”).  Notwithstanding the foregoing, Holdings and
its Subsidiaries may, without duplication, create, incur, assume or permit to
exist:


 


(a)           the Indebtedness created hereunder
and under the other Loan Documents;


 


(b)           the Indebtedness (other than
Indebtedness under the Term Loan Facility) existing on the Funding Date after
giving effect to the consummation of the Plan of Reorganization and which is
contemplated by the Plan of Reorganization on such date and any Permitted
Refinancing Indebtedness in respect of thereof;


 


(c)           Indebtedness consisting of Permitted
Unsecured Notes issued on or prior to the Funding Date, provided that the
requirements of Section 2.09(c) and (d) of the
Term Loan Credit Agreement as in effect on the date hereof are satisfied in
connection therewith, and any Permitted Refinancing Indebtedness in respect of
thereof;


 


(d)           intercompany loans and advances
permitted by Section 10.04 and which, (i) if owed to a U.S.
Loan Party, are evidenced by a promissory note and pledged pursuant to the
Guarantee and Collateral Agreement and (ii) if owed by a Loan Party, are
subordinated to the Loan Document Obligations on terms reasonably satisfactory
to the Administrative Agent;


 


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(e)           Indebtedness of any Foreign
Subsidiary of Holdings and any Guarantees thereof, provided that such
Indebtedness shall not be Guaranteed by or otherwise be recourse to any Loan
Party, except as permitted by Section 10.04(c) or (k); provided
further that the aggregate principal amount of such Indebtedness at any
time outstanding shall not exceed $35,000,000;


 


(f)            Indebtedness under the Term Loan
Facility, together with any Permitted Refinancing Indebtedness with respect
thereto, including Guarantees thereof, in an aggregate principal amount not at
any time in excess of $1,600,000,000 (as reduced by the aggregate principal
amount (in each case, at the time of issuance thereof) of (i) Permitted
Unsecured Notes permitted by paragraph (c) above and (ii) Permitted
Notes permitted by paragraph (m) below), provided that any incremental
financings in excess of $1,200,000,000 (including any incremental financings in
excess of $1,200,000,000 incurred through Permitted Refinancing Indebtedness)
under the Term Loan Facility shall be on substantially the same terms (other
than fees and other pricing terms (other than interest rates) and, subject to
pro forma compliance with the Incurrence Test, interest rates and, provided
that the incremental financing shall not have a Weighted Average Life to
Maturity shorter than the Weighted Average Life to Maturity of the Term Loans
in existence immediately prior to such incremental financing, maturity date),
as in effect for the Term Loan Facility immediately prior to the effectiveness
of such incremental facility or any Permitted Refinancing Indebtedness in
respect of the Term Loan Facility, as the case may be;


 


(g)           Indebtedness in respect of (i) performance,
surety, appeal or similar bonds, completion guarantees or similar instruments,
including letters of credit and bankers acceptances incurred for such purposes
(and not for the purpose of borrowing money), in each case provided in the
ordinary course of business, (ii) Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes and (iii) agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations pursuant to such agreement, incurred
in connection with the disposition of any business, assets or Subsidiary of
Holdings;


 


(h)           (i) Capital Lease Obligations
and Attributable Indebtedness, (ii) Indebtedness created, incurred or
assumed in respect of the purchase, improvement, repair or construction of
property, provided that such Indebtedness is created, incurred or
assumed within 180 days after the earlier of (x) the placement in
service of such property or (y) the final payment on such property, and (iii) Indebtedness
consisting of industrial revenue, environmental control and other similar bonds,
and Guarantees of and letters of credit supporting such Indebtedness, provided
that the aggregate amount of the Indebtedness and Attributable Indebtedness
created, incurred or assumed pursuant to this paragraph (h) at
any time outstanding shall not exceed $150,000,000;


 


(i)            Indebtedness incurred to pay annual
premiums for property and casualty insurance policies maintained by Holdings or
any of its Subsidiaries in the ordinary course of business not exceeding in an
aggregate amount at any time outstanding $75,000,000;


 


(j)            Indebtedness of any Person acquired
by Holdings or any of its Subsidiaries in a Permitted Acquisition (“Acquisition
Indebtedness”) and assumed by Holdings or such Subsidiary pursuant to such
acquisition (including any Permitted Refinancing 


 


153

















 


Indebtedness incurred in
respect thereof at the time of assumption thereof or from time to time
thereafter), provided that (i) such Indebtedness was not incurred
in contemplation of such acquisition, (ii) the aggregate principal amount
of such Indebtedness and Permitted Refinancing Indebtedness at any time
outstanding shall not exceed $50,000,000, (iii) such Indebtedness and any
Permitted Refinancing Indebtedness in respect thereof shall not be secured by
any assets other than the assets securing the acquired Indebtedness prior to
such acquisition and (iv) immediately after the incurrence thereof and
giving pro forma effect thereto, the Interest Coverage Ratio shall not be less
than the Interest Coverage Ratio immediately prior to such incurrence;


 


(k)           Guarantees with respect to bonds
issued to support workers’ compensation, or performance, surety, statutory or
appeal bonds and other similar obligations (other than Indebtedness) incurred
by Holdings or any of its Subsidiaries in the ordinary course of business;


 


(l)            Indebtedness in the form of any
earnout or other similar contingent payment obligation incurred in connection
with an acquisition permitted hereunder;


 


(m)          Indebtedness consisting of Permitted
Notes, provided that (i) the Net Cash Proceeds from the issuance and sale
thereof are applied to the mandatory prepayment of the Term Loans under the
Term Loan Facility, (ii) such Permitted Notes are exchanged for Term Loans
under the Term Loan Facility of one or more tranches pursuant to a Permitted
Debt Exchange or (iii) to the extent an amount of such Net Cash Proceeds
not in excess of the available Incremental Commitment Amount (as defined in the
Term Loan Credit Agreement as in effect on the date hereof) immediately prior
to the time of such issuance of sale are not so applied, the available
Incremental Commitment Amount (as defined in the Term Loan Credit Agreement as
in effect on the date hereof) is permanently reduced by an amount equal to the
amount of such Net Cash Proceeds not applied pursuant to sub-paragraph (i) or
(ii) above;


 


(n)           Permitted Timber Financings in an
aggregate principal amount at any time outstanding not in excess of
$10,000,000;


 


(o)           Indebtedness of Smurfit-Stone Puerto
Rico in an aggregate principal amount at any time outstanding not to exceed
$10,000,000 and the Guarantee thereof by Holdings on an unsecured basis; and


 


(p)           Other Indebtedness of Holdings or any
of its Subsidiaries in an aggregate principal amount at any time outstanding
not in excess of $75,000,000.


 


10.02.           Liens.  (a) Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities
of any Person) now owned or hereafter acquired by it or on any income or revenues
or rights in respect of any thereof, except:


 


(i)            Permitted Liens;


 


(ii)           Liens created under the Loan
Documents;


 


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(iii)          Liens created under or pursuant to the Term Loan Facility
Documents securing Indebtedness permitted under Section 10.01(f),
provided that any such Liens on the Collateral and rights and remedies with
respect thereto are at all times subject to the Intercreditor Agreement (or a
successor intercreditor agreement having the same terms as the Intercreditor
Agreement or such other terms reasonably acceptable to the Administrative
Agent);


 


(iv)          Liens existing as of the Closing Date that are not
discharged on the Funding Date and that are listed on Schedule 10.02(a)(iv),
provided that (A) such Liens shall apply only to the property or
assets to which they apply on the Closing Date and (B) such Liens shall
secure only (x) those obligations that they secured on the Closing Date
and (y) refinancings of such secured obligations permitted hereunder so
long as the principal amount of obligations secured under this clause (iv) does
not exceed the sum of the principal amount of such secured obligations being
refinanced plus the amount of any premium required to be paid thereon as
a result of, and any interest, fees and costs incurred in, such refinancing;


 


(v)           Liens securing Indebtedness permitted by Section 10.01(h),
provided that any such Lien shall apply only to the property that is the
subject of such Indebtedness and, if such Indebtedness was incurred to finance
the acquisition, improvement, repair or construction of such property, the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed 100% of the fair market value (as determined in good faith by Holdings
or a Subsidiary of Holdings, as applicable) of the such property at the time it
was so acquired, improved, repaired or constructed;


 


(vi)          Liens securing Indebtedness permitted by Section 10.01(i),
provided that such Liens attach only to insurance policies and proceeds
thereof;


 


(vii)         Liens securing Indebtedness constituting mortgage or
purchase money financings, Capital Lease Obligations, industrial revenue bonds
or similar financings assumed or incurred pursuant to Section 10.01(j) in
connection with any acquisition permitted hereunder, provided that (A) such
Liens attach only to property or assets acquired in connection with such
acquisition, (B) such Liens were not created in contemplation of such
acquisition and (C) such Liens shall secure only those obligations that
they secure at the time of such acquisition and Permitted Refinancing
Indebtedness in respect thereof;


 


(viii)        Liens on property or assets owned by
Foreign Subsidiaries of Holdings securing Indebtedness permitted under Section 10.01(e) and
Liens on property or assets owned by Smurfit-Stone Puerto Rico and securing
Indebtedness permitted under Section 10.01(o), provided that
no such Liens shall apply to any assets constituting ABL Priority Collateral or
any Equity Interests of a Canadian Loan Party directly held by a Canadian Loan
Party;


 


(ix)           Liens created under any agreement relating to the sale,
transfer or other disposition of assets permitted hereunder, provided
that such Liens relate solely to the assets to be sold, transferred or
otherwise disposed;


 


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(x)            any Lien consisting of a lease of personal property of
such Person to customers of such Person, if such lease constitutes an
Investment permitted under Section 10.04(h);


 


(xi)           Liens on assets of Holdings or any Subsidiary of Holdings
securing up to $30,000,000 of Indebtedness permitted by Section 10.01(p) or
the Incurrence Test, provided that no such Lien shall apply to any
assets constituting Collateral;


 


(xii)          Liens on timber properties securing Permitted Timber
Financings permitted under Section 10.01(n);


 


(xiii)         extensions, renewals or replacements of
any Lien referred to in clause (v), (vi) or (vii) above,
provided that such extension, renewal or replacement is limited to the
Indebtedness and property originally secured and encumbered thereby;


 


(xiv)        Liens securing Indebtedness under Permitted Second Lien Notes
permitted under Section 10.01(m) and Permitted Refinancing
Indebtedness in respect thereof, provided that any such Liens on the Collateral
and rights and remedies with respect thereto are at all times subject to the
Intercreditor Agreement (or a successor intercreditor agreement having the same
terms as the Intercreditor Agreement or such other terms reasonably acceptable
to the Administrative Agent); and


 


(xv)         Liens not otherwise permitted by the foregoing clauses of
this paragraph (a) securing obligations in an aggregate amount
outstanding at any time not in excess of $20,000,000, provided that no
such Liens shall apply to any assets constituting ABL Priority Collateral or
any Equity Interests of a Canadian Loan Party directly held by a Canadian Loan
Party.


 


(b)           Enter into any agreement prohibiting
the creation or assumption of any Lien upon properties or assets, whether now
owned or hereafter acquired, except any such restriction that exists under (i) this
Agreement, (ii) agreements governing any Indebtedness of Foreign
Subsidiaries of Holdings permitted hereunder, (iii) any documents
governing secured Indebtedness permitted hereunder, provided that such
restrictions only relate to the assets securing such Indebtedness, (iv) any
documents governing Indebtedness permitted under Section 10.01(j), (m) or
(p), provided that such restrictions are customary market terms
for similar credits and do not restrict the granting of Liens to secure
Indebtedness incurred under this Agreement or the Term Loan Facility, (v) restrictions
by reason of customary provisions contained in leases, licenses, governmental
contracts and similar agreements entered into in the ordinary course of
business, provided that such restrictions are limited to the property or
assets subject to such leases, licenses, contracts or agreements), and (vi) any
agreement with respect to a permitted sale or disposition of any assets, provided
such restrictions are limited to the assets to be sold or disposed of.


 


10.03.           Sale/Leaseback Transactions.  Enter into any Sale/Leaseback Transaction,
other than any Sale/Leaseback Transaction to the extent that (i) the
Capital Lease Obligations or Attributable Indebtedness, as the case may be,
would be permitted by Section 10.01(h)(i) and (ii) any
Liens associated therewith would be permitted by Section 10.02(a) 


 


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(provided that, if Holdings or any of its Subsidiaries enters
into such Sale/Leaseback Transaction with respect to any property owned by
Holdings or such Subsidiary more than 12 months prior to such transaction,
such Sale/Leaseback Transaction shall be treated as an Asset Sale and shall also
be subject to the restrictions of Section 10.13).


 


10.04.           Investments, Loans and Advances.  Have outstanding or make any loan or advance
to, or have or make any Investment in, any other Person or suffer to exist any
such loan, advance or Investment, or any obligation to make such loan, advance
or Investment, except as set forth on Schedule 10.04 and except:


 


(a)           Permitted Investments;


 


(b)           loans, advances or other
Investments made by (i) Holdings or any Subsidiary of Holdings to or
in any Loan Party or any wholly owned Domestic Subsidiary or any wholly owned
Canadian Subsidiary of Holdings, provided that any such Investments by a
Loan Party to or in any such Subsidiary that is not a Loan Party (x) complies
with the requirements of Section 10.13 and (y) are in an
aggregate amount not to exceed $5,000,000 outstanding at any time and (ii) any
Foreign Subsidiary of Holdings (other than a Canadian Subsidiary of Holdings)
to or in any other Foreign Subsidiary of Holdings;


 


(c)           loans, advances or other Investments
made to or in any Subsidiary of Holdings (other than a Loan Party, a
Wholly-Owned Domestic Subsidiary or a Wholly-Owned Canadian Subsidiary of
Holdings), and Guarantees of obligations of any such Subsidiary, in an
aggregate amount not to exceed $25,000,000 outstanding at any time;


 


(d)           Investments consisting of non-cash
consideration received in connection with a sale of assets permitted under Section 10.13;


 


(e)           Investments by SSCC, each Borrower
and their respective Subsidiaries in existence on the Closing Date in the
capital stock of their respective Subsidiaries;


 


(f)            Investments consisting of Equity
Interests, securities or notes received in settlement of accounts receivable
incurred in the ordinary course of business from a customer that Holdings or any
Subsidiary of Holdings has reasonably determined is unable to make cash
payments in accordance with the terms of such account receivable;


 


(g)           accounts receivable created or
acquired, and deposits, prepayments and other credits to suppliers made, in the
ordinary course of business;


 


(h)           any Investments consisting of (i) any
contract pursuant to which Holdings or any Subsidiary of Holdings obtains the
right to cut, harvest or otherwise acquire timber on property owned by any
other Person, whether or not the Borrower’s or such Subsidiary’s obligations
under such contract are evidenced by a note or other instrument, or (ii) loans
or advances to customers of Holdings or any Subsidiary of Holdings, including
leases of personal property of Holdings or such Subsidiary to such customers, provided
that the contracts, loans and advances constituting permitted Investments
pursuant to this paragraph (h) shall not exceed $20,000,000 at
any time outstanding;


 


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(i)            prepaid expenses and lease, utility,
workers’ compensation, performance and other similar deposits made in the
ordinary course of business;


 


(j)            loans to officers and employees not
to exceed $5,000,000 at any time outstanding;


 


(k)           so long as the Payment Conditions are
satisfied both before and after giving effect to such Investments, Holdings and
its Subsidiaries may make additional Investments not otherwise permitted under
this Section 10.04;


 


(l)            Investments constituting Guarantees
permitted under Section 10.01 and Investments permitted under Section 10.05(f);
and


 


(m)          Investments consisting of Hedging
Agreements permitted hereunder.


 


10.05.           Mergers, Consolidations, Sales of
Assets and Acquisitions.  Merge
into or amalgamate or consolidate with any other Person, or permit any other
Person to merge into or amalgamate or consolidate with it, or sell, transfer,
assign, lease, sublease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets (when taken as a
whole in combination with the other assets and properties of SSCC, each
Borrower and their respective Subsidiaries), or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or any substantial
part of the assets of any other Person, except:


 


(a)           if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, (i) any Domestic Subsidiary of Holdings
may merge into or consolidate with, liquidate or dissolve into, or sell,
transfer, assign, lease, sublease or otherwise dispose of all or substantially
all of its assets to, any U.S. Borrower in a transaction in which such U.S.
Borrower is the surviving corporation, (ii) any Domestic Subsidiary of
Holdings (other than any U.S. Borrower) may merge into or consolidate with,
liquidate or dissolve into, or sell, transfer, assign, lease, sublease or
otherwise dispose of all or substantially all of its assets to, any
Wholly-Owned Domestic Subsidiary of Holdings (other than any U.S. Borrower) in
a transaction in which the surviving corporation is a Wholly-Owned Domestic
Subsidiary of Holdings and (iii) any Canadian Subsidiary of Holdings may
merge into or consolidate or amalgamate with, liquidate or dissolve into, or
sell, transfer, assign, lease, sublease or otherwise dispose of all or
substantially all of its assets to, any Canadian Borrower in a transaction in
which such Canadian Borrower is the surviving corporation, (iv) any
Canadian Subsidiary of Holdings (other than any Canadian Borrower) may merge
into or consolidate or amalgamate with, liquidate or dissolve into, or sell,
transfer, assign, lease, sublease or otherwise dispose of all or substantially
all of its assets to, any wholly owned Canadian Subsidiary of Holdings (other
than any Canadian Borrower) in a transaction in which the surviving entity is a
Wholly-Owned Canadian Subsidiary of Holdings; provided that, in each
case, (x) if any Person other than a Wholly-Owned Domestic Subsidiary of
Holdings or Wholly-Owned Canadian Subsidiary of Holdings, as the case may be,
receives any consideration, such transaction is also permitted by Section 10.04
and (y) the surviving entity shall, at the time of such merger or
consolidation, be in compliance with the requirements of Section 9.09(b);


 


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(b)           if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, (i) any Wholly-Owned Foreign Subsidiary
of Holdings (other than any Canadian Subsidiary of Holdings) may merge into,
amalgamate or consolidate with, liquidate or dissolve into, or sell, transfer,
assign, lease, sublease or otherwise dispose of all or substantially all of its
assets to, any Canadian Loan Party in a transaction in which the surviving
entity is such Canadian Loan Party and (ii) any Wholly-Owned Foreign
Subsidiary of Holdings (other than any Canadian Subsidiary of Holdings) may
merge into, amalgamate or consolidate with, liquidate or dissolve into, or
sell, transfer, assign, lease, sublease or otherwise dispose of all or
substantially all of its assets to, any other Wholly-Owned Foreign Subsidiary
of Holdings (other than a Canadian Loan Party) in a transaction in which the
surviving entity is a Wholly-Owned Foreign Subsidiary of Holdings, provided
that no Person other than a Loan Party or a Wholly-Owned Foreign Subsidiary of
Holdings receives any consideration and the Collateral and Guarantee
Requirement shall be satisfied with respect to voting Equity Interests of such
surviving or acquiring Foreign Subsidiary of Holdings that are owned by a Loan
Party;


 


(c)           the Funding Date Merger and the other
transactions contemplated by the Plan of Reorganization as described in the
Disclosure Statement on the Closing Date may be consummated on or prior to the
Funding Date;


 


(d)           purchases of inventory, equipment and
real property in the ordinary course of business;


 


(e)           Investments permitted by Section 10.04;
and


 


(f)            any Loan Party may acquire all or
substantially all the assets of a Person or line of business, unit or division
of such Person, in each case primarily located in the United States or
Canada, or not less than 100% of the Equity Interests of such a Person (other
than directors’ qualifying shares) (in each case referred to herein as the “Acquired
Entity”); provided that (i) the Acquired Entity shall be in a
similar line of business as that of Holdings and its Subsidiaries, (ii) the
acquisition shall not be preceded by, or effected pursuant to, an unsolicited
tender offer or proxy solicitation, (iii) at the time of such transaction
both before and immediately after giving effect thereto, no Event of Default or
Default shall have occurred and be continuing, (iv) the Payment Conditions
are satisfied at the time of such acquisition and after giving pro forma effect
thereto and (v) upon consummation of such acquisition, the Acquired Entity
and each Domestic Subsidiary and Canadian Subsidiary of Holdings thereof shall
become a Loan Party if such Acquired Entity or Subsidiary would be a Material
Subsidiary based on a pro forma calculation for the most recent period of four
consecutive fiscal quarters in respect of which financial statements have been
delivered; and Holdings and each Borrower shall comply, and shall cause their
respective Subsidiaries to comply, with the other provisions of Section 9.09
applicable to such Acquired Entity or Subsidiary, or to its Equity Interests,
substantially concurrently with the consummation of such acquisition or by such
later date reasonably agreed by the Administrative Agent with respect to
specific compliance items (any acquisition of an Acquired Entity meeting all of
the criteria set forth in this paragraph (f) being referred to
herein as a “Permitted Acquisition”).


 


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10.06.           Restricted Payments.  (a) Declare or make, directly or
indirectly, any Restricted Payment or set aside any amount for any such
purpose.


 


(b)           Notwithstanding the
provisions of paragraph (a) above:


 


(i)            the transactions
contemplated by the Plan of Reorganization to occur on the Funding Date may be
consummated on the Funding Date;


 


(ii)           Holdings may make Restricted
Payments so long as the Payment Conditions are satisfied both before and after
giving effect to such Restricted Payments;


 


(iii)          Holdings may make Restricted
Payments for the repurchase, retirement or other acquisition for value of
Equity Interests of Holdings held by any future, present or former employee or
director of Holdings or any of its Subsidiaries pursuant to any employee or
director equity plan, employee or director stock option plan or any other
employee or director benefit plan of Holdings or its Subsidiaries, provided
that the aggregate amount of such Restricted Payments in any fiscal year shall
not exceed $5,000,000, provided that at the time of any such Restricted
Payment made pursuant to  this clause (iii) and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing; and


 


(iv)          Holdings may make Restricted
Payments in any fiscal year commencing on or after January 1, 2011, so
long as (x) immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing and (y) the aggregate amount
of such Restricted Payments made pursuant to this clause (iv) shall not
exceed (A) the lesser of (1) the Borrower’s Portion of Excess Cash
Flow (as defined in the Term Loan Credit Agreement (as in effect on the date
hereof)) and (2) the sum of (aa) $30,000,000 plus (bb) so long as
Excess Availability (on the date of such Restricted Payment after giving effect
to any Loans incurred (or to be incurred) or Letters of Credit issued (or to be
issued) on such date) shall exceed 20% of the Total Commitment as then in
effect, $20,000,000 minus (B) the aggregate principal amount of
Term Loans theretofore purchased pursuant to Section 10.09(iv).


 


10.07.           Transactions with Stockholders and
Affiliates.  Except to the
extent specifically permitted by the terms of this Agreement, directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 10% or more of any class of equity securities of
such Person or with any Affiliate of such Person or of any such holder, on
terms that are less favorable to such Person than those that could be obtained
at the time from Persons that are not such a holder or Affiliate, provided
that the foregoing restriction shall not apply to (a) any transaction
between or among the Loan Parties or any transaction between or among Foreign
Subsidiaries of Holdings (other than Canadian Subsidiaries of Holdings) or any
transaction between or among Canadian Subsidiaries (other than Loan Parties), (b) any
transaction or series of transactions between Holdings and any Subsidiary of
Holdings or between the Subsidiaries of Holdings on a basis that is not
systematically disadvantageous to any Loan Party, (c) customary fees paid
to members of the Board of Directors of Holdings or any of its Subsidiaries, (d) customary
compensation (including salaries and bonuses) paid to officers and employees of


 


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Holdings or any Subsidiary of Holdings, (e) management and
financial services provided by Holdings or any Subsidiary of Holdings to any
other Subsidiary of Holdings or any other entity in which Holdings or such
Subsidiary has Investments to the extent that such services are provided by
Holdings or such Subsidiary in the ordinary course of its business and senior
management of such Person has determined that the providing of such services is
in the best interests of such Person and (f) the transactions effected on
the Funding Date in connection with the effectiveness of, and pursuant to the
terms of, the Plan of Reorganization.


 


10.08.           Business.  Engage at any time in any business other than
the businesses engaged in by Holdings or any Subsidiary of Holdings on the
Closing Date and businesses that are reasonably similar or reasonably related
thereto, or are reasonable extensions thereof.


 


10.09.           Limitations on Debt Prepayments.  Optionally prepay, repurchase or redeem or
otherwise optionally defease or segregate funds with respect to (collectively, “prepay”)
any Term Loans, Permitted Notes or other long-term capital markets
Indebtedness; provided, however, that the foregoing will not
prohibit (i) any refinancing of such Indebtedness pursuant to the issuance
of Permitted Refinancing Indebtedness with respect thereto that is otherwise
permitted by this Agreement, (ii) the transactions effected on the Funding
Date in connection with the effectiveness of, and pursuant to the terms of, the
Plan of Reorganization, (iii) any other prepayment, repurchase, redemption
or defeasance of Indebtedness so long as the Payment Conditions are satisfied
both before and after giving effect to such prepayment, repurchase, redemption
or defeasance, as the case may be, and (iv) any purchase of Term Loans
pursuant to, and in compliance with the conditions set forth in, Section 2.23
of the Term Loan Credit Agreement (as in effect on the date hereof), so long as
(x) at the time of such purchase and after giving effect thereto no
Default or Event of Default shall have occurred and be continuing and (y) the
aggregate amount of all such purchases shall not exceed $30,000,000.


 


10.10.           Amendment of Certain Documents.  (a) Amend, modify or grant any waiver
with respect to any indenture, note or any other instrument evidencing
Indebtedness of Holdings or any Subsidiary of Holdings in an aggregate
principal amount in excess of $100,000,000 (other than any such Indebtedness
owed to Holdings or any Subsidiary of Holdings), if such amendment,
modification, or waiver has the effect of (i) increasing the amounts due
in respect of any such indenture, note or other instrument or, other than with
respect to the Term Loan Facility, any interest rate thereunder, unless any
such increase in amount would be permitted under Section 10.01 and
except that any increase in any interest rate resulting from such amendment or
modification will be permitted if, after giving pro forma effect thereto,
Holdings could incur at least $1.00 of additional indebtedness under the
Incurrence Test, (ii) subjecting any property of Holdings or any
Subsidiary of Holdings to any Lien, other than Liens permitted under Section 10.02,
(iii) shortening the maturity or weighted average life of any such
Indebtedness or (iv) creating or changing covenants, events of default and
other terms and conditions such that the covenants, events of default and other
terms and conditions become materially more adverse, when taken as a whole, to
the Lenders.


 


(b)           Cause or suffer to exist any
amendment, restatement, supplement or other modification to the certificate of
incorporation (including any certificate of designation with respect to any
preferred stock) or by-laws of (or, in each case an equivalent organizational


 


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document) Holdings or any
Subsidiary of Holdings without the prior written consent of the Required
Lenders, unless such amendment, restatement, supplement or modification is not
materially adverse to the interests of the Lenders hereunder or under the other
Loan Documents (provided that the foregoing will not prohibit the consummation of
the Funding Date Merger).


 


10.11.           Limitation on Dispositions of Stock of
Subsidiaries.  Directly or
indirectly sell or otherwise dispose of, or permit any Subsidiary of Holdings
to issue to any other Person (other than to any other Loan Party or a Wholly-Owned
Subsidiary of Holdings), any Equity Interests of any Subsidiary of Holdings,
except issuances to qualified directors if and to the extent required by
applicable law, provided that nothing in this Section 10.11
shall prohibit (i) any disposition or issuance permitted by Sections 10.05
and 10.13 if such disposition or issuance is structured as the
disposition or issuance of stock or other Equity Interests or (ii) the
issuance of Equity Interests on a pro rata basis to its equity holders by any
Non-Wholly-Owned Subsidiary of Holdings.


 


10.12.           Restrictions on Ability of Subsidiaries to
Pay Dividends.  Permit any
Subsidiary of Holdings to,
directly or indirectly, voluntarily create or otherwise voluntarily cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of Holdings to
(a) pay dividends or make any other distributions on its capital stock or
any other interest or (b) make or repay loans or advances to any Loan
Party, except for (i) encumbrances or restrictions under this Agreement
and the other Loan Documents, (ii) encumbrances or restrictions under the
indentures governing the Permitted Notes (or any Permitted Refinancing
Indebtedness permitted hereunder with respect thereto or any other indenture or
other document governing Indebtedness permitted hereby so long as the
encumbrances and restrictions thereunder are no more onerous to any Subsidiary
of Holdings than those contained
in the Term Loan Facility Documents as in effect on the Funding Date (and under
the Term Loan  Facility Documents as
amended from time to time or any Permitted Refinancing Indebtedness in respect
thereof, in each case, so long as the encumbrances and restrictions thereunder
are no more onerous, when taken as a whole, to any Subsidiary of Holdings than
those contained in the Term Loan 
Facility Documents as in effect on the Funding Date)), (iii) encumbrances
or restrictions under the Term Loan Facility Documents as in effect on the
Funding Date (and under the Term Loan Facility Documents as amended from time
to time or any Permitted Refinancing Indebtedness in respect thereof, in each
case, so long as the encumbrances and restrictions thereunder are no more
onerous, when taken as a whole, to any Subsidiary of Holdings than those contained in the Term Loan
Facility Documents as in effect on the Funding Date), (iv) customary
encumbrances or restrictions in joint venture agreements and similar agreements
that relate solely to the activities of such joint venture, (v) customary
encumbrances or restrictions contained in agreements relating to the sale of
all or a substantial part of the Equity Interests or assets of any Subsidiary
of Holdings pending such sale, provided
that such encumbrances and restrictions apply only to the Subsidiary of
Holdings to be sold and such
sale is permitted hereunder, and (vi) encumbrances or restrictions in
documents governing Indebtedness assumed or incurred under Section 10.01(j) or
existing with respect to any Person or the property or assets of such Person
acquired by Holdings or any
Subsidiary of Holdings in an
acquisition permitted hereunder, provided that such encumbrances and
restrictions are not applicable to any Person or the property or assets of any
Person other than such acquired Person or the property or assets of such
acquired Person.


 


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10.13.           Disposition of Collateral and Other Assets.  (a) Except for any transfer or
disposition permitted by paragraph (b) below, sell, lease,
assign, transfer or otherwise dispose of any asset or assets, in a single
transaction or a series of related transactions, having a fair market value in
excess of $10,000,000, unless (i) fair market value is received for such
asset (such fair market value to be determined by the Board of Directors of
Holdings or any applicable
Subsidiary of Holdings in the
exercise of its reasonable judgment in the case of any asset or assets with a
fair market value in excess of $100,000,000), (ii) except in the case of
any Asset Exchange, if the fair market value of such asset or assets is in
excess of $50,000,000, at least 75% of the consideration received by Holdings and the Subsidiaries of Holdings for such asset or assets shall be in
cash, cash equivalents and readily marketable securities and (iii) except
in the case of any Asset Exchange, any non-cash consideration shall consist of
debt obligations of the purchaser, provided that the foregoing shall not
restrict Holdings or any Subsidiary of Holdings from receiving debt obligations
of the purchaser in an aggregate principal amount not in excess of $50,000,000
in connection with any single transaction or series of related transactions.


 


(b)           Notwithstanding anything to
the contrary in this Agreement, Holdings shall not transfer any of its assets
to any Subsidiary of Holdings and none of the Subsidiaries of Holdings shall
transfer any of its assets to any other Subsidiary of Holdings unless (i) in
the case of any asset or assets constituting Collateral, such asset or assets
is transferred to a Loan Party and the Administrative Agent is satisfied that
the Liens created under the Security Documents on such asset or assets shall be
in full force and effect, or (ii) in the case of any asset or assets not
constituting Collateral, such transfer is permitted as an Investment under Section 10.04
or is permitted under Section 10.05.


 


10.14.           Fiscal Year.  Cause the fiscal year of SSCC or Holdings to
end on a date other than December 31.


 


10.15.           Material Subsidiaries.  (a) Permit, as of the date on which financial
statements with respect to the fiscal quarter of Holdings most-recently ended
are delivered (or, if not delivered by such date, on the date required to have
been delivered) pursuant to Section 9.04(a) or (b) hereof, the
sum of (i) the individual revenues and assets of Holdings and each Domestic
Subsidiary of Holdings that is a Material Subsidiary and a Loan Party and (ii)
the revenues and assets of each Foreign Subsidiary of Holdings at least 65% of
the voting stock and all of the non-voting Equity Interests of which has been
pledged by a U.S. Loan Party as Collateral to secure the U.S. Secured
Obligations and of such Foreign Subsidiary’s Subsidiaries, calculated on a
consolidated basis, in each case for or as of the end of the most recent period
of four consecutive fiscal quarters in respect of which financial statements
have been (or were required to have been) delivered, when taken together, to
account for less than 90% of Holdings’ consolidated revenues for, or less than
90% of Holdings’ consolidated assets at the close of, such period of four
consecutive fiscal quarters.


 


(b)           Permit on any day in any
fiscal quarter of Holdings, the aggregate amount of cash held by Domestic
Subsidiaries of Holdings in deposit accounts (other than Excluded Deposit
Accounts) that are not subject to Control Agreements to exceed $15,000,000,
unless, during the 30-day period after the last day of such fiscal quarter, one
or more of such Domestic Subsidiaries of Holdings are designated by Holdings as
a Material Subsidiary pursuant to clause (c) of the definition thereof and
enter into Control Agreements, with respect to their deposit 


 


163

















 


accounts referred to above,
so that, if such Control Agreement has been in effect at all times during such
fiscal quarter, such $15,000,000 threshold would not have been exceeded on any
day.


 


10.16.           Consolidated Fixed Charge Coverage Ratio.  During each Compliance Period, Holdings shall
not permit (i) the Consolidated Fixed Charge Coverage Ratio for the last
Test Period ended prior to the beginning of such Compliance Period for which
financial statements are available to be less than 1.00:1.00 or (ii) the
Consolidated Fixed Charge Coverage Ratio for any Test Period for which
financial statements are required to be delivered during such Compliance Period
pursuant to Section 9.04(a), (b) or (c)  to
be less than 1.00:1.00.


 


10.17.           No Additional Deposit Accounts; etc.  Each of Holdings and each other Borrower will
not, and will not permit any other Loan Party to, directly or indirectly, open,
maintain or otherwise have any checking, savings, deposit, securities or other
accounts at any bank or other financial institution where cash or Permitted
Investments are or may be deposited or maintained with any Person, other than (a) the
Core Concentration Accounts set forth on Part A of Schedule 10.17, (b) the
Collection Accounts set forth on Part B of Schedule 10.17, (c) the
other Deposit Accounts set forth on Part C of Schedule 10.17, (d) the
Excluded Accounts (which as of the Closing Date are set forth on Part D of
Schedule 10.17) and (e) the securities accounts or commodities
accounts set forth in Part E of Schedule 10.17; provided
that any such Loan Party may open a new Core Concentration Account, Collection
Account, other Deposit Account, securities account or commodities account not
set forth in such Schedule 10.17, so long as prior to opening any such
account (i) Holdings has delivered an updated Schedule 10.17 to the
Administrative Agent listing such new account (other than an Excluded Account)
and (ii) in the case of any new Core Concentration Account, Collection
Account, other Deposit Account (other than an Excluded Account), securities
account or commodities account, the financial institution with which such
account is opened, together with the applicable Loan Party which has opened
such account and the Security Agent have executed and delivered to the
Administrative Agent a Control Agreement reasonably acceptable to the
Administrative Agent (or in the case of a securities account, such other
control agreement as may be reasonably satisfactory to the Administrative
Agent).


 


SECTION 11.  Events of Default.


 


11.01.           Events of Default.  From and after the Funding Date (and, for the
avoidance of doubt, including for the purpose of determining the occurrence of
the Funding Date), upon the occurrence of any of the following specified events
(each, an “Event of Default”):


 


(a)           any representation or
warranty made or deemed made in any Loan Document, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished pursuant to any Loan
Document, shall prove to have been false or misleading in any material respect
when so made, deemed made or furnished;


 


(b)           default shall be made in the
payment of any principal of (or Face Amount of in the case of any B/A
Instrument) any Loan, Note or Unpaid Drawing when and as the same


 


164

















 


shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;


 


(c)           default shall be made in the
payment of any interest on any Loan, Note or Unpaid Drawing or any Fee or any
other amount (other than an amount referred to in paragraph (b) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days,
in the case of payment of any such interest or Fee, or 10 Business Days in the
case of payment of any such other amount;


 


(d)           default shall be made in the
due observance or performance by Holdings or any other Borrower of any
covenant, condition or agreement contained in Sections 9.01 (with
respect to Holdings or any other Borrower), 9.04(i), 9.04(j), 9.05(a),
9.05(f), 9.07, 9.13 or in Section 10;


 


(e)           default shall be made in the
due observance or performance by any Loan Party or any of their respective
Subsidiaries of any covenant, condition or agreement contained in any Loan
Document (other than those defaults specified in paragraph (b), (c) or
(d) above) and such default shall continue unremedied for a period
of 30 days (or 15 days solely in the case of Section 9.04(a),
9.04(b), 9.04(c) or 9.04(d)) after written notice thereof from the
Administrative Agent or any Lender to Holdings;


 


(f)            Holdings, any other Borrower
or any Subsidiary of Holdings shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable (after giving effect to any
applicable grace period), or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness (after giving effect to any
applicable grace period), if the effect of any failure referred to in this clause (ii) is
to cause, or to permit the holder or holders of such Indebtedness or a trustee
on its or their behalf to cause, such Indebtedness to become due prior to its
stated maturity, provided that this paragraph (f) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or asset securing such Indebtedness;


 


(g)           at any time after the
Funding Date, an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of Holdings, any other Borrower, any other Loan Party or any
Material Subsidiary of Holdings, or of a substantial part of the property or
assets of any such Person, under any Insolvency Law, (ii) the appointment
of a receiver, interim receiver, receiver and manager, trustee, custodian,
sequestrator, conservator or similar official for any such Person or for a
substantial part of the property or assets of any such Person or (iii) the
winding-up or liquidation of any such Person; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;


 


(h)           Holdings, any other
Borrower, any other Loan Party or any Material Subsidiary of Holdings shall (i) voluntarily
commence any proceeding or file any petition seeking relief under any
Insolvency Law, (ii) consent to the institution of, or fail to contest in
a


 


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timely and appropriate
manner, any proceeding or the filing of any petition described in paragraph (g) above,
(iii) apply for or consent to the appointment of a receiver, interim
receiver, receiver and manager, trustee, custodian, sequestrator, conservator
or similar official for any such Person or for a substantial part of the
property or assets of any such Person, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of
the foregoing;


 


(i)            one or more judgments for
the payment of money, individually or in the aggregate, in an amount in excess
of $30,000,000 (in each case to the extent not adequately covered by insurance
proceeds as to which the insurance company has acknowledged coverage pursuant
to a writing reasonably satisfactory to the Administrative Agent), shall be
rendered against Holdings, any other Borrower or any of their respective Subsidiaries
or any combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively
stayed, vacated, discharged or satisfied;


 


(j)            an ERISA Event shall have
occurred that, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in increased liability of
Holdings, any other Borrower, any other Loan Party, any of their respective
Subsidiaries and ERISA Affiliates in an aggregate amount more than $30,000,000
greater than the liability as of the Closing Date reasonably estimated by the
Required Lenders in good faith attributable to either of the following:


 


(i)            the Plans’ and Multiemployer
Plans’ funded status as of the most recent valuation or other statement of
financial condition prior to the Closing Date; or


 


(ii)           withdrawal liability with
respect to a Multiemployer Plan as of the most recent estimate of withdrawal
liability for such Multiemployer Plan received before the Closing Date;


 


(k)           there shall have occurred a
Change in Control or Holdings, any other Borrower or any of their respective
Subsidiaries shall make any mandatory prepayment, repurchase or redemption or
make any offer to make any such mandatory prepayment, repurchase or redemption
of any Indebtedness in an aggregate outstanding principal amount in excess of
$30,000,000 on account of any “Change of Control” (however designated) referred
to in the indenture, agreement or other instrument governing such Indebtedness;


 


(l)            any Lien purported to be
created by any Security Document shall cease to be, or shall be asserted by any
Loan Party not to be, a valid, perfected first priority (or, in the case of the
Term Priority Collateral, second priority, but second in priority only in
respect of the obligations under the Term Loan Facility or Permitted Notes)
Lien on (i) any Collateral (except as otherwise expressly provided in this
Agreement or such Security Document) with a fair market value or book value
(whichever is greater) in excess, individually or in the aggregate, of
$100,000,000, or (ii) any ABL Priority Collateral (except as otherwise
expressly provided in this Agreement or such Security Document) with a fair
market value or book value (whichever is greater) in excess, individually or in
the aggregate, of $50,000,000, in each case, except to the


 


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extent that any such loss of
perfection, priority or rank results from the failure of the Security Agent to
maintain possession of certificates representing securities pledged under the
Security Documents or otherwise take any action within its control (including
the filing of UCC continuation statements or similar filings or registrations
under the applicable laws of any other jurisdiction);


 


(m)          any Loan Document shall not
be for any reason, or shall be asserted by the Loan Party (except as otherwise
expressly provided in this Agreement or such Loan Document) not to be, in full
force and effect and enforceable in all material respects in accordance with
its terms; or


 


(n)           the Loan Document
Obligations shall cease to constitute, or shall be asserted by any Loan Party
(except as otherwise expressly provided in this Agreement or such Loan
Document) not to constitute, senior indebtedness under the subordination
provisions of any subordinated Indebtedness of any Loan Party, or any such
subordination provisions shall be invalidated or otherwise cease to be a legal,
valid and binding obligation of the parties thereto, enforceable in accordance
with its terms.


 


then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the
Administrative Agent, upon the written request of the Required Lenders, shall
by written notice to the Borrowers, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent, any Lender or the
holder of any Note to enforce its claims against any Loan Party (provided
that, if an Event of Default specified in Section 11.01(g) or
(h) shall occur with respect to any Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below, shall occur automatically
without the giving of any such notice):  (i) declare
the Total Commitment terminated, whereupon all the Commitments of each Lender
shall forthwith terminate immediately and any Commitment Fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare
the principal (and Face Amounts in the case of any B/A Instrument) of and any
accrued interest in respect of all Loans and the Notes and all Obligations
owing hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Loan Party; (iii) terminate
any Letter of Credit which may be terminated in accordance with its terms; (iv) (x) direct
the U.S. Borrowers to pay (and the U.S. Borrowers jointly and severally agree
that upon receipt of such notice, or upon the occurrence of an Event of Default
specified in Section 11.01(g) or (h) with respect
to any U.S. Borrower, they will pay) to the Security Agent at the Payment
Office such additional amount of cash or Permitted Investments, to be held as
security by the Security Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of any U.S. Borrower and then
outstanding and (y) direct the Canadian Borrowers to pay (and the Canadian
Borrowers jointly and severally agree that upon receipt of such notice, or upon
the occurrence of an Event of Default specified in Section 11.01(g) or
(h) with respect to any Canadian Borrower, they will pay) to the
Security Agent at the Payment Office such additional amount of cash or
Permitted Investments, to be held as security by the Security Agent, as is
equal to the aggregate Stated Amount of all Letters of Credit issued for the
account of any Canadian Borrower and then outstanding; (v) enforce, as
Security Agent, all of the Liens and security interests created pursuant to the
Security Documents; (vi) enforce the guarantee under the Guarantee and
Collateral Agreement or


 


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Canadian Guarantee and Collateral Agreement; and (vii) apply
any cash collateral held by the Administrative Agent pursuant to Section 5.02
to the repayment of the Obligations.


 


11.02.           Application of Proceeds.  (a) Subject to the terms of the
Intercreditor Agreement, upon the exercise of any of the remedies provided in
the last paragraph of Section 11.01, all moneys collected by the
Administrative Agent or the Security Agent (or, to the extent any Security
Document executed by a Loan Party requires proceeds of collateral thereunder to
be applied in accordance with the provisions of this Agreement, the pledgee,
assignee, mortgagee or other corresponding party under such Security Document)
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Administrative Agent or the Security Agent hereunder
(or, to the extent any Security Document executed by a Loan Party requires
proceeds of collateral thereunder to be applied in accordance with the
provisions of this Agreement, the pledgee, assignee, mortgagee or other
corresponding party under such Security Document) upon any exercise of remedies
hereunder, shall be applied as follows:


 


(i)            first, to all
amounts owing to the Security Agent pursuant to any of the Loan Documents in
its capacity as such in respect of (x) the preservation of Collateral or
its security interest in the Collateral or (y) the exercise of any
remedies provided in the last paragraph of Section 11.01;


 


(ii)           second, to the extent
proceeds remain after the application pursuant to preceding clause (i), to all
amounts owing to any Agent pursuant to any of the Loan Documents in its
capacity as such;


 


(iii)          third, to the extent
proceeds remain after the application pursuant to preceding clauses (i) and
(ii), to an amount equal to the outstanding Primary U.S. Loan Party Obligations
shall be paid to the Secured Parties as provided in Section 11.02(e),
with each Secured Party receiving an amount equal to its outstanding Primary
U.S. Loan Party Obligations or, if the proceeds are insufficient to pay in full
all such Primary U.S. Loan Party Obligations, its Pro Rata Share of the amount
remaining to be distributed;


 


(iv)          fourth, to the extent
proceeds remain after the application pursuant to preceding clauses (i) through
(iii), inclusive, to an amount equal to the outstanding Primary Obligations
(including Primary Obligations which are also Canadian Loan Party Obligations)
shall be paid to the Secured Parties as provided in Section 11.02(e),
with each Secured Party receiving an amount equal to its outstanding Primary
Obligations (including Primary Obligations which are also Canadian Loan Party
Obligations) or, if the proceeds are insufficient to pay in full all such
Primary Obligations (including Primary Obligations which are also Canadian Loan
Party Obligations), its Pro Rata Share of the amount remaining to be
distributed;


 


(v)           fifth, to the extent
proceeds remain after the application pursuant to preceding clauses (i) through
(iv), inclusive, to an amount equal to the outstanding Secondary U.S. Loan
Party Obligations shall be paid to the Secured Parties as provided in Section 11.02(e),
with each Secured Party receiving an amount equal to its outstanding Secondary
U.S. Loan Party Obligations or, if the proceeds are insufficient to pay in full


 


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all such Secondary U.S. Loan Party Obligations, its
Pro Rata Share of the amount remaining to be distributed;


 


(vi)          sixth, to the extent
proceeds remain after the application pursuant to preceding clauses (i) through
(v), inclusive, to an amount equal to the outstanding Secondary Obligations
(including Secondary Obligations which are also Canadian Loan Party
Obligations) shall be paid to the Secured Parties as provided in Section 11.02(e),
with each Secured Party receiving an amount equal to its outstanding Secondary
Obligations (including Secondary Obligations which are also Canadian Loan Party
Obligations) or, if the proceeds are insufficient to pay in full all such
Secondary Obligations (including Secondary Obligations which are also Canadian
Loan Party Obligations), its Pro Rata Share of the amount remaining to be
distributed;


 


(vii)         seventh, to the extent
proceeds remain after the application pursuant to preceding clauses (i) through
(vi), inclusive, to an amount equal to the outstanding Tertiary Obligations
shall be paid to the Secured Parties as provided in Section 11.02(e),
with each Secured Party receiving an amount equal to its outstanding Tertiary
Obligations or, if the proceeds are insufficient to pay in full all such
Tertiary Obligations, its Pro Rata Share of the amount remaining to be
distributed; and


 


(viii)        eighth, to the extent
proceeds remain after the application pursuant to preceding clauses (i) through
(vii), inclusive, and following the Discharge of Revolving Credit Obligations,
to the extent that the Term Loan Agent shall have notified the Administrative
Agent that the Discharge of Term Loan Credit Obligations (as defined in the
Intercreditor Agreement) has occurred, to the relevant Loan Party, their
successors or assigns, or as a court of competent jurisdiction may otherwise
direct or as otherwise required by the Intercreditor Agreement.


 


For purposes of this Agreement:  (i) “Pro Rata Share” shall mean,
when calculating a Secured Party’s portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which
is the then unpaid amount of such Secured Party’s Primary U.S. Loan Party
Obligations, Primary Obligations (including Primary Obligations which are also
Canadian Loan Party Obligations), Secondary U.S. Loan Party Obligations,
Secondary Obligations (including Secondary Obligations which are also Canadian
Loan Party Obligations) or Tertiary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Primary U.S. Loan
Party Obligations, Primary Obligations (including Primary Obligations which are
also Canadian Loan Party Obligations), Secondary U.S. Loan Party Obligations,
Secondary Obligations (including Secondary Obligations which are also Canadian
Loan Party Obligations) or Tertiary Obligations, as the case may be, (ii) “Primary
Obligations” shall mean (x) all Loan Document Obligations with respect
to principal (or Face Amount, as applicable) of, premium, fees and interest on,
Loans, Unpaid Drawings, the Stated Amount of outstanding Letters of Credit and
Fees, (y) all Qualified Secured Hedging Obligations other than obligations
with respect to indemnities, fees (including, without limitation, attorneys’
fees) and similar obligations and liabilities, and (z) all Qualified
Secured  Cash Management Services
Obligations other than obligations with respect to indemnities, fees
(including, without limitation, attorneys’ fees) and similar obligations and liabilities,
(iii) “Secondary Obligations” shall mean all Loan Document
Obligations, all Qualified Secured


 


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Hedging
Obligations and all Qualified Secured Cash Management Services Obligations, in
each case other than Primary Obligations, (iv) “Tertiary Obligations”
shall mean (x) all Hedging Obligations under Secured Hedging Agreements
and (y) all Cash Management Services Obligations under Secured Cash
Management Agreements, in each case other than Primary Obligations and
Secondary Obligations, (v) “Primary U.S. Loan Party Obligations”
shall mean all Primary Obligations which are also U.S. Loan Party Obligations, (vi) “Secondary
U.S. Loan Party Obligations” shall mean all Secondary Obligations which are
also U.S. Loan Party Obligations.


 


(b)           When payments to Secured
Parties are based upon their respective Pro Rata Shares (other than in respect
of Tertiary Obligations), the amounts received by such Secured Parties
hereunder shall be applied (for purposes of making determinations under this Section 11.02
only) (i) first, to their Primary Obligations and (ii) second,
to their Secondary Obligations.  If any
payment to any Secured Party of its Pro Rata Share of any distribution would
result in overpayment to such Secured Party, such excess amount shall instead
be distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Parties, with each
Secured Party whose Primary Obligations or Secondary Obligations, as the case
may be, have not been paid in full to receive an amount equal to such excess
amount multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such Secured Party
and the denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Parties entitled to such
distribution.


 


(c)           Each of the Secured Parties,
by their acceptance of the benefits hereof and of the Security Documents
executed by a Loan Party, agrees and acknowledges that if the Secured Parties
receive a distribution on account of undrawn amounts with respect to Letters of
Credit issued under this Agreement (which shall only occur after all Unpaid
Drawings have been paid in full), such amounts shall be paid to the
Administrative Agent and held by it, for the equal and ratable benefit of the
Secured Parties, as cash security for the repayment of Secured Obligations
owing by the Loan Parties to the Secured Parties as such.  If any amounts are held as cash security
pursuant to the immediately preceding sentence, then upon the termination of
all outstanding Letters of Credit under this Agreement, and after the
application of all such cash security to the repayment of all other Secured
Obligations owing by the Loan Parties to the Secured Parties after giving
effect to the termination of all such Letters of Credit, if there remains any
excess cash, such excess cash shall be returned by the Administrative Agent to
the Security Agent for distribution in accordance with Section 11.02(a).


 


(d)           Subject to the terms of the
Intercreditor Agreement, all payments required to be made hereunder shall be
made (x) if to the Lender Creditors, to the Administrative Agent for the
account of the Lender Creditors, (y) if to the Hedging Creditors, to the
trustee, paying agent or other similar representative (each, a “Representative”)
for the Hedging Creditors or, in the absence of such a Representative, directly
to the Hedging Creditors and (z) if to the Cash Management Creditors,
directly to the Cash Management Creditors.


 


(e)           For purposes of applying
payments received in accordance with this Section 11.02, the
Security Agent shall be entitled to rely upon (i) the Administrative
Agent, (ii) the Representative or, in the absence of such a
Representative, upon the Hedging Creditors and


 


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(iii) the Cash
Management Creditors for a determination (which the Administrative Agent and
each other Secured Party agrees (or shall agree) to provide upon request of the
Security Agent) of the outstanding Secured Obligations of the Loan Parties owed
to the Secured Parties.  Unless it has
received written notice from a Secured Party to the contrary, the
Administrative Agent, in furnishing information pursuant to the preceding
sentence, and the Security Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding.  Unless it has written notice from a Hedging
Creditor or a Cash Management Creditor to the contrary, the Security Agent, in
acting hereunder, shall be entitled to assume that no Secured Hedging
Agreements or Secured Cash Management Agreements are in existence.


 


(f)            Subject to the other
limitations (if any) set forth herein and in the other Loan Documents, it is
understood that the Loan Parties shall remain liable (as and to the extent set
forth in the Loan Documents) to the extent of any deficiency between the amount
of the proceeds of the Collateral and the aggregate amount of the Secured
Obligations of the Loan Parties.


 


(g)           It is understood and agreed
by each Loan Party and each Secured Party that the Security Agent shall have no
liability for any determinations made by it in this Section 11.02
(including, without limitation, as to whether given Collateral constitutes Term
Priority Collateral or ABL Priority Collateral), in each case except to the
extent resulting from the gross negligence or willful misconduct of the
Security Agent (as determined by a court of competent jurisdiction in a final
and non-appealable decision).  Each Loan
Party and each Secured Party also agrees that the Security Agent may (but shall
not be required to), at any time and in its sole discretion, and with no
liability resulting therefrom, petition a court of competent jurisdiction
regarding any application of Collateral in accordance with the requirements
hereof and of the Intercreditor Agreement, and the Security Agent shall be
entitled to wait for, and may conclusively rely on, any such determination.


 


(h)           Notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, the
Canadian Loan Parties shall not be required to repay or prepay, or to
guarantee, nor shall any proceeds in respect of Collateral of the Canadian Loan
Parties and payments by the Canadian Loan Parties be applied to, direct
obligations (excluding obligations as guarantor of the Canadian Loan Parties)
of the U.S. Loan Parties.


 


SECTION 12.  The Agents.


 


12.01.           Appointment.  The Lenders (including in their capacity as a
Swingline Lender, Issuing Lender, Agent and/or Lead Arranger, as the case may
be) hereby irrevocably designate and appoint the Agents to act as specified
herein and in the other Loan Documents. 
Each Lender hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize the
Agents to take such action on its behalf under the provisions of this
Agreement, the other Loan Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Agents by the terms hereof and thereof and such other powers as are
reasonably incidental thereto.  The
Agents may perform any of their respective duties hereunder by or through their
officers, directors, agents, employees or affiliates.


 


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12.02.           Nature of Duties.  (a)  The Agents shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Loan Documents.  No
Agent nor any of its officers, directors, agents, employees or affiliates shall
be liable for any action taken or omitted by it or them hereunder or under any
other Loan Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct (as determined by a court
of competent jurisdiction in a final and non-appealable decision).  The duties of the Agents shall be mechanical
and administrative in nature; the Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender or
the holder of any Note; and nothing in this Agreement or in any other Loan
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agents any obligations in respect of this Agreement or any
other Loan Document except as expressly set forth herein or therein.


 


(b)           Notwithstanding any other
provision of this Agreement or any provision of any other Loan Document, the
Syndication Agent, the Documentation Agents, the Lead Arrangers and the Senior
Managing Agents are named as such for recognition purposes only, and in its
capacity as such shall have no powers, duties, responsibilities or liabilities
with respect to this Agreement or the other Loan Documents or the transactions
contemplated hereby and thereby; it being understood and agreed that the
Syndication Agent, the Documentation Agents, the Lead Arrangers and the Senior
Managing Agents shall be entitled to all indemnification and reimbursement
rights in favor of the Administrative Agent as, and to the extent, provided for
under Sections 12.06 and 13.01.  Without limitation of the foregoing, the
Syndication Agent, the Documentation Agents, the Lead Arrangers and the Senior
Managing Agents shall not, solely by reason of this Agreement or any other Loan
Documents, have any fiduciary relationship in respect of any Lender or any
other Person.


 


12.03.           Lack of Reliance on the Agents.  Independently and without reliance upon the
Agents, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (a) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (b) its
own appraisal of the creditworthiness of Holdings and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any
Lender or the holder of any Note with any credit or other information with
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter. 
No Agent shall be responsible to any Lender or the holder of any Note
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of this
Agreement or any other Loan Document or the financial condition of Holdings or
any of its Subsidiaries or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Loan Document, or the financial condition of
Holdings or any of its Subsidiaries or the existence or possible existence of
any Default or Event of Default.


 


12.04.           Certain Rights of the Administrative Agent.  If the Administrative Agent shall request
instructions from the Required Lenders with respect to any act or action


 


172

















 


(including failure to act) in connection with this Agreement or any
other Loan Document, the Administrative Agent shall be entitled to refrain from
such act or taking such action unless and until the Administrative Agent shall
have received instructions from the Required Lenders; and the Administrative
Agent shall not incur liability to any Lender by reason of so refraining.  Without limiting the foregoing, neither any
Lender nor the holder of any Note shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent acting
or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of the Required Lenders.


 


12.05.           Reliance.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Loan Document and its duties hereunder and thereunder, upon advice of counsel
selected by such Agent.


 


12.06.           Indemnification.  To the extent any Agent (or any affiliate thereof)
is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse
and indemnify such Agent (and any affiliate thereof) in proportion to their
respective “percentage” as used in determining the Required Lenders (determined
as if there were no Defaulting Lenders) for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Agent (or any affiliate
thereof) in performing its respective duties hereunder or under any other Loan
Document or in any way relating to or arising out of this Agreement or any
other Loan Document; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent’s (or such affiliates’ thereof) gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision).


 


12.07.           Agents in their Individual Capacities.  With respect to its obligation to make Loans,
or issue or participate in Letters of Credit, under this Agreement, each Agent
shall have the rights and powers specified herein for a “Lender” and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term “Lender”, “Required Lenders”, “Majority
Lenders”, “Supermajority Lenders”, “holders of Notes” or any similar
terms shall, unless the context clearly indicates otherwise, include such Agent
in its respective individual capacities. 
Each Agent and its respective affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking, investment banking,
trust or other business with, or provide debt financing, equity capital or
other services (including financial advisory services) to any Loan Party or any
Affiliate of any Loan Party (or any Person engaged in a similar business with
any Loan Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Loan Party or any Affiliate of any Loan Party for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.


 


12.08.           Holders.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the


 


173

















 


assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Administrative Agent. 
Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee,
assignee or endorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.


 


12.09.           Resignation and Removal of Agents.  (a)  The Administrative Agent (for
purposes of this Section 12.09(a) through (e), the term
“Administrative Agent” also shall include DBNY in its capacity as Security
Agent hereunder and pursuant to the Security Documents) may resign from the
performance of all its respective functions and duties hereunder and/or under
the other Loan Documents at any time by giving 15 Business Days’ prior written
notice to the Lenders and, unless a Default or an Event of Default under Section 11.01(g) or (h) then exists,
Holdings.  Any such resignation by an
Administrative Agent hereunder shall also constitute its resignation as an
Issuing Lender, the Swingline Lender and the Fronting Lender, in which case the
resigning Administrative Agent (x) shall not be required to issue any
further Letters of Credit or make any additional Swingline Loans or Specified
Foreign Currency Loans hereunder and (y) shall maintain all of its rights
as Issuing Lender, Swingline Lender or Fronting Lender, as the case may be,
with respect to any Letters of Credit issued by it, or Swingline Loans or
Specified Foreign Currency Loans made by it, prior to the date of such
resignation.  Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.


 


(b)           Upon any such notice of
resignation by the Administrative Agent, the Required Lenders shall appoint a
successor Administrative Agent hereunder and under the other Loan Documents who
shall be a commercial bank or trust company reasonably acceptable to Holdings,
which acceptance shall not be unreasonably withheld or delayed (provided
that the Holdings’ approval shall not be required if a Default or an Event of
Default then exists).


 


(c)           If a successor
Administrative Agent shall not have been so appointed within such 15 Business
Day period, the Administrative Agent, with the consent of Holdings (which
consent shall not be unreasonably withheld or delayed, provided that
Holdings’ consent shall not be required if a Default or an Event of Default
then exists), shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent hereunder or thereunder until such time, if any,
as the Required Lenders appoint a successor Administrative Agent as provided
above.


 


(d)           If no successor
Administrative Agent has been appointed pursuant to clause (b) or (c) above
by the 20th Business Day after the date such notice of resignation was given by
the Administrative Agent, the Administrative Agent’s resignation shall become
effective and the Required Lenders shall thereafter perform all the duties of
the Administrative Agent hereunder and/or under any other Loan Document until
such time, if any, as the Required Lenders appoint a successor Administrative
Agent as provided above.


 


(e)           The Required Lenders may at
any time when the Administrative Agent has become the subject of a proceeding
under Debtor Relief Law, or had a receiver, conservator, trustee or custodian
appointed for it, upon no less than thirty (30) days’ prior notice, replace the
Administrative Agent.  The successor
Administrative Agent shall not be the subject of a


 


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proceeding under the Debtor
Relief Law, or had a receiver, conservator, trustee or custodian appointed for
it and shall succeed to and become vested with all of the rights, powers,
privileges and duties of the replaced Administrative Agent, and the replaced
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents. 
The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. 
The provisions of this Section 12 and Section 13.01
shall continue in effect for the benefit of such replaced Administrative Agent,
its sub-agents and their respective Affiliates in respect of any actions taken
or omitted to be taken by any of them while the replaced Administrative Agent
was acting as Administrative Agent.  Any
such replacement of an Administrative Agent hereunder shall automatically, and
with no further action required on the part of the Administrative Agent,
constitute the resignation of the Administrative Agent in its capacity as an
Issuing Lender, the Swingline Lender and the Fronting Lender, in which case the
replaced Administrative Agent (x) shall not be required to issue any
further Letters of Credit, make any additional Swingline Loans or fund any
Specified Foreign Currency Loan hereunder and (y) shall maintain all of
its rights as Issuing Lender, Swingline Lender or Fronting Lender, as the case
may be, with respect to any Letters of Credit issued by it, Swingline Loans
made by it, or Specified Foreign Currency Loans funded by it, prior to the date
of such replacement.


 


(f)            Upon a resignation,
replacement or removal of the Administrative Agent pursuant to this Section 12.09,
the Administrative Agent shall remain indemnified to the extent provided in
this Agreement and the other Loan Documents and the provisions of this Section 12
(and the analogous provisions of the other Loan Documents) shall continue in
effect for the benefit of the Administrative Agent for all of its actions and
inactions while serving as the Administrative Agent hereunder and under the
other Loan Documents.


 


(g)           Any Co-Collateral Agent may
resign at any time upon written notice to Holdings, the Administrative Agent
and each Lender and the resignation of such Co-Collateral Agent shall become
effective immediately upon the delivery of such written notice.


 


(h)           (i) If the Commitments
of General Electric Capital Corporation are less than 50% of the Commitments of
the Administrative Agent or General Electric Capital Corporation is a
Defaulting Lender, General Electric Capital Corporation may be removed as a
Co-Collateral Agent by Holdings or the Required Lenders upon written notice to
it as Co-Collateral Agent and with such removal to become effective immediately
upon the delivery of such written notice, (ii) if the Commitments of
JPMorgan Chase Bank, N.A. are less than 50% of the Commitments of the
Administrative Agent or JPMorgan Chase Bank, N.A. is a Defaulting Lender,
JPMorgan Chase Bank, N.A. may be removed as a Co-Collateral Agent by Holdings
or the Required Lenders upon written notice to it as Co-Collateral Agent and
with such removal to become effective immediately upon the delivery of such
written notice.


 


(i)            Upon a resignation or
removal of any Co-Collateral Agent pursuant to Section 12.09(g) or
(h), any Co-Collateral Agent shall remain indemnified to the extent
provided in this Agreement and the other Loan Documents and the provisions of
this Section 12 (and the analogous provisions of the other Loan
Documents) shall continue in effect for the benefit of such Co-Collateral Agent
for all of its actions and inactions while serving as such Co-Collateral Agent
hereunder and under the other Loan Documents.


 


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12.10.           Collateral Matters.  (a)  Each Lender (including in their
capacity as a Swingline Lender, Issuing Lender, Agent and/or Lead Arranger, as
the case may be) authorizes and directs the Security Agent to enter into the
Security Documents and the Intercreditor Agreement for the benefit of the
Lenders and the other Secured Parties. 
Each Lender hereby agrees, and each holder of any Note by the acceptance
thereof will be deemed to agree, that, except as otherwise set forth herein,
any action taken by the Required Lenders in accordance with the provisions of
this Agreement or the Security Documents, and the exercise by the Required
Lenders of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders.  The Security
Agent is hereby authorized on behalf of all of the Lenders, without the
necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Security Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.


 


(b)           The Lenders hereby authorize
and direct the Security Agent, at its option and in its discretion, to release
or subordinate (as the case may be) any Lien granted to or held by the Security
Agent upon any Collateral and the Guarantees under the Guarantee and Collateral
Agreement and/or Canadian Guarantee and Collateral Agreement (i) upon
termination of the Total Commitment (and all Letters of Credit and Bankers’
Acceptances (or the obligations in an amount of 105% of outstanding stated
amounts are cash collateralized), and payment and satisfaction of all of the
Obligations (other than inchoate indemnification obligations and other
contingent obligations not due and payable) at any time arising under or in
respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby, (ii) constituting property being sold or
otherwise disposed of (to Persons other than Holdings and its Subsidiaries)
upon the sale or other disposition thereof in compliance with Section 10.13,
or consummation of any transaction
permitted hereunder as a result of which any Guarantor (other than SSCE, SSCC
or any other Borrower) ceases to be a Subsidiary of Holdings, (iii) if
approved, authorized or ratified in writing by the Required Lenders (or all of
the Lenders hereunder, to the extent required by Section 13.12) or (iv) as
otherwise may be expressly provided in the relevant Security Documents or in
the Intercreditor Agreement.  Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Security Agent’s authority to release particular types or items of
Collateral pursuant to this Section 12.10.


 


(c)           The Security Agent shall
have no obligation whatsoever to the Lenders or to any other Person to assure
that the Collateral exists or is owned by any Loan Party or is cared for, protected
or insured or that the Liens granted to the Security Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to
exercise or to continue exercising at all or in any manner or under any duty of
care, disclosure or fidelity any of the rights, authorities and powers granted
or available to the Security Agent in this Section 12.10, in any of
the Security Documents or in the Intercreditor Agreement, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Security Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Security Agent’s own interest in
the Collateral as one of the Lenders and that the Security Agent shall have no
duty or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).


 


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(d)           The Security Agent may
perform any and all of its duties and exercise its rights and powers hereunder
or under any other Loan Document by or through, or delegate any and all such
rights and powers to, any one or more sub-agents, trustees or third parties
appointed by the Security Agent.  The
Security Agent (and any such sub-agent, trustee or third party) may perform any
and all of its duties and exercise its rights and powers by or through their
respective Affiliates.  The exculpatory
and indemnification provisions of this Section 12 and Section 13.01
shall apply to any such sub-agent, trustee or third party and to their
respective Affiliates to the same extent that such provisions apply to the
Security Agent.


 


12.11.           Delivery of Information.  The Administrative Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from any Loan Party, any Subsidiary thereof, the Required
Lenders, any Lender or any other Person under or in connection with this
Agreement or any other Loan Document except (a) as specifically provided
in this Agreement or any other Loan Document and (b) as specifically
requested from time to time in writing by any Lender with respect to a specific
document, instrument, notice or other written communication received by and in
the possession of the Administrative Agent at the time of receipt of such request
and then only in accordance with such specific request.


 


12.12.           Quebec Security.  Without limiting the powers of the Security
Agent hereunder or under any of the other Loan Documents, each Secured Party
hereby acknowledges and agrees that DBNY shall, for purposes of holding any
security granted by any Canadian Loan Party or by any Affiliate or Subsidiary
of any Canadian Loan Party on property pursuant to the laws of the Province of
Quebec to secure obligations of such Canadian Loan Party or such Affiliate or
Subsidiary under any bond or debenture (the “Quebec Secured Obligations”),
be the holder of an irrevocable power of attorney (fondé de pouvoir)
(within the meaning of the Civil Code of Quebec) for all present and
future Secured Parties and holders of any bond or debenture.  Each of the Secured Parties, for itself and
for all present and future Affiliates that are or may become Secured Parties
hereby irrevocably constitutes, to the extent necessary, DBNY as the holder of
an irrevocable power of attorney (fondé de pouvoir) (within the meaning
of Article 2692 of the Civil Code of Quebec) in order to hold
security granted by any of the Canadian Loan Parties or by any of their
Affiliates or Subsidiaries to secure the Quebec Secured Obligations.  Furthermore, each of the Secured Parties
hereby appoints DBNY to act in the capacity of the holder and depositary of
such bond or debenture on its own behalf as Security Agent and for and on
behalf and for the benefit of all present and future Secured Parties.  Each assignee (for itself and for all present
and future Affiliates) of a Secured Party shall be deemed to have confirmed and
ratified the constitution of the Security Agent as the holder of such
irrevocable power of attorney (fondé de pouvoir) by execution of the
relevant Assignment and Assumption Agreement or other relevant documentation
relating to such assignment. 
Notwithstanding the provisions of Section 32 of the An Act
respecting the special powers of legal persons (Quebec), DBNY may acquire
and be the holder of any bond or debenture. 
The Canadian Borrowers (on behalf of itself and the other Loan Parties
which are Canadian Subsidiaries) hereby acknowledge that such bond or debenture
constitutes a title of indebtedness, as such term is used in Article 2692 of
the Civil Code of Quebec.


 


12.13.           Co-Collateral Agents.  If a Co-Collateral Agent proposes an
adjustment or revision to Borrowing Base eligibility standards, advance rates
applicable to any


 


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Borrowing Base or Reserves, or makes any other proposal regarding a
determination or action which may be made by the Co-Collateral Agents pursuant
to this Agreement or any Loan Document, the other Co-Collateral Agents shall
respond to such proposal within three Business Days of its receipt of such
written proposal.  In the event that the
Co-Collateral Agents cannot agree on Borrowing Base eligibility standards,
advance rates applicable to the Borrowing Base or Reserves or any other action
or determination which may be made by the Co-Collateral Agents pursuant to the
Agreement or any Loan Document, the consenting vote of 2 of the 3 Co-Collateral
Agents shall be required; provided that if there are only two
Co-Collateral Agents at the time of such determination, the determination shall
be made by the individual Co-Collateral Agent either asserting the more
conservative credit judgment, the numerically larger Reserve or declining to
permit the requested action for which consent is being sought by the relevant
Borrowers, as applicable; provided  further in the event an issue
cannot be resolved by either the more conservative credit judgment, the
numerically larger Reserve or declining to permit a requested action by the
Borrowers (such as the selection or replacement of an appraisal firm), then the
decision of the Security Agent shall be final.


 


SECTION 13.  Miscellaneous.


 


13.01.           Payment of Expenses, etc.  (a)  The Borrowers hereby jointly and
severally agree to:  (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses (including Expenses) of the Agents (including,
without limitation, the reasonable fees and disbursements of one counsel to the
Administrative Agent and one local counsel in each relevant jurisdiction,
in each case acting jointly for the Agents and the fees and expenses in
connection with the appraisals and collateral examinations required pursuant to
Sections  6.01(i) and 9.06(b)) in connection
with the preparation, execution, delivery and administration of this Agreement
and the other Loan Documents and the documents and instruments referred to
herein and therein and any actual or proposed amendment, waiver or consent
relating hereto or thereto, of the Agents and their respective Affiliates in connection
with their syndication efforts with respect to this Agreement and of the
Agents, the Issuing Lenders in connection with the Letter of Credit Back-Stop
Arrangements entered into by such Persons and, after the occurrence and during
the continuance of an Event of Default, each of the Issuing Lenders, the Fronting Lender and one counsel
for all of the Lenders in connection with the enforcement of this Agreement and
the other Loan Documents and the documents and instruments referred to herein
and therein or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a “work-out”
or pursuant to any insolvency or bankruptcy proceedings (including, in each
case without limitation, the reasonable fees and disbursements of counsel (limited to one local counsel
in each relevant jurisdiction and, if necessary one bankruptcy counsel and one
regulatory counsel, in each case to the Administrative Agent (or one additional
per affected party in the case of a conflict preventing only one local counsel
acting), in each case acting jointly for the Lenders) and one consultant for the
Administrative Agent and, after the occurrence and during the continuance
of an Event of Default, counsel (limited to one local counsel in each relevant
jurisdiction and, if necessary one bankruptcy counsel and one regulatory
counsel, in each case to the Administrative Agent (or one additional per
affected party in the case of a conflict preventing only one local counsel acting)
in each case acting jointly for the Issuing Lenders, the Fronting Lender and
the Lenders) for each of the Issuing Lenders, the Fronting Lender
and the Lenders); (ii) pay and hold the Administrative Agent, the Security
Agent, the Swingline Lender, the


 


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Fronting Lender, each of the Issuing Lenders, each Co-Collateral Agent,
and each of the Lenders harmless from and against any and all present and
future stamp, excise and other similar documentary taxes with respect to the
foregoing matters and save the Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, each of the
Issuing Lenders, each Co-Collateral Agent and each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to the Administrative Agent,
the Security Agent, the Swingline Lender, the Fronting Lender, such Issuing
Lender, such Co-Collateral Agent or such Lender) to pay such taxes; and (iii) indemnify
the Administrative Agent (including without limitation in its capacity as agent
for the Borrowers pursuant to Section 13.15), the Security Agent, the Swingline Lender, the Fronting Lender, each
Co-Collateral Agent, each Issuing Lender and each Lender, and each of their
respective officers, directors, employees, representatives, agents, Affiliates,
trustees and investment advisors (each, an “Indemnified Person”) from
and hold each of them harmless against any and all liabilities, obligations,
losses, damages, penalties, claims, actions (including removal or remedial
actions), judgments, suits, costs, expenses and disbursements (including
reasonable attorneys’ and consultants’ fees and disbursements) (collectively, “Indemnified
Costs”) incurred by, imposed on or assessed against any of them as a result
of, or arising out of, or in any way related to, or by reason of, (A) any
investigation, litigation or other proceeding (whether or not the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, any Co-Collateral
Agent, any Issuing Lender or any Lender is a party thereto and whether or not
such investigation, litigation or other proceeding is brought by or on behalf
of any Loan Party) related to the entering into and/or performance of this
Agreement or any other Loan Document or the use of any Letter of Credit or the
proceeds of any Loans hereunder or the consummation of the Transaction or any
other transactions contemplated herein or in any other Loan Document or the
exercise of any of their rights or remedies provided herein or in the other
Loan Documents, or (B) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any real property at any time owned, leased or operated by
Holdings or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials by Holdings or any of its
Subsidiaries at any location, whether or not owned, leased or operated by
Holdings or any of its Subsidiaries, the non-compliance by Holdings or any of
its Subsidiaries with any Environmental Law (including applicable permits
thereunder) applicable to any real property, or any environmental claim
asserted against Holdings, any of its Subsidiaries or any real property at any
time owned, leased or operated by Holdings or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel and other consultant incurred in connection with any
such investigation, litigation or other proceeding (but excluding any
Indemnified Costs to the extent incurred by reason of the gross negligence or
willful misconduct of the Indemnified Person (or its related parties) to be indemnified
(as determined by a court of competent jurisdiction in a final and
non-appealable decision)).  To the extent
that the undertaking to indemnify, pay or hold harmless any Agent, the Swingline Lender, the
Fronting Lender, any Issuing Lender or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrowers jointly and severally shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.  In addition, the Borrowers jointly and
severally agree to reimburse the Administrative Agent, the Security Agent and
the Co-Collateral Agents for all


 


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reasonable third party administrative, audit and monitoring expenses
incurred in connection with the Borrowing Base and determinations thereunder.


 


(b)           To the full extent permitted by
applicable law, each of Holdings and the other Borrowers shall not assert, and
hereby waives, any claim against any Indemnified Person, on any theory of
liability, for special, indirect, consequential or incidental damages (as
opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof.  No Indemnified Person
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, except to the extent the liability of such
Indemnified Person results from such Indemnified Person’s (or its related
parties’) gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision).


 


(c)           The provisions of this Section 13.01
shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, termination of any
Commitments, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Administrative Agent or any Lender.  All amounts due under this Section 13.01
shall be payable promptly after written demand therefor.


 


13.02.           Right of Setoff.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent, each Issuing Lender and each Lender is
hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to any Loan Party or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by the Administrative Agent, such
Issuing Lender or such Lender (including, without limitation, by branches and
agencies of the Administrative Agent, such Issuing Lender or such Lender
wherever located) to or for the credit or the account of Holdings or any of its
Subsidiaries against and on account of the Obligations and liabilities of the
Loan Parties to the Administrative Agent, such Issuing Lender or such Lender
under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations purchased by such Lender
pursuant to Section 13.04(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not the Administrative Agent, such Issuing
Lender or such Lender shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured;
provided that, the provisions of this Section 13.02 shall
not be construed to apply to any payment made by the Borrowers pursuant to and
in accordance with the express terms of this Credit Agreement (including
pursuant to the Extension in accordance with Section 2.19).


 


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13.03.           Notices.  Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier communication, facsimile transmission or
electronic mail) and mailed, telecopied, transmitted or delivered:  if to any Lender, at its address, facsimile
number or electronic mail address specified on Schedule 13.03; if to the
Administrative Agent or DBNY as Co-Collateral Agent, at the Notice Office; if
to JPMorgan Chase Bank, N.A. as Co-Collateral Agent, 383 Madison Avenue, New York,
NY 10179, Attention:  Peter Predun,
Telephone:  (212) 270-7005, Telecopier
No.:  (212) 270-5100, Email: Peter.Predun@jpmorgan.com; if to General
Electric Capital Corporation as Co-Collateral Agent, at 500 West Monroe Street,
12th Floor, Chicago, IL 60661, Attention: 
Kai Sorenson, Telephone: (312) 463-2346, Telecopier No.: (312) 463-3840,
Email: Kai.Sorenson@jpmorgan.com; or, if to any Loan Party, at Six CityPlace Drive, Creve
Coeur, MO 63141, Attention of Timothy T. Griffith, Vice President and Treasurer
(Fax No. (314) 787-6186), with a copy to Brian S. Hart, Winston &
Strawn LLP, 35 W. Wacker Drive, Chicago, IL 60601 (Fax No. (312)
558-5700); or in each case (other than with respect to a Lender), at such other
address as shall be designated by such party in a written notice to the other
parties hereto and, as to each Lender, at such other address, facsimile number
or electronic mail address as shall be designated by such Lender in a written
notice to Holdings and the Administrative Agent.  All such notices and communications shall,
when mailed, telecopied, faxed, mailed electronically or sent by overnight
courier, be effective when deposited in the mails or overnight courier, as the
case may be, or sent by telecopier or electronic mail, except that notices and
communications to the Administrative Agent, any Co-Collateral Agent, Holdings
and the other Loan Parties shall not be effective until received by the
Administrative Agent, such Co-Collateral Agent, Holdings or the other Loan
Parties, as the case may be.


 


13.04.           Benefit of Agreement; Assignments;
Participations.  (a) 
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto; provided,
however, that neither Holdings nor any Borrower may assign or transfer
any of their rights, obligations or interest hereunder without the prior
written consent of the Lenders which consent will not be given unless the
assignee or transferee is a member of the same “wholly-owned group” as each of
the Borrowers and, provided  further, that, although any Lender
may transfer, assign or grant participations in its rights hereunder, such
Lender shall remain a “Lender” for all purposes hereunder (and may not transfer
or assign all or any portion of its Commitments or Loans hereunder except as
provided in Sections 2.13 and 13.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a “Lender”
hereunder and, provided  further, that no Lender shall transfer or
grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Loan Document
except to the extent such amendment or waiver would (i) extend the final
scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of
Credit is not extended beyond the Revolving Loan Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section 13.07(a) shall
not constitute a reduction in the rate of interest or Fees payable


 


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hereunder), or increase the amount of the participant’s participation
over the amount thereof then in effect (it being understood that a waiver of
any Default or Event of Default or of a mandatory reduction in the Total
Commitment shall not constitute a change in the terms of such participation,
and that an increase in any Commitment (or the available portion thereof) or
Loan shall be permitted without the consent of any participant if the
participant’s participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by Holdings or any other Borrower of any of its
rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under any or all of the Security Documents
(except as expressly provided in the Loan Documents) supporting the Loans or
Letters of Credit hereunder in which such participant is participating.  In the case of any such participation, the participant
shall not have any rights under this Agreement or any of the other Loan
Documents (the participant’s rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto) and all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold such
participation.


 


(b)           Notwithstanding the foregoing, any
Lender (or any Lender together with one or more other Lenders) may (x) assign
all or a portion of its Commitments under a Tranche and related outstanding
Obligations (or, if the Commitments with respect to the relevant Tranche have
terminated, outstanding Obligations) hereunder to (i) (A) its parent
company and/or any affiliate of such Lender which is at least 50% owned by such
Lender or its parent company or (B) one or more other Lenders or any
affiliate of any such other Lender which is at least 50% owned by such other
Lender or its parent company (provided that any fund (which fund,
together with its Affiliates, has a combined capital and surplus in excess of
$500,000,000) that invests in loans and is managed or advised by the same
investment advisor of another fund which is a Lender (or by an Affiliate of
such investment advisor) shall be treated as an affiliate of such other Lender
for the purposes of this sub-clause (x)(i)(B)); provided that no
such assignment may be made to any such Person that is, or would at such time
constitute, a Defaulting Lender or (ii) in the case of any Lender that is
a fund that invests in loans, any other fund (which fund, together with its
Affiliates, has a combined capital and surplus in excess of $500,000,000) that
invests in loans managed or advised by the same investment advisor of any Lender
or by an Affiliate of such investment advisor or (y) assign all, or if
less than all, a portion equal to at least $5,000,000, in each case in the
aggregate for the assigning Lender or assigning Lenders, of such Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to one or
more Eligible Transferees (treating any fund that invests in loans and any
other fund that invests in loans and is managed or advised by the same
investment advisor of such fund or by an Affiliate of such investment advisor
as a single Eligible Transferee), each of which assignees shall become a party
to this Agreement as a Lender by execution of an Assignment and Assumption Agreement,
provided that (t) at such time, Schedule 1.01(a) shall
be deemed modified to reflect the Commitments and/or outstanding Revolving
Loans, as the case may be, of such new Lender and of the existing Lenders, (u) upon
the surrender of the relevant Notes by the assigning Lender (or, upon such
assigning Lender’s indemnifying the applicable Borrowers for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrowers’ joint and several expense, to such new Lender and to the
assigning Lender upon the request of such new Lender or assigning Lender, such
new Notes to be in conformity with the requirements of Section 2.05
(with appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Revolving Loans, as the case may be, (v) the
consents (not to


 


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be unreasonably withheld,
delayed or conditioned) of each Issuing Lender, the Swingline Lender and,
unless such assignment is to a Person that will not be a Participating
Specified Foreign Currency Lender, the Fronting Lender, shall be required in
connection with any such assignment, (w) the consent of the Administrative
Agent and, so long as no Default or Event of Default then exists, Holdings,
shall be required in connection with any such assignment pursuant to clause (y) above
(such consents, in any case, not to be unreasonably withheld, delayed or
conditioned) provided that Holdings shall be deemed to have consented to
any such assignment unless it shall object thereto by written notice to the
Administrative Agent within 5 Business Days after having received notice
thereof, (x) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500, (y) each assignment by any
Participating Specified Foreign Currency Lender shall require a Specified
Foreign Currency Participation Settlement with respect to such Participating
Specified Foreign Currency Lender unless the Fronting Lender agrees in its sole
discretion that the respective assignee shall succeed such Participating
Specified Foreign Currency Lender as a Participating Specified Foreign Currency
Lender itself, in which case such assignee shall acquire the Specified Foreign
Currency Participation of the respective assignor and (z) no such transfer
or assignment will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 13.15.  To the extent of any assignment pursuant to
this Section 13.04(b), the assigning Lender shall be relieved of
its obligations hereunder with respect to its assigned Commitments and
outstanding Revolving Loans.  At the time
of each assignment pursuant to this Section 13.04(b) to a
Person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall, to the
extent legally entitled to do so, provide to Holdings and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a Section 5.04(b)(ii) Certificate)
described in Section 5.04(b). 
In addition, at the time of each assignment pursuant to this Section 13.04(b) to
a Person which is not already a Lender hereunder, the respective assignee
Lender shall, to the extent legally entitled to do so and at the reasonable
request of Holdings, file any certificate or document or furnish to the
relevant Borrower and the Administrative Agent, such certificate or document
that may be necessary to establish any available exemption from, or reduction
of, any Taxes, as described in Section 5.04(c).  To the extent that an assignment of all or
any portion of a Lender’s Commitments and related outstanding Obligations
pursuant to Section 2.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 2.10
or 3.06 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrowers shall not be obligated to pay such
increased costs (although the Borrowers, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).  A
Lender may only assign all or a portion of its Commitments hereunder if that
assignment would result in at least two Lenders under this Agreement.


 


(c)           Nothing in this Agreement shall
prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank and, with prior notification to the Administrative Agent
(but without the consent of the Administrative Agent or Holdings), any Lender
which is a fund may pledge all or any portion of its Loans and Notes to its
trustee or to a collateral agent providing credit or credit support to such
Lender in support of its obligations to


 


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such trustee, such
collateral agent or a holder of such obligations, as the case may be.  No pledge pursuant to this clause (c) shall
release the transferor Lender from any of its obligations hereunder.


 


(d)           Any Lender which assigns all of its
Commitments and/or Revolving Loans hereunder in accordance with Section 13.04(b) shall
cease to constitute a “Lender” hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 2.10, 2.11, 3.06, 5.04, 12.06, 13.01
and 13.06), which shall survive as to such assigning Lender.


 


13.05.           No Waiver; Remedies Cumulative.  No failure or delay on the part of the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, any Co-Collateral
Agent, any Issuing Lender or any Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between Holdings, any other Borrower or any other Loan Party and the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, any Co-Collateral
Agent, any Issuing Lender or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or
thereunder.  The rights, powers and remedies
herein or in any other Loan Document expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Administrative Agent, the
Security Agent, the Swingline Lender, the Fronting Lender, any Co-Collateral Agent, any
Issuing Lender or any Lender would otherwise have.  No notice to or demand on any Loan Party in
any case shall entitle any Loan Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, any Co-Collateral
Agent, any Issuing Lender or any Lender to any other or further action in any
circumstances without notice or demand.


 


13.06.           Payments Pro Rata.  (a)  Except as otherwise provided in
this Agreement, the Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of any Borrower in respect of any Obligations
hereunder, the Administrative Agent shall distribute such payment to the
Lenders entitled thereto (other than any Lender that has consented in writing
to waive its pro  rata share of any such payment) pro  rata
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.


 


(b)           Each of the Lenders agrees that, if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker’s
lien, by counterclaim or cross action, by the enforcement of any right under
the Loan Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, Unpaid Drawings, Commitment Fees or
Letter of Credit Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Loan Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in


 


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such amount; provided
that if all or any portion of such excess amount is thereafter recovered from
such Lenders, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.


 


(c)           Notwithstanding anything to the
contrary contained herein, the provisions of the preceding Sections 13.06(a) and
(b) shall be subject to the express provisions of Section 2.19
and of this Agreement which require, or permit, differing payments to be made
to Non-Defaulting Lenders as opposed to Defaulting Lenders.


 


13.07.           Computations.  All computations of interest (except as provided in Section 2.15),
Commitment Fees and other Fees (other than Drawing Fees) hereunder shall be
made on the basis of a year of 360 days (except for interest calculated by
reference to the Prime Lending Rate or clause (i) of the definition of
Canadian Prime Rate, which shall be based on a year of 365 or 366 days, as
applicable) for the actual number of days (including the first day but
excluding the last day; except that in the case of Letter of Credit Fees and
Facing Fees, the last day shall be included) occurring in the period for which
such interest, Commitment Fees or Fees are payable.


 


13.08.           GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE; WAIVER OF JURY TRIAL.  (a)  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN AS EXPRESSLY SET FORTH IN THE OTHER LOAN DOCUMENTS) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS
RULES THEREOF.  ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF
NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. 
EACH OF HOLDINGS AND EACH BORROWER HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS HOLDINGS, WITH A
REGISTERED ADDRESS BEING SIX CITYPLACE DRIVE, CREVE COEUR, MO 63141 (TELEPHONE
NO.: (314) 656-5300; FAX NO.:  (314)
787-6186), AS ITS AUTHORIZED DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF,
AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING; PROVIDED THAT DURING
THE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE PLAN OF REORGANIZATION EACH OF
THE PARTIES HERETO SUBMITS TO THE JURISDICTION OF THE U.S. BANKRUPTCY COURT
WITH RESPECT TO MATTERS RELATING HERETO.  IF FOR ANY REASON SUCH AUTHORIZED DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH OF
HOLDINGS AND EACH BORROWER AGREES TO DESIGNATE A NEW AUTHORIZED DESIGNEE,
APPOINTEE


 


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AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS
AGREEMENT.  EACH OF HOLDINGS AND EACH
BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH LOAN PARTY, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH LOAN PARTY. 
EACH OF THE PARTIES TO THIS AGREEMENT FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH LOAN PARTY AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING.  EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST HOLDINGS AND EACH BORROWER IN ANY OTHER JURISDICTION.


 


(b)           EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT
IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.


 


(c)           EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


13.09.           Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.  A set of counterparts executed by all the
parties hereto shall be lodged with Holdings and the Administrative Agent.  Delivery of an executed counterpart hereof by
facsimile


 


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or electronic transmission shall be as effective as delivery of an
original executed counterpart hereof.


 


13.10.           Effectiveness.  (a) Unless the Administrative Agent has
received actual notice from any Lender that the conditions contained in Section 6.01
have not been met to its satisfaction, upon the receipt by the Administrative
Agent from Holdings, the other Borrowers, each of the Co-Collateral Agents and
each of the Lenders a signed counterpart hereof (whether the same or different
counterparts) at the Notice Office or, in the case of the Lenders, shall have
given to the Administrative Agent telephonic (confirmed in writing), written or
telex notice (actually received) at such office that the same has been signed
and mailed to it and upon the Administrative Agent’s good faith determination
that the conditions contained in Section 6.01 have been met, then
the Closing Date shall be deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Closing Date shall not release Holdings, any
Borrower or any other Loan Party from any liability for failure to satisfy one
or more of the applicable conditions contained in Section 6.01).


 


(b)           The obligation of each Lender to make
Loans, and the obligation of each Issuing Lender to issue Letters of Credit
shall arise on the date (the “Funding Date”) which occurs after the
Closing Date on which the conditions contained in Sections 6.02 and 7
are met to the satisfaction of the Administrative Agent and the Required
Lenders.  Unless the Administrative Agent
has received actual notice from any Lender that the conditions described in the
preceding sentence have not been met to its satisfaction, upon the
Administrative Agent’s good faith determination that the conditions described
in the immediately preceding sentence have been met, then the Funding Date
shall be deemed to have occurred, regardless of any subsequent determination
that one or more of the conditions thereto had not been met (although the
occurrence of the Funding Date shall not release Holdings, any Borrower or any
other Loan Party from any liability for failure to satisfy one or more of the
applicable conditions contained in Section 6.02).  The Administrative Agent will give Holdings,
the other Borrowers and each Lender prompt written notice of the occurrence of
the Funding Date.


 


13.11.           Headings Descriptive.  The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.


 


13.12.           Amendment or Waiver; etc.  (a)  Neither this Agreement nor any
other Loan Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Loan Parties party hereto or thereto and
the Required Lenders (although additional parties may be added to (and annexes
may be modified to reflect such additions), and Subsidiaries of Holdings (other
than the Borrowers) may be released from, the guarantee under the Guarantee and
Collateral Agreement or Canadian Guarantee and Collateral Agreement, as the
case may be, and the relevant Security Documents), provided that no such
change, waiver, discharge or termination shall, without the consent of each
Lender (other than a Defaulting Lender except that, for the purposes of
succeeding clauses (i), (ii) and (iii) (but, in the case of such
clause (iii), only to the extent relating to such clause (i) or (ii)), a
Defaulting Lender shall have a separate vote to the extent otherwise provided
therein; provided  further that for the


 


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purposes
of succeeding clauses (ii) and (iii) (but, in the case of such clause
(iii), only to the extent relating to such clause (ii)), to the extent a
Defaulting Lender does not accept or reject in writing to the Administrative
Agent a written amendment, waiver or modification proposal on or prior to the
expiry of the period of time granted to all Lenders required to consent to such
proposal such Defaulting Lender shall be deemed to have consented to the
respective written amendment, waiver or modification proposal) (with
Obligations being directly affected in the case of the following clauses (i), (vi) and
(vii)), (i) extend the final scheduled maturity of any Loan or Note or
extend the stated expiration date of any Letter of Credit beyond the Revolving
Loan Maturity Date, or reduce the rate or extend the time of payment of
interest or Fees thereon (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates and (y) extensions
expressly permitted by Section 2.19), or reduce (or forgive) the
principal amount thereof (it being understood that any amendment or
modification to Section 13.07 shall not constitute a reduction in
the rate of interest or Fees for the purposes of this clause (i)), (ii) release
all or substantially all of the Collateral (except in connection with the
Discharge of Revolving Credit Obligations as expressly provided in the Loan
Documents) under all Security Documents, all or substantially all of the Loan
Parties (except in connection with the Discharge of Revolving Credit
Obligations as expressly provided in the Loan Documents) under the guarantee
under the Guarantee and Collateral Agreement or Canadian Guarantee and
Collateral Agreement or any Borrower (except (x) in connection with the
Discharge of Revolving Credit Obligations as expressly provided in the Loan
Documents or (y) following the payment in full in cash of the Canadian
Facility Obligations (other than unasserted contingent and indemnification obligations),
termination of all Canadian Facility Commitments and reduction of all exposure
under any Canadian Facility Letters of Credit issued and any Canadian Facility
Bankers’ Acceptances to zero (or the making of other arrangements satisfactory
to the issuers thereof), any Canadian Borrower) from this Agreement or under
the guarantee under the Guarantee and Collateral Agreement or Canadian
Guarantee and Collateral Agreement, as the case may be, (iii) amend,
modify or waive any provision of this Section 13.12(a) or Section 13.06
(except for technical amendments with respect to additional extensions of
credit pursuant to this Agreement which afford the protections to such
additional extensions of credit of the type provided to the Commitments on the
Funding Date), (iv) reduce the “majority” voting threshold specified in
the definition of Required Lenders, (v) consent to the assignment or
transfer by Holdings or any other Borrower of any of their rights and
obligations under this Agreement or any other Loan Document to which it is a
party, (vi) amend the priority of payments set forth in Section 11.02
and the priority of payments in provisions in the Security Documents setting
forth the application of proceeds, or (vii) amend Section 2.19
the effect of which is to extend the maturity of any Lender without its
consent; provided  further, that no such change, waiver, discharge
or termination shall (1) increase the Commitments of any Lender over the
amount thereof then in effect without the consent of such Lender (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitments of any Lender,
and that an increase in the available portion of the Commitments of any Lender
shall not constitute an increase of the Commitments of such Lender), (2) without
the consent of each Issuing Lender, amend, modify or waive any provision of Section 3
or alter its rights or obligations with respect to Letters of Credit, (3) without
the consent of the Swingline Lender, alter the Swingline Lender’s rights or
obligations with respect to Swingline Loans, (4) without the consent of
the Administrative Agent, amend, modify or waive any provision of


 


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Section 12 or any other provision of
this Agreement or any other Loan Document as same relates to the rights or
obligations of the Administrative Agent, (5) without the consent of the
Co-Collateral Agent affected thereby, amend, modify or waive any provision
relating to the rights or obligations of such Co-Collateral Agent, (6) without
the consent of the Fronting Lender, amend, modify or waive any provision of Section 15
or alter the Fronting Lender’s rights or obligations with respect to Specified
Foreign Currency Loans, or (7) without the consent of the Supermajority
Lenders, (v) amend the priority of payments set forth in Section 5.03(e),
(w) amend the definition of Supermajority Lenders, (x) amend or expand any of the following definitions,
in each case the effect of which would be to increase the amounts available for
borrowing hereunder:  Canadian Borrowing
Base, U.S. Borrowing Base, Borrowing Base, Eligible Accounts, Eligible
Inventory (including, in each case, the defined terms used therein) (it being understood that the
establishment, modification or elimination of Reserves, in each case by the
Co-Collateral Agents in accordance with the terms hereof, will not be deemed to
require a Supermajority Lender consent), (y) decrease the frequency of
Borrowing Base Certificate deliveries required pursuant to Section 9.04(i) or
(z) increase the percentage of any Borrowing Base for which Agent Advances
may be made pursuant to Section 2.01(e).


 


(b)           If, in connection with any proposed
change, waiver, discharge or termination of or to any of the provisions of this
Agreement as contemplated by clauses (i) through (vi), inclusive, of the
first proviso to Section 13.12(a), the consent of the Required Lenders
is obtained but the consent of one or more of such other Lenders whose consent
is required is not obtained, then the Borrowers shall have the right, so long
as all non-consenting Lenders whose individual consent is required are treated
as described below, to replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 2.13 so long as
at the time of such replacement, each such Replacement Lender consents to the
proposed change, waiver, discharge or termination, provided, that the
Borrowers shall not have the right to replace a Lender solely as a result of
the exercise of such Lender’s rights (and the withholding of any required
consent by such Lender) pursuant to the third proviso to Section 13.12(a).


 


(c)           Notwithstanding anything to the
contrary contained in clause (a) above of this Section 13.12,
the Borrowers, the Administrative Agent, the Security Agent and each
Incremental Lender may, in accordance with the provisions of Section 2.14
enter into an Incremental Commitment Agreement,
provided that after the execution and delivery by the Borrowers, the
Administrative Agent, the Security Agent and each such Incremental Lender of
such Incremental Commitment Agreement, such Incremental Commitment Agreement
may thereafter only be modified in accordance with the requirements of clause (a) above
of this Section 13.12.


 


(d)           If a fee is to be paid by any
Borrower in connection with any waiver or amendment hereunder, the agreement
evidencing such amendment or waiver may (but shall not be required to), at the
discretion of Administrative Agent, provide that only Lenders executing such
agreement by a specified date may share in such fee (and in such case may (but
shall not be required to), at the discretion of Administrative Agent, be
divided among the applicable Lenders on a pro rata basis without including the
interests of any Lenders which have not timely executed such agreement).


 


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13.13.           Survival; Continuing Obligation.  (i) All indemnities set forth herein
including, without limitation, in Sections 2.10, 2.11, 3.06,
5.04, 12.06 and 13.01, and in each other Loan Document,
are a continuing obligation of each Loan Party, separate from each of their
other respective obligations, and shall survive the execution, delivery and
termination of this Agreement, any other Loan Document and the Notes and the
making and repayment of the Obligations and (ii) any settlement or
discharge of any claim under any indemnity in a Loan Document will be
conditional on no payment made under that indemnity being avoided or set aside
or ordered to be refunded by virtue of any provision of any enactment relating
to bankruptcy, insolvency or liquidation.


 


13.14.           Domicile of Loans.  Each Lender may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such
Lender.  Notwithstanding anything to the
contrary contained herein, to the extent that a transfer of Loans pursuant to
this Section 13.14 would, at the time of such transfer, result in
increased costs under Section 2.10, 2.11, 3.06 or 5.04
from those being charged by the respective Lender prior to such transfer, then
the Borrowers shall not be obligated to pay such increased costs (although the
Borrowers shall be jointly and severally obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective transfer).


 


13.15.           Register.  The Borrowers hereby designate the
Administrative Agent to serve as their agent, solely for purposes of this Section 13.15,
to maintain a register (the “Register”) on which it will record the
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender.  Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrowers’
obligations in respect of such Loans. 
With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. 
The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section 13.04(b) (including
as contemplated by Section 2.13). 
Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as practicable,
the assigning or transferor Lender shall surrender the Note (if any) evidencing
such Loan, and thereupon one or more new Notes in the same aggregate principal
amount shall be issued to the assigning or transferor Lender and/or the new
Lender at the request of any such Lender. 
Any provision of Incremental Commitments pursuant to Section 2.14
shall be recorded by the Administrative Agent on the Register only upon the
acceptance of the Administrative Agent of a properly executed and delivered
Incremental Commitment Agreement.


 


13.16.           Confidentiality.  (a)  Subject to the provisions of clause
(b) of this Section 13.16, each Agent, each Lender and each
Issuing Lender agrees that it will not disclose any Confidential Information to
any Person without the prior consent of Holdings; provided that


 


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nothing herein shall prevent any Agent, Issuing Lender or any Lender
from disclosing any such information (a) to the extent required pursuant
to the order of any court or administrative agency or in any pending legal or
administrative proceeding, or otherwise as required by applicable law or
compulsory legal process (in which case the respective Agent, Issuing Lender or
Lender, to the extent permitted by law, agrees to inform Holdings promptly
thereof), (b) to the extent required upon the request or demand of any
regulatory authority having jurisdiction over such Agent, Issuing Lender or
Lender or any of their respective Affiliates (in which case, the respective Agent,
Issuing Lender or Lender to the extent permitted, agrees to inform Holdings
promptly thereof; although no such notice to Holdings shall be required in
connection with ordinary course reviews by any such regulatory authority), (c) to
the extent that such information becomes publicly available other than by
reason of improper disclosure by the respective Agent, Issuing Lender or Lender
or any of its Affiliates, (d) to the extent that such information is
received by the respective Agent, Issuing Lender or Lender on a
non-confidential basis from a third party that is not to its knowledge subject
to confidentiality obligations to any Loan Party, (e) to the Agents’, any
Issuing Lender’s or any Lender’s respective Affiliates and their respective
employees, legal counsel, independent auditors and other experts or agents who
need to know such information in connection with the Transaction and are
informed of the confidential nature of such information, (f) to potential
Lenders, participants or assignees or any potential counterparty (or its
advisors) to any swap or derivative transaction relating to any Borrower or any
of its Affiliates or any of their respective obligations, in each case who are
instructed that they shall be bound by terms no less restrictive than this
paragraph (or language substantially similar to this paragraph), or (g) for
purposes of establishing a “due diligence” defense, provided that the
respective Agent, Issuing Lender or Lender will, to the extent permitted,
promptly provide Holdings with the opportunity to seek a protective order or
other measure ensuring confidential treatment of the Confidential Information
used to establish such defense.


 


(b)           Holdings and the other Borrowers
hereby acknowledge and agree that each Lender may share with any of its
affiliates, and such affiliates may share with such Lender, any information
related to Holdings or any of its Subsidiaries (including, without limitation,
any non-public customer information regarding the creditworthiness of Holdings
and its Subsidiaries), provided such Persons shall be subject to the provisions
of this Section 13.16 to the same extent as such Lender.


 


13.17.           Patriot Act.  Each Lender subject to the USA PATRIOT ACT
(Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”) hereby notifies Holdings and the other Borrowers that pursuant to the
requirements of the Patriot Act, they are required to obtain, verify and record
information that identifies Holdings, the other Borrowers and the other Loan
Parties and other information that will allow such Lender to identify Holdings,
the other Borrowers and the other Loan Parties in accordance with the Patriot
Act.


 


13.18.           OTHER LIENS ON COLLATERAL; TERMS
OF INTERCREDITOR AGREEMENT; ETC.  (a)  THE LENDERS ACKNOWLEDGE THAT THE TERM LOAN
FACILITY IS SECURED BY LIENS ON THE TERM PRIORITY COLLATERAL AND THE ABL
PRIORITY COLLATERAL AND THAT THE PERMITTED SECOND LIEN NOTES WILL BE SECURED BY
LIENS ON THE TERM PRIORITY COLLATERAL AND THE ABL PRIORITY COLLATERAL.  IN CONNECTION WITH


 


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HOLDINGS’
ENTRY INTO THE TERM LOAN FACILITY AND/OR THE INCURRENCE OF ANY PERMITTED SECOND
LIEN NOTES, THE ADMINISTRATIVE AGENT SHALL ENTER INTO THE INTERCREDITOR
AGREEMENT, ESTABLISHING THE RELATIVE RIGHTS OF THE SECURED PARTIES, THE SECURED
PARTIES UNDER THE TERM LOAN FACILITY AND THE SECURED PARTIES UNDER THE
PERMITTED SECOND LIEN NOTES, AS THE CASE MAY BE, WITH RESPECT TO THE TERM
PRIORITY COLLATERAL AND THE ABL PRIORITY COLLATERAL AND SUCH AMENDMENTS TO THE
SECURITY DOCUMENTS AS SHALL BE APPROPRIATE OR NECESSARY TO CAUSE THE PERMITTED
SECOND LIEN NOTES TO BE SECURED AS SET FORTH IN THE DEFINITION OF THE TERM
“PERMITTED SECOND LIEN NOTES”, PROVIDED THAT THE ADMINISTRATIVE AGENT
HAS RECEIVED EVIDENCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT THAT
THE TERMS OF THE PERMITTED SECOND LIEN NOTES AND THE DEFINITIVE DOCUMENTATION
ENTERED INTO IN CONNECTION THEREWITH COMPLY WITH THE TERMS HEREOF.  EACH LENDER HEREBY IRREVOCABLY (I) CONSENTS
TO THE TREATMENT OF LIENS TO BE PROVIDED FOR UNDER THE INTERCREDITOR AGREEMENT
OR THE AMENDED SECURITY DOCUMENTS, AS THE CASE MAY BE, (II) AUTHORIZES
AND DIRECTS THE ADMINISTRATIVE AGENT AND THE SECURITY AGENT TO EXECUTE AND
DELIVER THE INTERCREDITOR AGREEMENT AND ANY DOCUMENTS RELATING THERETO, IN EACH
CASE, ON BEHALF OF SUCH LENDER AND WITHOUT ANY FURTHER CONSENT, AUTHORIZATION
OR OTHER ACTION BY SUCH LENDER, (III) AGREES THAT, UPON EXECUTION AND
DELIVERY THEREOF, SUCH LENDER SHALL BE BOUND BY THE TERMS OF THE INTERCREDITOR
AGREEMENT AS IF IT WERE A SIGNATORY THERETO AND WILL TAKE NO ACTION CONTRARY TO
THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (IV) AGREES THAT NO
LENDER SHALL HAVE ANY RIGHT OF ACTION WHATSOEVER AGAINST THE ADMINISTRATIVE
AGENT OR THE SECURITY AGENT AS A RESULT OF ANY ACTION TAKEN BY THE
ADMINISTRATIVE AGENT OR THE SECURITY AGENT PURSUANT TO THIS SECTION OR IN
ACCORDANCE WITH THE TERMS OF THE INTERCREDITOR AGREEMENT.  EACH LENDER HEREBY FURTHER IRREVOCABLY
AUTHORIZES AND DIRECTS THE ADMINISTRATIVE AGENT TO ENTER INTO SUCH AMENDMENTS,
SUPPLEMENTS OR OTHER MODIFICATIONS TO THE INTERCREDITOR AGREEMENT IN CONNECTION
WITH ANY EXTENSION, RENEWAL OR REFINANCING OF ANY TERM LOANS OR ANY PERMITTED
SECOND LIEN NOTES AS ARE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND
THE SECURITY AGENT TO GIVE EFFECT THERETO, IN EACH CASE ON BEHALF OF SUCH
LENDER AND WITHOUT ANY FURTHER CONSENT, AUTHORIZATION OR OTHER ACTION BY SUCH
LENDER.  THE ADMINISTRATIVE AGENT AND THE
SECURITY AGENT SHALL HAVE THE BENEFIT OF THE PROVISIONS OF SECTION 12
WITH RESPECT TO ALL ACTIONS TAKEN BY IT PURSUANT TO THIS SECTION TO THE
FULL EXTENT THEREOF.


 


(b)           THE PROVISIONS OF THIS SECTION 13.18
ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR
AGREEMENT, THE FORM OF WHICH IS ATTACHED AS AN EXHIBIT TO THIS
AGREEMENT.  REFERENCE MUST BE MADE TO THE
INTERCREDITOR AGREEMENTS ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF.


 


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EACH LENDER IS RESPONSIBLE
FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENT AND THE
TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF
ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR
ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT.


 


13.19.           Waiver of Sovereign Immunity.  Each of the Loan Parties, in respect of
itself, its Subsidiaries, its process agents, and its properties and revenues,
hereby irrevocably agrees that, to the extent that such Loan Party, its
Subsidiaries or any of its properties has or may hereafter acquire any right of
immunity, whether characterized as sovereign immunity or otherwise, from any
legal proceedings, whether in the United States and Canada or elsewhere, to
enforce or collect upon the Loans or any Loan Document or any other liability
or obligation of such Loan Party or any of its Subsidiaries related to or
arising from the transactions contemplated by any of the Loan Documents,
including, without limitation, immunity from service of process, immunity from
jurisdiction or judgment of any court or tribunal, immunity from execution of a
judgment, and immunity of any of its property from attachment prior to any
entry of judgment, or from attachment in aid of execution upon a judgment, such
Loan Party, for itself and on behalf of its Subsidiaries, hereby expressly
waives, to the fullest extent permissible under applicable law, any such
immunity, and agrees not to assert any such right or claim in any such proceeding,
whether in the United States and Canada or elsewhere.  Without limiting the generality of the
foregoing, each Loan Party further agrees that the waivers set forth in this Section 13.19
shall have the fullest extent permitted under the Foreign Sovereign Immunities
Act of 1976 of the United States and are intended to be irrevocable for
purposes of such Act.


 


13.20.           Judgment Currency.  (a)  The Loan Parties’ obligations
hereunder and under the other Loan Documents to make payments in the respective
Available Currency (the “Obligation Currency”) shall not be discharged
or satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent, the Security Agent, the respective Issuing Lender or the
respective Lender of the full amount of the Obligation Currency expressed to be
payable to the Administrative Agent, the Security Agent, such Issuing Lender or
such Lender under this Agreement or the other Loan Documents.  If for the purpose of obtaining or enforcing
judgment against any Loan Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall
be made, at the rate of exchange (as quoted by the Administrative Agent or if
the Administrative Agent does not quote a rate of exchange on such currency, by
a known dealer in such currency designated by the Administrative Agent)
determined, in each case, as of the day on which the judgment is given (such
day being hereinafter referred to as the “Judgment Currency Conversion Date”).


 


(b)           If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date
of actual payment of the amount due, each Borrower covenants and agrees to pay,
or cause to be paid, such additional amounts, if any (but in any event not a
lesser amount), as may be necessary to ensure that the amount paid in the


 


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Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.


 


(c)           For purposes of determining any rate
of exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.


 


13.21.           Qualified Secured Hedging Agreements
and Qualified Secured Cash Management Agreements.  (a) At any time prior to or within 15
days after any Loan Party enters into any Hedging Agreement or Cash Management Agreement,
or in the case of Hedging Agreements or Cash Management Agreements in effect on
the Funding Date, within 15 days of the Funding Date, if the applicable Loan
Party and counterparty desire that the monetary obligations in respect of such
Hedging Agreement or the monetary obligations in respect of such Cash
Management Agreement be treated as a “Hedging Obligations” or “Cash Management
Services Obligations”, as applicable, hereunder with rights in respect of
payment of proceeds of the Collateral in accordance with the waterfall
provisions set forth in Section 11.02, Holdings may notify the
Administrative Agent in writing (which notice the Administrative Agent shall
promptly provide to the Co-Collateral Agents) (to be acknowledged by the
Administrative Agent and Co-Collateral Agents) that (x) such Hedging
Agreement is to be a “Secured Hedging Agreement” and, if it wishes that
the monetary obligations in respect of the respective Secured Hedging Agreement
be treated as pari  passu with the Loan Document Obligations with
respect to the priority of payment of proceeds of the Collateral in accordance
with the waterfall provisions set forth in Section 11.02, a “Qualified
Secured Hedging Agreement” or (y) such Cash Management Agreement is to
be a “Secured Cash Management Agreement” and, if it wishes that the
monetary obligations in respect of the respective Secured Cash Management
Agreement be treated as pari  passu with the Loan Document
Obligations with respect to the priority of payment of proceeds of the
Collateral in accordance with the waterfall provisions set forth in Section 11.02,
a “Qualified Secured Cash Management Agreement”, so long as the
following conditions are satisfied:


 


(i)            in the case of a Hedging Agreement, such Hedging
Agreement is either (x) in effect on the Funding Date with a counterparty
that is a Hedging Creditor or (y) entered into after the Funding Date with
any counterparty that is a Hedging Creditor at the time such Hedging Agreement
is entered into; and


 


(ii)           in the case of a Cash Management Agreement, such Cash
Management Agreement is either (x) in effect on the Funding Date with a
Cash Management Creditor  or (y) entered
into after the Funding Date with a Cash Management Creditor at the time such
Cash Management Agreement is entered into;


 


provided that no such Secured Hedging Agreement or Secured
Cash Management Agreement can be secured on a first lien basis by the Term
Priority Collateral (and any request under this Section 13.21 will
be deemed to be a representation by Holdings to such effect); and provided
further, that no monetary obligations in respect of any Secured Hedging
Agreement or Secured Cash Management Agreement shall be treated as “Hedging
Obligations” or “Cash Management


 


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Services Obligations”, as applicable, hereunder or receive any benefit
of the designation under this Section 13.21 after the Discharge of
Revolving Credit Obligations.  If, in any
written notification by Holdings as set forth above, Holdings shall fail to
include in such written notice that a Secured Hedging Agreement or Secured Cash
Management Agreement shall constitute a Qualified Secured Hedging Agreement or
Qualified Secured Cash Management Agreement, as the case may be, then such
Secured Hedging Agreement or Secured Cash Management Agreement shall not
constitute a Qualified Secured Hedging Agreement or Qualified Secured Cash
Management Agreement, as the case may be.


 


(b) Until such time as Holdings
delivers (and the Administrative Agent and Co-Collateral Agents acknowledge)
such notice as described above, such Hedging Agreement or Cash Management
Agreement shall not constitute a Secured Hedging Agreement or Secured Cash
Management Agreement, as the case may be. 
The parties hereto understand and agree that the provisions of this Section 13.21
are made for the benefit of the Lenders and their Affiliates and the Term Loan
Lenders and their Affiliates which become parties to Hedging Agreements or Cash
Management Agreements, as applicable, and agree that any amendments or
modifications to the provisions of this Section 13.21 shall not be
effective with respect to any Secured Hedging Agreement or Secured Cash
Management Agreement, as the case may be, entered into prior to the date of the
respective amendment or modification of this Section 13.21 (without
the written consent of the relevant parties thereto).  Notwithstanding any such designation of a
Hedging Agreement as a Secured Hedging Agreement or a Cash Management Agreement
as a Secured Cash Management Agreement, no provider or holder of any such
Secured Hedging Agreement or Secured Cash Management Agreement shall have any
voting or approval rights hereunder (or be deemed a Lender) solely by virtue of
its status as the provider of such agreements or the Secured Obligations owing
thereunder, nor shall their consent be required (other than in their capacities
as a Lender to the extent applicable) for any matter hereunder or under any of
the other Loan Documents, including, without limitation, as to any matter
relating to the Collateral or the release of Collateral or Guarantors.  The Administrative Agent and Co-Collateral
Agents accept no responsibility and shall have no liability for the calculation
of the exposure owing by the Loan Parties under any such Secured Hedging
Agreement and/or Secured Cash Management Agreement, and shall be entitled in
all cases to rely on the applicable counterparty and the applicable Loan Party
party to such agreement for the calculation thereof.  Such counterparty and the applicable Loan
Party party to any such agreement each agrees to provide the Administrative
Agent and the Co-Collateral Agents with the calculations of all such exposures
and reserves, if any, at such times as the Administrative Agent or the
Co-Collateral Agents shall reasonably request, and in any event, not less than
monthly (unless otherwise agreed to by the Administrative Agent and the
Co-Collateral Agents).


 


SECTION 14.  Nature of Obligations.


 


14.01.           Nature of Obligations.  Notwithstanding anything to the contrary
contained elsewhere in this Agreement, it is understood and agreed by the
various parties to this Agreement that:


 


(a)           all U.S. Facility Obligations to repay principal of,
interest on, and all other amounts with respect to, all U.S. Facility Revolving
Loans, U.S. Facility Swingline Loans, U.S. Facility Letters of Credit and all
other U.S. Facility Obligations pursuant to


 


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this Agreement and each other Loan Document
(including, without limitation, all fees, indemnities, taxes and other U.S.
Facility Obligations in connection therewith or in connection with the related
Commitments) shall constitute the joint and several obligations of each of the
U.S. Borrowers.  In addition to the
direct (and joint and several) obligations of the U.S. Borrowers with respect
to U.S. Facility Obligations as described above, all such U.S. Facility
Obligations shall be guaranteed pursuant to, and in accordance with the terms
of, the Guarantee and Collateral Agreement, provided that the
obligations of a U.S. Borrower with respect to the U.S. Facility Obligations as
described above shall not be limited by any provision of the Guarantee and
Collateral Agreement entered into by such U.S. Borrower;


 


(b)           all Canadian Facility Obligations owing by any U.S.
Borrower to repay principal of, interest on, and all other amounts with respect
to, all Canadian Facility Revolving Loans and Canadian Facility Swingline Loans
borrowed by any U.S. Borrower, all Canadian Facility Letters of Credit issued
for the account of any U.S. Borrower and all other Canadian Facility
Obligations owing by any U.S. Borrower pursuant to this Agreement and each
other Loan Document (including, without limitation, all fees, indemnities,
taxes and other Canadian Facility Obligations in connection therewith or in
connection with the related Canadian Facility Commitments) shall constitute the
joint and several obligations of each of the U.S. Borrowers.  In addition to the direct (and joint and
several) obligations of the U.S. Borrowers with respect to Canadian Facility
Obligations as described above, all such Canadian Facility Obligations owing by
any U.S. Borrower shall be guaranteed pursuant to, and in accordance with the
terms of, the Guarantee and Collateral Agreement, provided that the
obligations of a U.S. Borrower with respect to the Canadian Facility
Obligations as described above shall not be limited by any provision of the
Guarantee and Collateral Agreement entered into by such U.S. Borrower; and


 


(c)           all Canadian Facility Obligations owing by any Canadian
Borrower to repay principal of, interest on, and all other amounts with respect
to, all Canadian Facility Revolving Loans and Canadian Facility Swingline Loans
borrowed by any Canadian Borrower, all Canadian Facility Letters of Credit
issued for the account of any Canadian Borrower and all other Canadian Facility
Obligations owing by any Canadian Borrower pursuant to this Agreement and each
other Loan Document (including, without limitation, all fees, indemnities,
taxes and other Canadian Facility Obligations in connection therewith or in
connection with the related Canadian Facility Commitments) shall constitute the
joint and several obligations of each of the Canadian Borrowers.  In addition to the direct (and joint and
several) obligations of the Canadian Borrowers with respect to Canadian
Facility Obligations as described above, all such Canadian Facility Obligations
owing by any Canadian Borrower shall be guaranteed pursuant to, and in
accordance with the terms of, the Guarantee and Collateral Agreement and
Canadian Guarantee and Collateral Agreement, provided that the
obligations of a Canadian Borrower with respect to the Canadian Facility
Obligations as described above shall not be limited by any provision of the
Canadian Guarantee and Collateral Agreement entered into by such Canadian
Borrower.


 


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14.02.           Independent Obligation.  The obligations of each Borrower with respect
to its Borrower Obligations are independent of the Loan Document Obligations of
each other Borrower or any Guarantor under its Guarantee of such Borrower
Obligations, and a separate action or actions may be brought and prosecuted
against each Borrower, whether or not any other Borrower or any Guarantor is
joined in any such action or actions. 
Each Borrower waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof.  Any payment by any
Borrower or other circumstance which operates to toll any statute of
limitations as to any Borrower shall, to the fullest extent permitted by law,
operate to toll the statute of limitations as to each Borrower.


 


14.03.           Authorization.  Each of the Borrowers authorizes the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting
Lender, the Co-Collateral Agents, the Issuing Lenders and the Lenders without
notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from
time to time to, to the maximum extent permitted by applicable law and the Loan
Documents to:


 


(a)           exercise or refrain from exercising any rights against any
other Borrower or any Guarantor or others or otherwise act or refrain from
acting;


 


(b)           release or substitute any other Borrower, endorsers,
Guarantors or other obligors;


 


(c)           settle or compromise any of the Borrower Obligations of
any other Borrower or any other Loan Party, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment of any liability (whether due or not) of any Borrower to
its creditors other than the Lenders;


 


(d)           apply any sums paid by any other Borrower or any other
Person, howsoever realized to any liability or liabilities of such other
Borrower or other Person regardless of what liability or liabilities of such
other Borrower or other Person remain unpaid; and/or


 


(e)           consent to or waive any breach of, or act, omission or
default under, this Agreement or any of the instruments or agreements referred
to herein, or otherwise, by any other Borrower or any other Person.


 


14.04.           Reliance.  It is not necessary for the Administrative
Agent, the Security Agent, the Swingline Lender, the Fronting Lender, any Issuing
Lender or any Lender to inquire into the capacity or powers of any Borrower,
Holdings or any of its other Subsidiaries or the officers, directors, members,
partners or agents acting or purporting to act on its behalf, and any Borrower
Obligations made or created in reliance upon the professed exercise of such
powers shall constitute the joint and several obligations of the respective
Borrowers hereunder.


 


14.05.           Contribution; Subrogation.  No Borrower shall exercise any rights of
contribution or subrogation with respect to any other Borrower as a result of
payments made by it hereunder, in each case unless and until (i) the Total
Commitment and all Letters of Credit


 


197

















 


have been terminated and (ii) all of the Loan Document Obligations
have been paid in full in cash.  To the
extent that any Canadian Loan Party or U.S. Loan Party shall be required to pay
a portion of the Loan Document Obligations which shall exceed the amount of loans,
advances or other extensions of credit received by such Loan Party and all
interest, costs, fees and expenses attributable to such loans, advances or
other extensions of credit, then such Loan Party shall be reimbursed by the
other Loan Parties within its group (Canadian or U.S.) for the amount of such
excess, subject to the restrictions of the previous sentence.  This Section 14.05 is intended
only to define the relative rights of Loan Parties, and nothing set forth in
this Section 14.05 is intended or shall impair the obligations of
each Loan Party to pay the Loan Document Obligations as and when the
same shall become due and payable in accordance with the terms hereof.


 


14.06.           Waiver.  Each Borrower waives any right to require the
Administrative Agent, the Security Agent, the Swingline Lender, the Fronting Lender, the Co-Collateral
Agents, the Issuing Lenders or the Lenders to (i) proceed against any
other Borrower, any Guarantor or any other party, (ii) proceed against or
exhaust any security held from any Borrower, any Guarantor or any other party
or (iii) pursue any other remedy in the Administrative Agent’s, the
Security Agent’s, the Swingline Lender’s, the Fronting Lender’s, any Issuing
Lender’s or Lenders’ power whatsoever. 
Each Borrower waives any defense based on or arising out of suretyship
or any impairment of security held from any Borrower, any Guarantor or any
other party or on or arising out of any defense of any other Borrower, any
Guarantor or any other party other than payment in full in cash of its Borrower
Obligations, including, without limitation, any defense based on or arising out
of the disability of any other Borrower, any Guarantor or any other party, or
the unenforceability of its Borrower Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Borrower,
in each case other than as a result of the payment in full in cash of its
Borrower Obligations.


 


14.07.           Limitation on Canadian Borrower
Obligations. 
Notwithstanding anything to the contrary herein or in any other Loan
Document (including provisions that may override any other provision), in no
event shall the Canadian Borrowers or any other Canadian Loan Party guarantee
or be deemed to have guaranteed or become liable or obligated on a joint and
several basis or otherwise for, or to have pledged any of its assets to secure,
any direct Secured Obligation owing by any U.S. Borrower or Domestic Subsidiary
of Holdings under this Agreement, any of the other Loan Documents, any Secured Hedging
Agreement or any Secured Cash Management Agreement.  All provisions contained in any Loan Document, any Secured Hedging
Agreement or any Secured Cash Management Agreement shall be interpreted
consistently with this Section 14.07 to the extent possible, and
where such other provisions conflict with the provisions of this Section 14.07,
the provisions of this Section 14.07 shall govern.


 


14.08.           Rights and Obligations.  The obligations of the Swingline Lender, the
Fronting Lender, each Issuing Lender and each Lender under this Agreement bind
each of them severally.  Failure by the
Swingline Lender, the Fronting Lender, any Issuing Lender or any Lender, as the
case may be, to perform its obligations under this Agreement does not affect
the obligations of any other party under this Agreement.  The Swingline Lender, the Fronting Lender,
each Issuing Lender or each Lender is not responsible for the obligations of
any other


 


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Swingline Lender, Fronting Lender, Issuing Lender or Lender, as the case
may be, under this Agreement.  The
rights, powers and remedies of the Swingline Lender, the Fronting Lender, each
Issuing Lender and each Lender in connection with this Agreement are separate
and independent rights, powers and remedies and any debt arising under this
Agreement to or for the account of the Swingline Lender, the Fronting Lender,
any Issuing Lender or any Lender from a Loan Party is a separate and
independent debt.


 


SECTION 15.  Revolving Loans; Intra-Lender Issues.


 


15.01.           Specified Foreign Currency
Participations. 
Notwithstanding anything to the contrary contained herein, all Revolving
Loans under a Tranche which are denominated in Canadian Dollars (each, a “Specified
Foreign Currency Loan”), shall be made solely by the Lenders (including the
Fronting Lender) under such Tranche who are not Participating Specified Foreign
Currency Lenders.  Subject to Section 15.07,
each Lender acceptable to the Fronting Lender (in its sole discretion) that
does not have Specified Foreign Currency Funding Capacity (a “Participating
Specified Foreign Currency Lender”) at the time such Lender becomes a “Lender”
hereunder shall irrevocably and unconditionally purchase and acquire and shall be
deemed to irrevocably and unconditionally purchase and acquire from the
Fronting Lender, and the Fronting Lender shall sell and be deemed to sell to
each such Participating Specified Foreign Currency Lender, without recourse or
any representation or warranty whatsoever, an undivided interest and
participation (a “Specified Foreign Currency Participation”) in each
Revolving Loan under a Tranche which is a Specified Foreign Currency Loan funded by
the Fronting Lender in an amount equal to such Participating Specified Foreign
Currency Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of the Borrowing that includes such Revolving
Loan (it being understood and agreed that whether or not a Person should become
a Participating Specified Foreign Currency Lender shall be made by the
Administrative Agent in it sole discretion, but once made, subject to Section 15.07,
shall not be revoked).  Such purchase and
sale of a Specified Foreign Currency Participation shall be deemed to occur
automatically upon the making of a Specified Foreign Currency Loan by the
Fronting Lender, without any further notice to any Participating Specified
Foreign Currency Lender.  The purchase
price payable by each Participating Specified Foreign Currency Lender to the
Fronting Lender for each Specified Foreign Currency Participation purchased by
it from the Fronting Lender shall be equal to 100% of the principal amount of
such Specified Foreign Currency Participation (i.e., the product of (i) the
amount of the Borrowing that includes the relevant Revolving Loan under a Tranche and (ii) such
Participating Specified Foreign Currency Lender’s U.S. Facility RL Percentage
or Canadian Facility RL Percentage, as the case may be), and such purchase
price shall be payable by each Participating Specified Foreign Currency Lender
to the Fronting Lender in accordance with the settlement procedure set forth in
Section 15.02.  The Fronting
Lender and the Administrative Agent shall record on their books the amount of the
Revolving Loans made by the Fronting Lender and each Participating Specified
Foreign Currency Lender’s Specified Foreign Currency Participation and funded
Specified Foreign Currency Participation therein, all payments in respect
thereof and interest accrued thereon and all payments made by and to each
Participating Specified Foreign Currency Lender pursuant to this Section 15.01.  This Section 15 shall not affect
the obligations of any Lender that does not have Specified Foreign Currency
Funding Capacity and that is not a Participating Specified Foreign Currency
Lender to make Specified Foreign Currency Loans in accordance with the terms
and conditions set forth in the other Sections of this Agreement.


 


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15.02.              Settlement Procedures for
Specified Foreign Currency Participations.  Each Participating Specified Foreign Currency
Lender’s Specified Foreign Currency Participation in the Specified Foreign
Currency Loans under a Tranche shall be in an amount equal to its U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be, of all such
Specified Foreign Currency Loans under such Tranche.  However, in order to facilitate the
administration of the Specified Foreign Currency Loans made by the Fronting
Lender and the Specified Foreign Currency Participations, settlement among the
Fronting Lender and the Participating Specified Foreign Currency Lenders with
regard to the Participating Specified Foreign Currency Lenders’ Specified
Foreign Currency Participations shall take place in accordance with the
following provisions:


 


(a)           The Fronting Lender and the Participating Specified
Foreign Currency Lenders shall settle (a “Specified Foreign Currency
Participation Settlement”) by payments in respect of the Specified Foreign
Currency Participations as follows:  So
long as any Specified Foreign Currency Loans are outstanding, Specified Foreign
Currency Participation Settlements shall be effected upon the request of the
Fronting Lender through the Administrative Agent on such Business Days as
requested by the Fronting Lender and as the Administrative Agent shall specify
by a notice by telecopy, telephone or similar form of notice to each
Participating Specified Foreign Currency Lender requesting such Specified
Foreign Currency Participation Settlement (each such date on which a Specified
Foreign Currency Participation Settlement occurs herein called a “Specified
Foreign Currency Participation Settlement Date”), such notice to be
delivered no later than 2:00 p.m. (New York time) at least one Business
Day prior to the requested Specified Foreign Currency Participation Settlement
Date; provided that the Fronting Lender shall have the option but not
the obligation to request a Specified Foreign Currency Participation Settlement
Date and, in any event, shall not request a Specified Foreign Currency
Participation Settlement Date prior to the occurrence of an Event of Default; provided
further, that if (x) such Event of Default is cured or waived in
writing in accordance with the terms hereof, (y) no Obligations have yet
been declared due and payable under Section 11.01 and (z) the
Administrative Agent has actual knowledge of such cure or waiver, all prior to
the Administrative Agent’s giving notice to the Participating Specified Foreign
Currency Lenders of the first Specified Foreign Currency Participation
Settlement Date under this Agreement, then the Administrative Agent shall not
give notice to the Participating Specified Foreign Currency Lenders of a Specified
Foreign Currency Participation Settlement Date based upon such cured or waived
Event of Default.  If on any Specified
Foreign Currency Participation Settlement Date the total principal amount of
the Specified Foreign Currency Loans made or deemed made by the Fronting Lender
during the period ending on (but excluding) such Specified Foreign Currency
Participation Settlement Date and commencing on (and including) the immediately
preceding Specified Foreign Currency Participation Settlement Date (or the Funding
Date in the case of the period ending on the first Specified Foreign Currency
Participation Settlement Date) (each such period herein called a “Specified
Foreign Currency Participation Settlement Period”) is greater than the
principal amount of Specified Foreign Currency Loans repaid during such
Specified Foreign Currency Participation Settlement Period to the Fronting
Lender, each Participating Specified Foreign Currency Lender under a Tranche
shall pay to the Fronting Lender (through the Administrative Agent), no later
than 11:00 a.m. (New York time) on such Specified


 


200

















 


Foreign Currency Participation Settlement Date, an
amount equal to such Participating Specified Foreign Currency Lender’s ratable
share of the amount of such excess under such Tranche.  If in any Specified Foreign Currency
Participation Settlement Period the outstanding principal amount of the
Specified Foreign Currency Loans repaid to the Fronting Lender in such period
exceeds the total principal amount of the Specified Foreign Currency Loans made
or deemed made by the Fronting Lender during such period, the Fronting Lender
shall pay to each Participating Specified Foreign Currency Lender under a
Tranche (through the Administrative Agent) on such Specified Foreign Currency
Participation Settlement Date an amount equal to such Participating Specified
Foreign Currency Lender’s ratable share of such excess under such Tranche.  Specified Foreign Currency Participation
Settlements in respect of Specified Foreign Currency Loans shall be made in the
respective Available Currency in which such Specified Foreign Currency Loan was
funded on the Specified Foreign Currency Participation Settlement Date for such
Specified Foreign Currency Loans.


 


(b)           If any Participating Specified Foreign Currency Lender
fails to pay to the Fronting Lender on any Specified Foreign Currency
Participation Settlement Date the full amount required to be paid by such
Participating Specified Foreign Currency Lender to the Fronting Lender on such
Specified Foreign Currency Participation Settlement Date in respect of such
Participating Specified Foreign Currency Lender’s Specified Foreign Currency
Participation (such Participating Specified Foreign Currency Lender’s “Specified
Foreign Currency Participation Settlement Amount”) with the Fronting
Lender, the Fronting Lender shall be entitled to recover such unpaid amount
from such Participating Specified Foreign Currency Lender, together with
interest thereon (in the same respective currency or currencies as the relevant
Specified Foreign Currency Loans) at the Base Rate plus the Applicable
Margin for Base Rate Loans plus, if such unpaid amount is not paid
within one Business Day after such Specified Foreign Currency Participation
Settlement Date, 2.00%.  Without limiting
the Fronting Lender’s rights to recover from any Participating Specified
Foreign Currency Lender any unpaid Specified Foreign Currency Participation
Settlement Amount payable by such Participating Specified Foreign Currency
Lender to the Fronting Lender, the Administrative Agent shall also be entitled
to withhold from amounts otherwise payable to such Participating Specified
Foreign Currency Lender an amount equal to such Participating Specified Foreign
Currency Lender’s unpaid Specified Foreign Currency Participation Settlement
Amount owing to the Fronting Lender and apply such withheld amount to the
payment of any unpaid Specified Foreign Currency Participation Settlement
Amount owing by such Participating Specified Foreign Currency Lender to the
Fronting Lender.


 


15.03.              Obligations Irrevocable.  The obligations of each Participating
Specified Foreign Currency Lender under a Tranche to purchase from the Fronting
Lender a participation in each Specified Foreign Currency Loan under such Tranche made by the
Fronting Lender and to make payments to the Fronting Lender with respect to
such participation, in each case as provided herein, shall be irrevocable and
not subject to any qualification or exception whatsoever, including any of the
following circumstances:


 


(a)           any lack of validity or enforceability of this Agreement
or any of the other Loan Documents or of any Loans, against the Borrowers or
any other Loan Party;


 


201

















 


(b)           the existence of any claim, setoff, defense or other right
which the Borrowers or any other Loan Party may have at any time against the
Administrative Agent, any Participating Specified Foreign Currency Lender, or
any other Person, whether in connection with this Agreement, any Specified
Foreign Currency Loans, the transactions contemplated herein or any unrelated
transactions;


 


(c)           any application or misapplication of any proceeds of any
Specified Foreign Currency Loans;


 


(d)           the surrender or impairment of any security for any
Specified Foreign Currency Loans;


 


(e)           the occurrence of any Default or Event of Default;


 


(f)            the commencement or pendency of any events specified in Section 11.01(g) or
(h), in respect of Holdings, the other Borrowers or any of their
respective Subsidiaries or any other Person; or


 


(g)           the failure to satisfy the applicable conditions precedent
set forth in Section 6 or 7.


 


15.04.              Recovery or Avoidance of
Payments.  In the event
any payment by or on behalf of any Borrower or any other Loan Party received by
the Administrative Agent or the Fronting Lender with respect to any Specified
Foreign Currency Loan under a Tranche made by the Fronting Lender is
thereafter set aside, avoided or recovered from the Administrative Agent or the
Fronting Lender in connection with any insolvency proceeding or due to any
mistake of law or fact, each Participating Specified Foreign Currency Lender
shall, upon written demand by the Administrative Agent, pay to the Fronting
Lender (through the Administrative Agent) such Participating Specified Foreign
Currency Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage under
such Tranche of such amount set aside, avoided or recovered,
together with interest at the rate and in the currency required to be paid by
the Fronting Lender or the Administrative Agent upon the amount required to be
repaid by it.


 


15.05.              Indemnification by Lenders.  Each Participating Specified Foreign Currency
Lender under
a Tranche agrees to indemnify the Fronting Lender (to the extent not reimbursed by
the Borrowers and without limiting the obligations of the Borrowers hereunder
or under any other Loan Document) ratably for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys’ fees) or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Fronting
Lender in any way relating to or arising out of any Specified Foreign Currency
Loans under
such Tranche or any action taken or omitted by the Fronting Lender
in connection therewith; provided that no Participating Specified
Foreign Currency Lender under such Tranche shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Fronting Lender (as determined by a court of competent
jurisdiction in a final and non-appealable judgment).  Without limiting the foregoing, each
Participating Specified Foreign Currency Lender under a Tranche agrees to reimburse the
Fronting Lender promptly upon demand for such Participating Specified Foreign
Currency Lender’s ratable share of any


 


202

















 


costs or expenses payable by the Borrowers to the Fronting Lender in
respect of the Specified Foreign Currency Loans under such Tranche to the extent
that the Fronting Lender is not promptly reimbursed for such costs and expenses
by the Borrowers.  The agreement
contained in this Section 15.05 shall survive payment in full of
all Specified Foreign Currency Loans.


 


15.06.              Specified Foreign Currency Loan
Participation Fee.  In
consideration for each Participating Specified Foreign Currency Lender’s
participation in the Specified Foreign Currency Loans made by the Fronting
Lender, the Fronting Lender agrees to pay to the Administrative Agent for the
account of each Participating Specified Foreign Currency Lender, as and when
the Fronting Lender receives payment of interest on its Specified Foreign
Currency Loans, a fee (the “Specified Foreign Currency Participation Fee”)
at a rate per annum equal to (x) to the extent the Specified Foreign Currency
Participation Settlement in respect of a Specified Foreign Currency Loan has
not occurred, the Applicable Margin on such Specified Foreign Currency Loan minus
0.25% on the unfunded Specified Foreign Currency Participation of such
Participating Specified Foreign Currency Lender in such Specified Foreign
Currency Loan of the Fronting Lender or (y) to the extent the Specified Foreign Currency
Participation Settlement in respect of a Specified Foreign Currency Loan has
occurred, full amount of interest on such Specified Foreign Currency Loan
payable under this Agreement.  The
Specified Foreign Currency Participation Fee in respect of any Specified
Foreign Currency Participation in a Specified Foreign Currency Loan shall be
payable to the Administrative Agent in the Available Currency in which the
respective Specified Foreign Currency Loan was funded when interest on such
Specified Foreign Currency Loan is received by the Fronting Lender.  If the Fronting Lender does not receive
payment in full of such interest, the Specified Foreign Currency Participation
Fee in respect of the Specified Foreign Currency Participation in such
Specified Foreign Currency Loans shall be reduced proportionately.  Any amounts payable under this Section 15.06
by the Administrative Agent to the Participating Specified Foreign Currency
Lenders shall be paid in the Available Currency in which the respective
Specified Foreign Currency Loan was funded (or, if different, the currency in
which such interest payments are actually received).


 


15.07.              Defaulting Lenders; etc.  Notwithstanding anything to the contrary
contained above, (x) no Lender may become a Participating Specified
Foreign Currency Lender at any time it is a Defaulting Lender, and (y) if
any Participating Specified Foreign Currency Lender at any time becomes a
Defaulting Lender, the Fronting Lender shall have the right to, by notice to
the affected Lender, (i) terminate such Lender’s status as a Participating
Specified Foreign Currency Lender for Revolving Loans and (ii) declare a
Specified Foreign Currency Participation Settlement Date to occur with respect
to such affected Lender.


 


15.08.              U.S. Dollar Payments.  Notwithstanding anything to the contrary
contained above, if a Participating Specified Foreign Currency Lender shall
have previously notified the Fronting Lender in writing that all payments of
Canadian Dollars under this Section 15 made to, or by, such Participating
Specified Foreign Currency Lender must be in U.S. Dollars, then all payments of
Canadian Dollars under this Section 15 required to be made by (x) the
Fronting Lender to such Participating Specified Foreign Currency Lender shall
be made in U.S. Dollars and (y) such Participating Specified Foreign
Currency Lender to the Fronting Lender shall be made in U.S. Dollars, in each
case in an amount equal to the U.S. Dollar Equivalent of such Canadian Dollar
payment; provided that (i) for purposes of determining the 


 


203

















 


U.S.
Dollar Equivalent for this Section 15.08, such amounts shall include any
premium and costs payable in connection with the purchase of U.S. Dollars and (ii) such
Participating Specified Foreign Currency Lender shall reimburse the Fronting
Lender for any difference between the amount it receives to, following
conversion thereof, the amount it is required to pay with respect to such
Participating Specified Foreign Currency Lender, which difference would
(without giving effect to this clause (ii)) be borne by the Fronting Lender.


 


SECTION 16.  Lender Loss Sharing Agreement.


 


16.01.           Definitions.  As used in this Section 16, the
following terms shall have the following meanings:


 


(a)           CAM:  the
mechanism for the allocation and exchange of interests in the Loans,
participations in Letters of Credit and collections thereunder established
under Section 16.02.


 


(b)           CAM Exchange: 
the exchange of the U.S. Facility Lenders’ interests and the Canadian
Facility Lenders’ interests provided for in Section 16.02.


 


(c)           CAM Exchange Date: 
the first date after the Closing Date on which there shall occur (i) any
event described in Section 11.01(g) or (h) with
respect to any Borrower, (ii) an acceleration of Loans and termination of
the Total Commitment pursuant to Section 11.01 or (iii) the
failure by any Borrower to repay any amounts due under any Tranche of Loans on
the Revolving Loan Maturity Date.


 


(d)           CAM Percentage: 
as to each Lender, such Lender’s RL Percentage of the Total Commitment
immediately prior to the CAM Exchange Date and the termination of the Total
Commitment.


 


(e)           Designated Obligations:  all Obligations of the Borrowers with respect
to (i) principal and interest under the Loans, (ii) Unpaid Drawings
under Letters of Credit and interest thereon and (iii) all Fees.


 


(f)            Revolver Facilities:  the facility established under the U.S.
Facility Commitments and the Canadian Facility Commitments, and “Revolver
Facility” means any one of such Revolver Facilities.


 


16.02.           CAM
Exchange.  (a)  On the CAM
Exchange Date:


 


(i)            the U.S. Facility Commitments and the Canadian Facility
Commitments shall have terminated in accordance with Section 11.01,


 


(ii)           each
U.S. Facility Lender shall fund its participation in any outstanding Swingline
Loans and Agent Advances in accordance with Sections 2.01(b) and (e),
and each Canadian Facility Lender shall fund its participation in any
outstanding Swingline Loans and Agent Advances in accordance with Section 2.01(b) and
Section 2.01(e), respectively,


 


204

















 


(iii)          each
U.S. Facility Lender shall fund its participation in any Unpaid Drawings made
under the applicable U.S. Facility Letters of Credit pursuant to Section 3.04,
and each Canadian Facility Lender shall fund its participation in any Unpaid
Drawings made under the applicable Canadian Facility Letters of Credit pursuant
to Section 3.04,


 


(iv)          each
Participating Foreign Currency Lender shall fund its Specified Foreign Currency
Participation in any Specified Foreign Currency Loans pursuant to Section 15.02,
and


 


(v)           the
Lenders shall purchase, at the U.S. Dollar Equivalent of par, interests in the
Designated Obligations under each Revolver Facility (and shall make payments in
U.S. Dollars to the Administrative Agent for reallocation to other Lenders to
the extent necessary to give effect to such purchases) and shall assume the
obligations to reimburse each Issuing Lender for unreimbursed drawings under
outstanding Letters of Credit under such Revolver Facility such that, in lieu
of the interests of each Lender in the Designated Obligations under the U.S.
Facility Commitments and the Canadian Facility Commitments in which it shall
participate immediately prior to the CAM Exchange Date, such Lender shall own
an interest equal to such Lender’s CAM Percentage in each component of the
Designated Obligations immediately following the CAM Exchange.


 


(b)           Each Lender and each Person acquiring
a participation from any Lender as contemplated by Section 13.04
hereby consents and agrees to the CAM Exchange. 
Each Borrower agrees from time to time to execute and deliver to the
Lenders all such promissory notes and other instruments and documents as the
Administrative Agent shall reasonably request to evidence and confirm the
respective interests and obligations of Lenders after giving effect to the CAM
Exchange, and each Lender agrees to surrender any promissory notes originally
received by it in connection with its Loans under this Agreement to the
Administrative Agent against delivery of any promissory notes so executed and
delivered; provided that the failure of any Lender to deliver or accept
any such promissory note, instrument or document shall not affect the validity
or effectiveness of the CAM Exchange.


 


(c)           As a result of the CAM Exchange, from
and after the CAM Exchange Date, each payment received by the Administrative
Agent pursuant to any Loan Document in respect of any of the Designated
Obligations shall be distributed to Lenders, pro  rata in
accordance with their respective CAM Percentages.


 


(d)           In the event that on or after the CAM
Exchange Date, the aggregate amount of the Designated Obligations shall change
as a result of the making of a disbursement under a Letter of Credit by an
Issuing Lender that is not reimbursed by the applicable Borrowers, then each
Lender shall promptly reimburse such Issuing Lender for its CAM Percentage of
such unreimbursed payment.


 


16.03.              Miscellaneous.  Notwithstanding any other provision of this Section 16,
the Administrative Agent and each Lender agree that if the Administrative Agent
or a Lender is required under applicable law to withhold or deduct any Taxes or
other amounts from payments made by it hereunder or as a result hereof to the
Administrative Agent or any Lender,


 


205

















 


such
Person shall be entitled to withhold or deduct such amounts and pay over such
Taxes or other amounts to the applicable Governmental Authority imposing such
Tax without any obligation to indemnify the Administrative Agent or any Lender
with respect to such amounts and without any other obligation of gross up or
offset with respect thereto and there shall be no recourse whatsoever by Agent
or any Lender subject to such withholding to the Administrative Agent or any
other Lender making such withholding and paying over such amounts, but without
diminution of the rights of the Administrative Agent or such Lender subject to
such withholding as against Borrowers and the other Loan Parties to the extent
(if any) provided in this Agreement and the other Loan Documents.  Any amounts so withheld or deducted shall be
treated as, for the purpose of this Section 16, having been paid to
the Administrative Agent or such Lender with respect to which such withholding
or deduction was made.


 


*     *    
*


 


206

















 


IN WITNESS WHEREOF, the
parties hereto have caused their duly authorized officers to execute and
deliver this Agreement as of the date first above written.


 


 


	
   

  	
  HOLDINGS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy T. Griffith

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SMURFIT-STONE
  CONTAINER ENTERPRISES, INC.

  
	
   

  	
  as a U.S. Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy T. Griffith

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SMURFIT-STONE
  CONTAINER CANADA, L.P.,

  
	
   

  	
  as a Canadian Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   3242795 NOVA SCOTIA LIMITED,

  
	
   

  	
   

  	
  as
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy T. Griffith

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  



 

















 


	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH, Individually and
  as Administrative Agent, Co-Collateral Agent and Security Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carin Keegan

  
	
   

  	
   

  	
  Name:

  	
  Carin
  Keegan

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scottye Lindsey

  
	
   

  	
   

  	
  Name:

  	
  Scottye
  Lindsey

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., Individually and

  as Co-Collateral Agent 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter S. Predun

  
	
   

  	
   

  	
  Name:

  	
  Peter
  S. Predun

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, Individually
  and as Co-Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 
















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION, as 

  Co-Collateral Agent, as a U.S. Lender and as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wafa Shalabi

  
	
   

  	
   

  	
  Name:

  	
  Wafa Shalabi

  
	
   

  	
   

  	
  Title:

  	
  Its Duly Authorized Signatory

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank AG
  New York Branch, as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Keegan

  
	
   

  	
   

  	
  Name:

  	
  Carin Keegan

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scottye Lindsey

  
	
   

  	
   

  	
  Name:

  	
  Scottye Lindsey

  
	
   

  	
   

  	
  Title:

  	
  Director

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank
  AG, Canada Branch, as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rod O’Hara

  
	
   

  	
   

  	
  Name:

  	
  Rod O’Hara

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Gynn

  
	
   

  	
   

  	
  Name:

  	
  David Gynn

  
	
   

  	
   

  	
  Title:

  	
  Director

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase
  Bank, N.A., as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter S. Predun

  
	
   

  	
   

  	
  Name:

  	
  Peter S. Predun

  
	
   

  	
   

  	
  Title:

  	
  Executive Director

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase
  Bank, N.A., Toronto Branch, as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter S. Predun

  
	
   

  	
   

  	
  Name:

  	
  Peter S. Predun

  
	
   

  	
   

  	
  Title:

  	
  Executive Director

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Bank of America,
  N.A., as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian J. Wright

  
	
   

  	
   

  	
  Name:

  	
  Brian J. Wright

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF
  INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Bank of America,
  N.A., acting through its Canada branch, as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Medina Sales De Andrade

  
	
   

  	
   

  	
  Name:

  	
  Medina Sales De Andrade

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  WACHOVIA CAPITAL FINANCE CORPORATION

  (NEW ENGLAND), as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sanat Amladi

  
	
   

  	
   

  	
  Name:

  	
  Sanat Amladi

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  WELLS FARGO CAPITAL FINANCE CORPORATION (CANADA), as
  a Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sanat Amladi

  
	
   

  	
   

  	
  Name:

  	
  Sanat Amladi

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Regions Bank, as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis J. Correa

  
	
   

  	
   

  	
  Name:

  	
  Curtis J. Correa

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA, as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen L. Anillo

  
	
   

  	
   

  	
  Name:

  	
  Karen L. Anillo

  
	
   

  	
   

  	
  Title:

  	
  Director

  



 


Signature Page to Smurfit ABL Credit Agreement


 
















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  The Bank of Nova Scotia, as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen H. Corey

  
	
   

  	
   

  	
  Name:

  	
  Stephen H. Corey

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sonya Bikhit

  
	
   

  	
   

  	
  Name:

  	
  Sonya Bikhit

  
	
   

  	
   

  	
  Title:

  	
  Associate

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  CAPITAL ONE LEVERAGE FINANCE CORPORATION, as a U.S.
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Dellova

  
	
   

  	
   

  	
  Name:

  	
  Paul Dellova

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  COBANK, ACB as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey C. Norte

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey C. Norte

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  RBS BUSINESS
  CAPITAL, A DIVISION OF RBS ASSET FINANCE, INC., A SUBSIDIARY OF RBS CITIZENS,
  NA

  as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John D. Bobbin

  
	
   

  	
   

  	
  Name:

  	
  John D. Bobbin

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  RZB FINANCE LLC, as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christoph Hoedl

  
	
   

  	
   

  	
  Name:

  	
  CHRISTOPH HOEDL

  
	
   

  	
   

  	
  Title:

  	
  First Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Valiska

  
	
   

  	
   

  	
  Name:

  	
  JOHN A. VALISKA

  
	
   

  	
   

  	
  Title:

  	
  First Vice President

  



 


Signature Page to Smurfit ABL Credit Agreement


 

















 


	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Siemens Financial Services, Inc., as a U.S. Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Doug Maher

  
	
   

  	
   

  	
  Name:

  	
  Doug Maher

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthias Grossmann

  
	
   

  	
   

  	
  Name:

  	
  Matthias Grossmann

  
	
   

  	
   

  	
  Title:

  	
  Sr. VP & CFO

  



 


Signature Page to Smurfit ABL Credit Agreement


 






 














 





 


SCHEDULES
TO ABL CREDIT AGREEMENT


 


among


 


SMURFIT-STONE
CONTAINER CORPORATION,


 


SMURFIT-STONE
CONTAINER ENTERPRISES, INC.,


 


CERTAIN
OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY THERETO,


 


THE
LENDERS PARTY HERETO,


 


DEUTSCHE
BANK AG NEW YORK BRANCH,


 


as ADMINISTRATIVE
AGENT and SECURITY AGENT,


 


and


 


DEUTSCHE
BANK AG NEW YORK BRANCH,


 


JPMORGAN
CHASE BANK, N.A.


 


and


 


GENERAL
ELECTRIC CAPITAL CORPORATION,


 


as
CO-COLLATERAL AGENTS


 






 


Dated
as of April 15, 2010


 






 


DEUTSCHE
BANK SECURITIES INC.,


 


J.P.
MORGAN SECURITIES INC.,


 


GE
CAPITAL MARKETS, INC.


 


BANC
OF AMERICA SECURITIES, LLC,


 


and


 


WELLS
FARGO CAPITAL FINANCE, LLC


 


as
JOINT LEAD ARRANGERS and JOINT BOOK-RUNNERS,


 


J.P.
MORGAN SECURITIES INC. as SYNDICATION AGENT,


 


GENERAL
ELECTRIC CAPITAL CORPORATION,


 


BANC
OF AMERICA SECURITIES, LLC,


 


and


 


WELLS
FARGO CAPITAL FINANCE, LLC


 


as
DOCUMENTATION AGENTS


 


and


 


THE
BANK OF NOVA SCOTIA


 


and


 


REGIONS
BANK


 


as
SENIOR MANAGING AGENTS


 




 





 

















 


SCHEDULE 1.01(a)


 


Commitments


 


	
  Lender

  	
   

  	
  U.S. Facility

  Commitment

  	
   

  	
  Canadian Facility

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank AG New York Branch

  	
   

  	
  $

  	
  55,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank AG, Canada Branch

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  56,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A., Toronto Branch

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  16,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  96,000,000.00

  	
   

  	
  $

  	
  16,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  56,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A., acting through its Canada Branch

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  16,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Finance Corporation (New England)

  	
   

  	
  $

  	
  56,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wells Fargo Capital Finance Corporation (Canada)

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  16,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Regions Bank

  	
   

  	
  $

  	
  72,500,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of Nova Scotia

  	
   

  	
  $

  	
  33,500,000.00

  	
   

  	
  $

  	
  16,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital One Leverage Finance Corp.

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CoBank, ACB

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBS Business Capital

  	
   

  	
  $

  	
  30,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RZB Finance LLC

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Siemens Financial Services, Inc.

  	
   

  	
  $

  	
  30,00,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  $

  	
  550,000,000.00

  	
   

  	
  $

  	
  100,000,000.00

  	
   

  



 

















 


SCHEDULE
1.01(b)


 


Provisions Relating to Bankers’
Acceptances, 


Bankers’
Acceptance Loans and B/A Discount Notes


 


BANKERS’ ACCEPTANCES


 


Acceptances and Drafts.


 


1.                                       Each Lender under a Tranche severally
agrees, on the terms and conditions of the Agreement and this Schedule 1.01(b) and
from time to time on any Business Day prior to the Revolving Loan Maturity Date
to make Bankers’ Acceptance Loans under such Tranche by (i) in the case of
a B/A Lender, accepting Drafts and purchasing such Bankers’ Acceptances in
accordance with Section 6 of this Schedule 1.01(b) and
the Agreement and (ii) in the case of a Non-B/A Lender, purchasing
completed Drafts (which have not and will not be accepted by such Lender) in
accordance with Section 6 of this Schedule 1.01(b) and
the Agreement; provided that no Loan shall be made as a Bankers’
Acceptance Loan if any Default or Event of Default has occurred and is continuing.


 


2.                                       Each Bankers’ Acceptance and Draft shall
be in a minimum Face Amount of $500,000 and in integral multiples of $100,000,
and each Bankers’ Acceptance Loan under a Tranche shall consist of the
acceptance and purchase of Bankers’ Acceptances or the purchase of Drafts on
the same day, in each case for the B/A Discount Proceeds, effected or arranged
by the Lenders under such Tranche in accordance with Section 6 of
this Schedule 1.01(b) and the Agreement and their respective
Commitments.


 


3.                                       If the Administrative Agent determines
that the Bankers’ Acceptances under a Tranche to be created and purchased or
Drafts to be purchased on the making of any Bankers’ Acceptance Loan under a
Tranche (upon a conversion or otherwise) will not be created and purchased
ratably by the Lenders under such Tranche in accordance with this Schedule
1.01(b) and the Agreement, then (i) the requested Face Amount of
such Bankers’ Acceptances and Drafts shall be reduced to such lesser amount as
the Administrative Agent determines will permit ratable sharing and (x) the
amount by which the requested Face Amount shall have been so reduced shall be
converted or continued, as the case may be, as a Canadian Prime Rate Loan to be
made contemporaneously with the making of such Bankers’ Acceptance Loan or (y) the
Borrowers may cancel part of, or withdraw in its entirety, the related Notice
of Borrowing, or (ii) the Administrative Agent may, acting reasonably at
the request of any Borrower, deem any Notice of Borrowing delivered in such
circumstances of a Bankers’ Acceptance Loan to be, in its entirety, a Notice of
Borrowing for Canadian Prime Rate Loans, and make a Canadian Prime Rate Loan to
such Borrower in the full amount as originally requested as a Bankers’
Acceptance Loan in such Notice of Borrowing.


 


Form of Drafts.


 


4.                                       Each Draft presented by a Borrower shall (i) be
in a minimum Face Amount of $500,000 and in an integral multiple of $100,000, (ii) be
dated the date of the making of such Bankers’ Acceptance Loan, and (iii) mature
and be payable by such Borrower (in common with all other Drafts presented in
connection with such Bankers’ Acceptance Loan) on


 

















 


a Business Day which occurs approximately 30, 60, 90 or 180 days (or
such longer period as the Administrative Agent and each Lender may agree) at
the election of such Borrower after the Drawing Date and on or prior to the
Revolving Loan Maturity Date.


 


Procedure for Drawing.


 


5.                                       Each Bankers’ Acceptance Loan shall be
made in accordance with the notice provisions given by the relevant Borrower by
way of a Notice of Borrowing to the Administrative Agent as set forth in Section 2.03
of the Agreement.


 


6.                                       Not later than 2:00 p.m. (Toronto
time) on an applicable Drawing Date, each Lender under the respective Tranche
shall complete one or more Drafts in accordance with the Notice of Borrowing
and either (i) accept the Drafts and purchase the Bankers’ Acceptances so
created for the B/A Discount Proceeds, or (ii) purchase the Drafts for the
B/A Discount Proceeds.  In each case,
upon receipt of the B/A Discount Proceeds and upon fulfillment of the
applicable conditions set forth in Sections 6 and 7 of the
Agreement, the Administrative Agent shall apply the B/A Discount Proceeds in
accordance with the applicable Notice of Borrowing or Notice of Conversion/Continuation,
as the case may be, as follows:  (i) remit
to the relevant Borrower (in the case of the making of a Canadian Revolving
Loan), (ii) prepay Canadian Prime Rate Loans (which shall constitute a
conversion of the Canadian Revolving Loans from Canadian Prime Rate Loans to
Bankers’ Acceptance Loans) or (iii) pay B/A Instruments maturing on such
date (which shall constitute a continuation of Bankers’ Acceptance Loans to new
Bankers’ Acceptance Loans), provided that in the case of any such conversion
or continuation of Loans, the relevant Borrower shall pay to the Administrative
Agent for account of the Lenders under the respective Tranche such additional
amounts, if any, as shall be necessary to effect the prepayment in full of the
respective Canadian Prime Rate Loans being prepaid, or the B/A Instruments
maturing, on such date.


 


7.                                       Each Borrower shall, at the request of
any Lender, issue one or more non-interest bearing promissory notes (each, a “B/A
Equivalent Note”) payable on the date of maturity of the unaccepted Draft
referred to below in this section, in such form as such Lender may specify and
in a principal amount equal to the Face Amount of, and in exchange for, any
unaccepted Drafts which the Lender has purchased in accordance with Section 6
of this Schedule 1.01(b) and the Agreement.


 


8.                                       Bankers’ Acceptances purchased by a
Lender may be held by it for its own account until the contract maturity date
or sold by it at any time prior to that date in any relevant Canadian market in
such Lender’s sole discretion.  Each
Borrower hereby renounces, and shall not claim or request or require any Lender
to claim, any days of grace for the payment of any Bankers’ Acceptance.


 


Presigned Draft Forms.


 


9.                                       To enable the Lenders to create Bankers’
Acceptances or complete Drafts in the manner specified in this Schedule 1.01(b) and
the Agreement, each Borrower shall supply each Lender with such number of
Drafts as it may reasonably request, duly endorsed and executed on behalf of
such Borrower.  Each Lender is hereby
authorized to issue such B/A


 


2

















 


Instruments endorsed in blank in such Face Amounts as may be determined
by such Lender, provided that the aggregate amount thereof is equal to
the aggregate amount of B/A Instruments required to be purchased by such
Lender.  No Lender shall be responsible
or liable for its failure to accept and/or purchase a B/A Instrument if the
cause of such failure is, in whole or in part, due to the failure of the
relevant Borrower to provide duly executed and endorsed B/A Instruments to such
Lender on a timely basis.  Each Lender
will exercise such care in the custody and safekeeping of Drafts as it would
exercise in the custody and safekeeping of similar property owned by it and
will, upon request by any Borrower, promptly advise such Borrower of the number
and designations, if any, of uncompleted Drafts held by it for such
Borrower.  The signature of any officer
of any Borrower on a Draft may be mechanically reproduced and B/A Instruments
bearing facsimile signature shall be binding upon such Borrower as if they had
been manually signed.  Even if the
individuals whose manual or facsimile signature appears on any B/A Instrument
no longer hold office on the date of signature, at the date of its acceptance
by the Lender or at any time after such date, any B/A Instrument so signed
shall be valid and binding upon each Borrower.


 


10.                                 Upon the request of any Lender, each
Borrower shall provide to such Lender a power of attorney to complete, sign,
endorse and issue B/A Instruments on behalf of such Borrower in form and
substance satisfactory to such Lender. 
Alternatively, at the request of any Lender, each Borrower shall deliver
to such lender a “depository bill” which complies with the requirements of the Depository
Bills and Notes Act (Canada), and hereby consents to the deposit of any
Bankers’ Acceptance in the form of a depository bill in the book-based debt
clearance systems maintained by the Canadian Depository for Securities Limited
or other recognized clearing house.  In
such circumstances, the delivery of Bankers’ Acceptances shall be governed by
the clearance procedures established thereunder.


 


Payment, Conversion or Renewal of B/A Instruments.


 


11.                                 Upon the maturity of a B/A Instrument,
each Borrower may (i) elect to issue a replacement B/A Instrument by
giving a Notice of Borrowing in accordance with Section 2.03 of the
Agreement (provided that such Borrower shall pay to the Administrative
Agent for the account of the Lenders under the respective Tranche such
additional amounts, if any, as shall be necessary to effect payment in full of
the Face Amount of the B/A Instrument maturing on such day), (ii) elect to
have all or a portion of the Face Amount of the B/A Instrument converted to a
Canadian Prime Rate Loan by giving a Notice of Borrowing in accordance with Section 2.03
of the Agreement, or (iii) pay, on or before 12:00 Noon (Toronto time) on
the maturity date for the B/A Instrument, an amount in Canadian Dollars equal to
the Face Amount of the B/A Instrument (notwithstanding that the Lender under
the respective Tranche may be the holder of it at maturity).  Any such payment shall satisfy the relevant
Borrower’s obligations under the B/A Instrument to which it relates and the
relevant Lender shall then be solely responsible for the payment of the B/A
Instrument.


 


12.                                 If any Borrower (i) fails to pay any
B/A Instrument when due or issue a replacement for B/A Discount Proceeds which
together with additional amounts then paid to the Administrative Agent for the
account of the Lender under the respective Tranche in respect of such maturing
B/A Instrument equals the Face Amount of such B/A Instrument pursuant to Section 11
of this Schedule 1.01(b) or (ii) fails to elect to convert all
or a portion of the Face


 


3

















 


Amount of such B/A Instrument to a Canadian Prime Rate Loan pursuant to
clause (ii) of Section 11 of this Schedule 1.01(b),
then the unpaid amount due and payable shall be converted to a Canadian Prime
Rate Loan made by the Lenders under the respective Tranche ratably under the
respective Tranche and shall bear interest calculated and payable as provided
in Section 2.08 of the Agreement. 
This conversion shall occur as of the due date and without any necessity
for such Borrower to give any notice thereof.


 


13.                                 On any date on which a Bankers’
Acceptance Loan under a Tranche is created, purchased, or converted, the
Administrative Agent shall be entitled to net all amounts payable on such date
by the Administrative Agent to a Lender under such Tranche against all amounts
payable on such date by such Lender to the Administrative Agent.  Similarly, on any such date each Borrower
hereby authorizes each Lender to net all amounts payable on such date by such
Lender to the Administrative Agent for the account of the relevant Borrower,
against all amounts payable on such date by such Borrower to such Lender in
accordance with the Administrative Agent’s calculations.


 


14.                                 Except for the requirement to pay
immediately upon acceleration of the Revolving Loans pursuant to Section 11.01
of the Agreement, each Borrower shall pay to the Administrative Agent an amount
in Canadian Dollars equal to the Face Amount of each Bankers’ Acceptance Loan requested
by such Borrower on the maturity date thereof (notwithstanding that the Lender
may be the holder of it at maturity).


 


Circumstances Making Bankers’ Acceptances Unavailable.


 


15.                                 If, for any reason a market for bankers’
acceptances does not exist at any time or the Lenders cannot for other reasons,
after reasonable efforts, readily sell bankers’ acceptances or perform their
other obligations under this Agreement with respect to bankers’ acceptances, in
each case, as determined in good faith by the Administrative Agent acting
reasonably and in respect of which the Administrative Agent shall have given
notice to the Borrowers of the occurrence and particulars thereof, (i) the
right of each Borrower to request a Bankers’ Acceptance Loan shall be suspended
until the circumstances causing a suspension no longer exist, (ii) any
applicable Notice of Borrowing which is outstanding shall either:  (x) be cancelled and the requested
Bankers’ Acceptance Loan shall not be made or (y) the Administrative Agent
may, acting reasonably and taking into account any circumstances then affecting
the Lenders and the availability of Revolving Loans denominated in Canadian
Dollars, at the direction of such Borrower, deem the aforementioned Notice of
Borrowing a Notice of Borrowing for Canadian Prime Rate Loans.


 


16.                                 The Administrative Agent shall promptly
notify each Borrower of the suspension of such Borrower’s right to request a
Bankers’ Acceptance Loan and of the termination of any suspension.


 


4

















 


SCHEDULE
1.01(c)


 


Material Subsidiaries


 


	
  Subsidiary(1)

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Equity Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-Stone Container
  Enterprises, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone Container
  Corporation — 100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-Stone Container
  Canada Inc.

  	
   

  	
  Nova Scotia

  	
   

  	
  Smurfit-Stone Container
  Enterprises, Inc. — 100% Common  Stone
  Container Finance Company of  Canada —
  Class C Shares  Stone Container Finance
  Company of  Canada II — Class C
  Shares  SLP Finance General Partnership —  Class D
  Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MBI
  Limited/Limitée

  	
   

  	
  New
  Brunswick

  	
   

  	
  Smurfit-Stone
  Container Canada Inc. - 50%  3083527 Nova Scotia
  Company — 50%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-MBI

  	
   

  	
  Ontario

  	
   

  	
  Smurfit-Stone
  Container Canada Inc. — 49.9999%  3083527 Nova
  Scotia Company — 49.9999%  MBI Limited/Limitée - .0002%

  



 






(1) Stone
Global, Inc. will be a Material Subsidiary on the Funding Date and a U.S.
Subsidiary Guarantor. 3242796 Nova Scotia Limited will be a Material Subsidiary
on the Funding Date and a Canadian Subsidiary Guarantor.


3242795
Nova Scotia Limited will be designated as a Material Subsidiary on the Funding
Date and a Canadian Subsidiary Guarantor.


 

















 


SCHEDULE 1.01(d)


 


* Mortgaged Properties


 






* The information
included in this Schedule 1.01(d) (six pages total) has been omitted pursuant
to a request for confidential treatment and has been filed separately with the Securities
and Exchange Commission.


 
















 


SCHEDULE 3.01(a)


 


Existing Letters of Credit


 


	
  Beneficiary

  	
   

  	
  Stated Amount

  	
   

  	
  L/C
  No.(1)

  	
   

  	
  Issuing

  Bank

  	
   

  	
  Origination

  Date

  	
   

  	
  Expiry

  Date

  	
   

  	
  Purpose*

  	
   

  	
  Account

  Party(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LETTERS
  OF CREDIT ISSUED UNDER PRIOR CREDIT AGREEMENT(2)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Prior Credit Agreement (US)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Travelers Casualty and
  Surety Co of America

  	
   

  	
  $

  	
  1,051,446.97

  	
  (3)

  	
  TPTS-771263

  	
   

  	
  JPM(4)

  	
   

  	
  06/26/09

  	
   

  	
  06/25/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE(5)

  
	
  2.

  	
  Self Insurance Plans,
  State of California

  	
   

  	
  $

  	
  8,900,000.00

  	
   

  	
  TPTS-766332

  	
   

  	
  JPM

  	
   

  	
  07/01/09

  	
   

  	
  06/30/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  3.

  	
  Florida Self-Insurers
  Guaranty Assoc.

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  TPTS-798518

  	
   

  	
  JPM

  	
   

  	
  09/11/09

  	
   

  	
  09/09/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total DIP Letters of Credit

  	
   

  	
  $

  	
  10,451,446.97

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LETTERS
  OF CREDIT ISSUED UNDER PRE-PETITION CREDIT AGREEMENT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-Petition
  Credit Agreement (US)(6)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  National Union Fire
  Insurance Company

  	
   

  	
  $

  	
  4,337,261.40

  	
   

  	
  SLT-318587

  	
   

  	
  JPM

  	
   

  	
  02/08/95

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  5.

  	
  Safeco Insurance Company
  of America

  	
   

  	
  $

  	
  825,000.00

  	
   

  	
  00318581

  	
   

  	
  JPM

  	
   

  	
  12/20/94

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  6.

  	
  Cedar Bay Generating
  Company

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  T-244728

  	
   

  	
  JPM

  	
   

  	
  05/03/95

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  7.

  	
  Pacific Employers
  Insurance Company

  	
   

  	
  $

  	
  48,599.00

  	
   

  	
  S-13814

  	
   

  	
  DB(7)

  	
   

  	
  12/14/01

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  8.

  	
  Evergreen National
  Indemnity Company

  	
   

  	
  $

  	
  1,350,000.00

  	
   

  	
  S-14343

  	
   

  	
  DB

  	
   

  	
  10/12/01

  	
   

  	
  09/27/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  9.

  	
  Zurich American
  Insurance Company

  	
   

  	
  $

  	
  22,585,827.00

  	
   

  	
  S-14626

  	
   

  	
  DB

  	
   

  	
  04/22/02

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  10.

  	
  Self-Insurance Division
  - Bureau of W.C. (Penn.)

  	
   

  	
  $

  	
  2,600,000.00

  	
   

  	
  S-14911

  	
   

  	
  DB

  	
   

  	
  11/05/02

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  



 






(1) All letters of
credit constitute standby letters of credit.


(2) Each letter of
credit under the Prior Agreement constitutes a “U.S. Facility Letter of
Credit”.


(3) $ denotes U.S.
Dollars


(4) “JP” means JPMorgan
Chase Bank, N.A.


(5) Smurfit-Stone
Container Enterprises, Inc.


(6) Each letter of
credit listed under the Pre-Petition Credit Agreement (US) constitutes a “U.S.
Facility Letter of Credit”.


(7) “DB” means Deutsche Bank Trust Company
Americas


 

















 


	
  11.

  	
  South Carolina Workers
  Compensation Comm.

  	
   

  	
  $

  	
  1,300,000.00

  	
   

  	
  3062031

  	
   

  	
  BA(8)

  	
   

  	
  03/24/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  12.

  	
  State of Minnesota

  	
   

  	
  $

  	
  234,183.00

  	
   

  	
  S-15798

  	
   

  	
  DB

  	
   

  	
  04/21/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  13.

  	
  Arkansas Workers
  Compensation Commission

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  3063036

  	
   

  	
  BA

  	
   

  	
  05/10/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  14.

  	
  Louisiana Department of
  Labor

  	
   

  	
  $

  	
  1,800,000.00

  	
   

  	
  S-15903

  	
   

  	
  DB

  	
   

  	
  06/30/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  15.

  	
  Montana Department of
  Labor & Industry

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  S-15904

  	
   

  	
  DB

  	
   

  	
  06/30/04

  	
   

  	
  06/30/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  16.

  	
  Travelers
  Casualty & Surety Company of America

  	
   

  	
  $

  	
  6,841,394.03

  	
   

  	
  S-15945

  	
   

  	
  DB

  	
   

  	
  07/21/04

  	
   

  	
  07/21/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  17.

  	
  Industrial Commission of
  Arizona

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  S-15965

  	
   

  	
  DB

  	
   

  	
  07/30/04

  	
   

  	
  07/30/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  18.

  	
  State of Oregon

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  3065108

  	
   

  	
  BA

  	
   

  	
  08/31/04

  	
   

  	
  08/31/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  19.

  	
  Ohio Bureau of Workers’
  Compensation

  	
   

  	
  $

  	
  2,253,000.00

  	
   

  	
  S-16079

  	
   

  	
  DB

  	
   

  	
  09/23/04

  	
   

  	
  09/23/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  20.

  	
  Hartford Fire Insurance
  Company

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  P-753755

  	
   

  	
  JPM

  	
   

  	
  04/01/88

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  21.

  	
  Home Insurance Company

  	
   

  	
  $

  	
  250,000.00

  	
   

  	
  P-753760

  	
   

  	
  JPM

  	
   

  	
  04/08/87

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  22.

  	
  NJDEP Tri-Pack
  Corporation

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  S-07603

  	
   

  	
  DB

  	
   

  	
  06/01/91

  	
   

  	
  10/26/10

  	
   

  	
  Environmental

  	
   

  	
  SSCE

  
	
  23.

  	
  Kemper Insurance
  Companies

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  P-215043

  	
   

  	
  JPM

  	
   

  	
  07/03/01

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  24.

  	
  Florida Self-Insurers
  Guaranty Association, Inc.

  	
   

  	
  $

  	
  5,523,515.00

  	
   

  	
  P-227239

  	
   

  	
  JPM

  	
   

  	
  07/01/02

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  25.

  	
  State of New York
  Workers’ Compensation Board

  	
   

  	
  $

  	
  1,861,416.00

  	
   

  	
  P-227256

  	
   

  	
  JPM

  	
   

  	
  07/01/02

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  26.

  	
  Ohio Bureau of Workers’
  Compensation

  	
   

  	
  $

  	
  975,000.00

  	
   

  	
  P-235341

  	
   

  	
  JPM

  	
   

  	
  03/07/03

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  27.

  	
  Georgia Self-Insurers
  Guaranty Trust Fund

  	
   

  	
  $

  	
  930,000.00

  	
   

  	
  3061943

  	
   

  	
  BA

  	
   

  	
  03/09/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  28.

  	
  Illinois Industrial
  Commission

  	
   

  	
  $

  	
  4,000,000.00

  	
   

  	
  S-16251

  	
   

  	
  DB

  	
   

  	
  11/17/04

  	
   

  	
  10/26/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  29.

  	
  Steering Committee for
  the OII Site

  	
   

  	
  $

  	
  1,222,000.00

  	
   

  	
  S-17142

  	
   

  	
  DB

  	
   

  	
  07/01/06

  	
   

  	
  06/30/10

  	
   

  	
  Environmental

  	
   

  	
  SSCE

  
	
  30.

  	
  United States
  Environmental Protection Agency, Region 3

  	
   

  	
  $

  	
  112,000.00

  	
   

  	
  S-17167

  	
   

  	
  DB

  	
   

  	
  07/21/06

  	
   

  	
  07/20/10

  	
   

  	
  Environmental

  	
   

  	
  SSCE

  
	
  31.

  	
  SCANA Energy
  Marketing, Inc.

  	
   

  	
  $

  	
  515,395.32

  	
   

  	
  S-17257

  	
   

  	
  DB

  	
   

  	
  11/01/06

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  32.

  	
  Shell Energy North
  America (Canada) Inc.

  	
   

  	
  $

  	
  3,700,000.00

  	
   

  	
  S-17262

  	
   

  	
  DB

  	
   

  	
  11/01/06

  	
   

  	
  10/26/09

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  33.

  	
  Gulf Power Company

  	
   

  	
  $

  	
  868,917.57

  	
   

  	
  S-17337

  	
   

  	
  DB

  	
   

  	
  12/22/06

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  34.

  	
  Tennessee Valley
  Authority

  	
   

  	
  $

  	
  1,985,564.01

  	
   

  	
  S-17336

  	
   

  	
  DB

  	
   

  	
  01/01/07

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  35.

  	
  Virginia Workers’
  Compensation Committee

  	
   

  	
  $

  	
  2,000,000.00

  	
   

  	
  3089115

  	
   

  	
  BA

  	
   

  	
  08/01/07

  	
   

  	
  08/01/10

  	
   

  	
  Risk Management

  	
   

  	
  SSCE

  
	
  36.

  	
  Clay County Board of
  Commissioners

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
  S-17857

  	
   

  	
  DB

  	
   

  	
  02/11/08

  	
   

  	
  10/26/10

  	
   

  	
  Environmental

  	
   

  	
  SSCE

  
	
  37.

  	
  CCIC North America Inc.

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  3094489

  	
   

  	
  BA

  	
   

  	
  08/04/08

  	
   

  	
  08/04/10

  	
   

  	
  Reclamation Division

  	
   

  	
  SSCE

  
	
  38.

  	
  North Western Energy

  	
   

  	
  $

  	
  73,896.11

  	
   

  	
  S-18063

  	
   

  	
  DB

  	
   

  	
  10/21/08

  	
   

  	
  10/21/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
  39.

  	
  Center Point Energy
  Services, Inc.

  	
   

  	
  $

  	
  202,676.48

  	
   

  	
  S-18072

  	
   

  	
  DB

  	
   

  	
  10/29/08

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total
  Pre-Petition US Letters of Credit 

  	
   

  	
  $

  	
  85,700,644.92

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






(8) “BA” means Bank of America, N.A.


 

















 


	
  Pre-Petition
  Credit Agreement (CAD)(9)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
  Minister of Environment

  	
   

  	
  C$

  	
   34,700.00

  	
  (10)

  	
  736/5495

  	
   

  	
  DBC(11)

  	
   

  	
  08/01/00

  	
   

  	
  08/01/10

  	
   

  	
  Environmental

  	
   

  	
  SSCI(12)

  
	
  41.

  	
  Minister of Environment

  	
   

  	
  C$

  	
   200,000.00

  	
   

  	
  736/5619

  	
   

  	
  DBC

  	
   

  	
  07/12/02

  	
   

  	
  7/12/10

  	
   

  	
  Environmental

  	
   

  	
  SSCI

  
	
  42.

  	
  Minister of Environment

  	
   

  	
  C$

  	
   200,000.00

  	
   

  	
  736/5787

  	
   

  	
  DBC

  	
   

  	
  03/25/04

  	
   

  	
  03/25/11

  	
   

  	
  Environmental

  	
   

  	
  SSCI

  
	
  43.

  	
  The Corporation of the
  Town of Milton

  	
   

  	
  C$

  	
   5,000.00

  	
   

  	
  736/5808

  	
   

  	
  DBC

  	
   

  	
  06/09/04

  	
   

  	
  06/09/10

  	
   

  	
  Environmental

  	
   

  	
  SSCI

  
	
  44.

  	
  Shell Energy Canada Inc.

  	
   

  	
  C$

  	
   66,134.87

  	
   

  	
  736/6692

  	
   

  	
  DBC

  	
   

  	
  11/01/06

  	
   

  	
  10/26/10

  	
   

  	
  Energy

  	
   

  	
  SSCI

  
	
  45.

  	
  The Corporation of the
  City of New Westminster

  	
   

  	
  C$

  	
   3,500.00

  	
   

  	
  736/6378

  	
   

  	
  DBC

  	
   

  	
  11/27/06

  	
   

  	
  10/26/10

  	
   

  	
  Environmental

  	
   

  	
  SSCI

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total
  Pre-Petition CAD Letters of Credit

  	
   

  	
  C$

  	
   509,334.87

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  US $ Equivalent (assumes 1.2226 f/x rate)

  	
   

  	
  $

  	
  416,599.76

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Pre-Petition Letters of Credit 

  	
   

  	
  $

  	
   86,117,244.68

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL LETTERS OF CREDIT

  	
   

  	
  $

  	
   96,568,691.65

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






(9) Each letter of
credit listed under the Pre-Petition Credit Agreement (CAD) constitutes a “Canadian
Facility Letter of Credit”.


(10) C$ denotes
Canadian dollars


(11) “DBC” means Deutsche
Bank AG, Canada Branch


(12) Smurfit-Stone Container
Canada, L.P.


 

















 


SCHEDULE 8.07


 


Certain Title Matters


 


None.


 
















 


SCHEDULE 8.08


 


Subsidiaries


 


	
  Subsidiary

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Equity Ownership

  
	
  A.            Domestic Subsidiaries

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-Stone Container
  Enterprises, Inc.(1)

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone Container
  Corporation — 100%

  
	
  Lot 24D Redevelopment
  Corporation

  	
   

  	
  Missouri

  	
   

  	
  Smurfit-Stone Container
  Enterprises, Inc — 100%

  
	
  Atlanta & St.
  Andrews Bay Railroad Company

  	
   

  	
  Florida

  	
   

  	
  Smurfit-Stone Container
  Enterprises, Inc. — 100%

  
	
  Cameo
  Container Corporation

  	
   

  	
  Illinois

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Stone
  International Services Corporation

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Calpine
  Corrugated, LLC

  	
   

  	
  California

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 90%

  
	
  Stone
  Global, Inc.(2)

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Stone
  Connecticut Paperboard Properties, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Smurfit-Stone Puerto Rico, Inc.

  	
   

  	
  Puerto
  Rico

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Smurfit
  Newsprint Corporation

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  SLP
  Finance I, LLC

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  SLP
  Finance II, LLC

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Timber
  Capital Holdings LLC

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Timber Note Holdings LLC

  	
   

  	
  Delaware

  	
   

  	
  Timber Capital Holdings
  LLC — 100%

  
	
  SMBI
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Smurfit-MBI
  - 100%

  



 






(1) Smurfit-Stone
Container Enterprises, Inc. will be the US Borrower.


(2) Stone Global, Inc. will be a
Material Subsidiary on the Funding Date and a U.S. Subsidiary Guarantor.


 

















 


	
  Subsidiary

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Equity Ownership

  
	
  B.            Canadian
  Subsidiaries

  	
   

  	
   

  	
   

  	
   

  
	
  3242796
  Nova Scotia Limited(3)

  	
   

  	
  Nova
  Scotia

  	
   

  	
  Stone
  Global, Inc. — 100%

  
	
  3242795
  Nova Scotia Limited(4)

  	
   

  	
  Nova
  Scotia

  	
   

  	
  Stone
  Global, Inc. — 100%

  
	
  Smurfit-Stone
  Container Canada, L.P.(5)

  	
   

  	
  Ontario

  	
   

  	
  3242796
  Nova Scotia Limited — 99% limited partner

  3242795
  Nova Scotia Limited — 1% general partner

  
	
  Stone
  Container Finance Company of Canada

  	
   

  	
  Nova
  Scotia

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Stone Container Finance Company  of Canada II

  	
   

  	
  Nova
  Scotia

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Smurfit-Stone Container Canada Inc.

  	
   

  	
  Nova Scotia

  	
   

  	
  Smurfit-Stone Container Enterprises, Inc. — 100%

  Stone Container Finance Company of

  Canada — Class C Shares

  Stone Container Finance Company of

  Canada II — Class C Shares

  SLP Finance General Partnership —

  Class D Shares

  
	
  SLP
  Finance General Partnership

  	
   

  	
  Quebec

  	
   

  	
  SLP
  Finance I, LLC — 50%

  SLP
  Finance II, LLC — 50%

  
	
  3083527 Nova Scotia Company

  	
   

  	
  Nova Scotia

  	
   

  	
  Smurfit-Stone Container
  Canada Inc. - 100%

  
	
  MBI Limited/Limitée

  	
   

  	
  New Brunswick

  	
   

  	
  Smurfit-Stone Container
  Canada Inc. - 50%

  3083527 Nova Scotia
  Company — 50%

  
	
  Smurfit-MBI

  	
   

  	
  Ontario

  	
   

  	
  Smurfit-Stone
  Container Canada Inc. — 49.9999%

  3083527
  Nova Scotia Company — 49.9999%

  MBI
  Limited/Limitée - .0002%

  



 






(3) 3242796
Nova Scotia Limited will be a Material Subsidiary on the Funding Date and a
Canadian Subsidiary Guarantor.


(4) 3242795
Nova Scotia Limited will be designated as a Material Subsidiary on the Funding
Date and a Canadian Subsidiary Guarantor.


(5) Smurfit-Stone
Container Canada, L.P. will be the Canadian Borrower.


 

















 


	
  Subsidiary

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Equity Ownership

  
	
  St. Laurent Display and
  Packaging Inc.

  	
   

  	
  Ontario

  	
   

  	
  Smurfit-Stone Container
  Canada Inc. - 100%

  
	
  Stone
  Venepal (Celgar) Pulp, Inc.

  	
   

  	
  Canada
  (federal)

  	
   

  	
  Smurfit-Stone
  Container Canada Inc. - 45%

  Celgar
  Investments, Inc. - 45%

  
	
  639647
  British Columbia Ltd.

  	
   

  	
  British
  Columbia

  	
   

  	
  Smurfit-MBI
  - 100%

  
	
  Francobec Company

  	
   

  	
  Nova Scotia

  	
   

  	
  SLP Finance General
  Partnership - 100%

  
	
  605681 N.B. Inc.

  	
   

  	
  New Brunswick

  	
   

  	
  SLP Finance General
  Partnership - 100%

  
	
  B.C. Shipper Supplies Ltd.

  	
   

  	
  British Columbia

  	
   

  	
  639647 British Columbia
  Ltd. - 100%

  
	
  Specialty
  Containers Inc.

  	
   

  	
  Alberta

  	
   

  	
  639647
  British Columbia Ltd. - 100%

  
	
  C.            Latin American Subsidiaries

  	
   

  	
   

  	
   

  	
   

  
	
  Stone
  Container de Mexico S. de R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  Smurfit-Stone Container
  Enterprises, Inc. — 99.994%

  Cameo Container
  Corporation - .006%

  
	
  CCA de Baja California S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  D.            Pacific Subsidiaries

  	
   

  	
   

  	
   

  	
   

  
	
  Stone
  Truepenny International, Inc.

  	
   

  	
  British
  Virgin Islands

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  
	
  Xiamen Stone Millennium Packaging & Paper Industries Co.
  Ltd.

  	
   

  	
  China

  	
   

  	
  Smurfit-Stone Packaging (Dongguan) Co., Ltd. — 100%

  
	
  Smurfit-Stone i2i Design

  Center, Ltd.

  	
   

  	
  British Virgin Islands

  	
   

  	
  Stone Truepenny
  International, Inc. — 100%

  
	
  Smurfit-Stone China

  Trading, Ltd.

  	
   

  	
  British Virgin Islands

  	
   

  	
  Stone Truepenny
  International, Inc. — 100%

  
	
  Smurfit-Stone
  (Asia) Limited

  	
   

  	
  Hong
  Kong

  	
   

  	
  Stone
  Truepenny International, Inc. — 100%

  
	
  Smurfit-Stone
  Packaging (Dongguan) Co., Ltd.

  	
   

  	
  China

  	
   

  	
  Smurfit-Stone
  (Asia) Limited — 100%

  
	
  Smurfit-Stone
  i2i (China)

  	
   

  	
  China

  	
   

  	
  Smurfit-Stone
  (Asia) Limited — 100%

  
	
  Smurfit-Stone
  HY Holdings, Ltd.

  	
   

  	
  British
  Virgin Islands

  	
   

  	
  Stone
  Truepenny International, Inc. — 100%

  



 

















 


	
  Subsidiary

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Equity Ownership

  
	
  Celgar
  Investments, Inc.

  	
   

  	
  British
  Virgin Islands

  	
   

  	
  Smurfit-Stone
  Container Canada Inc. — 100%

  
	
  E.             European Subsidiaries

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-Stone
  Recycling International Cooperatief U.A.

  	
   

  	
  Netherlands

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 99%

  Stone
  Global, Inc. — 1%

  
	
  Smurfit-Stone
  Container (UK) Limited

  	
   

  	
  United
  Kingdom

  	
   

  	
  Smurfit-Stone
  Container Enterprises, Inc. — 100%

  



 
















 


SCHEDULE 8.09


 


Litigation and Compliance with Laws


 


1.     In 2009, a
lawsuit was filed in the United States District Court for the Northern District
of Illinois against the four individual committee members for the
Administrative Committee (“Administrative Committee”) of the Company’s
savings plans and Patrick Moore, our Chief Executive Officer (together, the “Defendants”).  The suit alleges violations of the Employee
Retirement Income Security Act (“ERISA”) (the “2009 ERISA Case”) between
January 2008 and the date it was filed. 
The plaintiffs in the 2009 ERISA Case brought the complaint on behalf of
themselves and a class of similarly situated participants and beneficiaries of
four of our savings plans (the “Savings Plans”).  The plaintiffs assert that the Defendants
breached their fiduciary duties to the Savings Plans’ participants and
beneficiaries by allegedly making imprudent investments with the Savings Plans’
assets, making misrepresentations and failing to disclose material adverse
facts concerning the Company’s business conditions, debt management and
viability, and not taking appropriate action to protect the Savings Plans’
assets.  Even though the Company is not a
named defendant in the 2009 ERISA Case, management believes that any
indemnification obligations to the named Defendants would be covered by
applicable insurance.


 


2.     On January 11, 2010, a
second ERISA class action lawsuit was filed in the United States District Court
for the Western District of Missouri. 
The defendants in this case are the individual committee members for the
Administrative Committee, several other of the Company’s executives and the
individual members of its Board of Directors. 
The suit has similar allegations as the 2009 ERISA Case described above,
with the addition of breach of fiduciary duty claims related to our pension
plans.  The Company expects that both of
these matters will be consolidated in some manner as they purport to represent
a similar class of employees and former employees and seek recovery under
similar allegations and any of the Company’s indemnification obligations to the
named Defendants would be covered by applicable insurance.


 


3.     On February 24, 2010, a
third ERISA class action lawsuit was filed in the United States District Court
for the District of Delaware.  The
defendants in this case are the individual committee members for the
Administrative Committee, several other of the Company’s executives and the
individual members of its Board of Directors. 
The defendants in this case are the individual committee members of the
Administrative Committee of our savings plans, several of our other executives
and the individual members of our Board of Directors.  The suit has similar allegations as the two
other ERISA class action lawsuits.  We
expect that all of these matters will be consolidated in some manner as they
purport to represent a similar class of employees and former employees and seek
recovery under similar allegations and any of the Company’s indemnification
obligations to the named Defendants would be covered by applicable insurance.


 

















 


SCHEDULE 8.14(b)


 


Canadian Pension Plan
Matters


 


Unpaid
Contributions


 


SSC Canada and the other Canadian Subsidiaries have suspended pension
special payments (to amortize unfunded actuarial liabilities and solvency
deficiencies) since January 26, 2009. Aggregate minimum outstanding
special payments are estimated to C$39,717,264, excluding interest, as of April 30,
2010.


 


Unfunded Actuarial Liabilities/Solvency Deficiencies (as of the
date of the most recent actuarial valuation filed with Governmental
Authorities)


 


	
  Plan

  	
   

  	
  Valuation date

  	
   

  	
  Solvency deficiency

  	
   

  	
  Unfunded actuarial

  liability

  	
   

  
	
  SSCC Plan

  	
   

  	
  December 31, 2006(1)

  	
   

  	
  C$

  	
  49,406,800

  	
   

  	
  C$

  	
  16,758,047

  	
   

  
	
  SSCC (St-Laurent) Union

  	
   

  	
  December 31, 2006(2)

  	
   

  	
  C$

  	
  31,009,000

  	
   

  	
  C$

  	
  12,022,916

  	
   

  
	
  Smurfit — MBI Union

  	
   

  	
  December 31, 2008

  	
   

  	
  C$

  	
  44,072,600

  	
   

  	
  C$

  	
  7,276,196

  	
   

  
	
  Smurfit — MBI Non-Union

  	
   

  	
  December 31, 2006(3)

  	
   

  	
  C$

  	
  28,727,900

  	
   

  	
  C$

  	
  3,505,353

  	
   

  
	
  Smurfit — MBI Executive

  	
   

  	
  December 31, 2007

  	
   

  	
  C$

  	
  136,600

  	
  (4)

  	
  C$

  	
  159,752

  	
   

  
	
  Forest & Sawmill

  	
   

  	
  December 31, 2006

  	
   

  	
  C$

  	
  54,800

  	
   

  	
  C$

  	
  0

  	
   

  



 






(1) A cost certificate as of December 31, 2007 revealed an
additional solvency deficiency of C$255,900 and an additional unfunded
actuarial liability of C$452,900.


(2) A cost certificate as of June 1, 2008 revealed an additional
solvency deficiency of C$485,800 and an additional unfunded actuarial liability
of C$524,100.


(3) Based on an estimated financial position as at May, 31, 2009
on a solvency basis filed with Financial Services Commission of Ontario in August 2009.


(4) Termination deficiency: C$1,161,800.


 

















 


SCHEDULE 8.15


 


Environmental Matters


 


1.     Various
federal, state and local governmental authorities have developed and maintain
numerous databases or lists of environmental information, including lists of
leaking underground storage tanks, landfill facilities, hazardous waste sites
and the like.  The information in these
databases may contain errors, and certain databases and lists are posted for
public viewing without the opportunity for property owners and operators to
correct any errors that appear in them. 
Further, the inclusion of a property on an environmental database or
list maintained by a governmental agency, in and of itself, may not trigger the
need for investigation or remediation. 
To the knowledge of SSCC and the Borrower, the following Real Properties
appear on the Comprehensive Environmental Response, Compensation, Liability
Information System List (“CERCLIS”) maintained by the United States
Environmental Protection Agency (“EPA”):


 


(a)           47 Maple Street,
Mansfield, Massachusetts -  CERCLIS — No
Further Remedial Action Planned


 


(b)           910 Industrial
Street, Hopewell, Virginia - CERCLIS — No Further Remedial Action Planned


 


(c)           1 South Everett
Street, Panama City, Florida - CERCLIS Archive — No Further Remedial Action
Planned


 


(d)           19th & Main Street,
West Point, Virginia - CERCLIS Archive — No Further Remedial Action Planned


 

















 


SCHEDULE 8.17(a)


 


UCC Lien Filing Offices


 


1.     Secretary of
the State of Delaware


 


2.     Nova Scotia (in
accordance with the Personal Property Security Act of Nova Scotia)


 


3.     Register of
Personal and Movable Real Rights of Quebec


 


4.     Ontario (in
accordance with the Personal Property Security Act of Ontario)


 


5.     Manitoba (in
accordance with the Personal Property Security Act of Manitoba)


 


6.     Saskatchewan
(in accordance with the Personal Property Security Act of Saskatchewan)


 


7.     Alberta (in
accordance with the Personal Property Security Act of Alberta)


 


8.     British
Columbia (in accordance with the Personal Property Security Act of British Columbia)


 


9.     New Brunswick
(in accordance with the Personal Property Security Act of New Brunswick)


 

















 


SCHEDULE 8.18


 


Labor Matters


 


None.


 
















 


SCHEDULE 8.19


 


Real Properties


 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  1.

  	
   

  	
  Converting Plant

  	
   

  	
  3200
  Pinson Valley Parkway

  Birmingham, AL 35217

  (Jefferson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Mill

  	
   

  	
  1611
  County Road 85

  PO Box 508

  Stevenson, AL 35772

  (Jackson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Converting Plant

  	
   

  	
  2200
  Industrial Drive

  Jonesboro, AR 72401

  (Craighead County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Converting Plant

  	
   

  	
  2021
  South 5th Street

  Rogers, AR 72758

  (Benton County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Converting Plant

  	
   

  	
  201
  S. Hillview Drive

  Milpitas, CA 95035

  (Santa Clara County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Converting Plant

  	
   

  	
  1078
  Merrill Street

  Salinas, CA 93901

  (Monterey County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Converting Plant

  	
   

  	
  185
  N. Smith Street

  Corona, CA 91720

  (Riverside County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Converting Plant

  	
   

  	
  13833
  E. Freeway Drive

  Santa Fe Springs, CA 90670

  (Los Angeles County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Converting Plant

  	
   

  	
  15300
  Marquardt Avenue

  Santa Fe Springs, CA 90670

  (Los Angeles County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Converting Plant

  	
   

  	
  5050
  E. 50th Avenue

  Denver, CO 80216

  (Denver County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Mill

  	
   

  	
  125
  Depot Road

  Uncasville, CT 06832

  (New London County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Converting Plant

  	
   

  	
  1400
  West Tradeport Drive

  Jacksonville, FL 32218

  (Duval County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  13.

  	
   

  	
  Mill

  	
   

  	
  1
  Everitt Avenue

  Panama City, FL 32401

  (Bay County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Mill and Office

  	
   

  	
  9469
  Eastport Road

  Jacksonville, FL 32218

  (Duval County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Mill

  	
   

  	
  600
  N. 8th Street

  Fernandina Beach, FL 32034

  (Nassau County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Converting Plant

  	
   

  	
  1995
  Lithonia Industrial Boulevard

  Atlanta, GA 30058

  (DeKalb County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Converting Plant

  	
   

  	
  65
  Enterprise Boulevard SW

  Atlanta, GA 30336

  (Fulton County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Converting Plant

  	
   

  	
  6180
  Jersey Alcovy Road

  Covington, GA 30209

  (Newton County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Converting Plant

  	
   

  	
  2300
  Bridgeport Drive

  Sioux City, IA 51111

  (Woodbury County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Converting Plant

  	
   

  	
  1540 &
  1601 Tri View Avenue

  Sioux City, IA 51103

  (Woodbury County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Converting Plant

  	
   

  	
  3800
  Dixon Street

  Des Moines, IA 50313

  (Polk County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Converting Plant

  	
   

  	
  1900
  Foss Park Avenue

  North Chicago, IL 60064

  (Lake County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Converting Plant

  	
   

  	
  1415
  West 44th Street

  Chicago, IL 60609

  (Cook County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Converting Plant

  	
   

  	
  1815
  Morrissey Drive

  Bloomington, IL 61702

  (McLean County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  25.

  	
   

  	
  Converting Plant

  	
   

  	
  Sixth & Zschokke Streets

  Highland, IL 62249

  (Madison County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Converting Plant

  	
   

  	
  775 Linwood Road

  Galesburg, IL 61402

  (Knox County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Converting Plant

  	
   

  	
  7601 S. 78th Avenue

  Bridgeview, IL 60455

  (Cook County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Office and Design/Engineering Center

  	
   

  	
  450
  E. North Avenue

  Carol Stream, IL 60188

  (Dupage County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Converting Plant

  	
   

  	
  3101
  State Street

  Columbus, IN 47202

  (Bartholomew County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  Converting Plant

  	
   

  	
  1925
  Stone Court

  Mishawaka, IN 46545

  (St. Joseph County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  Mill

  	
   

  	
  Mill
  Street

  Hodge, LA 71247

  (Jackson Parish)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Converting Plant

  	
   

  	
  47
  Maple Street

  Mansfield, MA 02048

  (Bristol County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Converting Plant

  	
   

  	
  320
  Parker Street

  Springfield, MA 01129

  (Hampden County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Converting Plant

  	
   

  	
  725
  Pittman Road

  Baltimore, MD 21226

  (Anne Arundel County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Converting Plant

  	
   

  	
  50
  – 37th Avenue NE

  Minneapolis, MN 55421

  (Hennepin County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  Converting Plant

  	
   

  	
  655
  – 41st Avenue North

  St. Cloud, MN 56301

  (Stearns County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Converting Plant

  	
   

  	
  2705
  West Battlefield Street

  Springfield, MO 65808

  (Greene County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  38.

  	
   

  	
  Converting Plant

  	
   

  	
  933 S. Kent Street

  Liberty, MO 64068

  (Clay County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  Converting Plant

  	
   

  	
  577 Goddard Avenue

  Chesterfield, MO 63005

  (St. Louis County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
   

  	
  Converting Plant

  	
   

  	
  324 Turner Industrial Park Road

  Saltillo/Tupelo, MS 38866

  (Lee County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  41.

  	
   

  	
  Converting Plant

  	
   

  	
  1679
  S. Green Street

  Tupelo, MS 38802

  (Lee County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  42.

  	
   

  	
  Converting Plant

  	
   

  	
  8080
  North Point Boulevard

  Winston-Salem, NC 27106

  (Forsyth County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  43.

  	
   

  	
  Converting Plant

  	
   

  	
  662
  Washburn Switch Road

  Shelby, NC 28151

  (Cleveland County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
   

  	
  Converting Plant

  	
   

  	
  400
  Albemarle Street

  Lexington, NC 27292

  (Davidson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
   

  	
  Converting Plant

  	
   

  	
  2606
  Wilco Boulevard

  Wilson, NC 27893

  (Wilson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  46.

  	
   

  	
  Converting Plant

  	
   

  	
  51
  Robinson Street

  North Tonawanda, NY 14120

  (Niagara County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  47.

  	
   

  	
  Converting Plant

  	
   

  	
  975
  N. Freedom Street

  Ravenna, OH 44266

  (Portage County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  48.

  	
   

  	
  Converting Plant

  	
   

  	
  9960
  Alliance Road

  Cincinnati, OH 45242

  (Hamilton County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  49.

  	
   

  	
  Mill

  	
   

  	
  500 N. Fourth Street

  Coshocton, OH 43812

  (Coshocton County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  50.

  	
   

  	
  Converting Plant

  	
   

  	
  1010
  Mead Street

  (Mead & Kenskill)

  Washington Courthouse, OH 43160

  (Fayette County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  51.

  	
   

  	
  Converting Plant

  	
   

  	
  108 S. Sycamore Street

  Jefferson, Ohio 44047

  (Ashtabula County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52.

  	
   

  	
  Converting Plant

  	
   

  	
  2111 Old Shawnee Road

  Muskogee, OK 74403

  (Muskogee County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  53.

  	
   

  	
  Converting Plant

  	
   

  	
  9930 N. Burgard Way

  Portland, OR 97203

  (Multnomah County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  54.

  	
   

  	
  Converting Plant

  	
   

  	
  2940
  Reach Road

  Williamsport, PA 17701

  (Lycoming County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  55.

  	
   

  	
  Converting Plant

  	
   

  	
  100 McDonald Boulevard

  Philadelphia, PA 19014

  (Delaware County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  56.

  	
   

  	
  Converting Plant

  	
   

  	
  9820
  Blue Grass Road

  Philadelphia, PA 19114

  (Philadelphia County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  57.

  	
   

  	
  Converting Plant

  	
   

  	
  4461 Highway 301 South

  Latta, SC 29565

  (Dillon County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  58.

  	
   

  	
  Mill

  	
   

  	
  Paper
  Mill Road

  Florence, SC 29501

  (Florence County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  59.

  	
   

  	
  Converting Plant

  	
   

  	
  100
  East Benson Road

  Sioux Falls, SD 57104

  (Minnehaha County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60.

  	
   

  	
  Converting Plant

  	
   

  	
  1720
  Ninth Avenue

  Humboldt, TN 38343

  (Gibson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  61.

  	
   

  	
  Converting Plant

  	
   

  	
  550
  South Avenue East

  Collierville, TN 38017

  (Shelby County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  62.

  	
   

  	
  Converting Plant

  	
   

  	
  4512
  Anderson Road

  Knoxville, TN 37918

  (Knox County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  63.

  	
   

  	
  Converting Plant

  	
   

  	
  700
  Garrett Parkway

  Lewisburg, TN 37091

  (Marshall County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  64.

  	
   

  	
  Converting Plant

  	
   

  	
  6701 South Freeway

  Fort Worth, TX 76134

  (Tarrant County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65.

  	
   

  	
  Converting Plant

  	
   

  	
  13343 Interstate 20
  (I-20 & Hwy 155)

  Tyler, TX 75710

  (Smith County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  66.

  	
   

  	
  Converting Plant

  	
   

  	
  8440 Tewantin Drive

  Houston, TX 77061

  (Harris County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  67.

  	
   

  	
  Converting Plant

  	
   

  	
  7350 Stiles Road

  El Paso, TX 79915

  (El Paso County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  68.

  	
   

  	
  Converting Plant

  	
   

  	
  2302 W. Marshall Drive

  Grand Prairie, TX 75051

  (Dallas County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  69.

  	
   

  	
  Mill

  	
   

  	
  19th and Main Streets

  West Point, Virginia 23181

  (King William County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  70.

  	
   

  	
  Mill

  	
   

  	
  910
  Industrial Street,

  Hopewell, VA 23860

  (City of Hopewell)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  71.

  	
   

  	
  Converting Plant

  	
   

  	
  Richmond
  North

  5700 Lewis Road

  Sandston, VA 23150

  (Henrico County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  72.

  	
   

  	
  Converting Plant

  	
   

  	
  9400
  Heather Avenue

  Milwaukee, WI 53224

  (Milwaukee County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  73.

  	
   

  	
  Converting Plant

  	
   

  	
  2800
  W. Custer Avenue

  Milwaukee, WI 53209

  (Milwaukee County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  74.

  	
   

  	
  Converting Plant

  	
   

  	
  201
  Grove Street

  Castle Rock, WI 53910

  (Adams County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  75.

  	
   

  	
  Land only (15 acres)

  	
   

  	
  Hwy
  19 South

  Magnolia, AR

  (Columbia County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  76.

  	
   

  	
  Recycling Plant

  	
   

  	
  2710
  O Street

  Bakersfield, CA 93301

  (Kern County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  77.

  	
   

  	
  Recycling Plant

  	
   

  	
  20502 S. Denker Street

  Torrance, CA 90501

  (Los Angeles County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  78.

  	
   

  	
  Converting Plant

  	
   

  	
  74 Pickering Street

  Portland, CT 06480

  (Middlesex County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  79.

  	
   

  	
  Recycling Plant

  	
   

  	
  5111
  N. 26th Street

  Tampa, FL 33610

  (Hillsborough County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  80.

  	
   

  	
  Forest Resources Office

  	
   

  	
  1200 Franklin Street

  Fernandina Beach, FL 32034

  (Nassau County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  81.

  	
   

  	
  Recycling Plant

  	
   

  	
  3021 SW First Terrace

  Ft. Lauderdale, FL 33316

  (Broward County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  82.

  	
   

  	
  Recycling Plant

  	
   

  	
  1580
  W. Beaver Street

  Jacksonville, FL 33316

  (Duval County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  83.

  	
   

  	
  Land

  	
   

  	
  124
  Watts Street,

  Jacksonville, FL

  (Duval County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  84.

  	
   

  	
  Converting Plant

  	
   

  	
  2002
  E. 18th Street

  Jacksonville, FL 32206

  (Duval County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  85.

  	
   

  	
  Recycling Plant

  	
   

  	
  1311
  Walker Street

  Augusta, GA 30904

  (Augusta-Richmond County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  86.

  	
   

  	
  Recycling Plant

  	
   

  	
  626
  E. 111th Street

  Chicago, IL 60628

  (Cook County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  87.

  	
   

  	
  Converting Plant

  	
   

  	
  23315
  Young Road

  Joliet, IL 60434

  (Will County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  88.

  	
   

  	
  Recycling Plant

  	
   

  	
  417
  South 37th Avenue

  St. Charles, IL 60174

  (Kane County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  89.

  	
   

  	
  Recycling Plant

  	
   

  	
  1520
  North 5th Avenue

  Evansville, IN 47710

  (Vanderburgh County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  90.

  	
   

  	
  Recycling Plant

  	
   

  	
  510 Division Street

  Kansas City, KS 66103

  (Wyandotte County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  91.

  	
   

  	
  Recycling Plant

  	
   

  	
  750
  S. 11th Street

  Louisville, KY 40245

  (Jefferson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  92.

  	
   

  	
  Converting Plant

  	
   

  	
  33677
  Costen Road

  Pocomoke City, MD 21851

  (Worcester County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  93.

  	
   

  	
  Mill

  	
   

  	
  One Superior Way

  Ontonagon, MI 49953

  (Ontonagon County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  94.

  	
   

  	
  Recycling Plant

  	
   

  	
  5505
  Natural Bridge

  St. Louis, MO 63120

  (St. Louis County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  95.

  	
   

  	
  Mill

  	
   

  	
  14377
  Pulp Mill Road

  Missoula, MT 59808

  (Missoula County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  96.

  	
   

  	
  Land Only (approximately 1 acre)

  	
   

  	
  55
  Schenck Street

  North Tonawanda, NY 14120

  (Niagara County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  97.

  	
   

  	
  Warehouse

  	
   

  	
  52
  Campion Road

  New Hartford, NY 13413

  (Oneida County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  98.

  	
   

  	
  Converting Plant

  	
   

  	
  288
  South Illinois Avenue

  Mansfield, OH 44905

  (Richland County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  99.

  	
   

  	
  Recycling Plant

  	
   

  	
  1015
  Marion Road

  Columbus, OH 43207

  (Franklin County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100.

  	
   

  	
  Recycling Plant

  	
   

  	
  6328
  SE 100th

  Portland, OR 97266

  (Multnomah County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  101.

  	
   

  	
  Recycling Plant

  	
   

  	
  707
  19th Avenue North

  Nashville, TN 37203

  (Davidson County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  102.

  	
   

  	
  Converting Plant

  	
   

  	
  1125
  Haley Road

  Murfreesboro, TN 37129

  (Rutherford County)

  



 

















 


	
   

  	
   

  	
  Property Type

  	
   

  	
  Property Address

  
	
  103.

  	
   

  	
  Converting Plant

  	
   

  	
  265 W. Trigg Avenue

  Memphis, TN 38106

  (Shelby County)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  104.

  	
   

  	
  Chip Mill

  	
   

  	
  6367 Kings Highway

  Keysville, VA 23947

  (Charlotte County)

  



 


Additional Properties:


 


	
   

  	
   

  	
  County

  	
   

  	
  State

  	
   

  	
  Facility Name

  	
   

  	
  Acres

  	
   

  
	
  105.

  	
   

  	
  Baldwin

  	
   

  	
  AL

  	
   

  	
  Cow Dip Site

  	
   

  	
  3.0

  	
   

  
	
  106.

  	
   

  	
  Blount

  	
   

  	
  AL

  	
   

  	
  Snead Woodyard

  	
   

  	
  11.0

  	
   

  
	
  107.

  	
   

  	
  DeKalb

  	
   

  	
  AL

  	
   

  	
  Portersville Woodyard

  	
   

  	
  4.5

  	
   

  
	
  108.

  	
   

  	
  Escambia

  	
   

  	
  AL

  	
   

  	
  Huxford Woodyard

  	
   

  	
  62.9

  	
   

  
	
  109.

  	
   

  	
  Escambia

  	
   

  	
  AL

  	
   

  	
  Rock Creek Nursery

  	
   

  	
  267.0

  	
   

  
	
  110.

  	
   

  	
  Escambia

  	
   

  	
  AL

  	
   

  	
  Parker Farm Seed
  Orchard

  	
   

  	
  460.0

  	
   

  
	
  111.

  	
   

  	
  Henry

  	
   

  	
  AL

  	
   

  	
  Abbeville Woodyard

  	
   

  	
  20.0

  	
   

  
	
  112.

  	
   

  	
  Jackson

  	
   

  	
  AL

  	
   

  	
  Port Property

  	
   

  	
  4.2

  	
   

  
	
  113.

  	
   

  	
  Pike

  	
   

  	
  AL

  	
   

  	
  Troy Woodyard

  	
   

  	
  56.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  888.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  114.

  	
   

  	
  Coconino

  	
   

  	
  AZ

  	
   

  	
  Williams Property

  	
   

  	
  35.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  35.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  115.

  	
   

  	
  Trinity

  	
   

  	
  CA

  	
   

  	
  Burnt Ranch Sawmill

  	
   

  	
  94.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  94.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  116.

  	
   

  	
  Alachua

  	
   

  	
  FL

  	
   

  	
  High Springs Seed
  Orchard

  	
   

  	
  234.0

  	
   

  
	
  117.

  	
   

  	
  Alachua

  	
   

  	
  FL

  	
   

  	
  Alachua Landfill

  	
   

  	
  543.0

  	
   

  
	
  118.

  	
   

  	
  Bay

  	
   

  	
  FL

  	
   

  	
  Sitel Woodyard

  	
   

  	
  155.0

  	
   

  
	
  119.

  	
   

  	
  Bradford

  	
   

  	
  FL

  	
   

  	
  Debris Pits

  	
   

  	
  20.5

  	
   

  
	
  120.

  	
   

  	
  Bradford

  	
   

  	
  FL

  	
   

  	
  Bradford Woodyard

  	
   

  	
  0.4

  	
   

  
	
  121.

  	
   

  	
  Bradford

  	
   

  	
  FL

  	
   

  	
  Railroad ROW

  	
   

  	
  22.6

  	
   

  
	
  122.

  	
   

  	
  Clay

  	
   

  	
  FL

  	
   

  	
  Maxville Chipmill

  	
   

  	
  366.3

  	
   

  
	
  123.

  	
   

  	
  Duval

  	
   

  	
  FL

  	
   

  	
  Pendarvis Tract

  	
   

  	
  160.0

  	
   

  
	
  124.

  	
   

  	
  Gadsen

  	
   

  	
  FL

  	
   

  	
  Gretna Woodyard

  	
   

  	
  2.3

  	
   

  
	
  125.

  	
   

  	
  Hardee

  	
   

  	
  FL

  	
   

  	
  Hardee Woodyard

  	
   

  	
  13.7

  	
   

  
	
  126.

  	
   

  	
  Madison

  	
   

  	
  FL

  	
   

  	
  Greenville Woodyard

  	
   

  	
  103.0

  	
   

  
	
  127.

  	
   

  	
  Jackson

  	
   

  	
  FL

  	
   

  	
  Cottondale Woodyard

  	
   

  	
  27.0

  	
   

  
	
  128.

  	
   

  	
  Nassau

  	
   

  	
  FL

  	
   

  	
  Kent Seed Orchard

  	
   

  	
  274.0

  	
   

  
	
  129.

  	
   

  	
  Nassau

  	
   

  	
  FL

  	
   

  	
  Cattle Dip Site

  	
   

  	
  7.1

  	
   

  
	
  130.

  	
   

  	
  Nassau

  	
   

  	
  FL

  	
   

  	
  Callahan Office

  	
   

  	
  214.0

  	
   

  



 

















 


	
   

  	
   

  	
  County

  	
   

  	
  State

  	
   

  	
  Facility Name

  	
   

  	
  Acres

  	
   

  
	
  131.

  	
   

  	
  Nassau

  	
   

  	
  FL

  	
   

  	
  Crawford Road Landfill

  	
   

  	
  516.0

  	
   

  
	
  132.

  	
   

  	
  Pasco

  	
   

  	
  FL

  	
   

  	
  Lacoochee Woodyard

  	
   

  	
  18.0

  	
   

  
	
  133.

  	
   

  	
  St Johns

  	
   

  	
  FL

  	
   

  	
  Conservation Easement

  	
   

  	
  583.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  3,259.9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  134.

  	
   

  	
  Screven

  	
   

  	
  GA

  	
   

  	
  Dover Woodyard

  	
   

  	
  6.1

  	
   

  
	
  135.

  	
   

  	
  Telfair

  	
   

  	
  GA

  	
   

  	
  McRae Chipmill

  	
   

  	
  11.8

  	
   

  
	
  136.

  	
   

  	
  Whitfield

  	
   

  	
  GA

  	
   

  	
  Dalton Woodyard

  	
   

  	
  11.9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  29.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  137.

  	
   

  	
  Bienville

  	
   

  	
  LA

  	
   

  	
  Bryceland Woodyard

  	
   

  	
  2.1

  	
   

  
	
  138.

  	
   

  	
  Bienville

  	
   

  	
  LA

  	
   

  	
  Gibsland Woodyard

  	
   

  	
  1.0

  	
   

  
	
  139.

  	
   

  	
  Claiborne

  	
   

  	
  LA

  	
   

  	
  Homer Woodyard

  	
   

  	
  15.9

  	
   

  
	
  140.

  	
   

  	
  De Soto

  	
   

  	
  LA

  	
   

  	
  Mansfield Woodyard

  	
   

  	
  7.1

  	
   

  
	
  141.

  	
   

  	
  Jackson

  	
   

  	
  LA

  	
   

  	
  Bear Creek Chipmill

  	
   

  	
  16.9

  	
   

  
	
  142.

  	
   

  	
  Jackson

  	
   

  	
  LA

  	
   

  	
  Hodge Office

  	
   

  	
  2.5

  	
   

  
	
  143.

  	
   

  	
  Rapides

  	
   

  	
  LA

  	
   

  	
  Railroad Switch

  	
   

  	
  0.1

  	
   

  
	
  144.

  	
   

  	
  Sabine

  	
   

  	
  LA

  	
   

  	
  Loring/Cade Woodyard

  	
   

  	
  10.0

  	
   

  
	
  145.

  	
   

  	
  Winn

  	
   

  	
  LA

  	
   

  	
  Winnfield Woodyard

  	
   

  	
  30.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  86.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  146.

  	
   

  	
  Somerset

  	
   

  	
  MD

  	
   

  	
  Pocomoke Chipmill

  	
   

  	
  326.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  326.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  147.

  	
   

  	
  Covington

  	
   

  	
  MS

  	
   

  	
  Collins Woodyard

  	
   

  	
  15.3

  	
   

  
	
  148.

  	
   

  	
  Rankin

  	
   

  	
  MS

  	
   

  	
  Brandon Woodyard

  	
   

  	
  7.0

  	
   

  
	
  149.

  	
   

  	
  Scott

  	
   

  	
  MS

  	
   

  	
  Forest Woodyard

  	
   

  	
  31.3

  	
   

  
	
  150.

  	
   

  	
  Simpson

  	
   

  	
  MS

  	
   

  	
  Magee Woodyard

  	
   

  	
  16.2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  69.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  151.

  	
   

  	
  Franklin

  	
   

  	
  NC

  	
   

  	
  Katesville Woodyard

  	
   

  	
  16.8

  	
   

  
	
  152.

  	
   

  	
  Granville

  	
   

  	
  NC

  	
   

  	
  Butner Woodyard

  	
   

  	
  112.0

  	
   

  
	
  153.

  	
   

  	
  Hoke

  	
   

  	
  NC

  	
   

  	
  Raeford Woodyard

  	
   

  	
  24.3

  	
   

  
	
  154.

  	
   

  	
  Lee

  	
   

  	
  NC

  	
   

  	
  Cameron Woodyard

  	
   

  	
  20.5

  	
   

  
	
  155.

  	
   

  	
  Pasquotank

  	
   

  	
  NC

  	
   

  	
  Elizabeth City site

  	
   

  	
  4.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  178.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  156.

  	
   

  	
  Kershaw

  	
   

  	
  SC

  	
   

  	
  Elgin Sawmill

  	
   

  	
  0.4

  	
   

  
	
  157.

  	
   

  	
  Orangeburg

  	
   

  	
  SC

  	
   

  	
  Orangeburg Sawmill

  	
   

  	
  5.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  5.3

  	
   

  



 

















 


	
   

  	
   

  	
  County

  	
   

  	
  State

  	
   

  	
  Facility Name

  	
   

  	
  Acres

  	
   

  
	
  158.

  	
   

  	
  Bledsoe

  	
   

  	
  TN

  	
   

  	
  Pikeville Woodyard

  	
   

  	
  8.8

  	
   

  
	
  159.

  	
   

  	
  Grundy

  	
   

  	
  TN

  	
   

  	
  Tracy City Woodyard

  	
   

  	
  6.6

  	
   

  
	
  160.

  	
   

  	
  White

  	
   

  	
  TN

  	
   

  	
  Sparta Woodyard

  	
   

  	
  21.7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  37.1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  161.

  	
   

  	
  Caroline

  	
   

  	
  VA

  	
   

  	
  Caroline Woodyard

  	
   

  	
  85.2

  	
   

  
	
  162.

  	
   

  	
  Charlotte

  	
   

  	
  VA

  	
   

  	
  Keysville Chipmill

  	
   

  	
  42.9

  	
   

  
	
  163.

  	
   

  	
  Cumberland

  	
   

  	
  VA

  	
   

  	
  Cumberland Woodyard

  	
   

  	
  2.8

  	
   

  
	
  164.

  	
   

  	
  Fluvanna

  	
   

  	
  VA

  	
   

  	
  Palmyra Woodyard

  	
   

  	
  9.4

  	
   

  
	
  165.

  	
   

  	
  New Kent

  	
   

  	
  VA

  	
   

  	
  Parhams Woodyard

  	
   

  	
  25.3

  	
   

  
	
  166.

  	
   

  	
  Pittsylvania

  	
   

  	
  VA

  	
   

  	
  Eden Chipmill

  	
   

  	
  27.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  State Total

  	
   

  	
  192.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total

  	
   

  	
  5,202.9

  	
   

  



 
















 


SCHEDULE 9.09(c)


 


* Certain Non-Collateral Properties


 






* The
information included in this Schedule 9.09(c) (five pages total) has been
omitted pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission.


 

















 


SCHEDULE 10.02(a)(iv)


 


Existing Liens


 


1.                                       Liens securing
Capital Lease Obligations and purchase-money Indebtedness of  SSCC and its Subsidiaries having an aggregate outstanding
amount of approximately $2,524,658 (as of January 31, 2010) as of the
Closing Date.  Such Liens cover the
property financed by such Capital Lease Obligations and purchase-money
Indebtedness.


 


2.                                                                                       Liens securing
the Timber Note Monetization Indebtedness identified below:


 


·                  The Borrower
sold approximately 980,000 acres of owned and leased timberland in Florida,
Georgia and Alabama in October 1999. The final purchase price, after
adjustments, was $710 million. The Borrower received $225 million in cash, with
the balance of $485 million in the form of installment notes. The Borrower
entered into a program to monetize the installment notes receivable. The notes
were sold without recourse to Timber Note Holdings LLC (“TNH”), a
qualified special-purpose entity under the provisions of SFAS No. 140, for
$430 million cash proceeds and a residual interest in the notes. As of the
Closing Date, the outstanding balance of the Indebtedness of TNH under this
facility is $187,056,610.


 


Such Liens cover the
specified notes payable and related assets held by Timber Note Holdings LLC.


 


3.                                       Liens
identified on title reports relating to Mortgaged Properties delivered and
acceptable to DBNY.


 


4.                                       Liens
identified on the attached Lien Search Result Charts.


 

















 


SMURFIT-STONE CONTAINER ENTERPRISES, INC.


UCC FILINGS CHART


 


	
  Debtor

  (as shown on statement)

  	
   

  	
  Secured Party

  (as shown on statement)

  	
   

  	
  Jurisdiction

  	
   

  	
  Search

  through

  date

  	
   

  	
  UCC

  	
   

  	
  Fix

  	
   

  	
  Liens

  	
   

  	
  Suits &

  Judg

  	
   

  	
  File No.

  	
   

  	
  File Date

  	
   

  	
  Search Results

  Comments/Collateral

  
	
  SMURFIT-STONE CONTAINER ENTERPRISES, INC.

  
	
  Jefferson Smurfit Corporation (U.S.)

  PO Box 651564

  Charlotte, NC 28265

  	
   

  	
  Citibank, N.A.

  388 Greenwich Street

  New York, NY 10013

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  09/26/08

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  41877515

  	
   

  	
  07/06/04

  	
   

  	
  Accounts
  Receivable from The Stanley Works Co. purchased by Citibank, N.A. per the
  terms of the Supplier Agreement between Jefferson Smurfit Corporation (U.S.)
  and Citibank, N.A.

  
	
  Smurfit-Stone Container Enterprises, Inc.

  150 North Michigan Ave.

  Chicago, IL 60601

  	
   

  	
  Harold M. Pitman Company

  721 Union Boulevard

  Totowa, NJ 07512

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  09/26/08

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  53564029

  	
   

  	
  11/07/05

  	
   

  	
  All
  goods and inventory delivered on consignment by the Harold M. Pitman Company
  to the Consignee, used in Consignee’s operations, including but not limited
  to “graphic arts” films, photographic papers, plates, chemistry, sundries and
  supplies, spare parts, digital imaging supplies, stationery supplies.

  
	
  Smurfit-Stone Container Enterprises, Inc.

  Corporation Trust Center

  1209 Orange Street

  Wilmington, DE 19801

  	
   

  	
  Signode Packaging Systems

  3610 West Lake Avenue

  Glenview, IL 60026

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20074768429

  	
   

  	
  12/18/07

  	
   

  	
  Debtor’s
  inventory of Signode Packaging Materials now or hereafter on the premises of
  on consignment to the Debtor at the Debtor’s plant in Missoula, MT, CMF #
  611196-5, Territory 6601

  
	
  Smurfit-Stone Container Enterprises, Inc.

  Corporation Trust Center

  1209 Orange Street

  Wilmington, DE 19801

  	
   

  	
  Signode Packaging Systems

  3610 West Lake Avenue

  Glenview, IL 60026

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20080667715

  	
   

  	
  02/25/08

  	
   

  	
  Debtor’s
  inventory of Signode Packaging materials now or hereafter on the premises or
  on consignment to the Debtor at the Debtor’s plant in Portland, OR, CMF
  #160492-10, Territory 6121.

  
	
  Smurfit-Stone Container Enterprises, Inc.

  Corporation Trust Center

  1209 Orange Street

  Wilmington, DE 19801

  	
   

  	
  Signode Packaging Systems

  3610 West Lake Avenue

  Glenview, IL 60026

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20080668473

  	
   

  	
  02/25/08

  	
   

  	
  Debtor’s
  inventory of Signode Packaging materials now or hereafter on the premises or
  on consignment to the Debtor at the Debtor’s plant in Milpitas, CA, CMF
  #511748-10, Territory 6121.

  



 

















 


	
  Debtor

  (as shown on statement)

  	
   

  	
  Secured Party

  (as shown on statement)

  	
   

  	
  Jurisdiction

  	
   

  	
  Search

  through

  date

  	
   

  	
  UCC

  	
   

  	
  Fix

  	
   

  	
  Liens

  	
   

  	
  Suits &

  Judg

  	
   

  	
  File No.

  	
   

  	
  File Date

  	
   

  	
  Search Results

  Comments/Collateral

  
	
  Smurfit-Stone Container Enterprises, Inc.

  6 Cityplace Drive

  Creve Coeur, MO 63141

  	
   

  	
  American Packaging Capital, Inc.

  391 Diablo Road

  Suite C

  Danville, CA 94526

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20081375490

  	
   

  	
  04/21/08

  	
   

  	
  All
  of Debtor’s right, title and interest in the following: (A) any leases,
  rental agreement, installment sales agreement, finance agreements, notes and
  security agreements and other evidence or forms of payment obligations and/or
  security interests with various obligors (herein referred to as the
  “Contracts”), whether now existing or hereafter acquired, which are assigned
  to Secured Party by Debtor pursuant to that certain Vendor Program Agreement
  — Cost Per Item, dated January 18, 2008, as the same may be amended from
  time to time, or otherwise, all guaranties and other supporting obligations
  of, or other security for the Contracts (the “Related Documents”), all
  accounts and rights to payment relating to or arising under Contracts, the
  right to exercise all rights an remedies of Debtor as lessor or creditor
  under the Contracts and Related Documents, all goods, including equipment and
  inventory ( the “Equipment”), software and general intangibles which are
  subject to such Contracts, together with any replacements or substitutions
  therefore and attachments and accessions thereto; (B) all Usage Payments
  payable under and as described in any consumables agreement between Debtor
  and the Obligor(s) on such Contracts, together with any substitutions
  therefore; and (c) all proceeds of any of the foregoing, including any
  insurance proceeds.

  



 






 


 













 


	
  Debtor

  (as shown on statement)

  	
   

  	
  Secured Party

  (as shown on statement)

  	
   

  	
  Jurisdiction

  	
   

  	
  Search

  through

  date

  	
   

  	
  UCC

  	
   

  	
  Fix

  	
   

  	
  Liens

  	
   

  	
  Suits &

  Judg

  	
   

  	
  File No.

  	
   

  	
  File Date

  	
   

  	
  Search Results

  Comments/Collateral

  
	
  Smurfit-Stone Container Enterprises, Inc. 

  6 Cityplace Drive

  Creve Coeur, MO 63141

  	
   

  	
  American Packaging Capital, Inc. 

  391 Diablo Road

  Suite C

  Danville, CA 94526

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20081529351

  	
   

  	
  05/02/08

  	
   

  	
  Assignment of file #
  20081375490 filed 04/21/08. Collateral assigned to TCF Equipment
  Finance, Inc., 11100 Wayzata Blvd., Suite 801, Minnetonka, MN
  55305. This Amendment evidences of record a partial assignment by Secured
  Party to Assignee of the Collateral described on the Initial Financing
  Statement. Assignee has taken or may take assignment of Secured Party’s
  right, title and interest in certain of such Collateral pursuant to that
  certain Program Agreement — Meta Systems Cost Per Item, dated
  February 21, 2008, between Secured Party and Assignee, as the same may
  be amended from time to time, or otherwise, including without limitation any
  Contracts, whether now existing or hereafter acquired, which have been or may
  be assigned to Assignee, all Related Documents, all accounts and rights to
  payment relating to or arising under the Contracts, the right to exercise all
  rights and remedies of Debtor as lessor or creditor under the Contracts and
  Related Documents, all Equipment, software and general intangibles which are
  subject to such Contracts, together with any replacements or substitutions therefore
  and attachments and accessions thereto, all Usage Payments payable under
  consumables agreement with obligor(s) on such Contracts and
  substitutions therefore, and all proceeds of any of the foregoing, including
  any insurance proceeds.

  



 






 


 













 


	
  Debtor

  (as shown on statement)

  	
   

  	
  Secured Party

  (as shown on statement)

  	
   

  	
  Jurisdiction

  	
   

  	
  Search

  through

  date

  	
   

  	
  UCC

  	
   

  	
  Fix

  	
   

  	
  Liens

  	
   

  	
  Suits &

  Judg

  	
   

  	
  File No.

  	
   

  	
  File Date

  	
   

  	
  Search Results

  Comments/Collateral

  
	
  Smurfit-Stone Container Enterprises, Inc.

  150 North Michigan Avenue

  Chicago, IL 60601

  	
   

  	
  Leaf Funding, Inc.

  2005 Market Street

  15th Floor

  Philadelphia, PA 19103

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20081565041

  	
   

  	
  05/06/08

  	
   

  	
  All
  of Debtor’s right, title and interest (whether now owned or hereafter
  acquired) in and to: (a) all lease agreements, rental agreements,
  conditional sale agreements, loan and security agreements and other forms of
  equipment financing agreements from time to time assigned, sold or otherwise
  conveyed by Debtor to Secured Party; (b) all rent periodic payments, and
  all other sums due or to become due under such Chattel Paper; (c) all
  rights of Debtor to or under any guarantees of or collateral for the
  obligations of the lessee or other guarantees of or collateral for the
  obligations of the lessee or other obligor under any Chattel Paper
  (d) the property subject to such Chattel Paper and all
  vendor./manufacture warranty rights and claims relating to such property;
  (e) all general intangibles, documents, accounts, chattel paper and instruments
  associated therewith or relating thereto; and (f) all cash and non-cash
  proceeds of all of the foregoing in any form. Together items (a) —
  (f) are referred to as the “Contract Assets”. Nothing herein shall be
  deemed or construed to limit or contravene the absolute and complete
  assignment, sale, transfer and conveyance of the Contract Assets from Debtor
  to Secured Party.

  
	
  Smurfit-Stone Container Enterprises, Inc.

  150 North Michigan Avenue

  Chicago, IL 60601

  	
   

  	
  Leaf Funding, Inc.

  2005 Market Street

  15th Floor

  Philadelphia, PA 19103

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  01/13/09

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20082146353

  	
   

  	
  06/23/08

  	
   

  	
  Amendment to file #
  20081565041 filed 05/06/08. Change name of Secured Party to Integrity
  Leasing & Financing, Inc., One Union Place, Suite 201.
  Dedham, MA 02026.

  



 






 













 


	
  Debtor

  (as shown on statement)

  	
   

  	
  Secured Party

  (as shown on statement)

  	
   

  	
  Jurisdiction

  	
   

  	
  Search

  through

  date

  	
   

  	
  UCC

  	
   

  	
  Fix

  	
   

  	
  Liens

  	
   

  	
  Suits &

  Judg

  	
   

  	
  File No.

  	
   

  	
  File Date

  	
   

  	
  Search Results

  Comments/Collateral

  
	
  TIMBER NOTE HOLDINGS LLC

  
	
  Timber Note Holdings LLC 

  8182 Maryland Avenue

  Clayton, MO 63105

  	
   

  	
  The Bank of New York, as Collateral Agent 

  101 Barclay Street

  New York, NY 10286

  	
   

  	
  Secretary of State, Delaware

  	
   

  	
  11/26/08

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  43194885

  	
   

  	
  11/12/04

  	
   

  	
  See
  Exhibit A attached hereto. Exhibit A:
  This Financing Statement is filed in lieu of continuation for the following
  previously filed financing statement(s), each which remains effective:
  Missouri Secretary of State, 11/29/1999 UCC # 3096639 and St. Louis County,
  Missouri, 11/24/1999 UCC # 13055. This financing statement covers the
  following types (or items) of property: (a) Pledged Notes and the
  instruments or securities evidencing the Pledged Noted, the Rayonier Note
  Agreement and all rights relating thereto; (b) all additional
  indebtedness from time to time owed to Debtor by any obligor on the Pledged
  Notes and the instruments evidencing such indebtedness, and all interest,
  cash, instruments and other property or proceeds from time to time received;
  (c) the Liquid Collateral; and (d) to the extent not covered by clauses
  (a) through (c) above, all proceeds of any or all of the foregoing
  Collateral. See UCC financing statement for full Collateral description.

  
	
  CALPINE CORRUGATED LLC

  
	
  Calpine Corrugated, LLC

  3478 Buskirk Ave., Ste. 336 

  Pleasant Hill, CA 94523

  	
   

  	
  Signode Packaging Systems

  3610 West Lake Avenue

  Glenview, Il 60025

  	
   

  	
  Secretary of State, California

  	
   

  	
  11/23/08

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  07-7121624010

  	
   

  	
  07/11/07

  	
   

  	
  Debtor’s
  inventory of Signode Packaging materials now or hereafter on the premises or
  on consignment to the Debtor at the Debtor’s plant in Fresno, CA CMF
  #200193-10, Territory 6122.

  



 






 


 












 


SCHEDULE 10.04


 


Certain Permitted Investments


 


1.               Investments in
Persons other than Subsidiaries


 


	
  Entity

  	
   

  	
  Ownership Interest

  
	
  Schiffenhaus
  Canada, Inc.

  	
   

  	
  33.33% owned by
  Smurfit-MBI

  
	
  Schiffenhaus California
  LLC

  	
   

  	
  25% owned by SMBI Inc.

  
	
  Aspamill Inc.

  	
   

  	
  45% owned by Smurfit-Stone
  Container Canada Inc.

  
	
  Rosenbloom
  Group, Inc.

  	
   

  	
  45% owned by Smurfit-Stone
  Container Canada Inc.

  
	
  Rollcraft, Inc.

  	
   

  	
  45% owned by Smurfit-Stone
  Container Canada Inc.

  
	
  Cascapedia Booming Co.
  Ltd.

  	
   

  	
  50% owned by Smurfit-Stone
  Container Canada Inc.

  
	
  Stone Container (Hong
  Kong) Limited

  	
   

  	
  50% owned by Smurfit-Stone
  Container Enterprises, Inc.

  
	
  Stone Container Japan
  Company Ltd.

  	
   

  	
  50% owned by Smurfit-Stone
  Container Enterprises, Inc.

  
	
  Valores Universales S.A.
  de C.V.

  	
   

  	
  49% owned by Smurfit-Stone
  Container Enterprises, Inc.

  
	
  Wakecon Associates

  	
   

  	
  50% owned by Smurfit-Stone
  Container Enterprises, Inc.

  
	
  Groveton Paper
  Board, Inc.

  	
   

  	
  48.6% owned by
  Smurfit-Stone Container Enterprises, Inc.

  
	
  Smurfit/CIMIC Holdings
  Limited

  	
   

  	
  42.5% owned by
  Smurfit-Stone Container Enterprises, Inc.

  
	
  WCO Enterprises

  	
   

  	
  50% owned by Smurfit-Stone
  Container Enterprises, Inc.

  
	
  Niagara Sheets LLC

  	
   

  	
  24.5% owned by
  Smurfit-Stone Container Enterprises, Inc.

  
	
  NewCorr Packaging Limited
  Partnership

  	
   

  	
  16.4% owned by
  Smurfit-Stone Container Enterprises, Inc.

  
	
  NewCorr
  Realty LLC

  	
   

  	
  16.67%
  owned by Smurfit-Stone Container Enterprises, Inc.

  
	
  Hang-Yick Paper Products
  Co. Ltd.

  	
   

  	
  50% owned by Smurfit-Stone
  HY Holdings, Ltd.

  



 

















 


Borrower holds a loan
outstanding to Niagara Sheets LLC having an outstanding principal balance of
$730,100 as of December 31, 2008.


 


2.               Intercompany
Loans and Advances to Persons other than Subsidiaries


 


	
  Borrowing
  Entity

  	
   

  	
  Lending Entity

  	
   

  	
  Balance

  	
   

  
	
  Hang Yick Paper Products Co. Ltd.

  	
   

  	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  $

  	
  15,500,000

  	
   

  
							



 

















 


SCHEDULE 10.17


 


Deposit Accounts


 


PART A (Core
Concentration Accounts)


 


	
  Borrower/Loan
  Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Smurfit-Stone
  Container Enterprises Inc.  (1)

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Core
  Concentration Account

  	
   

  	
  802977587

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Core Concentration Account

  	
   

  	
  644602708

  	
   

  
	
  Calpine
  Corrugated, LLC(2)

  	
   

  	
  Union Bank of
  California

  	
   

  	
  Core
  Concentration Account

  	
   

  	
  7150203583

  	
   

  
	
  Smurfit-Stone
  Container Canada, LP

  	
   

  	
  Scotia Bank

  	
   

  	
  Core
  Concentration Account (CAD)

  	
   

  	
  630810273813

  	
   

  
	
  Smurfit-Stone
  Container Canada, LP

  	
   

  	
  Scotia Bank

  	
   

  	
  Core
  Concentration Account (USD)

  	
   

  	
  630810214019

  	
   

  



 


PART B (Collection
Accounts)


 


	
  Borrower/Loan
  Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America

  	
   

  	
  Collection
  Account (Lockbox)

  	
   

  	
  3750677531

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Collection Account (Lockbox)

  	
   

  	
  52-95505

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Collection Account (Lockbox)

  	
   

  	
  636282956

  	
   

  
	
  Smurfit-Stone
  Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Collection
  Account (USD A/R)

  	
   

  	
  630810214213

  	
   

  
	
  Smurfit-Stone
  Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Collection Account
  (CAD A/R)

  	
   

  	
  630810274011

  	
   

  
	
  Calpine
  Corrugated, LLC

  	
   

  	
  Union Bank of
  California

  	
   

  	
  Collection
  Account

  	
   

  	
  7150204504

  	
   

  



 






(1) Smurfit-Stone
Container Corporation will merge with and into Smurfit-Stone Container
Enterprises, Inc. on or prior to the Funding Date, and Smurfit-Stone
Container Enterprises, Inc. will change its name to “Smurfit-Stone
Container Corporation”.


(2) Calpine
Corrugated, LLC will merge with and into Smurfit-Stone Container
Enterprises, Inc. on or prior to the Funding Date.


 

















 


PART C (Other Deposit Accounts)


 


	
  Borrower/Loan Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone
  Container Enterprises Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Utility Deposit
  Account (Deposit Account)

  	
   

  	
  826074825

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Letter of Credit
  Account (Deposit Account)

  	
   

  	
  802977298

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Term Sweep
  Account(3) (Deposit Account)

  	
   

  	
  802977306

  	
   

  



 


PART D (Excluded Accounts)


 


	
  Borrower/Loan Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded Account*

  	
   

  	
  802977280

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America
  IL

  	
   

  	
  Excluded
  Account**

  	
   

  	
  81886-01576

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America
  IL

  	
   

  	
  Excluded
  Account** (investment account)

  	
   

  	
  863783

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  105-6047

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account*

  	
   

  	
  105-6241

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account*

  	
   

  	
  12335-20094

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JP Morgan Chase

  	
   

  	
  Excluded Account**

  	
   

  	
  323 137296

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded Account*

  	
   

  	
  644602674

  	
   

  
	
  Smurfit-Stone
  Container Enterprises Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded
  Account**

  	
   

  	
  127026-509

  	
   

  



 






(3) As
defined in the Agreement and Term Loan Credit Agreement.


 

















 


	
  Borrower/Loan Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded Account*

  	
   

  	
  6301532259509

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded Account*

  	
   

  	
  6301535849509

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  Wachovia

  	
   

  	
  Excluded Account*

  	
   

  	
  2000032600311

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  Wachovia

  	
   

  	
  Excluded Account*

  	
   

  	
  2079900545791

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc.

  	
   

  	
  Wachovia

  	
   

  	
  Excluded Account*

  	
   

  	
  2079900545801

  	
   

  
	
  Calpine Corrugated, LLC

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Excluded Account*

  	
   

  	
  802974352

  	
   

  
	
  Calpine
  Corrugated, LLC

  	
   

  	
  Wachovia

  	
   

  	
  Excluded
  Account*

  	
   

  	
  2079900628294

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  12334-18001

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  12330-17995

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  12338-17996

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  12336-17997

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  1591004830

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  1405344738

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  3750931413

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  190100151645

  	
   

  



 

















 


	
  Borrower/Loan Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc. d/b/a
  Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded Account**

  	
   

  	
  193101334905

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc. d/b/a
  Smurfit Recycling

  	
   

  	
  Fifth Third

  	
   

  	
  Excluded Account**

  	
   

  	
  040-1800039

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Commerce Bank

  	
   

  	
  Excluded
  Account**

  	
   

  	
  70044555

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc. d/b/a
  Smurfit Recycling

  	
   

  	
  National City Bank

  	
   

  	
  Excluded Account**

  	
   

  	
  700-8954-8

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  4426876539

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded
  Account**

  	
   

  	
  4426876542

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc. d/b/a
  Smurfit Recycling

  	
   

  	
  Bank of America

  	
   

  	
  Excluded Account**

  	
   

  	
  4426911944

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  Sun Trust

  	
   

  	
  Excluded
  Account**

  	
   

  	
  007 0003 739 168

  	
   

  
	
  Smurfit-Stone Container Enterprises, Inc. d/b/a
  Smurfit Recycling

  	
   

  	
  Wells Fargo National Bank of Alaska

  	
   

  	
  Excluded Account**

  	
   

  	
  5307287986

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc. d/b/a Smurfit Recycling

  	
   

  	
  National City
  Bank

  	
   

  	
  Excluded
  Account**

  	
   

  	
  685178054

  	
   

  
	
  Smurfit-Stone
  Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Excluded
  Account*

  	
   

  	
  630818873410

  	
   

  
	
  Smurfit-Stone Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Excluded Account* and **

  	
   

  	
  630810274116

  	
   

  
	
  Smurfit-Stone Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Excluded Account* and **

  	
   

  	
  630810273910

  	
   

  
	
  Smurfit-Stone Container Canada, L.P.

  	
   

  	
  Scotia Bank

  	
   

  	
  Excluded Account*

  	
   

  	
  630810274119

  	
   

  



 

















 


PART E (Securities and Commodities Accounts)


 


	
  Borrower/Loan
  Party

  	
   

  	
  Name and Address

  of Depositary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  
	
  Smurfit-Stone
  Container Enterprises, Inc.

  	
   

  	
  JPMorgan Chase

  	
   

  	
  Securities
  Account (investment account)

  	
   

  	
  29912981

  	
   

  



 






* Denotes that such account is a disbursement
deposit account the funds in which are used solely for the payment of salaries
and wages, employee benefits, workers’ compensation and similar expenses or
that has an ending daily balance of zero (clause (i) of definition of
Excluded Accounts).


 


**
Denotes that such account is a deposit account, the daily balance in which does
not at any time exceed $3,500,000 for all such excluded deposit accounts
(clause (iii) of definition of Excluded Accounts).


 
















 


SCHEDULE
13.03


 


Lender
Addresses


 


	
  Lender

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Deutsche
  Bank AG New York Branch

  	
   

  	
  60
  Wall Street

  New York, New York 10005

  Attention: Erin Morrissey

  Telephone: (212) 250-1765

  Telecopier No.: (212) 797-5690

  Email: erin.morrissey@db.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Payment
  Office in the case of all payments with respect to Canadian Dollar
  Denominated Revolving Loans, the office of DB Canada located at 199 Bay
  Street, Suite 4700, Commerce Court West, P.O. Box 263, Toronto,
  Ontario, Canada M5L 1E9

  
	
   

  	
   

  	
   

  
	
  Deutsche
  Bank AG, Canada Branch

  	
   

  	
  60
  Wall Street

  New York, New York 10005

  Attention: Erin Morrissey

  Telephone: (212) 250-1765

  Telecopier No.: (212) 797-5690

  Email: erin.morrissey@db.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Payment
  Office in the case of all payments with respect to Canadian Dollar
  Denominated Revolving Loans, the office of DB Canada located at 199 Bay
  Street, Suite 4700, Commerce Court West, P.O. Box 263, Toronto,
  Ontario, Canada M5L 1E9

  
	
   

  	
   

  	
   

  
	
  JP
  Morgan Chase Bank, N.A.

  	
   

  	
  383
  Madison Ave

  New York, NY 10179

  Attention: Peter Predun

  Telephone: (212) 270-7005

  Fax: (212) 270-5100

  Email: Peter.Predun@jpmorgan.com

  
	
   

  	
   

  	
   

  
	
  JPMorgan
  Chase Bank, N.A., Toronto Branch

  	
   

  	
  383
  Madison Ave

  New York, NY 10179

  Attention: Peter Predun

  Telephone:
  (212) 270-7005

  Fax: (212) 270-5100

  Email:

  



 

















 


	
   

  	
   

  	
  Peter.Predun@jpmorgan.com

  
	
   

  	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  	
  500
  West Monroe Street

  Chicago, IL 60661

  Attention: Kai Sorensen

  Telephone: (312) 463-2346

  Fax: (312) 463-3840

  Email: Kai.Sorensen@ge.com

  
	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  135
  S. LaSalle Street, Suite 425

  Chicago, IL 60603

  Attention: Mark Blankstein

  Telephone: (312) 234-4662

  Fax: (312) 904-0291

  Email: mark.blankstein@baml.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Canada
  notice office:

  Bank of America, N.A., Canada Branch

  200 Front Street West, Suite 2700

  Toronto, Ontario, M5V 3L2

  Attention: Dita Kumudewati

  Telephone: (416) 349-5286

  Fax: (416) 453-4041

  Email: Dita.Kumudewati@bankofamerica.com

  
	
   

  	
   

  	
   

  
	
  Wachovia
  Capital Finance Corporation (New England)

  	
   

  	
  301
  S. College St. D 1053-221

  Charlotte, NC 28202

  Attention: Amanda Watkins

  Telephone: (704) 374-2607

  Fax: (704) 374-2703

  Email: Amanda.watkins@wellsfargo.com

  
	
   

  	
   

  	
   

  
	
  Wells
  Fargo Capital Finance Corporation (Canada)

  	
   

  	
  301
  S. College St. D 1053-221

  Charlotte, NC 28202

  Attention: Amanda Watkins

  Telephone: (704) 374-2607

  Fax: (704) 374-2703

  Email: Amanda.watkins@wellsfargo.com

  
	
   

  	
   

  	
   

  
	
  Regions
  Bank

  	
   

  	
  11140
  State Bridge Road

  Alpharetta, GA 30022

  Attention: Curtis Correa

  Telephone: (770) 360-8870

  Fax: (770) 360-8877

  Email: curtis.correa@regions.com

  



 

















 


	
  CoBank,
  ACB

  	
   

  	
  CoBank,
  ACB

  5500 south Quebec Street

  Greenwood Village, CO 80111

  Attention: Michael Tousignant

  Telephone: (303) 694-5838

  Fax: (303) 740-4004

  Email: mtousignant@cobank.com

  



 
















 


Exhibit A-1


to the Credit Agreement


 


FORM OF
NOTICE OF BORROWING


 


[Date]


 


	
  Deutsche Bank AG New York Branch, as
  Administrative Agent (the “Administrative Agent”) for the Lenders
  party to the Credit Agreement referred to below

  	
   

  
	
  60 Wall Street

  	
   

  
	
  NYC60-0208, 2nd Floor

  	
   

  
	
  New
  York, New York  10005-2858

  	
   

  
	
  Attention:  Erin
  Morrissey

  	
   

  
	
  Telephone No.: (212) 250-1765

  	
   

  
	
  Telecopier No.: (212) 797-5690

  	
   

  
	
  Email: erin.morrisey@db.com

  	
   

  



 


Ladies and Gentlemen:


 


The
undersigned, [Name of Borrower](1) (the
“Borrower”), refers to the ABL Credit Agreement, dated as of [               ],
2010 (as amended, restated, modified and/or supplemented from time to
time, the “Credit Agreement”, the capitalized terms defined therein
being used herein as therein defined), among Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Domestic Subsidiaries and Canadian Subsidiaries of Holdings from time
to time party thereto, the lenders from time to time party thereto
(each, a “Lender” and collectively, the “Lenders”), Deutsche Bank
AG New York Branch (“DB”), as Administrative Agent and Security Agent
for such Lenders, and DB, JPMorgan Chase Bank, N.A. and General Electric
Capital Corporation, as Co-Collateral Agents, and hereby gives you notice,
irrevocably, pursuant to Section [2.03(a)][2.03(b)]
of the Credit Agreement, that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by Section [2.03(a)][2.03(b)] of the Credit
Agreement:


 


(i)            The Business Day of the Proposed
Borrowing is                      
    ,         .(2)


 


(ii)           The aggregate [principal amount]
[Face Amount] of the Proposed Borrowing is [$                  ]
[Cdn.$                 ].


 






(1)                                  Insert the name of the applicable
Borrower.


 


(2)                                  Shall be a
Business Day at least one Business Day in the case of Base Rate Loans or
Canadian Prime Rate Loans (or same day notice in the case of Swingline Loans)
and at least three Business Days in the case of Eurodollar Loans or Bankers’
Acceptance Loans, in each case, after the date hereof, provided that (in each
case) any such notice shall be deemed to have been given on a certain day only
if given before 12:00 Noon (New York City time) (or 1:00 P.M. (New York
City time) in the case of Swingline Loans) on such day.


 

















 


(iii)          The Loans to be made pursuant to the
Proposed Borrowing shall consist of  [U.S. Facility Revolving Loans] [U.S. Borrower Canadian Facility
Revolving Loans] [Canadian
Borrower Canadian Facility Revolving Loans] [U.S. Facility Swingline Loans] [U.S. Borrower Canadian Facility Swingline Loans] [Canadian Borrower
Canadian Facility Swingline Loans].


 


(iv)          The Loans [will] [will not] constitute
Agent Advances.


 


(v)           The Loans to be made pursuant to the
Proposed Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans] [Canadian Prime Rate Loans]
[Bankers’ Acceptance Loans].(3)


 


[(vi)         The initial Interest Period for the
Proposed Borrowing is [one week] [two weeks](4) [one
month] [two months] [three months] [six months] [nine months]
[twelve months](5)](6)


 


[(vii)        The term of the Proposed Borrowing shall
be [       .](7)


 


The
undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Borrowing:


 


(A)          the representations and warranties
contained in the Credit Agreement and in the other Loan Documents are and will
be true and correct in all material respects, before and after giving effect to
the Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date;


 


(B)           no Default or Event of Default has
occurred and is continuing, or would result from such Proposed Borrowing or
from the application of the proceeds thereof; and


 






(3)                                  Swingline Loans denominated in U.S. Dollars may only be incurred and
maintained as Base Rate Loans.  Swingline
Loans denominated in Canadian Dollars may only be incurred and maintained
as Canadian Prime Rate Loans


 


(4)                                  A one week or two week period may be
selected only to the extent agreed to by all Lenders with Loans and/or
Commitments under the relevant Tranche.


 


(5)                                  A nine month or
twelve month period may be selected only to the extent agreed to by all Lenders
under the  Relevant Tranche with Loans
and/or Commitments under such Tranche.


 


(6)                                  To be included
for a Proposed Borrowing of Eurodollar Loans.


 


(7)                                  To be included
for a Proposed Borrowing of Bankers’ Acceptance Loans in compliance with the
requirements of Schedule 1.01(b).


 


2

















 


(C)           the applicable conditions set forth
in Section 7.03 of the
Credit Agreement will be met on the date of the Proposed Borrowing and
immediately after giving effect thereto.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


3
















 


Exhibit A-2

to the Credit Agreement


 


FORM OF
NOTICE OF CONVERSION/CONTINUATION


 


[Date]


 


	
  Deutsche Bank AG New York Branch, as Administrative Agent (the “Administrative
  Agent”) for the Lenders party to the Credit Agreement referred to below

  	
   

  
	
  60 Wall Street

  	
   

  
	
  NYC60-0208, 2nd Floor

  	
   

  
	
  New York, New York  10005-2858

  	
   

  
	
  Attention:  Erin
  Morrissey

  	
   

  
	
  Telephone No.: (212) 250-1765

  	
   

  
	
  Telecopier No.: (212) 797-5690

  	
   

  
	
  Email: erin.morrisey@db.com

  	
   

  



 


Ladies and Gentlemen:


 


The
undersigned, [Name of Borrower] (the “Borrower”), refers to the ABL Credit
Agreement, dated as of [                         ],
2010 (as amended, restated, modified and/or supplemented from time to time, the
“Credit Agreement”; the capitalized terms defined therein being used
herein as therein defined), among Smurfit-Stone Container Corporation,
Smurfit-Stone Container Enterprises, Inc., certain Domestic Subsidiaries
and Canadian Subsidiaries of Holdings from time to time party thereto, the
lenders from time to time party thereto (the “Lenders”), Deutsche Bank
AG New York Branch (“DB”), as Administrative Agent and Security Agent
for such Lenders, and DB, JP Morgan Chase Bank, N.A. and General Electric
Capital Corporation, as Co-Collateral Agents, and hereby gives you notice,
irrevocably, pursuant to Section [2.06][2.09]
of the Credit Agreement, that the undersigned hereby requests to [convert]
[continue] the Borrowing of [U.S.
Facility Revolving Loans]  [U.S. Borrower Canadian Facility Revolving Loans]  [Canadian
Borrower Canadian Facility Revolving Loans] referred to
below, and in that connection sets forth below the information relating to such
[conversion]  [continuation] (the “Proposed [Conversion]  [Continuation]”) as required by Sections 2.06
and 2.09  of the Credit
Agreement:


 


(i)            The Proposed [Conversion]  [Continuation] relates to the Borrowing of [U.S. Facility Revolving Loans]
[U.S. Borrower Canadian Facility
Revolving Loans]  [Canadian
Borrower Canadian Facility Revolving Loans] denominated
in [$]  [Cdn.$] originally
made on                   
    , 20       (the “Outstanding
Borrowing”) in the principal amount of [$                   ][Cdn$                      ]
and currently maintained as a Borrowing of [Base
Rate Loans]  [Canadian Prime Rate Loans][Bankers’ Acceptance Loans with a term of
[     ], with the maturity date for the related Drafts
being [             ]][Eurodollar Loans with an Interest Period
ending on                     
         ,            ].


 

















 


(ii)           The Business Day of the Proposed [Conversion]  [Continuation] is                       
     ,         .(1)


 


(iii)          The Outstanding Borrowing shall be [continued as a Borrowing of [Eurodollar Loans with an Interest Period of [             ]] [Bankers’ Acceptance Loans with a term of
[           ], with the
maturity date for the related Drafts being [               ]][converted into a Borrowing of [Base Rate Loans][Eurodollar
Loans with an Interest Period of [              ]][Canadian
Prime Rate Loans][Bankers’
Acceptance Loans with a term of [           ],
with the maturity date for the related Drafts being [                ]].(2)


 


[The
undersigned hereby certifies that [no Default or
Event of Default][describe any
Default or Event of Default] has occurred
and will be continuing on the date of the Proposed [Conversion]  [Continuation] or will have occurred and be continuing on the date of the
Proposed [Conversion]  [Continuation]].(3)


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 






	
  (1)

  	
  In the case of a conversion of Base Rate Loans into,
  or a continuation of, Eurodollar Loans or Bankers’ Acceptance Loans, this
  date shall be a Business Day, at least three Business Days after the date
  hereof. In the case of a conversion of Eurodollar Loans into Base Rate Loans,
  this date shall be a Business Day at least one Business Day after the date
  hereof. In the case of a conversion of Canadian Prime Rate Loans into
  Bankers’ Acceptance Loans, this date shall be a Business Day, at least three
  Business Days after the date hereof. 
  Notice shall be deemed to have been given on a certain day only if
  given before 12:00 Noon (New York City time) on such day.

  
	
   

  	
   

  
	
  (2)

  	
  In the event that either
  (x) only a portion of the Outstanding Borrowing is to be so converted or
  continued or (y) the Outstanding Borrowing is to be divided into
  separate Borrowings with different Interest Periods or “terms”, the Borrower
  should make appropriate modifications to this clause to reflect same. The
  duration of Interest Periods is subject to Section 2.09 of the Credit
  Agreement.  The term of a Proposed
  Borrowing of Bankers’ Acceptance Loans shall comply with the relevant
  requirements of Schedule 1.01(b) to the Credit Agreement.  The Type of Loans into which an Outstanding
  Borrowing may be continued or converted, and the duration of any Interest
  Period selected, shall be subject to Sections 2.06 and 2.09 of the Credit
  Agreement, and otherwise in accordance with the terms of the Credit Agreement

  
	
   

  	
   

  
	
  (3)

  	
  In the case of a Proposed Conversion or
  Continuation, insert this sentence only (i) in the event that the
  conversion is from a Base Rate Loan to a Eurodollar Loan or a Canadian Prime
  Rate Loan to a Bankers’ Acceptance Loan or (ii) in the case of a
  continuation of a Eurodollar Loan or Bankers’ Acceptance Loans.

  



 


2
















 


Exhibit B-1


to the Credit Agreement


 


FORM OF [U.S.
FACILITY][U.S. BORROWER CANADIAN FACILITY][CANADIAN BORROWER CANADIAN FACILITY]
REVOLVING NOTE


 


	
  U.S.$[                     ]

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  [                
       ,
           ]

  



 


FOR
VALUE RECEIVED, each of the undersigned (together with any entity that becomes
a [U.S.][Canadian] Borrower under the Credit Agreement referred to below, each
a [“U.S. Borrower”]/[“Canadian Borrower”] and, collectively, the
[“U.S. Borrowers”]/[“Canadian Borrowers”]), hereby jointly and
severally promises to pay to [               ]
or its registered assigns (the “Lender”), in the relevant Available
Currency in immediately available funds, at the applicable Payment Office
initially located at (i) in the case of [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Revolving Loans
denominated in U.S. Dollars, [insert applicable Payment
Office] and (ii) in the case of [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Revolving Loans
denominated in Canadian Dollars, [insert applicable Payment
Office] on the Revolving Loan Maturity Date the principal sum of [                   ]
U.S. DOLLARS (U.S.$[                     ])
or, if less, the unpaid principal amount of all [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Revolving Loans made by
the Lender pursuant to the Credit Agreement, payable at such times and in such
amounts as are specified in the Credit Agreement; provided that,
notwithstanding the fact that the principal amount of this Note is denominated
in U.S. Dollars, to the extent provided in the Credit Agreement, all payments
hereunder with respect to [U.S. Facility][U.S. Borrower Canadian
Facility][Canadian Borrower Canadian Facility] Revolving Loans denominated in
Canadian Dollars, shall be made in Canadian Dollars, whether or not the U.S.
Dollar Equivalent of such amounts would exceed the stated principal amount of
this Note.


 


Each
[U.S.][Canadian] Borrower also jointly and severally promises to pay interest
on the unpaid principal amount of each [U.S. Facility][U.S. Borrower Canadian
Facility][Canadian Borrower Canadian Facility] Revolving Loan made by the
Lender in like money at said office from the date hereof until paid at the
rates and at the times provided in Section 2.08 of the Credit Agreement.


 


This
Note is one of the [U.S. Facility][U.S. Borrower Canadian Facility][Canadian
Borrower Canadian Facility] Revolving Notes referred to in the ABL Credit
Agreement, dated as of [                  ],
2010, among Smurfit-Stone Container Corporation, Smurfit-Stone Container
Enterprises Inc., certain Domestic Subsidiaries and Canadian Subsidiaries of
Holdings from time to time party thereto, the lenders from time to time party
thereto (including the Lender), Deutsche Bank AG New York Branch (“DB”),
as Administrative Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents (as amended,
restated, modified and/or supplemented from time to time, the “Credit
Agreement”), and is entitled to the benefits thereof and of the other Loan
Documents.  Except as otherwise defined
herein, all capitalized terms used herein and defined in the Credit Agreement
shall be used herein as therein defined. 
This Note is secured by each Security Document that is executed by a
[U.S. Loan Party]/[Loan Party] and is entitled to


 

















 


the benefits of the guarantee under the Guarantee and Collateral
Agreement[and Canadian Guarantee and Collateral Agreement].  As provided in the Credit Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Revolving Loan Maturity Date, in whole or in part, and [U.S. Facility][U.S.
Borrower Canadian Facility][Canadian Borrower Canadian Facility] Revolving
Loans may be converted from one Type of [U.S. Facility][U.S. Borrower Canadian
Facility][Canadian Borrower Canadian Facility] Revolving Loan into another Type
of [U.S. Facility][U.S. Borrower Canadian Facility][Canadian Borrower Canadian
Facility] Revolving Loan to the extent provided in the Credit Agreement.


 


In
case an Event of Default shall occur and be continuing, the principal of and
accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Credit Agreement.


 


The
[U.S.][Canadian] Borrowers hereby waive presentment, demand, protest or notice
of any kind in connection with this Note.


 


*     *     *


 


2

















 


THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW
YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAWS RULES THEREOF.


 


	
   

  	
  [NAME
  OF BORROWER](1)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 






(1) Include a signature block for each
[U.S.][Canadian] Borrower party to the Note.


 


3
















 


Exhibit B-2


to the Credit
Agreement


 


FORM OF [U.S.
FACILITY][U.S. BORROWER CANADIAN FACILITY][CANADIAN BORROWER CANADIAN FACILITY]
SWINGLINE NOTE


 


	
  U.S.$

  	
  New York, New
  York

  
	
   

  	
  [                  
      ,         ]

  



 


FOR
VALUE RECEIVED, each of the undersigned (together with any entity that becomes
a [U.S.][Canadian] Borrower under the Credit Agreement referred to below, each
a [“U.S. Borrower”]/[“Canadian Borrower”] and, collectively, the
[“U.S. Borrowers”]/[“Canadian Borrowers”]), hereby jointly and
severally promises to pay to [                            ] or its registered assigns (the “Swingline Lender”), in the
relevant Available Currency in immediately available funds, at the applicable
Payment Office, initially located at (i) in the case of [U.S. Facility][U.S.
Borrower Canadian Facility][Canadian Borrower Canadian Facility] Swingline
Loans denominated in U.S. Dollars, [insert applicable Payment
Office], and (ii) in the case of [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Swingline Loans
denominated in Canadian Dollars, [insert applicable Payment
Office] on the Swingline Expiry Date the principal sum of
[                    ]
U.S. DOLLARS (U.S.$[                    ])
or, if less, the unpaid principal amount of all [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Swingline Loans made by
the Swingline Lender pursuant to the Credit Agreement, payable at such times
and in such amounts as are specified in the Credit Agreement; provided
that, notwithstanding the fact that the principal amount of this Note is
denominated in U.S. Dollars, to the extent provided in the Credit Agreement,
all payments hereunder with respect to the [U.S. Facility][U.S. Borrower
Canadian Facility][Canadian Borrower Canadian Facility] Swingline Loans
denominated in Canadian Dollars shall be made in Canadian Dollars, whether or
not the U.S. Dollar Equivalent of such amounts would exceed the stated
principal amount of this Note.


 


Each
[U.S.][Canadian] Borrower also jointly and severally promises to pay interest
on the unpaid principal amount of each [U.S. Facility][U.S. Borrower Canadian
Facility][Canadian Borrower Canadian Facility] Swingline Loan made by the
Swingline Lender in like money at said office from the date hereof until paid
at the rates and at the times provided in Section 2.08 of the Credit Agreement.


 


This
Note is the [U.S. Facility][U.S. Borrower Canadian Facility][Canadian Borrower
Canadian Facility] Swingline Note referred to in the ABL Credit Agreement,
dated as of
[                    ],
2010, among Smurfit-Stone Container Corporation, Smurfit-Stone Container
Enterprises Inc., certain Domestic Subsidiaries and Canadian Subsidiaries of
Holdings from time to time party thereto, the lenders from time to time party
thereto, Deutsche Bank AG New York Branch (“DB”), as Administrative
Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A. and General
Electric Capital Corporation, as Co-Collateral Agents (as amended, restated,
modified and/or supplemented from time to time, the “Credit Agreement”),
and is entitled to the benefits thereof and of the other Loan Documents.  Except as otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein


 

















 


defined.  This Note is secured by
each Security Document that is executed by a [U.S. Loan Party]/[Loan Party] and
is entitled to the benefits of the guarantee under the Guarantee and Collateral
Agreement [and Canadian Guarantee and Collateral Agreement].  As provided in the Credit Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Swingline Expiry Date, in whole or in part.


 


In
case an Event of Default shall occur and be continuing, the principal of and accrued
interest on this Note may be declared to be due and payable in the manner and
with the effect provided in the Credit Agreement.


 


The
[U.S.][Canadian] Borrowers hereby waive presentment, demand, protest or notice
of any kind in connection with this Note.


 


2

















 


THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW
YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAWS RULES THEREOF.


 


 


	
   

  	
  [NAME OF BORROWER](1)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 






(1) Include a signature block for each
[U.S.][Canadian] Borrower party to the Note.


 


 


3

















 


Exhibit C


to the Credit
Agreement


 


FORM OF LETTER OF CREDIT
REQUEST


 


Dated
  (1)


 


Deutsche Bank AG New York
Branch, as Administrative Agent, under the ABL Credit Agreement, dated as of
[                      ],
2010 (as amended, restated, modified and/or supplemented from time to time, the
“Credit Agreement”), among Smurfit-Stone
Container Corporation, Smurfit-Stone Container Enterprises, Inc., certain
Domestic Subsidiaries and Canadian Subsidiaries of Holdings from time to time
party thereto, the Lenders from time to time party thereto, Deutsche
Bank AG New York Branch (“DB”), as Administrative Agent and Security
Agent, and DB, JPMorgan Chase Bank, N.A. and General Electric Capital
Corporation, as Co-Collateral Agents.


 


Attention:  Erin
Morrissey


 


Deutsche Bank AG New York
Branch


60 Wall Street


NYC60-0208, 2nd Floor


New York, New York 
10005-2858


Attention:  Erin Morrissey


Telephone No.: (212)
250-1765


Telecopier
No.: (212) 797-5690


Email:
erin.morrisey@db.com


 


[[  (2)  ], as Issuing Lender


under the Credit
Agreement


                                          


                                          


                                          ]


Attention: [                              ]


 


Ladies and Gentlemen:


 


 






(1)   Date of Letter of Credit Request.


 


(2)          Insert name and address of Issuing
Lender.  For standby Letters of Credit
issued by Deutsche Bank AG New York Branch 
insert:  Deutsche Bank AG New York
Branch, 60 Wall Street, New York, NY 10005-MS NYC 60-2708, Attention: Global
Loan Operations, Standby Letter of Credit Unit. 
For trade Letters of Credit issued by Deutsche Bank AG New York Branch,
insert: Deutsche Bank AG New York Branch, 60 Wall Street, New York, NY 10005,
Attention: Trade and Risk Services, Import LC. 
For Letters of Credit issued by another Issuing Lender, insert the
correct notice information for that Issuing Lender.


 

















 


Pursuant
to Section 3.03 of the
Credit Agreement, the undersigned hereby requests that the Issuing Lender
referred to above issue a [trade] [standby] Letter of
Credit for the account of the undersigned on (3) (the “Date of Issuance”) which
Letter of Credit shall be denominated in (4) and shall be in the aggregate
Stated Amount of (5).


 


For
purposes of this Letter of Credit Request, unless otherwise defined herein, all
capitalized terms used herein which are defined in the Credit Agreement shall
have the respective meaning provided therein.


 


The
beneficiary of the requested Letter of Credit will be (6), and such Letter of
Credit will be in support of (7) and will have a stated expiration date of (8).


 


We
hereby certify that:


 


(A)                              the representations and warranties
contained in the Credit Agreement and in the other Loan Documents are and will
be true and correct in all material respects on the Date of Issuance, both before
and after giving effect to the issuance of the Letter of Credit requested
hereby, unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date;


 


(B)                                no Default or Event of Default has
occurred and is continuing nor, after giving effect to the issuance of the
Letter of Credit requested hereby, would such a Default or Event of Default
occur; and


 






(3)          Date of Issuance which shall be a Business
Day that is at least five (5) Business Days after the date hereof (or such
earlier date as is acceptable to the respective Issuing Lender in any given
case).


 


(4)          Insert applicable currency in which the
Letter of Credit is to be denominated (i.e., 
U.S. Dollars or Canadian Dollars).


 


(5)          Aggregate initial Stated Amount of the
Letter of Credit which should not be less than $10,000 (or in the case of a
Letter of Credit issued in a currency other than U.S. Dollars, the U.S. Dollar
Equivalent thereof) or such lesser amount as is acceptable to the respective
Issuing Lender.


 


(6)          Insert name and address of beneficiary.


 


(7)          Insert a description of L/C Supportable
Obligations (in the case of standby Letters of Credit) and insert description
of permitted trade obligations of the Company or any of its Subsidiaries (in
the case of trade Letters of Credit).


 


(8)          Insert the last date upon which drafts
may be presented which may not be later than (i) in the case of standby
Letters of Credit, the earlier of (x) twelve months after the Date of
Issuance (subject to extension for successive 12 month periods to the extent
such extension is not beyond five (5) Business Days prior to the Revolving
Loan Maturity Date and (y) five (5) Business Days prior to the
Revolving Loan Maturity Date and (ii) in the case of trade Letters of
Credit, the earlier of (x) 180 days after the Date of Issuance and
(y) five (5) Business Days prior to the Revolving Loan Maturity Date.


 


2

















 


(C)                                the applicable conditions set forth in Section 7.03 of the Credit
Agreement will be met on the Date of Issuance and immediately after giving
effect thereto.


 


Copies of all
material documentation with respect to the supported transaction are attached
hereto.


 


	
   

  	
  [NAME
  OF APPLICABLE BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


3

















 


Exhibit D-1


to the Credit Agreement


 


FORM OF


 


U.S. PERFECTION CERTIFICATE


 


Reference is made to the ABL Credit Agreement dated as
of [       ], 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among
Smurfit-Stone Container Corporation (“SSCC”), Smurfit-Stone Container
Enterprises, Inc. (“SSCE”), certain Domestic Subsidiaries and
Canadian Subsidiaries of Holdings from time to time party thereto, the lenders
from time to time party thereto, Deutsche Bank AG New York Branch (“DB”),
as Administrative Agent and Security Agent and DB, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents.  Capitalized terms used but not defined herein
have the meanings assigned in the Credit Agreement or the Guarantee and
Collateral Agreement (the “Collateral Agreement”) referred to therein,
as applicable.


 


The undersigned, a Responsible Officer of Holdings,
hereby certifies to the Administrative Agent and each other Secured Party as
follows:


 


SECTION 1.  Names. 
(a)  Attached hereto as Schedule 1 is (i) the exact
legal name of each Grantor, as such name appears in its document of formation,
(ii) each other legal name such Grantor has had in the past five years,
including the date of the relevant name change and (iii) each other name,
including trade names and similar appellations, such Grantor or any of its
divisions or other business units has used in connection with the conduct of
its business or the ownership of its properties at any time during the past
five years.


 


(b)  Except as set
forth on Schedule 1, no Grantor has changed its identity or
corporate structure in any manner within the past five years.  Changes in identity or corporate structure
include mergers, consolidations and acquisitions, as well as any change in
form, nature or jurisdiction of organization. 
With respect to any such change that has occurred within the past five
years, Schedules 1 and 2A set forth the information required
by Sections 1 and 2 of this Certificate as to each acquiree
or constituent party to such merger, consolidation or acquisition.


 


SECTION 2.  Locations.  (a)  Attached hereto as Schedule 2A
is the (i) jurisdiction of formation and the form of organization of each
Grantor, (ii) organizational identification number, if any, assigned to
such Grantor by such jurisdiction, (iii) address (including the county) of
the chief executive office of such Grantor, (iv) the Federal Taxpayer
Identification Number of each Grantor and (v) whether each Grantor is a
Transmitting Utility as defined under the Uniform Commercial Code (“UCC”)
(indicating such Grantor with an “*”).


 


(b)  Set forth
on Schedule 2B is, with respect to each Grantor, all locations where
such Grantor maintains any books or records relating to the Collateral
consisting of Accounts, Contract Rights, Chattel Paper or General Intangibles
(with each location at which Chattel Paper, if any, is kept being indicated by
an “*”).


 

















 


(c)  Set forth on Schedule
2C are all other locations in the United States of America where any of the
Collateral consisting of Inventory or Equipment is located.


 


(d)  Set forth
on Schedule 2D are all the places of business of any Grantor that are
not identified above.


 


SECTION 3. 
Unusual Transactions.  All
Accounts have been originated by the Grantors and all Inventory has been
acquired by the Grantors in the ordinary course of business.


 


SECTION 4. 
File Search Reports.  File
search reports have been obtained from (i) the UCC filing office related
to each location of a Grantor identified on Schedule 2A and
(ii) the county recorder’s office relating to the county where each
Mortgaged Property is located, except as otherwise agreed to by the
Administrative Agent in accordance with the final paragraph of the definition
of the term “Collateral and Guarantee Requirement” in the Credit Agreement.


 


SECTION 5. 
UCC Filings.  UCC financing
statements have been prepared for filing in the appropriate UCC filing office
related to the jurisdiction of formation for each Grantor.  Attached hereto as Schedule 5 is a
true and correct list of each such filing and the UCC filing office in which
such filing is to be made.  All filing fees
and taxes payable in connection with the filings described in this Section 5
have been paid or will be paid promptly after the Funding Date.


 


SECTION 6. 
Equity Interests.  Attached
hereto as Schedule 6 is a true and correct list of all the Equity Interests
that each Grantor is required to pledge under the Guarantee and Collateral
Agreement, specifying the issuer and certificate number (if any) of, and the
number and percentage of ownership represented by, such Equity Interests, and
indicating with a “*” such Equity Interests of any limited liability company or
limited partnership that has not opted to have such Equity Interests treated as
“Securities” under the UCC.


 


SECTION 7. 
Debt Instruments.  Attached
hereto as Schedule 7 is a true and correct list of all debt instruments
and other Indebtedness that each Grantor is required to pledge under the
Guarantee and Collateral Agreement, specifying any promissory notes or
intercompany notes evidencing such debt instruments or Indebtedness.


 


SECTION 8. 
Mortgage Filings.  Attached
hereto as Schedule 8 is a true and correct list, with respect to
all Mortgaged Property, of (a) the exact name of the Person that owns such
property, as such name appears in its certificate of organization, (b) if
different from the name identified pursuant to clause (a) above, the exact
name of the current record owner of such property, as such name appears in the
records of the county recorder’s office for such property identified pursuant
to clause (c) below and (c) the county recorder’s office in which a
mortgage with respect to such property must be filed or recorded in order for
the Security Agent to obtain a perfected security interest therein.


 


2

















 


SECTION 9. 
Intellectual Property. 
Attached hereto as Schedule 9, in proper form for filing with the
United States Patent and Trademark Office or the United States Copyright
Office, as applicable, is a true and correct list of each Grantor’s
(i) registrations for and applications for registration of Copyrights in
the United States Copyright Office, (ii) material Copyright Licenses,
(iii) issued Patents and applications for Patents in the United States
Patent and Trademark Office and (iv) registrations for and applications
for registration of Trademarks in the United States Patent and Trademark
Office, in each case, including the name of the registered owner or owner of
the application, registration or application number, expiration date (if
applicable) and a brief description thereof and with respect to
(ii) above, the name and address of the licensor and the licensee.


 


SECTION 10. 
Commercial Tort Claims. 
Set forth on Schedule 10 is a true and correct list of
claims that exceed $5,000,000 in reasonable estimated value arising in tort with
respect to which any Grantor is claimant and which arose in the course of such
Grantor’s business, including a brief description thereof.


 


SECTION 11. 
Deposit Accounts, Securities Accounts and Commodities Accounts.  Attached hereto as Schedule 11 is
a true and correct list of Deposit Accounts, Securities Accounts and
Commodities Accounts maintained by each Grantor, including the name and address
of the depositary institution, Securities Intermediary or Commodities
Intermediary holding the account, as applicable, the type of account, the
account number , whether such account is required to be subject to a Control
Agreement pursuant to the Credit Agreement and, if not, why it is not so
required.


 


SECTION 12. 
Vessels.  Set forth below
is a list of all vessels with a fair market value in excess of $250,000 (provided
that in the case the aggregate fair market value of all vessels owned by the
Grantors does not exceed $2,500,000, no such listing is required) owned by each
Grantor including (i) the name, official number, weight, length, width and
height, regulation patent number, radio call letters and flag country of each
such vessel, (ii) the name of the Grantor that owns such vessel and
(iii) the fair market value apportioned to such vessel:


 


SECTION 13. 
Aircraft.  Set forth below
is a list of all aircraft with a fair market value in excess of $250,000 (provided
that in the case the aggregate fair market value of all aircraft owned by the
Grantors does not exceed $2,500,000, no such listing is required) owned by each
Grantor including (i) the name, manufacturer, model, serial number and
federal registration number of each such aircraft (including each airframe,
engine and propeller), (ii) the name of the Grantor that owns such
aircraft (including each airframe, engine and propeller) and (iii) the
fair market value apportioned to such aircraft (including each airframe, engine
and propeller):


 


3

















 


IN WITNESS WHEREOF, the undersigned has duly executed this certificate
on this         day of [     ], 2010.


 


	
   

  	
  SMURFIT-STONE CONTAINER
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


4
















 


Schedule 1


 


Names


 


	
  Grantor’s
  Exact Legal Name

  	
   

  	
  Former Names 

  (including date of change)

  	
   

  	
  Other Names

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule 2A


 


Jurisdiction of Formation, Organizational
Identification Number,

Chief Executive Office Address and Federal Taxpayer Identification Number


 


	
  Grantor(1)

  	
   

  	
  Jurisdiction

  of Formation

  	
   

  	
  Form of

  Organization

  	
   

  	
  Organizational

  Identification

  Number (if

  any)

  	
   

  	
  Chief
  Executive

  Office Address

  (including county)

  	
   

  	
  Federal

  Taxpayer

  Identification

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






(1)Indicate
with an asterisk (“*”) each Grantor that is a Transmitting Utility as defined
under the UCC.


 

















 


Schedule
2B


 


Other
Addresses (Books or Records)


 


	
  Grantor

  	
   

  	
  Other Locations where Books or Records

  relating to the Collateral are Maintained

  (including county)(1)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 






(1)Indicate
with an asterisk (“*”) each location at which Chattel Paper, if any, is kept.


 

















 


Schedule
2C


 


Other
Addresses (Collateral)


 


	
  Grantor

  	
   

  	
  Other
  Locations where Inventory or Equipment is

  Maintained

  (including county)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Schedule
2D


 


Other
Addresses


 


	
  Grantor

  	
   

  	
  Other
  Places of Business

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Schedule 5


 


UCC Filings


 


	
  Grantor

  	
   

  	
  UCC Filing Office

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Schedule
6


 


Equity Interests


 


	
  Grantor

  	
   

  	
  Issuer(1)

  	
   

  	
  Certificate

  Number

  	
   

  	
  Number of

  Equity Interests

  	
   

  	
  Percentage of

  Ownership

  

  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Indicate
with an “*” each limited liability company or limited partnership that has not
opted into Article 8 of the UCC.


 

















 


Schedule 7


 


Debt Instruments


 


	
  Grantor

  	
   

  	
  Creditor

  	
   

  	
  Debtor

  	
   

  	
  Type

  	
   

  	
  Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule 8


 


Mortgaged Property and Mortgage Filings


 


	
  Owner

  	
   

  	
  Record Owner

  	
   

  	
  Address

  	
   

  	
  County Recorder’s Office

  

  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


Schedule 9


 


Intellectual Property


 


I.                                         Registered
Copyrights


 


	
  Registered Owner

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II.                                     Copyright Applications


 


	
  Owner

  	
   

  	
  Title

  	
   

  	
  Application

  Number

  	
   

  	
  Filing

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III.                                 Copyright Licenses


 


	
  Licensor

  Name and

  Address

  	
   

  	
  Licensee

  Name and

  Address

  	
   

  	
  Date of

  License/

  Sublicense

  	
   

  	
  Registered
  Owner

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


IV.                                 Registered Patents


 


	
  Registered Owner

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


V.                                     Patent
Applications


 


	
  Owner

  	
   

  	
  Type

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


VI.                                 Registered Trademarks


 


	
  Registered
  Owner

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration Date

  

  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


VII.                             Trademark Applications


 




	
  Owner

  	
   

  	
  Mark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 

















 


Schedule 10


 


Commercial Tort Claims


 


	
  Grantor/Plaintiff

  	
   

  	
  Defendant

  	
   

  	
  Description

  

  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule 11


 


Deposit Accounts


 


	
  Name and Address

  of Depositary Institution

  	
   

  	
  Type of
  Account

  	
   

  	
  Account
  Number

  	
   

  	
  Subject
  to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Securities Accounts


 


	
  Name
  and Address

  of Intermediary Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  	
  Subject to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Commodities Accounts


 


	
  Name
  and Address

  of Intermediary Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  	
  Subject to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


Exhibit D-2


to the
Credit Agreement


 


FORM OF


 


CANADIAN PERFECTION
CERTIFICATE


 


Reference
is made to the ABL Credit Agreement dated as of
[      ], 2010 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Smurfit-Stone Container Corporation (“SSCC”), Smurfit-Stone
Container Enterprises, Inc. (“SSCE”), certain Domestic Subsidiaries
and Canadian Subsidiaries of Holdings from time to time party thereto, the
lenders from time to time party thereto, Deutsche Bank AG New York Branch (“DB”),
as Administrative Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents.  Capitalized terms used but not defined herein
have the meanings assigned in the Credit Agreement or the Canadian Guarantee
and Collateral Agreement (the “Collateral Agreement”) referred to
therein, as applicable.


 


The
undersigned, a Responsible Officer of Holdings, hereby certifies to the
Administrative Agent and each other Secured Party as follows:


 


SECTION 1.  Names. 
Attached hereto as Schedule 1 is the exact legal name of each
Grantor, including any French or combined form of name, and all former names of
such Grantor.


 


SECTION 2.  Locations.  (a) Attached hereto as Schedule 2A
is the (i) jurisdiction of formation and the form of organization of each
Grantor, and (ii) the address of the chief executive office of such
Grantor.


 


(b)           Set forth on Schedule 2B is, with respect to
each Grantor, all locations where such Grantor maintains any books or records
relating to the Collateral consisting of Accounts, Contract Rights, Chattel
Paper or Intangibles (with each location at which Chattel Paper, if any, is
kept being indicated by an “*”).


 


(c)           Set forth on Schedule 2C are all other locations
in Canada where any of the Collateral consisting of Inventory is located.


 


(d)           Set forth on Schedule 2D are all the places of
business of any Grantor that are not identified above.


 


SECTION 3.  Unusual Transactions.  All Accounts have been originated by the
Grantors and all Inventory has been acquired by the Grantors in the ordinary
course of business.


 


SECTION 4.  Search Report.  Attached hereto as Schedule 4 is a search
report summarizing all searches made against each Grantor in the Personal Property
Security Register in each province of Canada (or, if applicable, in the Quebec
Register of Personal and Movable Real Rights) and in the analogous registry in
each other jurisdiction in which tangible (corporeal) personal (movable)
property of such Grantor is located (other than de minimis portions of such
property) or in which the chief executive office of such Grantor is located.


 

















 


SECTION 5.  PPSA / UCC Filings.  PPSA (and, if required, UCC) financing
statements have been prepared for filing in the Personal Property Security
Register in each province of Canada (or, if applicable, in the Quebec Register
of Personal and Movable Real Rights) and in the analogous registry in each
other jurisdiction in which tangible (corporeal) personal (movable) property of
each Grantor is located (other than de minimis portions of such property) or in
which the chief executive office of each Grantor is located.  Attached hereto as Schedule 5 is a true and
correct list of all jurisdictions in which such filings are to be made.  All filing fees and taxes payable in
connection with the filings described in this Section 5 have been paid or
will be paid promptly after the Funding Date.


 


SECTION 6.  Equity Interests.  Attached hereto as Schedule 6 is a
true and correct list of all the Equity Interests that each Grantor is required
to pledge under the Canadian Guarantee and Collateral Agreement, specifying the
issuer and certificate number (if any) of, and the number and percentage of
ownership represented by, such Equity Interests, and indicating with a “*” if
any Equity Interest in any partnership or limited liability company is not a “Security”
for purposes of applicable securities transfer laws.


 


SECTION 7.  [Intentionally Deleted]


 


SECTION 8.  [Intentionally Deleted]


 


SECTION 9.  [Intentionally Deleted]


 


SECTION 10.  [Intentionally Deleted]


 


SECTION 11.  Bank Accounts, Securities Accounts and
Futures Accounts.  Attached hereto as
Schedule 11 is a true and correct list of bank accounts, Securities
Accounts and Futures Accounts maintained by each Grantor, including the name
and address of the bank, Securities Intermediary or Futures Intermediary
holding the account, as applicable, the type of account, the account number,
whether such account is required to be subject to a Control Agreement pursuant
to the Credit Agreement and, if not, why it is not so required.


 


SECTION 12.  [Intentionally Deleted]


 


SECTION 13.  [Intentionally Deleted]


 


2

















 


Exhibit D-2


to the Credit Agreement


 


IN
WITNESS WHEREOF, the undersigned has duly executed this Canadian Perfection
Certificate on this         day of
[     ], 2010.


 


	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


Schedule 1


 


Names


 


	
  Grantor’s Exact Legal Name

  	
   

  	
  Former
  Names

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Schedule 2A


 


Jurisdiction of Formation, Form of
Organization and Chief Executive Office Address


 


	
  Grantor

  	
   

  	
  Jurisdiction
  of

  Formation

  	
   

  	
  Form of

  Organization

  	
   

  	
  Chief
  Executive Office

  Address

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule 2B


 


Other Addresses (Books or
Records)


 


	
  Grantor

  	
   

  	
  Other Locations where Books or Records

  relating to the Collateral are Maintained(1)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 






(1)  Indicate with an asterisk (“*”) each
location at which Chattel Paper, if any, is kept.


 

















 


Schedule 2C


 


Other Addresses (Collateral)


 


	
  Grantor

  	
   

  	
  Other Locations in Canada where Inventory is Maintained

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Schedule 2D


 


Other Addresses


 


	
  Grantor

  	
   

  	
  Other Places of Business

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 
















 


Schedule 4


 


Search Report


 

















 


Schedule 5


 


PPSA / UCC Filings


 

















 


Schedule 6


 


Equity Interests


 


	
  Grantor

  	
   

  	
  Issuer(1)

  	
   

  	
  Certificate

  Number

  	
   

  	
  Number of

  Equity Interests

  	
   

  	
  Percentage of

  Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






(1)  Indicate with an “*” each partnership or
limited liability company interest that is not a “Security” for purposes of
applicable securities transfer laws.


 

















 


Schedule 7


 


[Intentionally Deleted]


 

















 


Schedule 8


 


[Intentionally Deleted]


 

















 


Schedule 9


 


[Intentionally Deleted]


 

















 


Schedule 10


 


[Intentionally
Deleted]


 

















 


Schedule 11


 


Bank Accounts


 


	
  Name
  and Address

  of Bank

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  	
  Subject to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Securities Accounts


 


	
  Name and Address

  of Intermediary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  	
  Subject to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Futures Accounts


 


	
  Name
  and Address

  of Intermediary

  Institution

  	
   

  	
  Type of Account

  	
   

  	
  Account Number

  	
   

  	
  Subject to Control

  Agreement (Reason

  for exclusion)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


EXHIBIT
E


to
the Credit Agreement


 


FORM OF


 


LIEN SUBORDINATION AND
INTERCREDITOR AGREEMENT


 


dated as of


 


[        ],
2010


 


among


 


SMURFIT-STONE CONTAINER CORPORATION


(formerly known as Smurfit-Stone Container
Enterprises, Inc.),


 


 


the Subsidiaries party hereto,


 


 


JPMORGAN CHASE BANK, N.A.


as Administrative Agent for the Term Loan Credit
Secured Parties


 


 


DEUTSCHE BANK AG NEW YORK BRANCH


as Collateral Agent for the Revolving Credit Secured
Parties


 


and


 


each Permitted Notes Agent 


from time to time party hereto


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  Definitions

  	
   

  
	
  Section 1.01. New York UCC

  	
  2

  
	
  Section 1.02. Other Defined Terms

  	
  2

  
	
  Section 1.03. Terms Generally

  	
  16

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  Lien Priorities

  	
   

  
	
   

  	
   

  
	
  Section 2.01. Relative Priorities

  	
  17

  
	
  Section 2.02. Prohibition on Contesting Liens

  	
  18

  
	
  Section 2.03. No New Liens

  	
  18

  
	
  Section 2.04. Effectiveness of Lien Priorities

  	
  19

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  Enforcement

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Exercise of Remedies

  	
  19

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  Payments

  	
   

  
	
   

  	
   

  
	
  Section 4.01. Application of Proceeds

  	
  23

  
	
  Section 4.02. Payments Over in Violation of Agreement

  	
  23

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  Other Agreements

  	
   

  
	
   

  	
   

  
	
  Section 5.01. Releases

  	
  24

  
	
  Section 5.02. Insurance

  	
  25

  
	
  Section 5.03. Amendments to Prior Credit Documents and
  Junior Credit Documents

  	
  26

  
	
  Section 5.04. Legend

  	
  27

  
	
  Section 5.05. Bailee for Perfection

  	
  28

  
	
  Section 5.06. Entry Upon Premises by Controlling Agent

  	
  29

  
	
  Section 5.07. Rights under Permits, Licenses and
  Intellectual Property

  	
  32

  
	
  Section 5.08. Permitted Notes

  	
  33

  
	
  Section 5.09. When Discharge of Obligations Deemed Not
  To Have Occurred

  	
  34

  
	
  Section 5.10. Canadian Intercompany Notes

  	
  35

  



 


i

















 


	
  Section 5.11. Cash Management and Hedging Obligations

  	
  36

  
	
  Section 5.12. Access to Information

  	
  36

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  Insolvency or Liquidation Proceedings

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Cash Collateral and DIP Financing

  	
  36

  
	
  Section 6.02. Relief from the Automatic Stay

  	
  37

  
	
  Section 6.03. Adequate Protection

  	
  38

  
	
  Section 6.04. No Waiver

  	
  38

  
	
  Section 6.05. Avoidance Issues

  	
  38

  
	
  Section 6.06. Post-Petition Interest

  	
  39

  
	
  Section 6.07. Separate Grants of Security and Separate
  Classification

  	
  39

  
	
  Section 6.08. Voting

  	
  40

  
	
  Section 6.09. Application

  	
  40

  
	
  Section 6.10. Waiver

  	
  40

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  Reliance;
  Waivers; Etc.

  	
   

  
	
   

  	
   

  
	
  Section 7.01. Reliance

  	
  40

  
	
  Section 7.02. No Warranties or Liability

  	
  41

  
	
  Section 7.03. No Waiver of Lien Priorities

  	
  41

  
	
  Section 7.04. Obligations Unconditional

  	
  42

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  
	
  Section 8.01. Conflicts

  	
  42

  
	
  Section 8.02. Effectiveness; Continuing Nature of this
  Agreement; Severability

  	
  43

  
	
  Section 8.03. Amendments; Waivers

  	
  43

  
	
  Section 8.04. Information Concerning Financial
  Condition of SSCC and Subsidiaries

  	
  43

  
	
  Section 8.05. Subrogation

  	
  44

  
	
  Section 8.06. Application of Payments

  	
  44

  
	
  Section 8.07. Governing Law; Jurisdiction; Consent to
  Service of Process

  	
  44

  
	
  Section 8.08. Waiver of Jury Trial

  	
  45

  
	
  Section 8.09. Notices

  	
  45

  
	
  Section 8.10. Further Assurances

  	
  46

  
	
  Section 8.11. Successors and Assigns

  	
  46

  
	
  Section 8.12. Specific Performance

  	
  46

  
	
  Section 8.13. Headings

  	
  46

  
	
  Section 8.14. Counterparts

  	
  46

  
	
  Section 8.15. Authorization

  	
  46

  



 


ii

















 


	
  Section 8.16. No Third Party Beneficiaries

  	
  46

  
	
  Section 8.17. Provisions Solely To Define Relative
  Rights

  	
  47

  
	
  Section 8.18. Additional Grantors

  	
  47

  
	
  Section 8.19. Term Loan Credit Agent and Revolving
  Credit Agent

  	
  47

  



 


iii

















 


SCHEDULES:


 


	
  Schedule
  I

  	
  —  Notice
  Addresses

  
	
  Schedule
  II

  	
  —  Grantors

  



 


EXHIBITS:


 


	
  Exhibit I

  	
  —  Form of
  Supplement

  
	
  Exhibit II

  	
  —  Form of
  Joinder Agreement

  



 

















 


LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT dated
as of [·], 2010 (as amended,
supplemented or otherwise modified from time to time, this “Agreement”),
among SMURFIT-STONE CONTAINER CORPORATION, a Delaware corporation (formerly
known as Smurfit-Stone Container Enterprises, Inc.) (“SSCC”); the
other SUBSIDIARIES of SSCC whose signatures appear below or who in the future
become parties hereto as provided in Section 8.18; JPMORGAN CHASE BANK,
N.A., in its capacity as Administrative Agent for, and acting on behalf of, the
Term Loan Credit Secured Parties referred to herein (together with its
successors and assigns in such capacity, the “Term Loan Credit Agent”);
and DEUTSCHE BANK AG NEW YORK BRANCH, in its capacity as Collateral Agent for,
and acting on behalf of, the Revolving Credit Secured Parties referred to
herein (together with its successors and assigns in such capacity, the “Revolving
Credit Agent”); and each Permitted Notes Agent that from time to time
becomes a party hereto pursuant to Section 5.07.  Capitalized terms used and not otherwise
defined in this Agreement are used with the meanings specified in Article I.


 


SSCC, the Term Loan Credit
Lenders from time to time party thereto and the Term Loan Credit Agent have entered into the Term Loan Credit
Agreement, under which the Term Loan Credit Lenders have agreed, upon the terms
and subject to the conditions set forth therein, to extend credit to SSCC.  The Term Loan Credit Obligations will be
incurred or guaranteed by the Grantors as provided in the Term Loan Credit
Agreement and secured by Liens on the Term Loan Credit Collateral as provided
in the Term Loan Credit Collateral
Documents.


 


On or prior to the date
hereof, SSCC, the subsidiaries of SSCC party thereto, the Revolving Credit
Lenders from time to time party thereto and the Revolving Credit Agent are
entering into, or have entered into, as the case may be, the Revolving Credit
Agreement, under which the Revolving Credit Lenders are agreeing, upon the terms
and subject to the conditions set forth therein, to extend credit to SSCC and
certain of its Subsidiaries.  The
Revolving Credit Obligations will be incurred or guaranteed by, amongst others,
the Grantors and secured by Liens, including those on the Revolving Credit
Collateral, as provided in the Revolving Credit Collateral Documents.


 


The Term Loan Credit
Documents and the Revolving Credit Documents provide, among other things, that
the parties hereto will enter into this Agreement to set forth their relative
rights and remedies with respect to the Common Collateral.


 


The Term Loan Credit
Documents and Revolving Credit Documents permit SSCC to issue Permitted Notes
secured by the Common Collateral whose Liens on the Common Collateral will be
subordinated to the Term Loan Credit Liens with respect to the Non-ABL
Collateral but senior to the Revolving Credit Liens and will be subordinated to
the Term Loan Credit Liens and Revolving Credit Liens with respect to the ABL
Collateral; provided that, among other things, such Permitted Notes be
subject 


 


1

















 


to an Agreement setting
forth the relative rights and remedies of the Term Loan Credit Secured Parties,
the Revolving Credit Secured Parties and the holders of such debt with respect
to the Common Collateral.


 


Accordingly, in
consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Term Loan Credit Agent (for itself and on behalf of the Term
Loan Credit Secured Parties), the Revolving Credit Agent (for itself and on
behalf of the Revolving Credit Secured Parties) and each Permitted Notes Agent
(for itself and on behalf of the Permitted Notes Secured Parties under the
applicable Permitted Notes Documents) agree as follows:


 


ARTICLE I


 


Definitions


 


Section 1.01.  New York UCC.  All capitalized terms used without definition
herein that are defined in the UCC as in effect in the State of New York shall
have the meanings specified therein.


 


Section 1.02.  Other Defined Terms.  As used in the Agreement, the following terms
shall have the following meanings:


 


“ABL Collateral”  means any and all present and future right, title and
interest of the Grantors in and to the following, whether now owned or
hereafter acquired, existing or arising, and wherever located to the extent
constituting Common Collateral:  (a) all
Accounts Receivable and related Records; (b) all Chattel Paper; (c) all
Deposit Accounts, Commodities Accounts, Securities Accounts and all lock-boxes
at any bank, including all Money and Certificated Securities, Uncertificated
Securities, Securities Entitlements and Investment Property or other assets
credited thereto or deposited therein (including all cash, cash equivalents,
marketable securities and other funds held in or on deposit in any such Deposit
Account, Commodity Account or Securities Account but excluding all equity
interests of or owned by any of the Grantors and all such assets relating to
Intellectual Property), and all cash, cash equivalents, checks and other
negotiable instruments, funds and other evidences of payments (but excluding
the Non-ABL Sweep Collateral Account and any cash or other assets held in the
Non-ABL Sweep Collateral Account in accordance with the Term Loan Credit
Agreement as in effect on the date hereof or, provided that any amendment or
modification to the terms thereof with respect to such Non-ABL Sweep Account
are not materially adverse to the Revolving Credit Lenders, the Term Loan
Credit Agreement as Amended from time to time); (d) all Inventory; (e) to
the extent evidencing, governing, securing or otherwise related to the items
referred to in the preceding clauses (a), (b), (c) and (d) of this
definition, all contracts, contract rights, payment intangibles, Documents,
Instruments, Letter of Credit Rights and Commercial Tort Claims and other
claims or causes of action; (f) all books, Records and data processing
software directly relating to, or arising from any of the foregoing; and (g) all
substitutions, replacements, products, Supporting Obligations and Proceeds
(including, insurance proceeds, income, payments, 


 


2

















 


damages and proceeds of
suit) of any and all of the foregoing. 
For the avoidance of doubt, ABL Collateral shall not include
Intellectual Property.


 


“ABL Collateral
Enforcement Actions” has the meaning assigned to such term in Section 5.06(a).


 


“ABL Collateral
Enforcement Notice” has the meaning assigned to such term in Section 5.06(a).


 


“Accounts Receivable”
means all Accounts and other rights to payment for the sale, lease, license,
assignment or other disposal of any Inventory or the performance of services
(whether performed or to be performed), existing on the date of this Agreement
or hereafter arising, whether or not earned by performance.


 


“Agent” means (a) with
respect to the Term Loan Credit Secured Parties, the Term Loan Credit Agent, (b) with
respect to the Revolving Credit Secured Parties, the Revolving Credit Agent and
(c) with respect to the Permitted Notes Secured Parties of any Series, the
Permitted Notes Agent with respect to such Series.


 


“Amend” means, in
respect of any Indebtedness, obligation or agreement, to amend, restate,
modify, waive, supplement, restructure, extend, increase or renew such
Indebtedness, in whole or in part.  “Amended” and “Amendment” shall have correlative meanings.


 


“Bankruptcy Case”
means a case under the Bankruptcy Code or any other Bankruptcy Law.


 


“Bankruptcy
Code” means Title 11 of the United States Code entitled “Bankruptcy,”
as now or hereafter in effect, or any successor statute.


 


“Bankruptcy
Law” means the Bankruptcy Code and any similar Federal, state or foreign
law for the relief of debtors.


 


“Canadian Collateral”
means any and all of the assets of a Canadian Revolving Credit Loan Party on
which any Lien has been granted or is purported to be granted pursuant to a
Revolving Credit Collateral Document by such Canadian Revolving Credit Loan
Party to secure any Revolving Credit Obligations.


 


“Canadian Intercompany
Notes” means each promissory note evidencing any loan or advance from time
to time made by any Grantor to a Canadian Revolving Credit Loan Party, in each
case where the obligations evidenced thereby are secured by a Lien on assets of
such Canadian Revolving Credit Loan Party.


 


“Canadian Intercompany
Notes Documents” means the Canadian Intercompany Notes and all other
instruments, agreements and other documents evidencing or governing the loan
evidenced by any Canadian Intercompany Note, providing for any security
interest or other right in respect thereof, affecting the terms of 


 


3

















 


the foregoing or entered
into in connection therewith and all schedules, exhibits and annexes to each of
the foregoing.


 


“Canadian Revolving
Credit Loan Party” means each Revolving Credit Loan Party that is
incorporated, organized, or established in Canada or any province or territory
thereof.


 


“Cash Management Services”
shall mean (a) cash management
services, including treasury, depository, overdraft, electronic funds transfer
and other cash management arrangements and (b) commercial credit card and
merchant card services.


 


“Cash
Management and Hedging Obligations” shall mean the Term Loan Credit Cash
Management and Hedging Obligations and the Revolving Credit Cash Management and
Hedging Obligations.


 


“Class”, when used in
reference to (a) any Obligations, refers to whether such Obligations are
the Term Loan Credit Obligations, the Revolving Credit Obligations or the
Permitted Notes Obligations of any Series, (b) any Agent, refers to
whether such Agent is the Term Loan Credit Agent, the Revolving Credit Agent or
the Permitted Notes Agent of any Series, (c) any Secured Parties, refers to
whether such Secured Parties are the Term Loan Credit Secured Parties, the
Revolving Credit Secured Parties or the Permitted Notes Secured Parties of any Series and
(d) any Credit Documents, refers to whether such Credit Documents are the
Term Loan Credit Documents, the Revolving Credit Documents or the Permitted
Notes Documents with respect to Permitted Notes of any Series.


 


“Collateral” means all Term
Loan Credit Collateral, all Revolving Credit Collateral and all Permitted Notes
Collateral.


 


“Collateral Documents”
means the Term Loan Credit Collateral Documents, the Revolving Credit
Collateral Documents and the Permitted Notes Collateral Documents.


 


“Common Collateral”
means all Collateral that secures two or more Classes of Obligations.  For the avoidance of doubt, “Common
Collateral” shall not include Canadian Collateral or any other assets of any
Person that is not both a Term Loan Credit Loan Party or a Permitted Notes Loan
Party, on the one hand, and a Revolving Credit Loan Party, on the other hand.


 


“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies, or the dismissal or appointment of the
management, of a Person, whether through the ability to exercise voting power,
by contract or otherwise.  “Controlled”
shall have a correlative meaning.


 


“Controlling Agent”
means, with respect to any Common Collateral consisting of ABL Collateral or
Non-ABL Collateral, the Agent with respect to the Prior Secured Parties secured
by such Common Collateral and in respect of which Common Collateral all Other
Secured Parties are Junior Secured Parties. 
The parties hereto 


 


4

















 


acknowledge that (a) prior
to the Discharge of the Term Loan Credit Obligations, the Term Loan Credit
Agent is the Controlling Agent with respect to the Non-ABL Collateral, (b) prior
to the Discharge of the Revolving Credit Obligations, the Revolving Credit
Agent is the Controlling Agent with respect to the ABL Collateral, (c) after
the Discharge of the Term Loan Credit Obligation and prior to the Discharge of
the Permitted Notes Obligations, the Designated Permitted Notes Agent will be
the Controlling Agent with respect to the Non-ABL Collateral and (d) after
the Discharge of the Revolving Credit Obligation and prior to the Discharge of
the Term Loan Credit Obligations, the Term Loan Credit Agent will be the
Controlling Agent with respect to the ABL Collateral.


 


“Controlling Secured
Parties” means, with respect to any Common Collateral consisting of ABL
Collateral or Non-ABL Collateral and any Secured Parties, the Prior Secured
Parties with respect to such Common Collateral and in respect of which Common
Collateral all Other Secured Parties are Junior Secured Parties.


 


“Credit
Documents” means the Term Credit Documents, the Revolving Credit Documents
and the Permitted Notes Documents.


 


“Designated Permitted
Notes Agent” means (a) if there is only one Series of Permitted
Notes, the Permitted Notes Agent with respect to such Series and (b) if
there is more than one Series of Permitted Notes, the Person designated
from time to time by the Permitted Notes Agents with respect to Permitted Notes
Documents under which at least a majority of the then aggregate amount of
Permitted Notes Obligations are outstanding, in a notice to the Term Loan
Credit Agent, the Revolving Credit Agent and SSCC, as the “Designated Permitted
Notes Agent”.


 


“DIP
Financing” has the meaning set forth in Section 6.01(b).


 


“DIP Financing Liens”
has the meaning set forth in Section 6.01(b).


 


“Discharge” means,
subject to Section 5.09, with respect to any Class of Obligations:


 


(a)  payment in full in
cash of the principal of and interest (including interest accruing on or after
the commencement of any Insolvency or Liquidation Proceeding, whether or not
such interest would be allowed in such Insolvency or Liquidation Proceeding) on
all such Obligations (other than Cash Management and Hedging Obligations);


 


(b)  payment in full in
cash of all other Obligations (other than Cash Management and Hedging
Obligations) of such Class that are due and payable or otherwise accrued
and owing at or prior to the time such principal and interest are paid (other
than claims, causes of action or other liabilities in respect of which no claim
or demand for payment has been made at such time);


 


5

















 


(c)  termination or
expiration of all commitments, if any, to extend credit that would give rise to
Obligations (other than Cash Management and Hedging Obligations) of such Class;


 


(d)  termination or
cash collateralization of all letters of credit and bankers’ acceptances the
reimbursement or payment obligations in respect of which constitute Obligations
(other than Cash Management and Hedging Obligations) of such Class (any
such cash collateralization to be in an amount and manner reasonably
satisfactory to the Agent for such Class of Obligations, but in no event
shall such amount be greater than 105% of the aggregate undrawn face amount in
the case of letters of credit or 105% of the principal amount in the case of
bankers’ acceptances);


 


(e)  adequate provision
(as agreed to by each Agent or otherwise determined by a court of competent
jurisdiction) has been made for any contingent or unliquidated Obligations
(other than Cash Management and Hedging Obligations) of such Class in
respect of claims, causes of action or other monetary liabilities that have
been asserted, or threatened in writing (and which would reasonably be expected
to be asserted), against the Secured Parties of such Class, and of which the
Agent of such Class shall have informed the other Agents in writing
concurrently with the satisfaction of each of the requirements set forth in
clauses (a) through (d) above; and


 


(f)  in the case of the
Discharge of the Revolving Credit Obligations, to the extent that the
requirements set forth above have been satisfied with the proceeds of a
foreclosure on Collateral or other enforcement action by the Revolving Credit
Agent with respect to the Revolving Credit Obligations under the Revolving
Credit Collateral Documents, the payment in full in cash of all Revolving
Credit Cash Management and Hedging Obligations that are due and payable at such
time.


 


“Discharge
of Prior Obligations” means, subject to the provisions of Section 5.09,
(a) with respect to the Term Loan Credit Liens on the ABL Collateral and
the Term Loan Credit Obligations insofar as they are secured by such Liens, the
occurrence of a Discharge of the Revolving Credit Obligations, (b) with
respect to the Revolving Credit Liens on the Non-ABL Collateral and the
Revolving Credit Obligations insofar as they are secured by such Liens, the
occurrence of a Discharge of the Term Loan Credit Obligations and the Permitted
Notes Obligations and (c) (i) with respect to the Permitted Notes
Liens on the ABL Collateral and the Permitted Notes Obligations insofar as they
are secured by such Liens, the occurrence of a Discharge of the Revolving
Credit Obligations and the Term Loan Credit Obligations and (ii) with
respect to the Permitted Notes Liens on the Non-ABL Collateral and the
Permitted Notes Obligations insofar as they are secured by such Liens, the
occurrence of a Discharge of the Term Loan Credit Obligations.


 


“Disposition” has the
meaning set forth in Section 5.01(b). 
“Dispose”, when used as a verb, shall have a correlative meaning.


 


“Domestic Subsidiary”
shall mean any Subsidiary organized under the laws of the United States or any
State thereof (including the District of Columbia).


 


6
















 


“Equity Interests”
means shares of capital stock, partnership interests, membership interests,
beneficial interests in a trust or other equity ownership interests, whether
voting or nonvoting, in, or interests in the income or profits of, a Person,
and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any of the foregoing.


 


“GAAP” means
generally accepted accounting principles in the United States, applied on a
consistent basis.


 


“Governmental
Authority” means the United States or any foreign nation’s
government and any Federal, state, provincial, regional, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.


 


“Grantors”
means, at any time, SSCC and each Domestic Subsidiary that, at such time, has,
pursuant to any Collateral Document, granted a Lien on any Common Collateral
owned by it to secure any Term Loan Credit Obligation, Revolving Credit
Obligation or Permitted Notes Obligation pursuant to any Credit Document; provided
that solely for purpose of Section 2.03, a Domestic Subsidiary shall be
deemed to be a “Grantor” if it is required pursuant to the Credit Documents of
a Class to grant a Lien on assets owed by it to secure Obligations of such
Class.


 


“Hedging Agreement”
shall mean any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
SSCC or the Subsidiaries shall be a Hedging Agreement.


 


“Incremental
Revolving Facility” means an incremental revolving facility established
under the Term Loan Credit Agreement.


 


“Indebtedness” means and
includes all liabilities, absolute or contingent, that constitute
“Indebtedness” within the meaning of the Term Loan Credit Agreement or any
equivalent term under the Revolving Credit Agreement or the Permitted Notes
Indenture.


 


“Insolvency or
Liquidation Proceeding” means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code with respect to any Grantor or Canadian
Revolving Credit Loan Party; (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding,
with respect to any Grantor or Canadian Revolving Credit Loan Party, or with
respect to a material portion of the assets of any of the foregoing; (c) any
liquidation, dissolution, reorganization or winding up of any Grantor or
Canadian Revolving Credit Loan Party, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy; or (d) any 


 


7

















 


assignment for the benefit
of creditors or any other marshalling of assets and liabilities of any Grantor
or Canadian Revolving Credit Loan Party; provided, in the case of any
involuntary case or proceeding, that such case or proceeding shall have
continued for 60 days without having been dismissed or discharged.


 


“Junior Agent” means,
with respect to any Common Collateral and any Prior Secured Party, each Agent
representing Secured Parties whose Liens on such Common Collateral are Junior
Liens.


 


“Junior Collateral
Documents” means, with respect to any Junior Liens, the Collateral
Documents pursuant to which such Junior Liens are granted.


 


“Junior Credit Documents”
means (a) with respect to Junior Obligations that are Term Loan Credit
Obligations, the Term Loan Credit Documents, (b) with respect to Junior
Obligations that are Revolving Credit Obligations, the Revolving Credit
Documents and (c) with respect to Junior Obligations that are Permitted
Notes Obligations, the Permitted Notes Documents.


 


“Junior Liens” means (a) with
respect to the ABL Collateral (i) prior to the Discharge of the Revolving
Credit Obligations, any Term Loan Credit Liens and Permitted Notes Liens and (ii) from
and after the Discharge of the Revolving Credit Obligations and prior to the
Discharge of the Term Loan Credit Obligations, any Permitted Notes Lien and (b) with
respect to the Non-ABL Collateral (i) prior to the Discharge of the Term
Loan Credit Obligations, any Permitted Notes Liens and Revolving Credit Liens
and (ii) from and after the Discharge of the Term Loan Credit Obligations
and prior to the Discharge of the Permitted Notes Obligations, any Revolving
Credit Liens.


 


“Junior Obligations”
means (a) with respect to any Common Collateral consisting of ABL
Collateral or Non-ABL Collateral or any Prior Liens thereon, any Obligations
that are secured by Junior Liens on such Common Collateral and (b) with
respect to any Prior Obligations or Prior Secured Parties secured by any Common
Collateral consisting of ABL Collateral or Non-ABL Collateral, any Obligations
that are secured by Junior Liens on such Common Collateral, but, in each case,
only insofar as such Obligations are secured by such Junior Liens, it being
agreed that, to the extent provided herein, Obligations secured by Junior Liens
on the ABL Collateral or the Non-ABL Collateral, as the case may be, may also
be secured by Prior Liens on other Common Collateral and insofar as they shall
be secured by such Prior Liens on such other Common Collateral shall constitute
Prior Obligations with respect thereto.


 


“Junior Secured Parties”
means, as to any Common Collateral consisting of ABL Collateral and Non-ABL
Collateral and any Prior Secured Party, any Secured Parties to the extent the
Obligations held by such Secured Parties, or in respect of which such Secured
Parties are the obligee, are secured by Junior Liens on such Common Collateral
pursuant to the terms of this Agreement.


 


8

















 


“Lien” means, with respect
to any asset, (a) any mortgage, deed of trust, lien, pledge, assignment
for security, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.


 


“Loan Parties” means
the Term Loan Credit Loan Parties, the Revolving Credit Loan Parties and the
Permitted Notes Loan Parties.


 


“New
Agent” has the meaning set forth in Section 5.09.


 


“Non-ABL
Collateral” means all Common Collateral that is not ABL
Collateral.


 


“Non-ABL Controlling
Agent” means the Controlling Agent with respect to the Non-ABL Collateral.


 


“Non-ABL Sweep Account”
means (a) the “Term Sweep Account” as defined in the Term Loan Credit
Agreement and (b) each other Deposit Accounts or Securities Accounts
holding only the Proceeds of any sale or disposition of any Non-ABL Collateral
and the proceeds or investment thereof for the same purposes and in
substantially the same manner as the Non-ABL Sweep Account defined in clause (a) hereof.


 


“Notice
of New Refinancing Obligations” has the meaning set forth
in Section 5.09.


 


“Obligations” means all Term
Loan Credit Obligations, all Revolving Credit Obligations and all Permitted
Notes Obligations.


 


“Other Secured Parties”
means (a) with respect to any Term Loan Credit Secured Party, the
Revolving Credit Secured Parties and the Permitted Notes Secured Parties, (b) with
respect to any Revolving Credit Secured Party, the Term Loan Credit Secured
Parties and the Permitted Notes Secured Parties and (c) with respect to
any Permitted Notes Secured Party, the Term Loan Credit Secured Parties and the
Revolving Credit Secured Parties.


 


“Permitted Notes”
means Indebtedness incurred by the Borrower in the form of notes or bonds, the
incurrence of which (a) reduces the aggregate principal amount permitted
to be incurred under the incremental facility under the Term Loan Agreement or
any Refinancing Agreement with respect to Term Loan Credit Obligations or (b) constitutes
a Refinancing of loans under the Term Loan Credit Agreement (including, for the
avoidance of doubt, pursuant to an exchange of Term Loans for such Permitted
Notes), in each case as permitted under the Term Loan Credit Agreement and the
Revolving Credit Agreement or any Refinancing Agreement with respect to Term
Loan Credit Obligations.


 


9

















 


“Permitted Notes Agent”
has the meaning set forth in Section 5.08(a).


 


“Permitted Notes
Collateral” means any assets of SSCC or any other Grantor on which any Lien
has been granted or is purported to be granted pursuant to a Permitted Notes
Collateral Document by SSCC or any other Grantor to secure any Permitted Notes
Obligation.


 


“Permitted Notes
Collateral Documents” means each Permitted Notes Mortgage and each other
security agreement, instrument and document now existing or entered into after
the date hereof that grants a Lien on any assets of SSCC or any of the
Subsidiaries constituting Common Collateral to secure any Permitted Notes Obligations;
provided that the Permitted Notes Collateral Documents shall be
substantially the same as the Term Loan Collateral Documents (with such
differences as are reasonably satisfactory to the Term Loan Credit Agent and
the Revolving Credit Agent).


 


“Permitted Notes
Documents” means, with respect to
any Series of Permitted Notes, each promissory note, indenture, Permitted
Notes Collateral Document and each other operative agreement evidencing or
governing the Permitted Notes of such Series, each as Amended from time to
time.


 


“Permitted Notes Liens”
means Liens on the Common Collateral securing the Permitted Notes Obligations,
including all such Liens created under the Permitted Notes Collateral
Documents.


 


“Permitted
Notes Loan Party” means SSCC and each Subsidiary that incurs or guarantees
the Permitted Notes Obligations pursuant to the Permitted Notes Documents.


 


“Permitted Notes Mortgage”
means each mortgage, deed of trust, assignment of leases and rents, leasehold
mortgage or other security document that grants a Lien on any real property
owned or leased by SSCC or any other Grantor to secure any Permitted Notes
Obligations.


 


“Permitted Notes
Obligations” means, with respect
to any Series of Permitted Notes, (a) all principal of, and interest
(including any interest which accrues after the commencement of any Bankruptcy
Case, whether or not allowed or allowable as a claim in any such proceeding)
payable with respect to, the Permitted Notes, (b) all other amounts
payable to the Permitted Notes Secured Parties under the Permitted Notes
Documents and (c) all Amendments or Refinancings of the foregoing; provided
that the resulting Indebtedness is secured by Common Collateral and is
otherwise effected in accordance with the provisions hereof.


 


“Permitted Notes Secured
Parties” has the meaning set forth in Section 5.08(a).


 


“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.


 


10

















 


“Pledged
Collateral” has the meaning set forth in Section 5.05.


 


“Prior Agent” means,
with respect to any Collateral and any Junior Secured Party, each Collateral
Agent representing Secured Parties whose Liens on such Collateral are Prior
Liens.


 


“Prior Collateral
Documents” means, with respect to any Junior Agent or any other Junior
Secured Parties, any Collateral Documents to the extent that the Obligations
created thereunder are Prior Obligations.


 


“Prior Lien Collateral”
means, with respect to any Junior Agent or any other Junior Secured Party, the
Common Collateral securing such Junior Secured Party’s Junior Liens that also
secures Prior Liens of an Other Secured Party.


 


“Prior Liens” means (a) with
respect to the ABL Collateral (i) prior to the Discharge of the Revolving
Credit Obligations, any Revolving Credit Lien and (ii) prior to the
Discharge of the Term Loan Credit Obligations, any Term Loan Credit Lien and (b) with
respect to the Non-ABL Collateral (i) prior to the Discharge of the Term
Loan Credit Obligations, any Term Loan Credit Lien and (ii) prior to the
Discharge of the Permitted Notes Obligations, any Permitted Notes Lien.


 


“Prior Obligations”
means (a) with respect to any Common Collateral consisting of ABL
Collateral or Non-ABL Collateral or any Junior Liens thereon, any Obligations
that are secured by Prior Liens on such Common Collateral and (b) with
respect to any Junior Obligations or Junior Secured Parties secured by any
Common Collateral consisting of ABL Collateral or Non-ABL Collateral, any
Obligations that are secured by Prior Liens on such Common Collateral, but, in
each case, only insofar as such Obligations are secured by such Prior Liens, it
being agreed that, to the extent provided herein, it being agreed that, to the
extent provided herein, Obligations secured by Prior Liens on the ABL
Collateral or Non-ABL Collateral, as the case may be, may also be secured by
Junior Liens on other Common Collateral and insofar as they shall be secured by
such Junior Liens on such other Common Collateral shall constitute Junior
Obligations with respect thereto.


 


“Prior Secured Parties”
means, with respect to any Common Collateral consisting of ABL Collateral or
Non-ABL Collateral and any Junior Secured Parties, any Secured Parties to the
extent that the Obligations held by such Secured Parties, or in respect of
which such Secured Parties are the obligees, are secured by Prior Liens on such
Common Collateral pursuant to the terms of this Agreement.


 


“Recovery” has the
meaning set forth in Section 6.05.


 


“Refinance” means, in
respect of any Indebtedness, to refinance or replace, or to issue other
indebtedness in exchange for or replacement of, such Indebtedness in whole or
in part.  “Refinanced” and “Refinancing”
shall have correlative meanings. 
Notwithstanding anything to the contrary herein, each party hereto
acknowledges and agrees that no Incremental Revolving Facility established
after the 


 


11

















 


termination of the Revolving
Credit Agreement shall constitute a Refinancing of the Revolving Credit
Obligations under this Agreement.


 


“Refinanced Obligations”
has the meaning set forth in Section 5.09.


 


“Refinancing Obligations”
has the meaning set forth in Section 5.09.


 


“Related Secured Parties”
means (a) in the case of the Term Loan Credit Agent, the Term Loan Credit
Secured Parties, (b) in the case of the Revolving Credit Agent, the
Revolving Credit Secured Parties and (c) in the case of the Permitted
Notes Agent, the Permitted Notes Secured Parties.


 


“Revolving Credit Agent”
has the meaning assigned to such term in the preamble to this Agreement.


 


“Revolving Credit
Agreement” means the revolving facility (and, as applicable, term loan
facility) agreement, dated as of [·], 2010, among
SSCC, certain Subsidiaries, the lenders party thereto and Deutsche Bank AG New
York Branch, as the administrative agent, as Amended from time to time.


 


“Revolving Credit Cash
Management and Hedging Obligations” means (a) any and all obligations of the Revolving
Credit Loan Parties or any Subsidiaries, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor) in
connection with Cash Management Services; provided that the obligations
of the Revolving Credit Loan Parties or any Subsidiaries with respect to Cash
Management Services described in clause (b) of the definition thereof
shall not exceed an aggregate principal amount of $10,000,000, in each case to
the extent such obligations are designated by SSCC as “obligations” secured by
the Revolving Credit Collateral pursuant to the procedures set forth in the
Revolving Credit Agreement and (b) all obligations owing by the
Revolving Credit Loan Parties or any Subsidiaries to counterparties to Hedging
Agreements, in each case to the extent
such obligations are permitted to be and are designated by SSCC as
“obligations” secured by the Revolving Credit Collateral pursuant to the
procedures set forth in the Revolving Credit Agreement.


 


“Revolving Credit
Collateral” means all assets of SSCC or any other Grantor on which any Lien
has been granted or is purported to be granted pursuant to a Revolving Credit
Collateral Document by SSCC or any other Grantor to secure any Revolving Credit
Obligation.


 


“Revolving Credit
Collateral Documents” means the Revolving Credit Guarantee and Collateral
Agreement, the Revolving Credit Mortgages and each other security agreement,
instrument and document now existing or entered into after the date hereof (or
Amended from time to time) that grants a Lien on any assets of SSCC or any of
the Subsidiaries constituting Common Collateral to secure any Revolving Credit
Obligations.


 


12

















 


“Revolving Credit
Documents” means the Revolving Credit Agreement and the Revolving Credit
Collateral Documents.


 


“Revolving Credit
Guarantee and Collateral Agreement” means the guarantee and security
agreement, as Amended from time to time, pursuant to which SSCC and each
Revolving Credit Loan Party guarantees certain of the Revolving Credit
Obligations and SSCC and each Domestic Subsidiary party thereto grants or
purports to grant security interests to the Revolving Credit Agent and the
Revolving Credit Secured Parties on the assets of SSCC and each Domestic
Subsidiary party thereto.  As of the date
hereof, the Revolving Credit Guarantee and Collateral Agreement means the
Guarantee and Collateral Agreement dated as of [             ],
2010, among SSCC, the Subsidiaries party thereto and the Revolving Credit
Agent.


 


“Revolving Credit Lenders”
means, at any time, Persons that are at such time “Lenders” under and as
defined in the Revolving Credit Agreement.


 


“Revolving Credit Liens”
means Liens on the Common Collateral securing the Revolving Credit Obligations,
including all such Liens created under the Revolving Credit Collateral  Documents.


 


“Revolving Credit Loan
Parties” means the “Loan Parties” as defined in the Revolving Credit
Agreement.


 


“Revolving Credit
Mortgage” means each mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document that grants a Lien on any
real property owned or leased by SSCC or any other Grantor to secure any
Revolving Credit Obligations.


 


“Revolving Credit
Obligations” means (a) all principal of, and interest (including any
interest which accrues after the commencement of any Bankruptcy Case, whether
or not allowed or allowable as a claim in any such proceeding) payable with
respect to, the commitments, loans and letters of credit under the Revolving
Credit Agreement, (b) all other amounts payable to the Revolving Credit
Secured Parties under the Revolving Credit Documents (including with respect to
guarantee obligations of any Revolving Credit Loan Party from time to time owed
to any Revolving Credit Secured Party, reimbursement of amounts drawn under
(and obligations to cash collateralize) letters of credit, fees, expenses and
indemnification obligations), (c) all Amendments or Refinancings of the
foregoing; provided that the resulting Indebtedness is secured by Common
Collateral and is otherwise effected in accordance with the provisions thereof
and (d) all Revolving Credit Cash Management and Hedging Obligations.


 


“Revolving Credit Secured
Parties” means the “Secured Parties” as defined in the Revolving Credit
Agreement.


 


“Rising Prior Agent”
means, at any time that the Prior Obligations secured by a Prior Lien of  a Controlling Agent shall have been Discharged,
the Junior Agent that becomes the Controlling Agent at the time of such
Discharge hereunder or, if there are no remaining Prior Agents, the Junior
Agent.


 


13

















 


“Rule 3-16
Collateral” means securities of any Subsidiary (the “Affected Subsidiary”),
which if pledged to secure the Permitted Notes Obligations, would require,
pursuant to Rule 3-16 of Regulation S-X (as such rule is amended,
modified or interpreted by the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1934 (or any other similar applicable rule,
regulation or law), the filing by SSCC or any other Subsidiary with the SEC (or
any other Governmental Authority) of separate financial statements of such
Affected Subsidiary that are not already required to be filed with the SEC (or
such Governmental Authority) by SSCC or any Subsidiary.


 


“Secured Parties”
means the Term Loan Credit Secured Parties, the Revolving Credit Secured
Parties and the Permitted Notes Secured Parties.


 


“Series”, when used in reference to Permitted Notes Obligations, refers to
such Permitted Notes Obligations as shall have been issued or incurred pursuant
to the same indentures or other agreements and with respect to which the same
Person acts as the Agent.


 


“SSCC” has the
meaning assigned to such term in the preamble to this Agreement.


 


“subsidiary” means,
with respect to any Person (herein referred to as the “parent”), any
corporation, partnership, association or other business entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership or membership interests are, at the time any determination
is being made, owned, controlled or held by, or otherwise Controlled by, the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.


 


“Subsidiary” means
any direct or indirect subsidiary of SSCC.


 


“Term Loan Credit Agent”
has the meaning assigned to such term in the preamble to this Agreement.


 


“Term Loan Credit
Agreement” means the Credit Agreement dated as of [·], 2010, among SSCC, the lenders party thereto and
JPMorgan Chase Bank N.A., as administrative agent, as Amended from time to time.


 


“Term Loan Credit Cash
Management and Hedging Obligations” (a) any and all obligations of the Term Loan Credit Loan Parties or any
Subsidiaries, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Cash
Management Services; provided that the obligations of the Term Loan
Credit Loan Parties or any Subsidiaries with respect to Cash Management Services
described in clause (b) of the definition thereof shall not exceed an
aggregate principal amount of $10,000,000, in each case to the extent such
obligations are designated by SSCC as “obligations” secured by the Term Loan
Credit Collateral pursuant to the procedures set forth in the Term Loan Credit
Agreement and (b) all obligations owing by the Term Loan Credit
Loan Parties or any Subsidiaries to 


 


14

















 


counterparties to Hedging
Agreements, in each case, to the
extent such obligations are permitted to be and are designated by SSCC as
“obligations” secured by the Term Loan Credit Collateral pursuant to the
procedures set forth in the Term Loan Credit Agreement.


 


“Term Loan Credit
Collateral” means all assets of SSCC or any other Grantor on which any Lien
has been granted or is purported to be granted pursuant to a Term Loan Credit
Collateral Document by SSCC or any other Grantor to secure any Term Loan Credit
Obligations.


 


“Term Loan Credit
Collateral Documents” means the Term Loan Credit Guarantee and Collateral
Agreement, the Term Loan Credit Mortgages and each other security agreement,
instrument and document now existing or entered into after the date hereof  (or Amended from time to time) that grants a
Lien on any assets of SSCC or any of the Subsidiaries constituting Common
Collateral to secure any Term Loan Credit Obligations.


 


“Term Loan Credit
Documents” means the Term Loan Credit Agreement and the Term Loan Credit
Collateral Documents.


 


“Term Loan Credit
Guarantee and Collateral Agreement” means the guarantee and security
agreement, as Amended from time to time, pursuant to which SSCC and each Term
Loan Credit Loan Party guarantees certain of the Term Loan Credit Obligations
and SSCC and each Domestic Subsidiary party thereto grants or purports to grant
security interests to the Term Loan Credit Agent and the Term Loan Credit
Secured Parties on the assets of SSCC and each Domestic Subsidiary party
thereto.  As of the date hereof, the Term
Loan Credit Guarantee and Collateral Agreement means the Guarantee and
Collateral Agreement dated as of
[             ],
2010, among SSCC, the Subsidiaries party thereto and the Term Loan Credit
Agent.


 


“Term Loan Credit
Guarantors” means the “Guarantors” as defined in the Term Loan Credit
Agreement.


 


“Term Loan Credit Lenders”
means, at any time, Persons that are at such time “Lenders” under and as
defined in the Term Loan Credit Agreement.


 


“Term Loan Credit Liens”
means Liens on the Common Collateral securing the Term Loan Credit Obligations,
including all such Liens created under the Term Loan Credit Collateral
Documents.


 


“Term Loan Credit Loan
Parties” means the “Loan Parties” as defined in the Term Loan Credit
Agreement.


 


“Term Loan Credit
Mortgage” means each mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document that grants a Lien on any
real property owned or leased by SSCC or any other Grantor to secure any Term
Loan Credit Obligations.


 


15

















 


“Term Loan Credit
Obligations” means (a) all principal of, and interest (including any
interest which accrues after the commencement of any Bankruptcy Case, whether
or not allowed or allowable as a claim in any such proceeding) payable with
respect to, the commitments and loans under the Term Loan Credit Agreement, (b) all
other amounts payable to the Term Loan Credit Secured Parties under the Term
Loan Credit Documents (including with respect to guarantee obligations of any
Term Loan Credit Loan Party from time to time owed to any Term Loan Credit
Secured Party, fees, expenses and indemnification obligations), (c) all
Amendments or Refinancings (other than Permitted Notes) of the foregoing; provided
that the resulting Indebtedness is secured by Common Collateral and is
otherwise effected in accordance with the provisions thereof and (d) all
Term Loan Credit Cash Management and Hedging Obligations.


 


“Term Loan Credit Secured
Parties” means the “Secured Parties” as defined in the Term Loan Credit
Guarantee and Collateral Agreement.


 


“UCC” means the
Uniform Commercial Code (or any similar or equivalent legislation) as in effect
in any applicable jurisdiction.


 


Section 1.03.  Terms Generally.  The definitions of terms set forth herein
shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time Amended (subject to any restrictions on such
Amendments set forth herein), (b) any definition of or reference to any
statute, regulation or other law herein shall be construed (i) as
referring to such statute, regulation or other law as from time to time Amended
(including by succession of comparable successor statutes, regulations or other
laws) and (ii) to include all official rulings and interpretations
thereunder having the force of law or with which affected Persons customarily
comply, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (e) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, and (f) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.


 


16
















 


ARTICLE II


 


Lien Priorities


 


Section 2.01.  Relative Priorities.  Notwithstanding (a) the date, time,
method, manner or order of grant, attachment or perfection of any Junior Lien
or Prior Lien on any Common Collateral, (b) any provision of the UCC or
any other applicable law or of  the Term
Loan Credit Documents, the Revolving Credit Documents or any Permitted Notes
Documents, (c) any defect or deficiency in, or failure to perfect, any
Prior Lien, (d) the possession or control by any Agent or any bailee of
all or any part of the Common Collateral or (e) any other circumstance
whatsoever, each Agent, on behalf of itself and its Related Secured Parties,
hereby agrees that:


 


(i) any
Prior Lien on any Common Collateral now or hereafter held by or on behalf of any
Prior Agent or any Prior Secured Party or any agent or trustee therefor,
regardless of how acquired, whether by grant, possession, statute, operation of
law, court order, subrogation or otherwise, shall be senior in all respects and
prior to all Junior Liens on such Common Collateral; and


 


(ii) any
Junior Lien on any Common Collateral now or hereafter held by or on behalf of
any Junior Agent or any Junior Secured Party or any agent or trustee therefor,
regardless of how acquired, whether by grant, possession, statute, operation of
law, court order, subrogation or otherwise, shall be junior and subordinated in
all respects to all Prior Liens on such Common Collateral.


 


Any and all foreclosure
Proceeds relating to any Common Collateral shall be distributed in accordance
with the priorities of the Liens with respect to Common Collateral established
hereby, (A) in the case of the Non-ABL Collateral, (1) FIRST to the
Term Loan Credit Agent for the benefit of the Term Loan Credit Secured Parties,
(2) SECOND, following the Discharge of the Term Loan Credit Obligations,
to the Designated Permitted Notes Agent for the benefit of the Permitted Notes
Secured Parties, (3) THIRD, following the Discharge of the Term Loan
Credit Obligations and the Discharge of the Permitted Notes Obligations, to the
Revolving Credit Agent for the benefit of the Revolving Credit Secured Parties
and (4) FOURTH, following the Discharge of all Obligations, to the
applicable Grantor and (B) in the case of the ABL Collateral, (1) FIRST
to the Revolving Credit Agent for the benefit of the Revolving Credit Secured
Parties, (2) SECOND, following the Discharge of the Revolving Credit
Obligations, to the Term Loan Credit Agent for the benefit of the Term Loan
Credit Secured Parties, (3) THIRD, following the Discharge of the
Revolving Credit Obligations and the Discharge of the Term Loan Credit
Obligations, and subject to the terms of, and the rights of the Grantors under,
the Permitted Notes Documents, the Designated Permitted Notes Agent with respect
to such series for the benefit of the Permitted Notes Parties and (4) FOURTH,
following the Discharge of all Obligations, to the applicable Grantor.  All Prior Liens in respect of any Common
Collateral shall be and remain (until the Discharge of the Class of
Obligations secured by such Prior Liens) senior in right, priority, operation,
effect and in all other respects to the Liens securing any other Class of
Obligations that are Junior Liens in respect of such Common Collateral, whether
or not 


 


17

















 


such Prior Liens are
subordinated to any Lien securing any other obligation of SSCC or the other
Grantors.


 


Section 2.02.  Prohibition on Contesting Liens.  Each Agent, on behalf of itself and its
Related Secured Parties, agrees that none of them will (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the perfection, priority,
validity or enforceability of any Prior Lien or any Junior Lien, the validity
or enforceability of any Credit Documents or Obligations, the relative rights
and duties of the Agents and Secured Parties granted or established under the
Credit Documents or the provisions of this Agreement; provided that
nothing in this Agreement shall be construed to prevent or impair the right of
any Agent or Secured Party to enforce this Agreement (including the priority of
Liens set forth in Section 2.01).


 


Section 2.03.  No New Liens.  Whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against SSCC or any other Grantor, SSCC and
the other parties hereto agree that none of SSCC and any other Grantor shall
grant, and no Secured Party shall accept, any additional Lien on any asset of
SSCC or such other Grantor to secure any Obligation unless SSCC or such other
Grantor has granted or concurrently grants a Lien on such asset to secure the
other outstanding Obligations (all such Liens to have the relative priorities
set forth herein based on whether the assets subject to such additional Liens
constitute ABL Collateral or Non-ABL Collateral); provided that, with
respect to any Lien granted under a Term Loan Credit Mortgage or a Permitted
Notes Mortgage with respect to any real property located in the State of New
York, such Lien may be granted without a prior or concurrent grant of a Lien
thereon to secure the Revolving Credit Obligations so long as, prior to the
grant of such Lien under such Term Loan Credit Mortgage or Permitted Notes
Mortgage, SSCC or the applicable Grantor shall have given notice thereof to the
Revolving Credit Agent and the Revolving Credit Agent shall have notified SSCC
that, pursuant to its authority under the Revolving Credit Agreement, the
Revolving Credit Agent shall forego such grant of a Lien to secure the
Revolving Credit Obligations; provided  further that, with respect
to any Lien granted under a Term Loan Collateral Document or a Revolving Credit
Collateral Document with respect to any Rule 3-16 Collateral, such Lien
may be granted without a prior or concurrent grant of a Lien thereon to secure
the Permitted Notes Obligations so long as, prior to the grant of such Lien
under such Term Loan Credit Collateral Document or Revolving Credit Collateral
Document, SSCC or the applicable Grantor shall have given notice thereof to the
Permitted Notes Agent and the Permitted Notes Agent shall have notified SSCC
that, pursuant to its authority under the Permitted Notes Documents, the
Permitted Notes Agent shall forego such grant of a Lien to secure the Permitted
Notes Obligations.  If a Junior Agent or a Junior Secured Party shall (nonetheless and in
breach hereof) hold any Lien on any assets of any Grantor securing any Junior
Obligations that are not also subject to a Lien in respect of the Prior
Obligations under the Prior Credit Documents and if the Discharge of Prior
Obligations has not occurred, then such Junior Agent shall, without the need
for any further consent of any party and notwithstanding anything to the contrary
in any other document, be deemed to also hold and have held such Lien for the
benefit of the Prior Agents as a security for the Prior Obligations (subject to
the lien priority and the other terms hereof) 


 


18

















 


and shall promptly following knowledge
thereof notify the Prior Agents in writing of the existence of such Lien and in
any event take such actions as may be reasonably requested by any Prior Agent
to assign or release such Liens to such Prior Agent (and/or its designee) as
security for the applicable Prior Obligations; provided that if the
instructions of the Prior Agents conflict, the request of the Controlling Agent
shall control.  If a Prior Agent or a Prior Secured Party shall (nonetheless and in
breach hereof) hold any Lien on any assets of any Grantor securing any Prior
Obligations that are not also subject to a Lien in respect of the Junior
Obligations under the Junior Credit Documents and if the Discharge of such
Junior Obligations has not occurred, then such Prior Agent shall, without the
need for any further consent of any party and notwithstanding anything to the
contrary in any other document, be deemed to also hold and have held such Lien
for the benefit of the Junior Agents as a security for the Junior Obligations
(subject to the lien priority and the other terms hereof) and shall promptly
following knowledge thereof notify the Junior Agents in writing of the
existence of such Lien.  To the extent
that the foregoing provisions are not complied with for any reason, without
limiting any other rights and remedies available to any Prior Agent or any
Prior Secured Parties, each Junior Agent, for itself and on behalf of its
Related Secured Parties, agrees that any amounts received by or distributed to
any of them pursuant to or as a result of Liens granted in contravention of
this Section shall be subject to Section 4.02.  In furtherance of the foregoing, and without
limiting Section 8.10, each Grantor agrees, upon request by the Agent with
respect to Obligations of any Class, to identify the Collateral of any other Class that
could reasonably constitute Common Collateral and the Grantors with respect
thereto.  For the avoidance of doubt and
subject to Section 5.09, in the event letters of credit or bankers’
acceptances are cash collateralized in connection with the Discharge of
Obligations of a Class pursuant to clause (d) of the definition of
Discharge, such cash collateral shall no longer be required to secure the
Obligations of any other Class.


 


Section 2.04.  Effectiveness of Lien Priorities.  Each of the parties hereto acknowledges that
the Lien priorities provided for in this Agreement shall not be affected or
impaired in any manner whatsoever, including, without limitation, on account
of:  (i) the invalidity,
irregularity or unenforceability of all or any part of the Credit Documents; (ii) any
amendment, change or modification of any Credit Documents; or (iii) any
impairment, modification, change, exchange, release or subordination of or limitation
on, any liability of, or stay of actions or lien enforcement proceedings
against, SSCC or any Loan Party under a Credit Document, or its property, or
its estate in bankruptcy resulting from any bankruptcy, arrangement,
readjustment, composition, liquidation, rehabilitation, similar proceeding or
otherwise involving or affecting any Secured Party.


 


ARTICLE III


 


Enforcement


 


Section 3.01.  Exercise of Remedies.  (a)  Until the Discharge of Prior
Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against SSCC or any other Grantor, each
Junior Agent and each Junior Secured Party will not:


 


19

















 


(i) exercise
or seek to exercise any rights or remedies with respect to any Common
Collateral subject to any Prior Lien (including the exercise of any right of
setoff or any right under any lockbox agreement, account control agreement,
landlord waiver or bailee’s letter or similar agreement or arrangement to which
such Junior Agent or such Junior Secured Party is a party) or institute or
commence, or join with any Person (other than the Controlling Agent) in
commencing, any action or proceeding with respect to such rights or remedies
(including any action of foreclosure, enforcement, collection or execution);


 


(ii) contest,
protest or object to any foreclosure proceeding or action brought by any Prior
Agent or any Prior Secured Party or any other exercise by any Prior Agent or
any Prior Secured Party of any rights and remedies relating to any Common
Collateral subject to such Prior Agent’s or such Prior Secured Party’s Prior
Lien, whether under the applicable Prior Credit Documents or otherwise; or


 


(iii) object
to the forbearance by any Prior Agent or any Prior Secured Party from bringing
or pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to any Common Collateral subject to such Prior
Agent’s or such Prior Secured Party’s Prior Lien;


 


provided that the
Junior Liens granted on such Common Collateral shall attach to any Proceeds of
such Common Collateral resulting from actions taken by any Prior Agent or any
Prior Secured Party in accordance with this Agreement, subject to the relative
priorities set forth in Article II.


 


(b)  Subject to the
terms and conditions of this Agreement, until the Discharge of Prior
Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against SSCC or any other Grantor, the
Controlling Agent and Controlling Secured Parties shall have the exclusive
right to enforce rights, exercise remedies (including setoff and the right to
credit bid their debt) and make determinations regarding any release,
Disposition or restrictions with respect to any Common Collateral subject to
their Prior Liens without any consultation with or the consent of any other
Agent or its Related Secured Parties; provided that the Liens of such
other Agent and its Related Secured Parties on such Common Collateral shall
remain on the Proceeds of such Common Collateral released or Disposed of,
subject to the relative priorities set forth in Article II.  In exercising rights and remedies with
respect to the Common Collateral subject to their Prior Liens, the Controlling
Agent and each Controlling Secured Party may enforce the provisions of the
applicable Prior Credit Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of their sole
discretion.  Such exercise and enforcement
shall include the right of any agent appointed by them to sell or otherwise
Dispose of such Common Collateral upon foreclosure, to incur expenses in
connection with such sale or Disposition and to exercise all the rights and
remedies of a secured creditor under the UCC and of a secured creditor under
Bankruptcy Laws of any applicable jurisdiction.


 


20

















 


(c)  Notwithstanding
the foregoing provisions of this Section, any Junior Agent and any Junior Secured
Party may:


 


(i) file
a claim or statement of interest with respect to its Junior Obligations in any
Insolvency or Liquidation Proceeding that has been commenced by or against SSCC
or any other Grantor;


 


(ii) take
any action (not adverse to the priority status of any Prior Liens on the Common
Collateral or the rights of any Prior Agent or any Prior Secured Party to
exercise rights and remedies in respect thereof) in order to create, perfect,
preserve or protect its Junior Lien on the Common Collateral;


 


(iii) file
any necessary responsive or defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to
or otherwise seeking the disallowance of the claims of the Junior Secured
Parties, including any claims secured by the Common Collateral, if any, in each
case in accordance with the terms of this Agreement;


 


(iv) vote
on any plan of reorganization and file any proof of claim in an Insolvency or
Liquidation Proceeding or otherwise, in each case, in accordance with the terms
of this Agreement, with respect to the Common Collateral subject to any Prior
Liens;


 


(v) exercise
their rights and remedies as unsecured creditors, as provided in paragraph (e) of
this Section; and


 


(vi) exercise
the rights and remedies provided for in Section 6.03.


 


Each Junior Agent, on behalf
of itself and its Related Secured Parties, agrees that it will not take or
receive any Common Collateral subject to any Prior Lien or any Proceeds of any
such Common Collateral in connection with the exercise of any right or remedy
(including setoff) with respect to such Common Collateral in violation of this
Agreement unless and until the Discharge of the Prior Obligations has
occurred.  Without limiting the
generality of the foregoing, until the Discharge of Prior Obligations has
occurred, except as expressly provided in Section 6.03 and this paragraph
(c), the sole right of each Junior Agent and each Junior Secured Party with
respect to any Common Collateral subject to any Prior Lien is to hold a Junior
Lien on such Common Collateral pursuant to the applicable Junior Collateral
Documents for the period and to the extent granted therein and to receive a
share of the Proceeds thereof, if any, remaining after the Discharge of Prior
Obligations has occurred.


 


(d)  Each Junior Agent,
for itself and on behalf of its Related Secured Parties:


 


(i) agrees
that it and such Junior Secured Parties will not take any action that would
hinder or delay any exercise of rights or remedies under the Prior Credit
Documents with respect to, or the realization of the full value of, the Common
Collateral on which any Prior Agent has Prior Liens or would otherwise 


 


21

















 


be prohibited hereunder,
including any Disposition of any Common Collateral subject to any Prior Lien,
whether by foreclosure or otherwise, or that would limit, invalidate, avoid or
set aside any Prior Lien or Prior Collateral Document with respect to the
Common Collateral or change the priority of Liens set forth in Section 2.01;


 


(ii) agrees
that it and such Junior Secured Parties will not, until the Discharge of Prior
Obligations has occurred, assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert or
otherwise claim the benefit of, any marshalling, appraisal, valuation or other
similar right that may otherwise be available under applicable law with respect
to any Common Collateral subject to any Prior Lien or any other similar rights
a junior secured creditor may have under applicable law;


 


(iii) waives
any and all rights it or such Junior Secured Parties may have as junior lien
creditors or otherwise to object to the manner in which any Prior Agent or any
Prior Secured Party seeks to enforce or collect any Prior Obligations or to
enforce or realize on the Prior Liens undertaken in accordance with this
Agreement, regardless of whether any action or failure to act by or on behalf
of such Prior Agent or such Prior Secured Party is adverse to the interests of
the Junior Secured Parties; and


 


(iv) acknowledges
and agrees that no covenant, agreement or restriction contained in any Junior
Collateral Documents or any other Junior Credit Document (other than this
Agreement) shall be deemed to restrict in any way the rights and remedies of
any Prior Agent or any Prior Secured Party with respect to the Common
Collateral subject to any Prior Lien as set forth in this Agreement and the
Prior Credit Documents.


 


(e)  Except to the
extent inconsistent with this Agreement, any Junior Agent and any Junior
Secured Party may exercise rights and remedies available to it as an unsecured
creditor of SSCC or any other Grantor in accordance with the terms of the
applicable Junior Credit Documents and applicable law; provided that in
the event that any Junior Secured Party becomes a judgment Lien creditor in
respect of any Common Collateral subject to any Prior Lien as a result of its
enforcement of its rights as an unsecured creditor with respect to the applicable
Junior Obligations, such judgment Lien shall be subject to the terms of this
Agreement to the same extent as the other Liens securing the Junior
Obligations.  Nothing in this Agreement
shall prohibit the receipt by any Junior Agent or any Junior Secured Party of
the required or permitted payments of interest, principal and other amounts
owed in respect of the Junior Obligations so long as such receipt is not the
direct or indirect result of the exercise by such Junior Agent or such Junior
Secured Party of rights or remedies as a secured creditor (including the
exercise of any right of setoff) or enforcement in contravention of this
Agreement of any Junior Lien held by any of them.  Nothing
in this Agreement shall be construed to impair or otherwise adversely affect
(i) any rights or remedies the Term Loan Credit Agent or any Term Loan
Credit Secured Party may have (1) with respect to any Non-ABL Collateral
subject to a Term Loan Credit Lien and (2) following the Discharge of the 


 


22

















 


Revolving Credit Obligations, with respect to any ABL Collateral
subject to a Term Loan Credit Lien, (ii) rights or remedies the Revolving
Credit Agent or any Revolving Credit Secured Party may have (1) with
respect to any ABL Collateral subject to a Revolving Credit Lien and (2) following
the Discharge of the Term Loan Credit Obligations and the Discharge of the
Permitted Notes Obligations, with respect to any Non-ABL Collateral subject to
a Revolving Credit Lien and (iii) any rights or remedies the Permitted
Notes Agent or any Permitted Notes Secured Party may have (1) following
the Discharge of the Term Loan Credit Obligations, with respect to any Non-ABL
Collateral subject to a Permitted Notes Lien and (2) following the Discharge
of Revolving Credit Obligations and the Discharge of the Term Loan Credit
Obligations, with respect to any ABL Collateral subject to a Permitted Notes
Lien.


 


(f)  Subject to Section 2.03
in the case of clause (i) below, nothing in this Agreement shall restrict
the Revolving Credit Agent or any Revolving Credit Secured Party from
exercising any right or remedy or taking any other action with respect to (i) Revolving
Credit Collateral that does not constitute Common Collateral and (ii) any
Canadian Collateral.


 


ARTICLE IV


 


Payments


 


Section 4.01.  Application of Proceeds.  So long as the Discharge of Prior Obligations
has not occurred, whether or not any Insolvency or Liquidation Proceeding has
been commenced by or against SSCC or any other Grantor, Common Collateral or
Proceeds thereof received in connection with the sale or other disposition of,
or collection on, such Common Collateral upon any exercise of remedies shall,
subject to Section 5.09, be applied to the applicable Prior Obligations in
the order, if any, required by Sections 2.01 and 6.07 and otherwise as
specified in the relevant Prior Credit Documents.  Upon the Discharge of Prior Obligations, the
Controlling Agent shall deliver to the Rising Prior Agent any Common Collateral
and Proceeds of Common Collateral held by it in the form in which received,
with any necessary endorsements, or as a court of competent jurisdiction may
otherwise direct, to be applied by such Rising Prior Agent to its related Class of
Obligations in the order, if any, required by Sections 2.01 and 6.07 and
otherwise as specified in the relevant Collateral Documents.


 


Section 4.02.  Payments Over in Violation of Agreement.  So long as the Discharge of Prior Obligations
has not occurred, whether or not any Insolvency or Liquidation Proceeding has
been commenced by or against SSCC or any other Grantor, if any Junior Agent or
any Junior Secured Party receives any Common Collateral subject to any Prior
Lien or any Proceeds of any such Common Collateral in connection with (i) the
exercise of any right or remedy (including any right of setoff) relating to
such Collateral in contravention of this Agreement or (ii) the transfer of
such Common Collateral or Proceeds to such Junior Agent or such Junior Secured
Party by any Person holding a Lien on such Collateral that is subordinated to
the Lien of such Junior Agent or such Junior Secured Party, such Collateral or
Proceeds shall be segregated and held in trust and forthwith paid over to the
Controlling Agent for the benefit of the Controlling Secured 


 


23

















 


Parties, in the form in which received, with any necessary
endorsements, or as a court of competent jurisdiction may otherwise
direct.  The Controlling Agent is hereby
authorized to make any such endorsements as agent for the Junior Agents or
Junior Secured Parties (such authorization being coupled with an interest and
irrevocable until the Discharge of Prior Obligations has occurred).


 


ARTICLE V


 


Other Agreements


 


Section 5.01.  Releases.  (a)  If in connection with the exercise
of the Controlling Agent’s remedies (including any Dispositions in connection
with such exercise) in respect of any Common Collateral subject to its Prior
Liens, the Controlling Agent, for itself or on behalf of the Controlling
Secured Parties, releases its Prior Liens on any part of such Common
Collateral, then the Junior Liens on such Common Collateral shall be
automatically, unconditionally and simultaneously released; provided
that such Junior Liens shall remain on the Proceeds of such Common Collateral,
subject to the relative priorities set forth in Article II.  Each Junior Agent, for itself and on behalf
of its Related Secured Parties, agrees promptly to execute and deliver to the
Controlling Agent or the applicable Grantor such termination statements,
releases and other documents as the Controlling Agent or such Grantor may
request to confirm such release.


 


(b)  If, with respect
to any Class of Obligations constituting Junior Obligations, in connection
with any sale, lease, exchange, transfer or other disposition of any Common
Collateral (collectively, a “Disposition”) permitted under the terms of
all the Prior Credit Documents (other than in connection with the exercise of
the Controlling Agent’s remedies in respect of Common Collateral as provided in
paragraph (a) above), the Controlling Agent, for itself or on behalf of
the Controlling Secured Parties, releases any of its Prior Liens on any part of
such Common Collateral (other than (i) in connection with the Discharge of
Prior Obligations or (ii) after the occurrence and during the continuance
of any Event of Default under the Junior Credit Documents of such Class), then
the Junior Liens of the Junior Agent and the Junior Secured Parties of such Class on
such Collateral shall be automatically, unconditionally and simultaneously
released; provided that if such Prior Liens of the Controlling Agent and
the Controlling Secured Parties continue to apply to the Proceeds of such
Disposition, the Junior Liens of such Class continue to apply to such
Proceeds, subject to the relative priorities set forth in Article II.  The Junior Agent with respect to such Class of
Obligations, for itself or on behalf of its Related Secured Parties, promptly
shall execute and deliver to the Controlling Agent or the applicable Grantor
such termination statements, releases and other documents as the Controlling
Agent or such Grantor may request to confirm such release.


 


(c)  Until the
Discharge of Prior Obligations has occurred, each Junior Agent, for itself and
on behalf of its Related Secured Parties, hereby irrevocably constitutes and
appoints the Controlling Agent and any officer or agent of the Controlling
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full power and authority in the name, place and stead of such Junior Agent
or its Related 


 


24

















 


Secured Parties or in the Controlling Agent’s own name, from time to
time in the Controlling Agent’s discretion, for the purpose of carrying out the
terms of this Section, to take any and all action and to execute any and all
documents and instruments which may be necessary or appropriate to accomplish
the purposes of this Section with respect to Common Collateral subject to
its prior Lien, including any endorsements or other instruments of transfer or
release.


 


(d)  Until the
Discharge of Prior Obligations has occurred, to the extent that any Prior Agent
or Prior Secured Parties release any Prior Lien on Common Collateral and any
such Lien is later reinstated, then each Junior Agent with respect to such
Common Collateral, for itself and on behalf of its Related Secured Parties,
shall have, and hereby is hereby granted, a Lien on such Common Collateral,
subject to the lien subordination provisions of this Agreement.


 


Section 5.02.  Insurance.  Until the Discharge of Prior Obligations has
occurred, subject to the terms of, and the rights of the Grantors under, the
applicable Prior Credit Documents, the Controlling Agent and Controlling
Secured Parties shall have the right to adjust settlements for any insurance
policy covering any Common Collateral subject to their Prior Liens in the event
of any loss thereunder and to approve any award granted in any condemnation or
similar proceeding (or any deed in lieu of condemnation) affecting such Common
Collateral.  Until the Discharge of Prior
Obligations has occurred, subject to the terms of, and the rights of the
Grantors under, the Prior Credit Documents, all proceeds of any such policy and
any such award (or any payments with respect to a deed in lieu of condemnation)
if in respect to (a) Non-ABL Collateral, shall be paid to (i) the
Term Loan Credit Agent for the benefit of the Term Loan Credit Secured Parties,
(ii) following the Discharge of the Term Loan Credit Obligations, the
Designated Permitted Notes Agent for the benefit of the Permitted Notes Secured
Parties, (iii) following the Discharge of the Term Loan Credit Obligations
and the Discharge of the Permitted Notes Obligations, the Revolving Credit
Agent for the benefit of the Revolving Credit Secured Parties and (iv) following
the Discharge of all Obligations, to the owner of the subject property, such
other Person as may be entitled thereto or as a court of competent jurisdiction
may otherwise direct and (b) ABL Collateral, shall be paid to (i) the
Revolving Credit Agent for the benefit of the Revolving Credit Secured Parties,
(ii) following the Discharge of the Revolving Credit Obligations, the Term
Loan Credit Agent for the benefit of the Term Loan Credit Secured Parties, (iii) following
the Discharge of the Revolving Credit Obligations and the Discharge of the Term
Loan Credit Obligations, the Designated Permitted Notes Agent with respect to
such series for the benefit of the Permitted Notes Secured Parties and (iv) following
the Discharge of all Obligations, to the owner of the subject property, such
other Person as may be entitled thereto or as a court of competent jurisdiction
may otherwise direct.  Until the Discharge
of Prior Obligations has occurred, if any Junior Agent or any Junior Secured
Party shall, at any time, receive any proceeds of any such insurance policy or
any such award or payment in contravention of this Agreement, it shall
segregate and hold in trust and forthwith pay such proceeds over to the
Controlling Agent in accordance with Section 4.02.


 


25

















 


Section 5.03.  Amendments to Prior Credit Documents and
Junior Credit Documents.  (a) 
Each Prior Credit Document may be Amended in accordance with the terms thereof,
and all Indebtedness under each Prior Credit Document may be Refinanced in
accordance with the terms thereof, except, in each case, as prohibited under
the Junior Credit Documents as in effect on the date hereof and as Amended from
time to time (but without giving effect to any Amendment that prohibits or
restricts the Amendment of any Prior Credit Document or the Refinancing of any
Indebtedness under any Prior Credit Document to a greater extent than the
provisions of such Junior Credit Documents in effect on the date hereof).  No Amendment of any Prior Credit Document
shall affect the Lien subordination or other provisions of this Agreement.


 


(b)  Each Junior Credit
Document may be Amended in accordance with the terms thereof, and all
Indebtedness under each Junior Credit Document may be Amended or Refinanced in
accordance with the terms thereof, except, in each case, as prohibited under
the Prior Credit Documents as in effect on the date hereof and as Amended from
time to time (but without giving effect to any Amendment that prohibits or
restricts the Amendment of any Junior Credit Document or the Refinancing of any
Indebtedness under any Junior Credit Document to a greater extent than the provisions
of such Prior Credit Documents in effect on the date hereof).  No Amendment of any Junior Credit Document
shall affect the Lien subordination or other provisions of this Agreement.


 


(c)  Without in any way
limiting the generality of Section 7.03 (but subject to the rights of SSCC
and the other Grantors under the Prior Credit Documents and subject to the
provisions of Section 5.03(a)), any Prior Agent or any  Prior Secured Party may, at any time and from
time to time in accordance with the applicable Prior Credit Documents and
applicable law, without the consent of, or notice to, any Junior Agent or any
Junior Secured Party, without incurring any liabilities or obligations to any
Junior Agent or any Junior Secured Party and without impairing or releasing the
Lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of any Junior Agent or any Junior
Secured Party is affected, impaired or extinguished thereby) do any one or more
of the following:


 


(i) change
the manner, place or terms of payment or change or extend the time of payment
of, or Amend the terms of, any of the Prior Obligations or any Prior Lien on
any Collateral or guarantee thereof or any liability of SSCC or any other
Grantor, or any liability incurred directly or indirectly in respect thereof
(including any increase in or extension of the Prior Obligations, without any
restriction as to the tenor or terms of any such increase or extension) or
otherwise amend, renew, exchange, extend, modify or supplement in any manner
any Prior Liens held by the Prior Agents or the Prior Secured Parties, the
Prior Obligations or any of the Prior Credit Documents;


 


(ii) sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with in
any manner and in any order any part of the Collateral subject to its Prior
Lien or any liability of SSCC or any other Grantor to the Prior Agents or the 


 


26
















 


Prior Secured Parties, or
any liability incurred directly or indirectly in respect thereof;


 


(iii) settle
or compromise any Prior Obligation or any other liability of SSCC or any other
Grantor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including the Prior Obligations) in any manner or
order; and


 


(iv) exercise
or delay in or refrain from exercising any right or remedy against SSCC, any
other Grantor or any other Person or any Collateral, elect any remedy and
otherwise deal freely with SSCC, any other Grantor or any Collateral subject to
its Prior Lien and any liability incurred directly or indirectly in respect
thereof.


 


(d)  In the event that
the Controlling Agent of any Class enters into any amendment, waiver or
consent in respect of any of the Collateral Documents of such Class for
the purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any such Collateral Document or changing in
any manner the rights of such Controlling Agent, its Related Secured Parties,
SSCC or any other Grantor thereunder (including the release of any Liens
permitted by Section 5.01(a) or (b)), then such amendment, waiver or
consent shall apply automatically to any comparable provision of the Collateral
Documents relating to the relevant Prior Lien Collateral to the extent securing
any Junior Obligations without the consent of any Junior Agents or any Junior
Secured Parties and without any action by any Junior Agents, SSCC or any other
Grantor; provided, however, that (i) no such amendment,
waiver or consent shall (A) remove assets subject to the Junior Liens or
release any such Junior Liens, except to the extent that such release is
permitted or required by Section 5.01(a) or (b) and provided
that there is a concurrent release of the corresponding Liens on the Common
Collateral securing the Obligations held by the Controlling Secured Parties and
in respect of which such Controlling Secured Parties are the obligees, (B) amend,
modify or otherwise affect the rights or duties of any Junior Agent without its
prior written consent or (C) permit Liens on the Common Collateral (other
than DIP Financing Liens) which are not permitted under the terms of the Credit
Documents related to such Junior Obligations and (ii) written notice of
such amendment, waiver or consent shall have been given to the Junior Agents.


 


(e)  Without the prior
written consent of the Prior Agent, no Junior Collateral Documents may be
amended, supplemented or otherwise modified or entered into to the extent such
amendment, supplement or modification, or the terms of any new Junior
Collateral Document, would contravene the provisions of this Agreement.


 


Section 5.04.  Legend.  SSCC and each Grantor
agrees, and each Agent acknowledges, that each Junior Collateral Document shall
include the following language (or language to similar effect approved by the
Controlling Agent):


 


27

















 


“Notwithstanding
anything herein to the contrary, the lien and security interest granted
pursuant to this Agreement and the exercise of any right or remedy hereunder
are subject to the provisions of the Lien Subordination and Intercreditor
Agreement dated as of [•], (as amended, restated, supplemented or
otherwise modified from time to time, the “Intercreditor Agreement”), among
SSCC, the other subsidiaries of SSCC party thereto, the Term Loan Credit Agent
(as defined therein), Revolving Credit Agent (as defined therein) and each
Permitted Notes Agent (as defined therein) that becomes a party thereto.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.”


 


In addition, the Grantors
agree that each Revolving Credit Mortgage or Permitted Notes Mortgage in favor
of the Junior Secured Parties covering any Common Collateral subject to their
Junior Lien shall contain such other language as the Controlling Agent may
reasonably request to reflect the subordination of such Revolving Credit
Mortgage or Permitted Notes Mortgage, as the case may be, to the Term Loan
Credit Mortgage or Permitted Notes Mortgage, as the case may be, in favor of
the Prior Secured Parties covering such Common Collateral.


 


Section 5.05.  Bailee for Perfection.  (a)  Each Prior Agent agrees to hold
that part of the Common Collateral on which it holds a Prior Lien and that is
in its possession or control, or in the possession or control of its agents or
bailees (such Collateral being the “Pledged Collateral”), as collateral
agent for its Related Secured Parties and as gratuitous bailee and, with
respect to such Common Collateral that cannot be perfected in such manner, as
agent for, the other Agents (such bailment or agency being intended, among
other things, to satisfy the requirements of Sections 8-301(a)(2) and
9-313(c) of the UCC) and any assignee thereof solely for the purpose of
perfecting the security interests granted under the applicable Credit
Documents, subject to the terms and conditions of this Section.  Each Junior Agent agrees (a) to hold any
part of the Pledged Collateral of which it obtains possession or control
(including through any of its agents or bailees) as collateral agent for the
Prior Secured Parties and Junior Secured Parties and any assignees of the
foregoing solely for the purpose of perfecting the security interest granted
under the applicable Prior Credit Documents, subject to the terms and
conditions of this Section and (b) as soon as practicable after it
(or any of its agents or bailees) obtains possession of any Common Collateral,
deliver or cause to be delivered such Common Collateral, together with any
necessary endorsements, to the Controlling Agent so as to allow such
Controlling Agent to obtain control of such Common Collateral and cooperate
with such Controlling Agent to assign control over such Common Collateral to
the Controlling Agent (or its agents or bailees).


 


(b)  No Prior Agent
shall have any obligation whatsoever to the Junior Agents or the Junior Secured
Parties to ensure that any Pledged Collateral is genuine or owned by any of the
Grantors or to preserve rights or benefits of any Person except as expressly
set forth in this Section.  The duties or
responsibilities of any Agent to the other Agents or the Other Secured Parties
under this Section shall be limited solely to holding Pledged Collateral
in its possession or under its control as gratuitous bailee or agent in 


 


28

















 


accordance with this Section and delivering such Pledged
Collateral upon the Discharge of Prior Obligations as provided in paragraph (d) below.


 


(c)  No Prior Agent, acting pursuant to this Section, shall have
by reason of any Credit Document, this
Agreement or any other document a fiduciary relationship in respect of any other Agent or any Secured Party, or any liability to any other Agent or any Secured Party, absent gross negligence or willful
misconduct on the part of such Prior Agent.


 


(d)  Upon the Discharge
of Prior Obligations, the Controlling Agent as in effect immediately prior to
such Discharge of Prior Obligations shall transfer possession of such Common
Collateral physically held by such Controlling Agent (or any agent, bailee or
designee thereof (other than any other Agent)) and otherwise shall take
commercially reasonable actions (in each case at the sole cost and expense of
the Grantors) to transfer possession or control of such other Common Collateral
or any such account to the Rising Prior Agent (to the extent the Rising Prior
Agent has a Priority Lien on such Common Collateral or account after giving
effect to any prior or concurrent releases of Liens) including, in the case of
any deposit or securities account or securities account holding Common
Collateral maintained with such Controlling Agent, taking commercially
reasonable actions to enter into a control agreement in favor of the Rising
Agent, or transferring all cash and other assets in such account to (i) one
or more depositary institutions or securities intermediaries that enter into
such a control agreement or (ii) an account maintained by the Rising Prior
Agent (or on terms otherwise reasonably acceptable to the Rising Prior
Agent)).  Notwithstanding anything to the
contrary herein, if, for any reason, any Junior Obligations remain outstanding
upon the Discharge of Prior Obligations, all rights of the Controlling Agent as
in effect immediately prior to such Discharge of Prior Obligations, hereunder
and under the applicable Collateral Documents (1) with respect to the
delivery and control of any part of the Common Collateral subject to a Prior
Lien of such Controlling Agent, and (2) to direct, instruct, vote upon or
otherwise influence the maintenance or disposition of such Common Collateral,
shall immediately, and (to the extent permitted by law) without further action
on the part of either of the Rising Agent or such Controlling Agent, pass to
the Rising Agent, who shall thereafter hold such rights for the benefit of its
Related Secured Parties.


 


(e)  Subject to the
terms of this Agreement, so long as the Discharge of Prior Obligations has not
occurred, the Controlling Agent shall be entitled to deal with the Pledged
Collateral or Collateral within its “control” in accordance with the terms of
this Agreement and the applicable Prior Credit Documents as if the Junior Liens
of the Junior Agents and the Junior Secured
Parties did not exist.


 


Section 5.06.  Entry Upon Premises by Controlling Agent.  (a)  If the Revolving Credit Agent shall
take any action to exercise its rights or remedies (including any action of
foreclosure, enforcement, collection or execution) with respect to the ABL
Collateral (“ABL Collateral Enforcement Actions”), each other Agent
(subject to a prior written request by the Revolving Credit Agent to the
applicable Agent (the “ABL Collateral Enforcement Notice”)) (i) shall
cooperate with any efforts on the part of the 


 


29

















 


Revolving Credit Agent (and with its officers, employees,
representatives and agents) (at the sole cost and expense of the Revolving
Credit Agent and the Revolving Credit Secured Parties (but with the Grantors’
reimbursement and indemnity obligation with respect thereto as provided in the
Revolving Credit Documents, which shall not be limited hereby)) and subject to
the condition that the other Agents and the Other Secured Parties shall have no
obligations or duty to take any action or refrain from taking any action that
could reasonably be expected to result in the incurrence of any liability or
damage to such other Agents or Other Secured Parties to conduct ABL Collateral
Enforcement Actions with respect to the ABL Collateral and to complete the
processing of any Inventory (including work-in-process) included in the ABL
Collateral and to assemble the ABL Collateral and process, ship, produce,
store, complete, supply, lease, sell or otherwise handle, deal with, or dispose
of, in any lawful manner, the ABL Collateral, (ii) shall not hinder or
restrict in any respect the Revolving Credit Agent from taking ABL Collateral
Enforcement Actions, from completing the manufacturing and processing of, and
turning into finished goods, any ABL Collateral (including raw materials and
work-in-process) and assembling the ABL Collateral or shipping, producing,
storing, completing, supplying, leasing, selling or otherwise handling, dealing
with or disposing of, in any lawful manner, the ABL Collateral and (iii) shall
permit the Revolving Credit Agent, its agents, employees, advisers and
representatives, at the sole cost and expense of the Revolving Credit Secured
Parties (but with the Grantors’ reimbursement and indemnity obligation with
respect thereto as provided in the Revolving Credit Documents, which shall not
be limited hereby), to enter upon and use the Non-ABL Collateral (including
manufacturing, storage and transportation facilities and equipment, computers,
records, documents and files and Intellectual Property) for a period not to
exceed 180 days after the later of (i) date on which such Agent (other
than the Revolving Credit Agent) shall obtain possession and control of such
Non-ABL Collateral and (ii) the date of delivery of the ABL Collateral
Enforcement Notice, for purposes of (A) assembling and storing the ABL
Collateral and completing the manufacturing and processing of, and turning into
finished goods, any ABL Collateral 
(including raw materials and work-in-process), (B) selling any or
all of the ABL Collateral located on such Non-ABL Collateral, whether in bulk,
in lots or to customers in the ordinary course of business or otherwise, (C) removing
and transporting any or all of the ABL Collateral located in or on such Non-ABL
Collateral, (D) otherwise shipping, storing, leasing, selling or otherwise
handling, dealing with, assembling or disposing of, in any lawful manner, the
ABL Collateral and (E) taking reasonable actions to protect, secure and
otherwise enforce the rights or remedies of the Revolving Credit Agent and the
Revolving Credit Secured Parties (including with respect to any ABL Collateral
Enforcement Actions) in and to the ABL Collateral; provided, however,
that nothing contained in this Agreement shall restrict the Non-ABL Controlling
Agent (or any other Agent at the instruction of the Non-ABL Controlling Agent)
from selling, assigning or otherwise transferring any Non-ABL Collateral prior
to the expiration of such 180 day period if the purchaser, assignee or
transferee agrees to be bound by the provisions of this Section in writing
(for the benefit of the Revolving Credit Agent and the Revolving Credit Secured
Parties).  It is agreed that if any stay
or other order prohibiting the exercise of rights or remedies with respect to
the ABL Collateral has been entered by a court of competent jurisdiction, such
180 day period shall be tolled during the pendency 


 


30

















 


of any such stay or other order; provided that after the 180th
day following the date on which the Non-ABL Controlling Agent (or any other
Agent at the instruction of the Non-ABL Controlling Agent) shall obtain
possession and control of any Non-ABL Collateral, such period shall terminate
as to such Non-ABL Collateral if the Non-ABL Controlling Agent shall determine
in good faith and advise the Revolving Credit Agent that the continuance of
such period would prevent a contemplated sale of such Non-ABL Collateral or
materially reduce the price obtainable in such sale.  Notwithstanding anything in this paragraph to
the contrary, each Agent (other than the Revolving Credit Agent) and its
Related Secured Parties (i) shall have no obligation to exercise rights or
remedies that may be available to them under the applicable Credit Documents
and (ii) shall be required to permit the Revolving Credit Agent, and its
agents, advisers and representatives, to enter upon and use the Non-ABL
Collateral only to the extent such Agent or such Related Secured Parties have
possession and control of such Non-ABL Collateral.


 


(b)  If the Revolving
Credit Agent elects to enter upon and use the Non-ABL Collateral as provided in
paragraph (a) of this Section, it shall take all reasonable efforts (and
shall direct its agents, advisers and representatives to take all reasonable
efforts) to avoid, to the extent reasonably practicable, interference with the
operation of the Non-ABL Collateral. 
Subject to the Non-ABL Controlling Agent having obtained possession and
control of any of the Non-ABL Collateral, any Agent (other than the Revolving
Credit Agent) may instruct the Revolving Credit Agent in writing to remove all
ABL Collateral from such Non-ABL Collateral by the end of the 180 day period
referred to in paragraph (a) of this Section, whereupon, at the end of
such 180 day period, the Revolving Credit Agent shall, at the sole cost and
expense of the Revolving Credit Secured Parties (but with the Grantors’
reimbursement and indemnity obligation with respect thereto as provided in the
Revolving Credit Documents, which shall not be limited hereby), remove the ABL
Collateral from the Non-ABL Collateral; provided that no stay or other
order prohibiting such removal has been entered by a court of competent
jurisdiction (it being understood and agreed that the running of such 180 day
period shall be tolled during the pendency of any such stay or other
order).  If the Revolving Credit Agent
does not remove the ABL Collateral from the Non-ABL Collateral by the end of
such 180 day period (or such longer period as such a stay or other order is in
effect), the Non-ABL Controlling Agent may cause the ABL Collateral to be
removed and, thereafter, store the ABL Collateral in such location or locations
as the Non-ABL Controlling Agent shall deem advisable pending repossession by
the Revolving Credit Agent.  Any costs
reasonably incurred by any Agent (other than the Revolving Credit Agent) or its
Related Secured Parties by virtue of such removal and storage shall be paid by
the Revolving Credit Secured Parties (but with the Grantors’ reimbursement and
indemnity obligation with respect thereto, as provided in the Revolving Credit
Documents, which shall not be limited hereby). 
The Non-ABL Controlling Agent agrees to notify the Revolving Credit
Agent of the location or locations to which any of the ABL Collateral shall
have been removed by it pursuant to the foregoing provisions.


 


(c)  During the period
of actual occupation, use or control by the Revolving Credit Agent, or its
agents, advisers or representatives, of any Non-ABL Collateral, the Revolving
Credit Secured Parties shall be obligated hereunder to 


 


31

















 


(i) reimburse the Agents (other than the Revolving Credit Agent)
for all utilities, insurance and all other operating costs of such Non-ABL
Collateral during any such period of actual occupation, use or control
(calculated on a per diem basis based upon a fraction, the numerator of which
shall be the actual number of days of such occupation, use or control and the
denominator of which shall be 365 days) to the extent the same are
actually paid by such Agent or its Related Secured Parties, (ii) repair at
their expense any physical damage to such Non-ABL Collateral directly resulting
from such occupancy, use or control, and leave such Non-ABL Collateral in
substantially the same condition as it was at the commencement of such
occupancy, use or control, ordinary wear and tear excepted, and (iii) indemnify
and hold harmless any Agent and its Related Secured Parties from and against
any losses, claims, liabilities, costs or expenses directly resulting from such
occupancy, use or control or from any acts or omissions of the Revolving Credit
Agent or its agents, employees, advisers or representatives in connection
therewith, absent gross negligence or willful misconduct on the part of such
Agent or such Related Secured Parties. 
Notwithstanding the foregoing, in no event shall the Revolving Credit
Secured Parties have any liability to the Agents (other than the Revolving
Credit Agent) and its Related Secured Parties pursuant to this Section as
a result of any condition (including any environmental condition, claim or
liability) on or with respect to the Non-ABL Collateral existing prior to the
date of the exercise by the Revolving Credit Agent of its rights under this
Section, and the Revolving Credit Secured Parties shall have no duty or
liability to maintain the Non-ABL Collateral in a condition or manner better
than that in which it was maintained prior to the use thereof by the Revolving
Credit Agent or its agents, employees, advisers or representatives, or for any
diminution in the value of the Non-ABL Collateral that results solely from
ordinary wear and tear resulting from the use of the Non-ABL Collateral by the
Revolving Credit Agent or its agents, advisers or representatives in the manner
and for the time periods specified under this Section.  Without limiting the rights granted in this
Section, the Revolving Credit Agent and the Revolving Credit Secured Parties
shall cooperate with the Non-ABL Controlling Agent in connection with any
efforts made by it to sell the Non-ABL Collateral.


 


Section 5.07.  Rights under Permits, Licenses and
Intellectual Property.  Each Agent
(other than the Revolving Credit Agent) (a) consents (without any
representation, warranty or obligation whatsoever) to the grant by any Grantor
to the Revolving Credit Agent of a non-exclusive royalty-free license to use
any permit, license or Intellectual Property of such Grantor that is subject to
a Lien held by any such Agent (or any permit, license or Intellectual Property
acquired by such purchaser, assignee or transferee from any Grantor, as the
case may be) in connection with the enforcement of any Revolving Credit Lien
held by the Revolving Credit Agent upon any Revolving Credit Collateral and (b) agrees
that if the Revolving Credit Agent shall require rights available under any
permit, license or Intellectual Property controlled by such Agent, or any of
its Affiliates, in order to realize on any ABL Collateral, such Agent shall
take all such actions as shall be available to it, consistent with applicable
law and reasonably requested by the Revolving Credit Agent, to make such rights
available to the Revolving Credit Agent. 
The Revolving Credit Agent agrees that if any Agent (other than the
Revolving Credit Agent) shall require rights available under any permit or
license controlled by the Revolving Credit Agent in order to realize on any
Non-ABL Collateral, 


 


32

















 


the Revolving Credit Agent shall take all such actions as shall be
available to it, consistent with applicable law and reasonably requested by
such Agent, to make such rights available to such Agent.  Each Agent agrees that any sale or other
transfer of any Common Collateral consisting of Intellectual Property upon any
exercise of remedies shall be made expressly subject to the rights to be made
available pursuant to this Section in writing (for the benefit of each
other Agent and the Related Secured Parties).


 


Section 5.08.  Permitted
Notes.  (a)  To the extent, but
only to the extent, permitted by the provisions of the then existing Credit
Documents, SSCC may incur Indebtedness in the form of Permitted Notes, which
shall be secured by (i) the Non-ABL Collateral on a second lien, junior
and subordinated basis to the Term Loan Credit Obligations and on a senior
basis to the Revolving Credit Obligations and (ii) the ABL Collateral on a
third lien, junior and subordinated basis to both the Term Loan Credit
Obligations and the Revolving Credit Obligations, if and subject to the
condition that (A) such Permitted Notes are not secured by any property or
assets of SSCC or any Subsidiary other than property or assets constituting
Term Loan Credit Collateral, (B) such Permitted Notes are not guaranteed
by any Subsidiaries other than the Term Loan Credit Guarantors  and (C) the Agent of any such Permitted
Notes (each a “Permitted Notes Agent”), acting on behalf of the holders
of such Permitted Notes (such Permitted Notes Agent and the holders in respect
of any such Permitted Notes being referred to as the “Permitted Notes
Secured Parties”), becomes a party to this Agreement as a Permitted Notes
Agent and by satisfying conditions (i) through (vi), as applicable, of the
immediately succeeding paragraph.


 


(b)  In order for a Permitted
Notes Agent of any Series to become a party to this Agreement:


 


(i) such
Permitted Notes Agent shall have executed and delivered a Joinder Agreement
substantially in the form of Exhibit II (with such changes as may be
reasonably approved by the other Agents) pursuant to which it becomes an Agent
hereunder, and the Permitted Notes of such Series and the related
Permitted Note Secured Parties become subject hereto and bound hereby;


 


(ii) SSCC
shall have delivered to each existing Agent (A) true and complete copies
of each of the Permitted Note Documents relating to such Permitted Notes,
certified as being true and correct by an officer of SSCC and (B) a
certificate of an officer of SSCC that the Permitted Notes can be issued
without violating any of the Term Loan Documents, Revolving Credit Documents or
Permitted Notes Documents of any existing Series of Permitted Notes;


 


(iii) all
filings, recordations and/or amendments or supplements to the Permitted Notes
Collateral Documents related to such Permitted Notes necessary or desirable in
the reasonable opinion of the existing Agents to confirm and perfect the
appropriate priority Liens with respect to the applicable Collateral securing
the Permitted Notes Obligations relating to such Permitted Notes shall have
been made, executed and/or delivered (or, with respect to any such filings or
recordations, reasonably acceptable provisions to perform such filings or 


 


33

















 


recordings have been taken
in the reasonable judgment of the Controlling Agent), and all fees and taxes in
connection therewith shall have been paid (or reasonably acceptable provisions
to make such payments have been taken in the reasonable judgment of the
Controlling Agent); and


 


(iv) the
Permitted Notes Documents related to such Permitted Notes shall provide, in a
manner reasonably satisfactory to the existing Agents, that each Permitted
Notes Secured Party of such Series will be subject to and bound by the
provisions of this Agreement in its capacity as a holder of such Permitted
Notes Obligations.


 


Section 5.09.  When Discharge of Obligations Deemed Not
To Have Occurred.  If SSCC or any
other Grantor shall enter into any Refinancing of any Class of Obligations
(the Class of Obligations so Refinanced, “Refinanced Obligations”)
(other than the Permitted Notes) that is (a) permitted by the Credit
Documents with respect to each other Class and (b) secured by Liens
on Common Collateral securing such Refinanced Obligations, then a Discharge of
the Obligations of such Class shall be deemed not to have occurred for all
purposes of this Agreement and, subject to the next sentence, from and after
the date on which the Notice of New Refinancing Obligations referred to below
in this Section is delivered to each other Agent, (i) the obligations
under such Refinancing of such Refinanced Obligations (the “Refinancing
Obligations”) shall automatically be treated as Prior Obligations and/or
Junior Obligations (to the same extent and with the same priority and rights with
respect to the Common Collateral constituting Non-ABL Collateral or ABL
Collateral, as applicable, as the Refinanced Obligations), (ii) the Liens
securing such Refinancing Obligations shall be treated as Prior Liens and/or
Junior Liens (to the same extent as the corresponding Liens with respect to the
Common Collateral constituting Non-ABL Collateral or ABL Collateral, as
applicable, securing the Refinanced Obligations) for all purposes of this
Agreement, including for purposes of the provisions governing Lien priorities
and rights in respect of Common Collateral constituting Non-ABL Collateral or
ABL Collateral, as applicable, set forth herein, and (iii) the collateral
agent for such Refinancing Obligations (the “New Agent”) shall be a
Prior Agent and/or Junior Agent for all purposes of this Agreement (to the same
extent as the Agent for the Refinanced Obligations with respect to the Common
Collateral constituting Non-ABL Collateral or ABL Collateral, as
applicable).  If the Obligations of any Class shall
be Refinanced (other than the Permitted Notes) in part but not in whole, then (A) both
the remaining Obligations of such Class and the Refinancing Obligations
shall have the status of the Obligations of such Class hereunder, (B) the
Liens on any Common Collateral securing the Refinancing Obligations shall
constitute Prior Liens and/or Junior Liens to the same extent as the Liens on
such Common Collateral constituting Non-ABL Collateral and ABL Collateral, as
applicable, securing such remaining Obligations of such Class (it being
understood and agreed that the relative rights of, and priorities of the Liens
securing, the obligations under such Refinancing Obligations and such remaining
Obligations of such Class shall not be governed by this Agreement) and (C) the
original Agent of such Class and the New Agent of such Class shall
each have the rights and obligations of the original Agent with respect to the
Common Collateral constituting Non-ABL Collateral or ABL Collateral, as
applicable, hereunder; provided, that (x) in the event any
determinations made or notices 


 


34

















 


given hereunder by the original Agent and the New Agent of such Class shall
conflict, the determination made or notice given by the Agent of such Class representing
the greater amount of Obligations of such Class shall control and (y) any
Pledged Collateral held by either Agent of such Class shall be held by it
both in its own right and as bailee of the other Agent of such Class (in
accordance with the provisions and subject to the limitations set forth in Section 5.05),
as their interests may appear.  Upon
receipt of a notice (the “Notice of New Refinancing Obligations”)
stating that SSCC or any Grantor has Refinanced the Obligations of any Class (other
than through the Permitted Notes) on a secured basis as provided above (which
notice shall include the identity of the New Agent of such Class, the original
Agent of such Class and each other Agent shall promptly enter into such
documents and agreements (including Amendments to this Agreement) as SSCC or
such New Agent shall reasonably request in order to provide to the New Agent
the rights contemplated hereby.  As a
condition to its ability to enforce this Agreement, the New Agent of any Class shall
agree in a writing addressed to each other Agent, for the benefit of such other
Agent’s Related Secured Parties, and, if any portion of the original
Obligations of such Class shall remain outstanding, to the original Agent
of such Class , for the benefit of the original Agent’s Related Secured
Parties, to be bound by the terms of this Agreement.  The provisions of this Section are
intended to ensure that (i) the Liens on any Common Collateral securing
the Refinancing Obligations of each Class (other than the Permitted Notes)
will have the same priorities relative to the Liens on such Common Collateral
constituting Non-ABL Collateral or ABL Collateral, as applicable, securing the
Obligations of each other Class as the Liens that secured such Refinanced
Obligations of such Class prior to such Refinancing and (ii) the
parties benefited by the Liens on any Common Collateral constituting Non-ABL
Collateral or ABL Collateral, as applicable, securing any Refinancing
Obligations of a Class (other than the Permitted Notes) will have the same
rights and obligations relative to the parties holding Liens on such Common
Collateral securing the Obligations of each other Class as the parties
that were benefited by the Liens on such Common Collateral constituting Non-ABL
Collateral or ABL Collateral, as applicable, that secured such Refinanced
Obligations, and such provisions shall be construed accordingly.  Notwithstanding anything to the contrary and
for the avoidance of doubt, if the Revolving Credit Agreement is terminated in
its entirety and an Incremental Revolving Facility is established, then the
Revolving Credit Obligations shall be deemed not to have been Refinanced and
shall instead be deemed to have been Discharged for all purposes of this
Agreement.


 


Section 5.10.  Canadian Intercompany Notes.  The parties hereto acknowledge and agree
that, notwithstanding the status of the Canadian Intercompany Notes as Non-ABL
Collateral, each of the Term Loan Credit Agent and each Permitted Notes Agent,
on behalf of itself and its respective Related Secured Parties, agrees that (a) neither
it nor any such Related Secured Parties (nor any of the Secured Parties under
and as defined in the Canadian Intercompany Notes Documents) will exercise any
rights or remedies against, or otherwise seek to realize on, any Canadian
Collateral securing any Canadian Intercompany Note at any time prior to the
Discharge of the Revolving Credit Obligations and (b) any Proceeds or
other amounts received by the Term Loan Agent or any Permitted Notes Agent, or
any of their respective Related Secured Parties 
(or any Secured Party under and as defined in the Canadian Intercompany
Notes Documents) as a 


 


35

















 


result of any exercise of rights or remedies against or realization
upon any Canadian Collateral securing any Canadian Intercompany Note at any
time prior to the Discharge of the Revolving Credit Obligations shall be
segregated and held in trust and forthwith paid over to the Revolving Credit
Agent, for the benefit of the Revolving Credit Secured Parties, in the form in
which received, with any necessary endorsements, and shall be applied to
satisfy and discharge the Revolving Credit Obligations (with any amount
remaining after the Discharge of the Revolving Credit Obligations to be applied
(i) FIRST in the manner specified in the relevant Term Loan Credit
Document and (ii) SECOND, following the Discharge of Term Loan Credit
Obligations, in the manner specified in the Permitted Notes Documents).


 


Section 5.11.  Cash Management and Hedging
Obligations.  SSCC and each Grantor
acknowledges and agrees that (a) no Term Loan Credit Cash Management and
Hedging Obligations shall be designated as Revolving Credit Cash Management and
Hedging Obligations and (b) no Revolving Credit Cash Management and
Hedging Obligations shall be designated as Term Loan Credit Cash Management and
Hedging Obligations.


 


Section 5.12.  Access to Information.  If any Agent (other than the Revolving Credit
Agent) takes actual possession of any documentation of a Grantor (whether such
documentation is in the form of a writing or is stored in any data equipment or
data record in the physical possession of such Agent), then upon request of the
Revolving Credit Agent and reasonable advance notice, such Agent will, unless
prohibited by contract or law, permit the Revolving Credit Agent or its
representative to inspect and copy such documentation if and to the extent the
Revolving Credit Agent certifies to such Agent that:


 


(a) such documentation
contains or may contain information necessary or appropriate, in the good faith
opinion of the Revolving Credit Agent, to the enforcement of the Revolving
Credit Agent’s Liens upon any ABL Collateral; and


 


(b) the Revolving
Credit Agent and the Revolving Credit Secured Parties are entitled to receive
and use such information under applicable law and, in doing so, will comply
with all obligations imposed by law or contract in respect of the disclosure or
use of such information.


 


ARTICLE VI


 


Insolvency or Liquidation
Proceedings


 


Section 6.01.  Cash Collateral and DIP
Financing.  (a) 
This Agreement will continue in full force and effect notwithstanding the
commencement of any proceeding under the Bankruptcy Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law by or
against SSCC or any other Grantor.


 


(b)  If SSCC or any
Grantor becomes subject to a case under the Bankruptcy Code and, as
debtor(s)-in-possession, moves for approval of financing 


 


36
















 


(including on a priming basis) (“DIP Financing”) to be provided
by one or more lenders under Section 364 of the Bankruptcy Code or the use
of cash collateral as defined in Section 363 of the Bankruptcy Code or any
similar Bankruptcy Law, each Junior Agent, on behalf of itself and its Related
Secured Parties, agrees that it will raise no objection or oppose or contest
(or join with or support any third party opposing, objecting or contesting) to
any such financing or to the Liens on the Prior Lien Collateral securing the
same (“DIP Financing Liens”) or to any use of cash collateral
constituting Prior Lien Collateral and will not request adequate protection or
any other relief in connection therewith (except, as expressly agreed by the
Controlling Agent or to the extent permitted by Section 6.03), unless the
Controlling Agent or Controlling Secured Parties then oppose or object to such
DIP Financing or such DIP Financing Liens or use of such cash collateral (and,
to the extent that such DIP Financing Liens are senior to, or rank pari passu with, Prior Liens on such Prior
Collateral, each Junior Agent will, for itself and on behalf of the other
Junior Secured Parties, subordinate the Junior Liens on such Collateral to the
Prior Liens and the DIP Financing Liens on the same basis as the Junior Liens
are subordinated to the Prior Liens under this Agreement (and all obligations
relating thereto)), so long as, in connection with the grant of any DIP
Financing Liens, the Junior Secured Parties retain Liens on all the Prior Lien
Collateral with the same priority in relation to the Prior Liens as existed
prior to the commencement of the case under the Bankruptcy Code.


 


(c)  Each Junior Agent,
on behalf of itself and its Related Secured Parties, agrees that it will not object
to or oppose a sale or other disposition of any Prior Lien Collateral (or any
portion thereof) under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code free and clear of its Liens (subject to
attachment of proceeds with respect to the Junior Lien on such Prior Lien
Collateral in favor of such Junior Agent in the same order and manner as
otherwise set forth herein) or other claims under Section 363 of the
Bankruptcy Code if the Controlling Agent or the Controlling Secured Parties
shall have consented to such sale or disposition of such Prior Collateral.


 


(d)  If, in connection
with any judicial or insolvency proceeding, debt obligations of the reorganized
debtor secured by Liens upon any property of the reorganized debtor are
distributed pursuant to a plan of reorganization or similar dispositive
restructuring plan, both on account of the Prior Obligations and the Junior
Obligations, then, to the extent the debt obligations distributed on account of
the Prior Obligations and on account of the Junior Obligations are secured by
Liens upon the same property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens securing such debt obligations.


 


Section 6.02.  Relief from the Automatic Stay.  Until the Discharge of Prior Obligations has
occurred, each Junior Agent, on behalf of itself and its Related Secured
Parties, agrees that none of them shall seek (or support any other Person seeking)
relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding in respect of any Common Collateral subject to a Prior
Lien without the prior written consent of each Prior Agent.  Each Junior Agent, on behalf of itself and
its Related Secured Parties, agrees that none of them shall oppose (or support
any other 


 


37

















 


Person opposing) any motion of the Controlling Agent seeking relief
from the automatic stay or any other stay in any Insolvency or Liquidation
Proceeding in respect of any Common Collateral subject to its Prior Lien.


 


Section 6.03.  Adequate Protection.  Each Junior
Agent, on behalf of itself and its Related Secured Parties, agrees that it will
not contest any request by any Prior Agent or any other Prior Secured Party for
adequate protection with respect to their Prior Liens on Common Collateral or
contest any objection by a Prior Agent or any other Prior Secured Party to any
motion, relief, action or proceeding based on such Prior Agent or other Prior
Secured Party claiming a lack of adequate protection with respect to their
Prior Liens on Common Collateral. 
Notwithstanding the foregoing, if a Prior Agent or any Prior Secured
Party is granted adequate protection in the form of additional collateral in
connection with any use of cash collateral constituting Prior Collateral or DIP
Financing secured by Prior Collateral, then each Junior Agent, on behalf of
itself and its Related Secured Parties, may seek or request adequate protection
in the form of a Lien on such additional collateral, which Lien will be junior
and subordinated to the Liens securing the Prior Obligations and such DIP
Financing (and all obligations related thereto) on the same basis as the other Junior
Liens are subordinated to the Prior Liens under this Agreement.  In the event a Junior Agent or any other
Junior Secured Party seeks or requests adequate protection in respect of Junior
Obligations and such adequate protection is granted in the form of additional
collateral, then such Junior Agent, on behalf of itself and its Related Secured
Parties, agrees that the Prior Agents and the Prior Secured Parties and any
such DIP Financing shall also be granted a senior Lien on such additional
collateral as security for the Prior Obligations and for any such DIP Financing
and that any Lien on such additional collateral securing the Junior Obligations
shall be junior and subordinated to the Lien on such collateral securing the
Prior Obligations (and any such DIP Financing and related obligations) and to
any other Liens granted to the Prior Secured Parties as adequate protection on
the same basis as the other Liens on Common Collateral securing the Junior
Obligations are so subordinated to the Liens on Common Collateral securing the
Prior Obligations under this Agreement.


 


Section 6.04.  No Waiver.  Subject to Sections 3.01(c) and
3.01(e), nothing contained herein shall prohibit or in any way limit any Prior
Agent or any Prior Secured Party from objecting in any Insolvency or
Liquidation Proceeding or otherwise to any action taken by any Junior Agent or
any of its Related Secured Parties, including the seeking by any such Junior
Agent or any such Related Secured Party of adequate protection or the asserting
by any such Junior Agent or any such Related Secured Party of any of its rights
and remedies under the applicable Junior Credit Documents or otherwise, in each
case to the extent affecting such Prior Agent’s or such Prior Secured Parties’
rights in its Prior Lien Collateral.


 


Section 6.05.  Avoidance Issues.  If any Prior Secured Party is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of SSCC or any other Grantor any amount paid in respect of Prior
Obligations (a “Recovery”), then such Prior Secured Party shall be
entitled to a reinstatement of the applicable Prior Obligations with respect to
all such recovered amounts.  If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be 


 


38

















 


reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto from such date of reinstatement.


 


Section 6.06.  Post-Petition Interest.  (a)  Each Junior Agent agrees, on behalf
of itself and its Related Secured Parties, that none of them shall oppose or
seek to challenge any claim by any Prior Agent or any Prior Secured Party for
allowance in any Insolvency or Liquidation Proceeding of Prior Obligations
consisting of post-petition interest, fees or expenses to the extent of the
value of such Prior Agent’s or such Prior Secured Party’s Prior Lien on its
Prior Lien Collateral, without regard to the existence of the Junior Lien
of any Junior Agent or any Junior Secured Party on such Prior
Lien Collateral (it being understood and agreed that such value will be
determined without regard to the existence of the Junior Liens on the Prior
Collateral).


 


(b)  Each Prior Agent
agrees, on behalf of itself and its Related Secured Parties, that none of them
shall oppose or seek to challenge any claim by any Junior Agent or any Prior
Secured Party for allowance in any Insolvency or Liquidation Proceeding of
Junior Obligations consisting of post-petition interest, fees or expenses to
the extent of the value of such Junior Agent’s or such Junior Secured Party’s
Junior Lien on such Prior Agent’s Prior Lien Collateral (it being
understood and agreed that such value will be determined only after taking into
account the Prior Liens on the Prior Lien Collateral and all Prior Obligations
secured thereby (including post-petition interest, fees and expenses)).


 


Section 6.07.  Separate Grants of Security and Separate
Classification.  Each Agent, for
itself and on behalf of its Related Secured Parties, acknowledges and agrees
that (a) the grants of Liens pursuant to applicable Collateral Documents
constitute separate and distinct grants of Liens; and (b) because of, among
other things, their differing rights in the ABL Collateral and the Non-ABL
Collateral, the Term Loan Credit Obligations, Revolving Credit Obligations and
the Permitted Notes Obligations are fundamentally different from one another
and must be separately classified in any plan of reorganization proposed or
adopted in an Insolvency or Liquidation Proceeding (other than any such plan of
reorganization that provides for the payment in full and in cash of the
aggregate principal amount of (and accrued interest, fees, premiums and
expenses under) the Term Loan Credit Obligations, the Revolving Credit
Obligations and Permitted Notes Obligations). 
To further effectuate the intent of the parties as provided in the
immediately preceding sentence, if it is held that the claims of one or more of
the Term Loan Credit Secured Parties, Revolving Credit Secured Parties and the
Permitted Notes Secured Parties or any of them in respect of any
ABL Collateral or Non-ABL Collateral constitute only one secured claim (rather
than separate classes of secured claims), then each of the parties hereto
hereby acknowledges and agrees that, as set forth in Section 2.01 and as
contemplated by Section 4.01, all distributions shall be made as if there
were separate classes of secured claims against the Grantors in respect of such
ABL Collateral or Non-ABL Collateral (with the effect being that, to the
extent that the aggregate value of such ABL Collateral or Non-ABL
Collateral is sufficient (for this purpose ignoring all claims held by the
Junior Secured Parties), the Controlling Secured Parties  shall be entitled to receive, in addition to amounts otherwise
distributed to them in 


 


39

















 


respect of principal, pre-petition interest and other claims, all
amounts owing in respect of post-petition interest, fees and expenses
(including any additional interest payable pursuant to the applicable Prior
Credit Documents arising from or related to a default) that are disallowed as a
claim in any Insolvency or Liquidation Proceeding before any distribution in
respect of ABL Collateral or Non-ABL Collateral, as the case may be, is
made in respect of the claims held by the Junior Secured Parties, with each
Junior Agent, for itself and on behalf of its Related Secured Parties, hereby
acknowledging and agreeing to turn over to (i) FIRST the Controlling
Agent, for itself and on behalf of the Controlling Secured Parties and (ii) SECOND,
following the Discharge of Obligations with respect to the Controlling Agent,
the Rising Prior Agent (if any) for itself and on behalf of such Rising Agent’s
Related Secured Parties, amounts otherwise received or receivable by them to
the extent necessary to effectuate the intent of this sentence (with respect to
the payment of post-petition interest, fees and expenses), even if such
turnover has the effect of reducing the claim or recovery of the Junior Secured
Parties).


 


Section 6.08.  Voting.  Each of the parties hereto acknowledges and
agrees that no Junior Agent or Junior Secured Party shall be required to vote
to approve any plan of reorganization with respect to any Grantor for any
reason or to agree that any provision of any Junior Credit Document shall
survive the effectiveness of any plan of reorganization with respect to any
Grantor in an Insolvency or Liquidation Proceeding.


 


Section 6.09.  Application.  This Agreement shall be applicable prior to
and after the commencement of any Insolvency or Liquidation Proceeding.  All references herein to any Grantor shall
apply to any trustee for such Person and such Person as debtor in
possession.  The relative rights as to
the Common Collateral and proceeds thereof shall continue after the filing
thereof on the same basis as prior to the date of the petition, subject to any
court order approving the financing of, or use of cash collateral by, any
Grantor.


 


Section 6.10.  Waiver.  Except as to claims arising under this
Agreement, each Junior Agent, for itself and on behalf of its Related Secured
Parties, waives any claim it may hereafter have against any Prior Secured Party
arising out of (i) the election of any Prior Secured Party of the
application of Section 1111(b)(2) of the Bankruptcy Code, or (ii) in
any Insolvency or Liquidation Proceeding, the grant in any cash collateral or financing
arrangement of a security interest, subject to the Prior Liens of such Prior
Secured Party, in connection with the Common Collateral.


 


ARTICLE VII


 


Reliance;
Waivers; Etc.


 


Section 7.01.  Reliance.  Other than any reliance on the terms of this
Agreement, each Agent, on behalf of its Related Secured Parties, acknowledges
that such Related Secured Parties have, independently and without reliance on
any other Agent or any other Secured Party, and based on documents and
information deemed by them to be appropriate, made their own credit analysis
and decision to enter into the Credit Documents applicable to such Agent and
such Related Secured Parties and be bound by 


 


40

















 


the terms of this Agreement and agrees, on behalf of its Related
Secured Parties, that such Related Secured Parties will continue to make their
own credit decisions in taking or not taking any action under such Credit
Documents or this Agreement.


 


Section 7.02.  No Warranties or Liability.  Each Agent, on behalf of itself and its
Related Secured Parties, acknowledges and agrees that the other Agents and their respective Related Secured Parties have made no express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of
the applicable Credit Documents, the ownership of any Collateral or the
perfection or priority of any Liens thereon. 
Except as otherwise provided herein, the Secured Parties of each Class will be entitled to manage and supervise their
respective loans and extensions of credit under the applicable Credit Documents
with respect to such Class in accordance
with law and as they may otherwise, in their sole discretion, deem appropriate.  No Agent or any of its Related Secured
Parties shall have any duty to any other Agent or its Related Secured Parties
to act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any
agreements with SSCC or any other
Grantor (including any Credit Documents), regardless of any knowledge thereof
which they may have or be charged with.


 


Section 7.03.  No Waiver of Lien Priorities.  (a)  No right of any Agent or any of its
Related Secured Parties to enforce any provision of this Agreement or any
Credit Document shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of SSCC or any other Grantor or by any act or
failure to act by any Agent or Secured Party, or by any noncompliance by any
Person with the terms, provisions and covenants of this Agreement, any of the
Credit Documents or any Canadian Intercompany Note Documents, regardless of any
knowledge thereof that such Agent or any of its Related Secured Parties may
have or be otherwise charged with.


 


(b)  Except as
otherwise provided herein, each Junior Agent,
on behalf of itself and its Related Secured
Parties, agrees that Prior Agent and the Prior Secured Parties shall have no
liability to such Junior Agent or
any such Related Secured Party, and any Junior Agent, on behalf of itself and its
Related Secured Parties, hereby waives any claim against any Prior Agent or any Prior Secured Party, arising out of any and all
actions which any Prior Agent or
any Prior Secured Party may take or permit or omit to take with respect to:


 


(i) the
Prior Credit Documents (other than this Agreement) applicable to such Prior
Agent or Prior Secured Party;


 


(ii) the
collection of the Prior Obligations (other than in violation of the express
provisions of this Agreement) applicable to such Prior Agent or Prior Secured
Party; or


 


(iii) the
foreclosure upon, or sale, liquidation or other disposition of, any Collateral
subject to any Prior Agents’ or Prior
Secured Parties’ Prior Liens.


 


41

















 


Each Junior Agent, on behalf
of itself and its Related Secured Parties, agrees that the Prior Agents and the
Prior Secured Parties have no duty to them in respect of the maintenance or
preservation of any Collateral subject to any Prior Agents’ or Prior Secured
Parties’ Prior Liens, the Prior Obligations applicable to such Prior Agent or
Prior Secured Party or otherwise.


 


Section 7.04.  Obligations Unconditional.  All rights, interests, agreements and
obligations of the Prior Agents and the Prior Secured Parties and the Junior
Agents and the Junior Secured Parties hereunder (and the rights and obligations
of the parties hereto set forth in Section 5.05 with respect to the
Canadian Collateral) shall remain in full force and effect irrespective of:


 


(a)  any lack of
validity or enforceability of any Prior Credit Document or any Junior Credit
Document;


 


(b)  except as
otherwise expressly set forth in this Agreement, any change in the time, manner
or place of payment of, or in any other terms of, the Prior Obligations or the
Junior Obligations, or any Amendment, including any increase in the amount
thereof, whether by course of conduct or otherwise, of the terms of any Prior
Credit Document or any Junior Credit Document;


 


(c)  except as
otherwise expressly set forth in this Agreement, any exchange of any security
interest in any Collateral or any other collateral, or any Amendment, whether
in writing or by course of conduct or otherwise, of all or any of the Prior
Obligations or Junior Obligations or any guarantee thereof;


 


(d)  the commencement
of any Insolvency or Liquidation Proceeding in respect of SSCC or any other
Grantor;


 


(e)  any other
circumstances that otherwise might constitute a defense available to, or a
discharge of, SSCC or any other Grantor in respect of any Prior Agent, any
Prior Obligations, any Prior Secured Party, any Junior Agent, any Junior
Obligations or any Junior Secured Party in respect of this Agreement; or


 


(f)  any circumstance
that might constitute a defense available to, or a discharge of, SSCC or any
other Grantor in respect of any security interest in the Canadian Collateral or
the Canadian Intercompany Notes.


 


ARTICLE VIII


 


Miscellaneous


 


Section 8.01.  Conflicts.  In the event of any conflict between the
provisions of this Agreement and the provisions of any Credit Documents or the
Canadian Intercompany Notes Documents, the provisions of this Agreement shall
govern and control.


 


42

















 


Section 8.02.  Effectiveness; Continuing Nature of this
Agreement; Severability.  This
Agreement shall become effective when executed and delivered by the parties
hereto.  This is a continuing agreement
of lien subordination, and the Secured Parties of any Class may continue,
at any time and without notice to any Agent or
Secured Party of any other Class to extend credit and other financial
accommodations and lend monies to or for the benefit of SSCC or any Grantor
constituting Obligations of such Class in reliance hereon.  Each
Agent, on behalf of itself and its
Related Secured Parties, hereby waives any right it or any of them may have
under applicable law to revoke this Agreement or any of the provisions
hereof.  The terms of this Agreement
shall survive, and shall continue in full force and effect, in any Insolvency
or Liquidation Proceeding.  Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction shall
not invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  All references to SSCC or any other Grantor
shall include SSCC or such Grantor as debtor and debtor-in-possession and any
receiver or trustee for SSCC or any other Grantor (as the case may be) in any
Insolvency or Liquidation Proceeding. 
Without limiting the generality of the foregoing, this Agreement is
intended to constitute and shall be deemed to constitute a “subordination
agreement” within the meaning of Section 510(a) of the Bankruptcy
Code and is intended to be and shall be interpreted to be enforceable to the
maximum extent permitted pursuant to applicable nonbankruptcy law.


 


Section 8.03.  Amendments; Waivers.  No Amendment of any of the provisions of this
Agreement shall be effective unless the same shall be in writing and signed on
behalf of each party hereto or its authorized agent and each waiver, if any,
shall be a waiver only with respect to the specific matter involved and shall
in no way impair the rights of the parties making such waiver or the
obligations of the other parties to such party in any other respect or at any
other time; provided that additional Grantors may be added as parties hereto in
accordance with the provisions of Section 8.18.  Notwithstanding the foregoing, none of SSCC
or any other Grantor shall have any right to consent to or approve any
Amendment of any provision of this Agreement (and its signature thereto shall
not be required) except to the extent its rights or obligations are affected; provided
that SSCC shall be provided with written notice of (and fully executed copies
of) all Amendments of any provision of this Agreement.


 


Section 8.04.  Information Concerning Financial Condition
of SSCC and Subsidiaries.  Each
Agent, on behalf of its Related Secured Parties, acknowledges that none of the
Agents or the Secured Parties shall be responsible for keeping any other Agent
or Secured Party informed of (a) the financial condition of SSCC and the
Subsidiaries or (b) any other circumstances bearing upon the risk of
nonpayment of the Term Loan Credit
Obligations, the Revolving Credit Obligations or the Permitted Notes
Obligations.  No Agent or any Secured Party shall have any duty to advise any other Agent or any other Secured Party of information
known to it regarding such condition or any such circumstances or
otherwise.  In the event any Agent or any other Secured Party, in its sole discretion, undertakes
at any time or from time to time to provide any such information to any other Agent or any other Secured Party, it shall be under no
obligation:


 


43

















 


(a)  to make, and no Agent and any Secured Party
shall make, any express or implied representation or warranty, including with
respect to the accuracy, completeness, truthfulness or validity of any such
information so provided;


 


(b)  to provide any
additional information or to provide any such information on any subsequent
occasion;


 


(c)  to undertake any
investigation; or


 


(d)  to disclose any
information which such party wishes to maintain confidential or is otherwise
required to maintain confidential.


 


Section 8.05.  Subrogation.  Subject to the Discharge of the Prior
Obligations, with respect to the value of any payments or distributions in
cash, property or other assets that any Junior Agent or any Junior Secured
Party pays over to any Prior Agent or any Prior Secured Party under the terms
of this Agreement, such Junior Agent or such Junior Secured Party shall be
subrogated to the rights of such Prior Agent or such Prior Secured Party; provided
that each Junior Agent, on behalf of itself and the Junior Secured Parties,
hereby agrees not to assert or enforce all such rights of subrogation it may
acquire as a result of any payment hereunder until the Discharge of Prior
Obligations has occurred.  SSCC and the
other Grantors acknowledge and agree that the value of any payments or
distributions in cash, property or other assets received by any Junior Agent or
any Junior Secured Party that are paid over to any Prior Agent or any Prior
Secured Party pursuant to this Agreement shall not reduce any of the applicable
Junior Obligations.


 


Section 8.06.  Application of Payments.  All payments received by any Prior Agent or any Prior Secured Parties may be applied, reversed and
reapplied, in whole or in part, to such part of the Prior Obligations as shall
be provided in the applicable Prior Credit Documents.  Each Junior Agent, on behalf of itself and
its Related Secured Parties, assents to any extension or postponement of the
time of payment of the Prior Obligations or any part thereof and to any other
indulgence with respect thereto, to any substitution, exchange or release of
any security which may at any time secure any part of the Prior Obligations and
to the addition or release of any other Person primarily or secondarily liable
therefor.


 


Section 8.07.  Governing Law; Jurisdiction; Consent to
Service of Process.  (a)  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE
NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAWS RULES THEREOF.


 


(b)  Each party hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the non-exclusive jurisdiction of any New York State court or Federal court of
the United States sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or 


 


44

















 


for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement in the courts of any
jurisdiction.


 


(c)  Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any New York State or Federal court referred to
in paragraph (b) of this Section. 
Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.


 


(d)  Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 8.09.  Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.


 


Section 8.08.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.08.


 


Section 8.09.  Notices.  All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile,
addressed to the recipients at their addresses set forth in Schedule I
hereto, or, as to each party, at such other address as may be designated by
such party in a written notice to all of the other parties.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.


 


45

















 


Section 8.10.  Further Assurances.  Each
Agent, on behalf of itself and its
Related Secured Parties and the other parties hereto agree that each of them
shall take such further actions and shall execute and deliver such additional
documents and instruments (in recordable form, if requested) as any Agent may reasonably request to effectuate the terms of and the Lien
priorities contemplated by this Agreement.


 


Section 8.11.  Successors and Assigns.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of each Agent, each Secured Party, SSCC and any Subsidiary
party hereto that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.


 


Section 8.12.  Specific Performance.  Each of the Term Loan Credit Agent, the
Revolving Credit Agent and any Permitted Notes Agent may demand specific
performance of this Agreement.  Each of
the Term Loan Credit Agent, on behalf of itself and the Term Loan Credit
Secured Parties, the Revolving Credit Agent, on behalf of itself and the
Revolving Credit Secured Parties, and any Permitted Notes Agent, on behalf of
itself and the applicable Permitted Notes Secured Parties, hereby irrevocably
waives any defense based on the adequacy of a remedy at law and any other
defense which might be asserted to bar the remedy of specific performance in
any action brought by the Term Loan Credit Agent, the Term Loan Credit Secured
Parties, the Revolving Credit Agent, the Revolving Credit Secured Parties, any
Permitted Notes Agent or the Permitted Notes Secured Parties, as the case may be.


 


Section 8.13.  Headings.  Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.


 


Section 8.14.  Counterparts.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. 
Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
facsimile or electronic imaging means shall be effective as delivery of a
manually executed counterpart of this Agreement or such other document or
instrument, as applicable.


 


Section 8.15.  Authorization.  By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.


 


Section 8.16.  No Third Party Beneficiaries.  This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the parties hereto and its
respective successors and assigns, including each of the Term Loan Credit Secured
Parties, the Revolving Credit Secured Parties and the Permitted Notes Secured
Parties.  Nothing in this Agreement shall
impair, as between SSCC, the other Grantors or any other Revolving Credit Loan
Parties, on the one hand, and the Agents and Secured Parties 


 


46
















 


of each Class, on the other hand, the obligations of SSCC, the other
Grantors and the other Revolving Credit Loan Parties to pay principal,
interest, fees and other amounts as provided in the Credit Documents of the
applicable Class.


 


Section 8.17.  Provisions Solely To Define Relative
Rights.  The intercreditor provisions
of this Agreement are and are intended solely for the purpose of defining the
relative rights of (a) the Term Loan Credit Agent and the Term Loan Credit
Secured Parties, (b) the Revolving Credit Agent and the Revolving Credit
Secured Parties and (c) the Permitted Notes Agents and the Permitted Notes
Secured Parties.  Nothing in this
Agreement (i) is intended to or shall impair the obligations of SSCC, the
other Grantor or the other Revolving Credit Loan Party, which are absolute and
unconditional, to pay the Obligations of each Class as and when the same
shall become due and payable in accordance with their terms or (ii) shall
relieve any Grantor from the performance of any term, covenant, condition or
agreement on such Grantor’s part to be performed or observed under or in
respect of any of the Collateral pledged by it or from any liability to any
Person under or in respect of any of such Collateral or impose any obligation
on any Agent to perform or observe any such term, covenant, condition or
agreement on such Grantor’s part to be so performed or observed or impose any
liability on any Agent for any act or omission on the part of such Grantor
relative thereto or for any breach of any representation or warranty on the
part of such Grantor contained in this Agreement or any Credit Document, or in
respect of the Collateral pledged by it. 
The obligations of each Grantor contained in this paragraph shall
survive the termination of this Agreement and the discharge of such Grantor’s
other obligations hereunder.  Each Agent
acknowledges and agrees that no other Agent has made any representation or
warranty with respect to the execution, validity, legality, completeness,
collectability or enforceability of any other Credit Documents.  Except as otherwise provided in this
Agreement, each of the Agents will be entitled to manage and supervise their
respective extensions of credit to SSCC or any of its Subsidiaries in
accordance with law and their usual practices, modified from time to time as
they deem appropriate.


 


Section 8.18.  Additional Grantors.  Pursuant to the Term
Loan Credit Documents, Revolving Credit Documents and the Permitted Notes
Documents certain Subsidiaries not party hereto on the date hereof are required
to become a party hereto as a “Grantor”. 
Upon the execution and delivery by any Subsidiary of an instrument in
the form of Exhibit I hereto, any such Subsidiary shall become a
party hereto and a Grantor hereunder with the same force and effect as if
originally named as such herein.  The
execution and delivery of any such instrument shall not require the consent of
any other party hereto.  The rights and
obligations of each party hereto shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.


 


Section 8.19.  Term Loan Credit Agent and Revolving
Credit Agent.  It is understood and
agreed that (a) JPMorgan Chase Bank, N.A. (“JPM”) is entering into
this Agreement in its capacity as administrative agent under the Term Loan
Credit Documents and the provisions of Article VIII of the Term Loan
Credit Agreement applicable to JPM as administrative agent thereunder shall
also apply to JPM as Term Loan Credit Agent hereunder and (b) Deutsche
Bank AG New York (“DB”) is entering in this Agreement in its capacity as
collateral agent under the Revolving Credit Documents and the provisions 


 


47

















 


of Section 12 of the Revolving Credit Agreement applicable to DB
as collateral agent thereunder shall also apply to DB as Revolving Credit Agent
hereunder.


 


[signature page follows]


 


48

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
written above.


 


	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
  By   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  GRANTORS  

  LISTED
  ON SCHEDULE II HERETO,

  
	
   

  	
   

  	
   

  
	
   

  	
  By   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:
  

  



 


LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT


 

















 


	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as

  Term
  Loan Credit Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  By   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:
  

  



 


LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT


 


2

















 


	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH, as Revolving Credit Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  By   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:
  

  



 


LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT


 


3

















 


SCHEDULE I


 


Notice Addresses


 


If
to Smurfit-Stone Container Corporation, to it at:


 


Six
CityPlace Drive


Creve
Coeur, MO 63141


Attention:  Timothy T. Griffith, Vice President and
Treasurer


Fax
No.:  (314) 787 6186)


 


with
a copy to


Winston &
Strawn LLP


35
W. Wacker Drive


Chicago,
IL 60601


Attention:  Brian S. Hart


Fax
No.:  (312) 558-5700


 


If
to JPMorgan Chase Bank, N.A., to it at:


 


Loan
Agency Services Group


1111
Fannin Street, 10th Floor


Houston,
Texas 77002


Attention:  Christian Cho and Sylvia Guttierrez


Fax
No.:  (713) 427-6307


 


with
a copy to


JPMorgan
Chase Bank, N.A.


383
Madison Avenue, 24th Floor


New
York, NY 10017


Attention:  Peter S. Predun


Fax
No.:  (212) 270-5100


 


If
to Deutsche Bank AG New York Branch, to it at:


 


60
Wall Street


New
York, NY 10005


Attention:
Erin Morrissey


Fax
No.:  212-797-5690


 

















 


SCHEDULE II


 


Grantors


 

















 


EXHIBIT I to


the Lien Subordination and


Intercreditor Agreement


 


[FORM OF] SUPPLEMENT
NO.      dated as of 
[                      ], to the
Lien Subordination and Intercreditor Agreement dated as of [·], 2010 (the “Intercreditor
Agreement”), among SMURFIT-STONE CONTAINER CORPORATION, a Delaware
corporation (“SSCC”); the other SUBSIDIARIES of SSCC identified therein,
JPMORGAN CHASE BANK, N.A., as Term Loan Credit Agent, and DEUTSCHE BANK AG NEW
YORK BRANCH, as Revolving Credit Agent.


 


Section 8.18 of the
Intercreditor Agreement provides that additional Subsidiaries may become party
thereto as a “Grantor” thereunder by execution and delivery of an instrument in
the form of this Supplement.  Pursuant to
one or more of the Credit Documents, the undersigned Subsidiary (the “New
Subsidiary”) is required to become a party to the Intercreditor Agreement
as a “Grantor” thereunder.


 


Capitalized terms used and
not otherwise defined herein have the meanings assigned to them in the
Intercreditor Agreement.


 


Reference is made to (a) the
Term Loan Credit Agreement, and (b) the Revolving Credit Agreement.


 


Accordingly, the New
Subsidiary hereby agrees as follows:


 


SECTION 1.  In accordance with Section 8.18 of the
Intercreditor Agreement, the New Subsidiary by its signature below becomes a
party to the Intercreditor Agreement as a “Grantor” with the same force and
effect as if originally named therein as such, and the New Subsidiary hereby
agrees to all the terms and provisions of the Intercreditor Agreement
applicable to it in such capacity thereunder. Each reference to a “Grantor” in
the Intercreditor Agreement shall be deemed to include the New Subsidiary.


 


SECTION 2.  The New Subsidiary represents and warrants to
the Term Loan Credit Agent, the Revolving Credit Agent, any Permitted Notes
Agent and the Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and subject to general principles of equity (whether enforcement is
sought by proceeding in equity or at law)).


 


SECTION 3.  This Supplement shall become effective when
the Term Loan Credit Agent, the Revolving Credit Agent and each Permitted Notes
Agent shall have received a counterpart (or a copy) of this Supplement that
bears the signature of the New Subsidiary. 
Delivery of an executed signature page to this Supplement by
facsimile or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.


 

















 


SECTION 4.  Except as expressly supplemented hereby, the
Intercreditor Agreement shall remain in full force and effect.


 


SECTION 5.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES THEREOF.


 


IN WITNESS WHEREOF, the New
Subsidiary has duly executed this Supplement as of the day and year first above
written.


 


	
   

  	
  [NAME
  OF NEW SUBSIDIARY],

  
	
   

  	
   

  	
   

  
	
   

  	
  by   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:
  

  



 


2
















 


IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this Agreement as of the
date first above written.


 


	
   

  	
  HOLDINGS:

  
	
   

  	
   

  
	
   

  	
  SMURFIT-STONE CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMURFIT-STONE
  CONTAINER ENTERPRISES, INC.

  as a U.S. Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMURFIT-STONE
  CONTAINER CANADA, L.P.,

  as a Canadian Borrower

  
	
   

  	
   

  
	
   

  	
  By: 3242795 NOVA
  SCOTIA LIMITED,

  as its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy T. Griffith

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  



 


3

















 


	
   

  	
  DEUTSCHE BANK AG
  NEW YORK BRANCH, Individually and as Administrative Agent, Co-Collateral
  Agent and Security Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE
  BANK, N.A., Individually and as Co-Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION, Individually and as Co-Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


4
















 


EXHIBIT II to


the Lien Subordination and


Intercreditor Agreement


 


[FORM OF] JOINDER
AGREEMENT NO. [ ] dated as of [      ],
20[  ] to the Lien Subordination and
Intercreditor Agreement dated as of [·], 2010 (the “Intercreditor
Agreement”), among SMURFIT-STONE CONTAINER CORPORATION, a Delaware
corporation (“SSCC”); the other SUBSIDIARIES of SSCC identified therein,
JPMORGAN CHASE BANK, N.A., as Term Loan Credit Agent, DEUTSCHE BANK AG NEW YORK
BRANCH, as Revolving Credit Agent [and [                         ], as Permitted Notes Agent[s]].


 


A.  Capitalized terms used herein but not
otherwise defined herein shall have the meanings assigned to such terms in the
Intercreditor Agreement.


 


B.  As a condition to the ability of the SSCC to
incur Permitted Notes and to secure such Permitted Notes with (i) a third
priority Lien, junior and subordinate to both the Revolving Credit Obligations
and the Term Loan Credit Obligations, on ABL Collateral, and (ii) a second
priority Lien, senior with respect to the Revolving Credit Obligations and
junior and subordinate to the Term Loan Credit Obligations, on Non-ABL
Collateral, under and pursuant to the relevant Permitted Notes Collateral
Documents for such Permitted Notes, among other things, the agent of any such
Permitted Notes, acting on behalf of the holders of the Permitted Notes, is
required to become party to the Intercreditor Agreement.  Section 5.08 of the Intercreditor
Agreement provides that such agent may become a party to the Intercreditor
Agreement by the execution and delivery by such agent of an instrument in the
form of this Joinder Agreement and the satisfaction of the other conditions set
forth in Section 5.08 of the Intercreditor Agreement.  The undersigned agent (“New Permitted
Notes Agent”) is executing this Joinder Agreement in accordance with the
requirements of the Credit Documents.


 


Accordingly, the Term Loan
Credit Agent, the Revolving Credit Agent, [the Permitted Notes Agent[s]] and
the New Permitted Notes Agent agree as follows:


 


SECTION 1.  In accordance with Section 5.08 of the
Intercreditor Agreement, the New Permitted Notes Agent by its signature below
becomes a Permitted Notes Agent under, and the related Permitted Notes and
holders of Permitted Notes become subject to and bound by, the Intercreditor
Agreement with the same force and effect as if the New Permitted Notes Agent
had originally been named therein as a Permitted Notes Agent, and the New
Permitted Notes Agent, on behalf of itself and such holders of Permitted Notes,
hereby agrees to all the terms and provisions of the Intercreditor Agreement
applicable to it as a Permitted Notes Agent and to the holders of Permitted
Notes that it represents as Permitted Notes Secured Parties.  Each reference to an “Agent” or “Permitted
Notes Agent” in the Intercreditor Agreement shall be deemed to include the
New Permitted Notes Agent.  The
Intercreditor Agreement is hereby incorporated herein by reference.


 
















 


SECTION 2.  The New Permitted Notes Agent represents and
warrants to each other Agent and the other Secured Parties that (i) it has
full power and authority to enter into this Joinder Agreement, in its capacity
as agent, (ii) this Joinder Agreement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the terms of such Joinder Agreement
(except as the enforceability thereof may be limited by bankruptcy, insolvency
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and subject to general principles of equity
(whether enforcement is sought by proceeding in equity or at law)) and (iii) the
Permitted Notes provide that, upon the New Permitted Notes Agent’s entry into
this Joinder Agreement, the holders of the Permitted Notes will be subject to
and bound by the provisions of the Intercreditor Agreement as Permitted Notes
Secured Parties.


 


SECTION 3.  This Joinder Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Joinder Agreement shall become effective
when each of the Agents party hereto shall have received a counterpart of this
Joinder Agreement that bears the signature of the New Permitted Notes
Agent.  Delivery of an executed signature
page to this Joinder Agreement by facsimile transmission shall be
effective as delivery of a manually signed counterpart of this Joinder
Agreement.


 


SECTION 4.  Except as expressly supplemented hereby, the
Intercreditor Agreement shall remain in full force and effect.


 


SECTION 5.  THIS JOINDER AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS
RULES THEREOF.


 


SECTION 6.  In case any one or more of the provisions
contained in this Joinder Agreement should be held invalid, illegal or
unenforceable in any respect, no party hereto shall be required to comply with
such provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Intercreditor Agreement shall not in any
way be affected or impaired.  The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.


 


SECTION 7.  All communications and notices hereunder
shall be in writing and given as provided in Section 8.09 of the
Intercreditor Agreement.  All
communications and notices hereunder to the New Permitted Notes Agent shall be
given to it at the address set forth below its signature hereto.


 


2

















 


SECTION 8.  SSCC agrees to reimburse each Agent party
hereto for its reasonable out-of-pocket expenses in connection with this
Joinder Agreement, including the reasonable fees, other charges and
disbursements of counsel for such Agent.


 


3

















 


IN WITNESS WHEREOF, the
parties set forth below have duly executed this Joinder Agreement to the
Intercreditor Agreement as of the day and year first above written.


 


	
   

  	
  [NAME
  OF NEW PERMITTED NOTES AGENT], as [                        ]
  for the holders of
  [                                  ],

  
	
   

  	
   

  
	
   

  	
  by  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address
  for notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  attention
  of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telecopy:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  as
  Term Loan Credit Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH,

  
	
   

  	
  as
  Revolving Credit Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF PERMITTED NOTES AGENT](1),

  
	
   

  	
  as
  Permitted Notes Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
  Name:

  
				



 






(1) If Permitted Notes
of another Series is already outstanding.


 

















 


	
   

  	
  Title:

  



 


2

















 


 


	
  Acknowledged
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SMURFIT-STONE
  CONTAINER CORPORATION,

  	
   

  
	
   

  	
   

  
	
  by  

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  THE
  GRANTORS 

  	
   

  
	
  LISTED
  ON SCHEDULE I HERETO,

  	
   

  
	
   

  	
   

  
	
  by  

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


3

















 


Schedule I to the


Joinder Agreement to the


Lien Subordination and Intercreditor Agreement


 


Grantors


 
















 


Exhibit F


to the Credit Agreement


 


FORM OF SOLVENCY CERTIFICATE


 


To
the Administrative Agent and each of the Lenders

party to the Credit Agreement referred to below:


 


I, the undersigned, the Treasurer of Smurfit-Stone Container Corporation (“Holdings”), a Delaware corporation, in that capacity
only and not in my individual capacity, do hereby certify as of the date hereof
that:


 


1.             This Certificate is
furnished to the Administrative Agent and the Lenders pursuant to Section 6.02(s) of the ABL Credit Agreement,
dated as of [                  ],  2010,
among Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises,
Inc., certain Domestic
Subsidiaries and Canadian Subsidiaries of Holdings from time to time party
thereto, the lenders from time to time party thereto (each a “Lender”,
and, collectively, the “Lenders”), Deutsche Bank AG New York Branch (“DB”),
as Administrative Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents (the “Credit
Agreement”).  Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.


 


2.             Immediately after giving effect to
the Transactions to occur on the Funding Date, (a) the present fair saleable
value of the assets of Holdings and its Subsidiaries, on a consolidated basis,
will exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of
Holdings and its Subsidiaries, on a consolidated basis, as they become absolute
and mature, (b) Holdings and its Subsidiaries, on a consolidated basis, will
not have unreasonably small capital to carry out their businesses as conducted
or as proposed to be conducted, and (c) neither SSCC nor any Borrower intends
to, nor does it intend to permit any of its Subsidiaries to, and does not
believe that it or any such Subsidiary will, incur debts beyond its ability to
pay such debts as they become absolute and mature (taking into account the
timing and amounts of cash to be received by each of them or any such
subsidiary and the amounts to be payable on or in respect of its obligations).


 

















 


 


IN WITNESS WHEREOF, the undersigned has set his hand this     
day of                         ,
2010.


 


 


	
   

  	
  SMURFIT-STONE CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2
















 


Exhibit G


to the Credit Agreement


 


FORM OF COMPLIANCE CERTIFICATE


 


This Compliance Certificate is delivered to you pursuant to Section 9.04(d)
of the ABL Credit Agreement, dated as of [                ],
2010 (as amended, restated, supplemented or modified from time to time, the “Credit
Agreement”), among Smurfit-Stone Container Corporation, Smurfit-Stone
Container Enterprises, Inc., certain Domestic Subsidiaries and Canadian
Subsidiaries of Holdings from time to time party thereto, the lenders from time
to time party thereto, Deutsche Bank AG New York Branch (“DB”), as
Administrative Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A. and
General Electric Capital Corporation, as Co-Collateral Agents.  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.


 


1.             I am the duly
elected, qualified and acting                                           
of Holdings.


 


2.             I have reviewed and
am familiar with the contents of this Compliance Certificate.  I am providing this Compliance Certificate
solely in my capacity as a Financial Officer of Holdings.  The matters set forth herein are true to the
best of my knowledge after due inquiry.


 


3.             I have reviewed the
terms of the Credit Agreement and the other Loan Documents and have made or
caused to be made under my supervision a review in reasonable detail of the
transactions and condition of Holdings and its Subsidiaries during the
accounting period covered by the financial statements attached hereto as ANNEX
1 (the “Financial Statements”).


 


[4.            After reasonable
inquiry, to my knowledge no Default or Event of Default has occurred and is
continuing as of the date of this Compliance Certificate[, except for                     ].]


 


[4.][5.]     Attached hereto as ANNEX
2 are the computations showing (in reasonable detail) the calculation of,
and, during a Compliance Period, compliance with, the Consolidated Fixed Charge
Coverage Ratio.


 


[6.            Attached hereto as ANNEX
3 is the information required to establish compliance with certain
covenants contained in Sections 10.01, 10.02, 10.03, 10.04,
10.06 and 10.09 of the Credit Agreement for the Test Period ended
on [            ,       ].](1)


 


[7.            No Material
Subsidiary exists (other than the Loan Parities), except as described on Annex
4.


 






(1) To be included for any Compliance
Certificate being delivered pursuant to Section 9.04(d)(i) of the Credit
Agreement.


 

















 


IN WITNESS WHEREOF, in my capacity as a Financial Officer of Holdings
and not in my individual capacity, I have executed this Compliance Certificate
this          day of                         ,
2010.


 


	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2

















 


ANNEX 1


 


[Applicable Financial Statements To Be Attached]


 

















 


ANNEX 2


 


[Applicable Calculations of Consolidated Fixed Charge
Coverage Ratio To Be Attached]


 


Consolidated
Fixed Charge Coverage Ratio for each relevant Test Period referred to in Section
10.16


 


(i)                                     :1.00


 


(ii)                                  :1.00


 

















 


ANNEX 3


 


The
information described herein is as of [                  ,
        ](2) (the “Computation
Date”) and, except as otherwise indicated below, pertains to the period
from [the Funding Date] [January     , 20    ]
to the Computation Date (the “Relevant Period”).


 


	
  Permitted Acquisitions and
  Negative and Financial Covenants

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
  Indebtedness
  as of the Computation Date (Section 10.01)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Section 10.01(e)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Section 10.01(f)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  Section 10.01(h)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  Section 10.01(i)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  Section 10.01(j)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  Section 10.01(n)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  Section 10.01(o)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
  Section 10.01(p)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
  [The
  Incurrence Test](3)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Liens
  as of the Computation Date (Section 10.02)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Section 10.02(xi)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Section 10.02(xv)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
  Investments,
  Loans and Advances as of the Computation Date (Section 10.04)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Clause
  (i)(y) of Section 10.04(b)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Section
  10.04(c)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  Section
  10.04(h)

  	
   

  	
  $

  	
   

  
								



 






(2)                                  Insert the last
day of the respective fiscal quarter or year covered by the financial
statements which are required to be accompanied by this Compliance Certificate.


 


(3)                                  Attached hereto
in reasonable detail is a calculation of the Interest Coverage Ratio to the
extent debt is incurred during the Relevant Period pursuant to the Incurrence
Test.


 

















 


	
   

  	
  (iv)

  	
  Section
  10.04(j)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
  Restricted
  Payments made during such period (Section 10.06)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Section
  10.06(b)(iii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Section
  10.06(b)(iv)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Debt
  Repayments made during such period (Section 10.09)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Section
  10.09(iv)

  	
   

  	
  $

  	
   

  



 


2

















 


ANNEX 4


 


[Description of any additional
Material Subsidiary]


 
















 


Exhibit H


to the Credit
Agreement


 


FORM OF ASSIGNMENT


AND


ASSUMPTION AGREEMENT(1)


 


This
Assignment and Assumption Agreement (this “Assignment”), is dated as of
the Effective Date set forth below and is entered into by and between
[the][each] Assignor identified in item [1][2] below ([the] [each, an] “Assignor”)
and [the] [each] Assignee identified in item 2 below ([the] [each, an] “Assignee”).  [It is understood and agreed that the rights
and obligations of such [Assignees][and Assignors] hereunder are several and
not joint.]  Capitalized terms used
herein but not defined herein shall have the meanings given to them in the ABL
Credit Agreement identified below (as amended, restated, supplemented and/or
otherwise modified from time to time, the “Credit Agreement”).  The Standard Terms and Conditions for
Assignment and Assumption Agreement set forth in Annex 1 hereto (the “Standard
Terms and Conditions”) are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.


 


For an
agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns
to [the] [each] Assignee, and [the] [each] Assignee hereby irrevocably
purchases and assumes from [the][each] Assignor, subject to and in accordance with
the Standard Terms and Conditions and the Credit Agreement, as of the Effective
Date inserted by the Administrative Agent as contemplated below, the interest
in and to all of [the][each] Assignor’s rights and obligations under the Credit
Agreement and any other documents or instruments delivered pursuant thereto
that represents the amount and percentage interest identified below of all of
the [respective] Assignor’s outstanding rights and obligations identified below
(including Revolving Loans, Letters of Credit and Swingline Loans) ([the]
[each, an] “Assigned Interest”). 
[Each] [Such] sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment, without
representation or warranty by [the][any] Assignor.


 


[1.                                   Assignor:


 


2.                                       Assignee:                                              ](2)


 


	
  [1][3].Credit
  Agreement:

  	
   

  	
  ABL Credit Agreement,
  dated as of [                    ],
  2010, among Smurfit-Stone Container Corporation, Smurfit-Stone Container
  Enterprises, Inc., certain Domestic Subsidiaries and Canadian Subsidiaries of
  Holdings from time to time party thereto, the Lenders

  



 






	
  (1)

  	
   

  	
  This Form of Assignment
  and Assumption Agreement should be used by Lenders for an assignment to a
  single Assignee or to funds managed by the same or related investment
  managers.

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  If the form is used for a single Assignor and
  Assignee, items 1 and 2 should list the Assignor and the Assignee,
  respectively. In the case of an assignment to funds managed by the same or
  related investment managers, or an assignment by multiple Assignors, the
  Assignors and the Assignee(s) should be listed in the table under bracketed
  item 2 below.

  



 

















 


	
   

  	
   

  	
  from time to time party
  thereto, Deutsche Bank AG New York Branch (“DB”), as Administrative Agent
  and Security Agent, and DB, JPMorgan Chase Bank, N.A. and General Electric
  Capital Corporation, as Co-Collateral Agents.

  



 


[2.                                   Assigned Interest:(3)


 


	
  Assignor

  	
   

  	
  Assignee

  	
   

  	
  Tranche Assigned

  	
   

  	
  Aggregate Amount 

  of

  Commitment/Loans

  under Relevant

  Tranche for all

  Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  under Relevant

  Tranche Assigned

  	
   

  
	
  [Name of Assignor]

  	
   

  	
  [Name of Assignee]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Name of Assignor]

  	
   

  	
  [Name of Assignee]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


[4.                                   Assigned Interest:(4)


 


	
  Tranche
  Assigned

  	
   

  	
  Aggregate Amount of

  Commitment/Loans under Relevant

  Tranche for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans under

  Relevant Tranche Assigned

  	
   

  
	
   

  	
   

  	
  [$]                            

  	
   

  	
  [$]

  	
   

  



 


Effective Date                       ,         ,         .


 


	
  Assignor[s]
  Information

  	
   

  	
  Assignee[s]
  Information

  
	
  Payment Instructions:

  	
   

  	
  Payment Instructions:

  



 






	
  (3)

  	
   

  	
  Insert this chart if
  this Form of Assignment and Assumption Agreement is being used for
  assignments to funds managed by the same or related investment managers or
  for an assignment by multiple Assignors. Insert additional rows as needed.

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  Insert this chart if this Form of Assignment and
  Assumption Agreement is being used by a single Assignor for an assignment to
  a single Assignee.

  



 


2

















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Reference:

  	
   

  	
   

  	
   

  	
  Reference:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Notice Instructions:

  	
   

  	
   

  	
   

  	
  Notice Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Reference:

  	
   

  	
   

  	
   

  	
  Reference:

  



 


3

















 


The terms set forth in this Assignment are hereby agreed to:


 


 


	
  ASSIGNOR

  	
   

  	
  ASSIGNEE

  
	
  [NAME
  OF ASSIGNOR]

  	
   

  	
  [NAME OF ASSIGNEE](5)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  



 






	
  (5)

  	
   

  	
  Add additional signature blocks, as needed, if this
  Form of Assignment and Assumption Agreement is being used by funds managed by
  the same or related investment managers.

  



 


4

















 


[Consented to and](6)
Accepted:


 


	
  DEUTSCHE BANK AG NEW
  YORK BRANCH,

  	
   

  	
   

  
	
  as
  Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [DEUTSCHE BANK AG NEW YORK
  BRANCH,

  	
   

  	
   

  
	
  as Fronting Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:](7)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SMURFIT-STONE
  CONTAINER CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:](8)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [NAME OF ISSUING LENDER], as Issuing Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 






	
  (6)

  	
   

  	
  Insert only if
  assignment is being made to an Eligible Transferee pursuant to Section
  13.04(b)(y) of the Credit Agreement. Consent of the Administrative Agent
  shall not be unreasonably withheld or delayed.

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  Consent of the Fronting
  Lender (not to be unreasonably withheld, delayed or conditioned) is required
  unless the assignment is to a Person that will not be a Participating
  Specified Foreign Currency Lender.

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  Insert only if (i) no Default or Event of Default is
  then in existence and (ii) the assignment is being made to an Eligible
  Transferee pursuant to 13.04(b)(y) of the Credit Agreement. Consent of
  Holdings shall not be unreasonably withheld or delayed.

  



 


5

















 


ANNEX I


TO


EXHIBIT H


 


SMURFIT-STONE CONTAINER
CORPORATION


 


ABL CREDIT AGREEMENT


 


STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT


AND ASSUMPTION AGREEMENT


 


1.                                       Representations and Warranties.


 


1.1.                              Assignor.  [The] [Each]
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of [the] [its] Assigned Interest, (ii) [the] [its] Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with any Loan Document, (ii)
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument
or document delivered pursuant thereto (other than this Assignment) or any
collateral thereunder, (iii) the financial condition of Holdings, any of its
Subsidiaries or affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by Holdings, any of its
Subsidiaries or affiliates or any other Person of any of their respective obligations
under any Loan Document.


 


1.2.                              Assignee.  [The] [Each]
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
to consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) confirms that it is (A) a Lender, (B) a parent
company and/or an affiliate of [the][each] Assignor which is at least 50% owned
by [the][each] Assignor or its parent company, (C) a fund that invests in bank
loans and is managed by the same investment advisor as a Lender, by an
affiliate of such investment advisor or by a Lender or (D) an Eligible
Transferee under Section 13.04(b) of
the Credit Agreement; (iii) confirms that it is not, or would not constitute
upon the effectiveness of this Assignment, a Defaulting Lender, (iv) from and
after the Effective Date, it shall be bound by the provisions of the ABL
Facility Agreement and, to the extent of [the][its] Assigned Interest, shall
have the obligations of a Lender thereunder, (v) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 9.04
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and to purchase [the][its] Assigned Interest on the basis of
which it has made such analysis and decision and (vi) if it is organized under
the laws of a jurisdiction outside the United States, it has attached to this
Assignment any tax documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by it; (b) agrees
that it will, independently and without reliance upon the Administrative Agent,
[the][each] Assignor, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (c)
appoints and authorizes the Administrative Agent and the Security Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to or otherwise conferred
upon the Administrative Agent or the Security Agent by the terms thereof,
together


 

















 


Annex I


to Exhibit J


 


with such powers as are reasonably incidental thereto; and (d) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it as
a Lender.


 


2.                                       Payment.  From and
after the Effective Date, the Administrative Agent shall make all payments in
respect of [the] [each] Assigned Interest (including payments of principal,
interest, fees, commissions and other amounts) to [the][each] Assignor for
amounts which have accrued to but excluding the Effective Date and to [the]
[each] Assignee for amounts which have accrued from and after the Effective
Date.


 


3.                                       Effect of Assignment. 
Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Effective Date, (i) [the][each] Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and (ii) [the][each] Assignor shall, to the extent
provided in this Assignment, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan Documents.


 


4.                                       General Provisions. 
This Assignment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.  This Assignment may be executed in any number
of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of the Assignment.  THIS ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW).


 


*                                         *                                         *


 


2
















 


Exhibit I


to the Credit Agreement


 


FORM OF JOINDER AGREEMENT


 


THIS JOINDER IN CREDIT AGREEMENT, (this “Joinder”) is executed
as of [             ,       ] by [NAME OF NEW SUBSIDIARY], a                      [corporation] [limited liability company]
[partnership] (the “Joining Party”), and delivered to Deutsche Bank AG
New York Branch, as Administrative Agent and as Security Agent, for the benefit
of the Secured Parties.  Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
shall be used herein as therein defined.


 


W  I  T  N  E
S  S  E  T  H:


 


WHEREAS, Smurfit-Stone Container Corporation, Smurfit-Stone Container
Enterprises, Inc., certain Domestic Subsidiaries and Canadian Subsidiaries of
Holdings from time to time party thereto, the various lenders from time to time
party thereto (the “Lenders”), Deutsche Bank AG New York Branch (“DB”),
as Administrative Agent and Security Agent, and DB, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents, have entered
into an ABL Credit Agreement, dated as of [                ], 2010 (as the same may be
amended, modified or supplemented from time to time, the “Credit Agreement”),
providing for the making of Loans to, and the issuance of Letters of Credit for
the accounts of, the Borrowers as contemplated therein;


 


WHEREAS, the Joining Party is a direct or indirect [Domestic][Canadian]
Subsidiary of Holdings and desires, or is required pursuant to the provisions
of the Credit Agreement, to become a Borrower under the Credit Agreement; and


 


WHEREAS, the Joining Party will obtain benefits from (i) the incurrence
of Loans by the Borrowers, and the issuance of, and participation in, Letters
of Credit for the accounts of the Borrowers, in each case pursuant to the
Credit Agreement, and (ii) the entering into of Secured Hedging Agreements and
Secured Cash Management Agreements, and, accordingly, desires to execute this
Joinder in order to (x) satisfy the requirements described in the preceding
paragraph, (y) induce the Lenders to make Loans to the Borrowers and issue,
and/or participate in, Letters of Credit for the accounts of the Borrowers and (z)
induce the respective Secured Parties to enter into Secured Hedging Agreements
and Secured Cash Management Agreements;


 


NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Joining Party, the receipt and sufficiency of which are hereby
acknowledged, the Joining Party hereby makes the following representations and
warranties to the Secured Parties and hereby covenants and agrees with each
Secured Parties as follows:


 


1.             By this Joinder, the
Joining Party becomes a [U.S.][Canadian] Borrower for all purposes under the
Credit Agreement, pursuant to Section 9.09 thereof.


 


2.             The Joining Party
agrees that, upon its execution hereof, it will become a [U.S.][Canadian]
Borrower under the Credit Agreement, and will be bound by all terms,


 

















 


Exhibit I


 


conditions
and duties applicable to a [U.S.][Canadian] Borrower under the Credit Agreement
and the other Loan Documents (including each Note, whether or not such Joining
Party actually signs a counterpart thereof). 
Without limitation of the foregoing, and in furtherance thereof, the
Joining Party agrees, on a joint and several basis with the other [U.S.][Canadian]
Borrowers, to irrevocably and unconditionally pay in full all of the
[U.S.][Canadian] Borrower Obligations of the [U.S.][Canadian] Borrowers in
accordance with the terms of the Credit Agreement and the other Loan Documents.


 


3              The Joining Party hereby
makes and undertakes, as the case may be, each covenant, representation and
warranty made by, and as each [U.S.][Canadian] Borrower under the Credit
Agreement, in each case as of the date hereof (except to the extent any such
representation or warranty relates solely to an earlier date in which case such
representation and warranty shall be true and correct as of such earlier date),
and agrees to be bound by all covenants, agreements and obligations of a
[U.S.][Canadian] Borrower, pursuant to the Credit Agreement, respectively, and
all other Loan Documents to which it is or becomes a party.


 


6.             This Joinder shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of and be enforceable by each of the parties hereto
and its successors and assigns, provided, however, that the
Joining Party may not assign any of its rights, obligations or interest
hereunder or under any other Loan Document without the prior written consent of
the Lenders or as otherwise permitted by the Loan Documents.  THIS JOINDER SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK.  This Joinder may
be executed in any number of counterparts, each of which shall be an original,
but all of which shall constitute one instrument.  In the event that any provision of this
Joinder shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Joinder which shall
remain binding on all parties hereto.


 


7.             From and after the
execution and delivery hereof by the parties hereto, this Joinder shall
constitute a “Loan Document” for all purposes of the Credit Agreement and the
other Loan Documents.


 


8              Each
of the representations and warranties set forth in the Credit Agreement and
each other Loan Document and applicable to the undersigned is true and correct
in all material respects, after giving effect to this Joinder on the date
hereof, except to the extent that any such representation and warranty relates
solely to any earlier date, in which case such representation and warranty is
true and correct in all material respects as of such earlier date.


 


9.             No
event has occurred or is continuing as of the date hereof, or will result from
the transactions contemplated hereby on the date hereof, that would constitute
an Event of Default or a Default.


 


10.           The effective date of
this Joinder is [                    ],
20[    ].


 


*     *     *


 


2

















 


IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be
duly executed as of the date first above written.


 


	
   

  	
   

  	
  [NAME
  OF NEW BORROWER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Accepted
  and Acknowledged by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEUTSCHE
  BANK AG NEW YORK BRANCH,

  	
   

  	
   

  
	
  as
  Administrative Agent and as Security Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


3
















 


Exhibit J


to the Credit Agreement


 


BORROWING BASE CERTIFICATE


 


This
Certificate is being delivered pursuant to Section [6.02(n)][9.04(i)] of the
ABL Credit Agreement, dated as of [                    ], 2010, among
Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises Inc.,
certain Domestic Subsidiaries and Canadian Subsidiaries of Holdings from time
to time party thereto, the Lenders from time to time party thereto, Deutsche
Bank AG New York Branch (“DB”), as Administrative Agent and Security
Agent, and DB, JPMorgan Chase Bank, N.A. and General Electric Capital
Corporation, as Co-Collateral Agents (as amended, restated, modified and/or
supplemented from time to time, the “Credit Agreement”).  Unless otherwise defined herein, all terms used
herein shall have the meanings ascribed to them in the Credit Agreement.


 


The
undersigned represents and warrants on behalf of Holdings in his or her
capacity as a Financial Officer of Holdings and not in an individual capacity,
that the information set forth on the attached Borrowing Base Certificate is,
to the best of his or her knowledge, (i) accurate and complete in all material
respects, (ii) calculated in accordance with the Credit Agreement and (iii) separately
sets forth the U.S. Borrowing Base and the Canadian Borrowing Base as of the
close of business on [                   
       ,               ].


 


IN
WITNESS WHEREOF, the undersigned, in his or her capacity as a Financial Officer
of Holdings and not in an individual capacity, has executed this Certificate as
of this [      ] day of [                                   ].


 


	
   

  	
  SMURFIT-STONE CONTAINER CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


BORROWING BASE CERTIFICATE FOR THE PERIOD ENDING [DATE]


ISSUED BY SMURFIT-STONE CONTAINER CORPORATION


 


PART A —
U.S. BORROWING BASE:


 


2

















 


PART B —
CANADIAN BORROWING BASE:


 


3
















 


Exhibit K


to the Credit Agreement


 


FORM OF INCREMENTAL
COMMITMENT AGREEMENT


 


[Name(s) of Lender(s)]


 


[Date]


 


[Smurfit-Stone
Container Corporation]


[                                    ]


[                                    ]


Attention:  [                            ]


Phone:  [                            ]


Fax:      [                            ]


 


Deutsche Bank AG New York Branch, as
Administrative Agent for the Lenders party to the Credit Agreement referred to
below


 


60 Wall Street


NYC60-0208, 2nd Floor


New York, New York 10005-2858


Attention:  Erin
Morrissey


Telephone No.: (212) 250-1765


Telecopier No.: (212) 797-5690


Email: erin.morrisey@db.com


 


Re:  Incremental Commitments


 


Ladies
and Gentlemen:


 


Reference
is hereby made to the ABL Credit Agreement, dated as of [                    ], 2010 among Smurfit-Stone
Container Corporation, Smurfit-Stone Enterprises Inc., certain Domestic
Subsidiaries and Canadian Subsidiaries of Holdings from time to time party
thereto, the lenders from time to time party thereto (the “Lenders”),
Deutsche Bank AG New York Branch (“DB”), as Administrative Agent and
Security Agent, and DB, JPMorgan Chase Bank, N.A. and General Electric Capital
Corporation, as Co-Collateral Agents (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement”). Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings set forth in the Credit Agreement.  Each lender (each an “Incremental Lender”)
party to this letter agreement (this “Agreement”) hereby severally
agrees to provide the Incremental Commitment set forth opposite its name on Annex
I attached hereto (for each such Incremental Lender, its “Incremental
Commitment”).  Each Incremental
Commitment provided pursuant to this Agreement shall be subject to all of the
terms and conditions set forth in the Credit Agreement, including, without
limitation, Sections 2.01(a) and 2.14 thereof.


 

















 


Each
Incremental Lender, the Borrowers and the Administrative Agent acknowledge and
agree that the Incremental Commitments provided pursuant to this Agreement
shall constitute Incremental Commitments and, upon the Agreement Effective Date
(as hereinafter defined), the Incremental Commitment of each Incremental Lender
shall become, or in the case of an existing Lender, shall be added to (and
thereafter become a part of), the [U.S. Facility Commitment][the Canadian
Facility Commitment] of such Incremental Lender.  Each Incremental Lender, the Borrowers and
the Administrative Agent further agree that, with respect to the Incremental
Commitment provided by each Incremental Lender pursuant to this Agreement, such
Incremental Lender shall receive from the Borrowers under the applicable
Tranche such upfront fees and/or other fees, if any, as may be separately agreed
to in writing with such Borrowers and acknowledged by the Administrative Agent,
all of which fees shall be due and payable to such Incremental Lender on the
terms and conditions set forth in each such separate agreement.


 


Furthermore,
each of the parties to this Agreement hereby agrees to the terms and conditions
set forth on Annex I hereto in respect of each Incremental Commitment
provided pursuant to this Agreement.


 


Each
Incremental Lender party to this Agreement, to the extent not already a party
to the Credit Agreement as a Lender thereunder, (i) confirms that it is an
Eligible Transferee and is not a Defaulting Lender, or would constitute a
Defaulting Lender on the Agreement Effective Date, (ii) confirms that it has
received a copy of the Credit Agreement and the other Loan Documents, together
with copies of the financial statements referred to therein and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement and to become a Lender under
the Credit Agreement, (iii) agrees that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement and the other Loan Documents, (iv) appoints and authorizes the
Administrative Agent and the Security Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the Administrative Agent and the Security
Agent, as the case may be, by the terms thereof, together with such powers as
are reasonably incidental thereto, (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement and the other Loan Documents are required to be performed by
it as a Lender, and (vi) in the case of each Incremental Lender organized under
the laws of a jurisdiction outside the United States, attaches the forms and/or
Section 5.04(b)(ii) Certificate referred to in Section 5.04(b) of the Credit
Agreement.


 


Upon
the date of (i) the execution of a counterpart of this Agreement by each
Incremental Lender, the Administrative Agent, the Borrowers and each Guarantor,
(ii) the delivery to the Administrative Agent of a fully executed counterpart
(including by way of facsimile or other electronic transmission) hereof, (iii) the
payment of any fees then due and payable in connection herewith and (iv) the
satisfaction of any other conditions precedent set forth in Section 3 of Annex
I hereto (such date, the “Agreement Effective Date”), each
Incremental Lender party hereto (i) shall be obligated to make the [U.S.
Facility][Canadian Facility] Revolving Loans provided to be made by it as
provided in this Agreement on the terms, and subject to the conditions, set
forth in the Credit Agreement and in this Agreement and (ii) to


 


2

















 


the extent provided in this Agreement, shall have the rights and
obligations of a [U.S. Facility][Canadian Facility] Lender thereunder and under
the other applicable Loan Documents.


 


Each
[U.S.][Canadian] Borrower acknowledges and agrees that (i) they shall be
jointly and severally liable for all [U.S. Facility Obligations][Canadian
Facility Obligations] of any [U.S.][Canadian] Borrowers in the same with
respect to the Incremental Commitments provided hereby as provided in the
Credit Agreement including, without limitation, all [U.S. Facility][Canadian
Facility] Revolving Loans made pursuant thereto, and (ii) all such [U.S.
Facility Obligations][Canadian Facility Obligations] (including all such [U.S.
Facility][Canadian Facility] Revolving Loans) shall be secured by each Security
Document that is executed by a [U.S. Loan Party]/[Loan Party] and is entitled
to the benefits of the guarantee under the Guarantee and Collateral Agreement
[and Canadian Guarantee and Collateral Agreement] in accordance with the
requirements of the Credit Agreement.


 


Each
Guarantor acknowledges and agrees that all [U.S Facility Obligations][Canadian
Facility Obligations] with respect to the Incremental Commitments provided
hereby and all [U.S. Facility][Canadian Facility] Revolving Loans made pursuant
thereto shall (i) be fully guaranteed pursuant to the Guarantee and Collateral
Agreement [and Canadian Guarantee and Collateral Agreement] as, and to the
extent, provided therein and in the Credit Agreement and (ii) be entitled to
the benefits of the Loan Documents as, and to the extent, provided therein and
in the Credit Agreement.


 


You may accept this Agreement by signing the enclosed
copies in the space provided below, and returning one copy of same to us before
the close of business on                                ,           . 
If you do not so accept this Agreement by such time, our Incremental
Commitments set forth in this Agreement shall be deemed canceled.


 


After
the execution and delivery to the Administrative Agent of a fully executed copy
of this Agreement (including by way of counterparts and by facsimile or other
electronic transmission) by the parties hereto, this Agreement may only be
changed, modified or varied by written instrument in accordance with the
requirements for the modification of Loan Documents pursuant to Section 13.12
of the Credit Agreement.


 


In the
event of any conflict between the terms of this Agreement and those of the
Credit Agreement, the terms of the Credit Agreement shall control.


 


*         *         *


 


3

















 


THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE
NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAWS RULES THEREOF.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF EACH INCREMENTAL LENDER]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  



 


	
  Agreed
  and Accepted

  	
   

  
	
  this
  [      ] day of [                    ,         ]:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SMURFIT-STONE
  CONTAINER CORPORATION]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  [NAME
  OF OTHER BORROWERS]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  DEUTSCHE
  BANK AG NEW YORK BRANCH,

  	
   

  
	
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


4

















 


Each
Guarantor acknowledges and agrees to each the foregoing provisions of this
Incremental Commitment Agreement and to the incurrence of the [U.S.
Facility][Canadian Facility] Revolving Loans to be made pursuant thereto.


 


 


	
  [EACH GUARANTOR], as a Guarantor 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  
	
   

  	
  Title:

  	
   

  



 


5

















 


ANNEX I


 


TERMS AND CONDITIONS FOR INCREMENTAL COMMITMENT AGREEMENT


 


Dated as of                           ,


 


1.             Names of the Borrowers:


 


2.                                       Incremental Commitment amounts (as of the
Agreement Effective Date):


 


	
  Names
  of Incremental Lenders

  	
   

  	
  Amount of Incremental

  Commitment to be added to U.S.

  Facility Commitment

  	
   

  	
  Amount of Incremental

  Commitment to be added

  to Canadian Facility

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:(1)

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3.                                       Applicable Margins and Adjustable
Applicable Margins to be applicable to all Revolving Loans(2)


 


4.                                       Applicable Commitment Fee Percentage and
Adjustable Applicable Commitment Fee Percentage to be applicable to all
Revolving Loans(3)


 






	
  (1)

  	
   

  	
  The
  aggregate amount of Incremental Commitments must be at least $25,000,000 (or
  such lesser amount that is acceptable to the Administrative Agent in its sole
  discretion). The aggregate amount of all Incremental Commitments permitted to
  be provided pursuant to Section 2.14 of the Credit Agreement shall not
  exceed in the aggregate $150,000,000

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Insert
  the Applicable Margins that shall apply to the Revolving Loans to be made
  pursuant to the Incremental Commitments being provided hereunder, provided
  if the Applicable Margins with respect to the Revolving Loans to be incurred
  pursuant to an Incremental Commitment shall be higher in any respect than
  those applicable to any other Loans, the Applicable Margins for the other
  Loans and extension of credit under the Credit Agreement shall be
  automatically increased as and to the extent needed to eliminate any
  deficiencies in accordance with the definition of “Applicable Margin” in the
  Credit Agreement.

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Insert the Applicable Commitment Fee Percentage that
  shall apply to the Revolving Loans to be made pursuant to the Incremental
  Commitments being provided hereunder, provided if the Applicable
  Commitment Fee Percentage with respect to the Revolving Loans to be incurred
  pursuant to an Incremental Commitment shall be higher in any respect than
  those applicable to any other Loans, the Applicable 

  



 

















 


5.             Other Conditions
Precedent:(4)


 






	
   

  	
   

  	
  Commitment
  Fee Percentage for the other Loans and extension of credit under the Credit
  Agreement shall be automatically increased as and to the extent needed to
  eliminate any deficiencies in accordance with the definition of “Applicable
  Commitment Fee Percentage” in the Credit Agreement.

  
	
  (4)

  	
   

  	
  Insert
  any additional conditions precedent which may be required to be satisfied
  prior to the Agreement Effective Date.

  



 


7
















 


Exhibit L


to the Credit Agreement


 


FORM OF SECTION 5.04(b)(ii) CERTIFICATE


 


Reference
is hereby made to the ABL Credit Agreement, dated as of [                    ], 2010, among
Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Domestic Subsidiaries and Canadian Subsidiaries of Holdings from time
to time party thereto, the lenders from time to time party thereto, Deutsche
Bank AG New York Branch (“DB”), as Administrative Agent and Security
Agent, and DB, JPMorgan Chase Bank, N.A. and General Electric Capital
Corporation (as amended, restated, modified and/or supplemented from time to
time, the “Credit Agreement”; the capitalized terms defined therein
being used herein as therein defined). 
Pursuant to the provisions of Section 5.04(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a “bank” as such
term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.


 


 


	
   

  	
  [NAME OF LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:                                ,

  	
   

  



 
















 


Exhibit M


to the Credit Agreement


 




 


 





FORM OF


GUARANTEE AND COLLATERAL AGREEMENT


 


dated as of


 


[       ], 2010,


 


among


 


SMURFIT-STONE CONTAINER CORPORATION

(formerly known as Smurfit-Stone Container Enterprises, Inc.),


 


THE SUBSIDIARIES PARTIES HERETO


and


 


DEUTSCHE BANK AG NEW YORK BRANCH,


 


as Security Agent


 


 


THIS
COLLATERAL AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT OF EVEN DATE HEREWITH AMONG SMURFIT-STONE CONTAINER CORPORATION, A
DELAWARE CORPORATION (FORMERLY KNOWN AS SMURFIT-STONE CONTAINER ENTERPRISES,
INC.), THE OTHER SUBSIDIARIES OF SMURFIT-STONE CONTAINER CORPORATION PARTY
THERETO, JPMORGAN CHASE BANK, N.A., IN ITS CAPACITY AS ADMINISTRATIVE AGENT
FOR, AND ACTING ON BEHALF OF, THE TERM LOAN CREDIT SECURED PARTIES REFERRED TO
THEREIN, DEUTSCHE BANK AG NEW YORK BRANCH, IN ITS CAPACITY AS SECURITY AGENT
FOR, AND ACTING ON BEHALF OF, THE REVOLVING CREDIT SECURED PARTIES REFERRED TO
THEREIN AND EACH PERMITTED NOTES AGENT THAT FROM TIME TO TIME BECOMES A PARTY
THERETO AS MORE FULLY SET FORTH IN SECTION 7.16 HEREOF.




 





 

















 


	
   

  	
  TABLE OF CONTENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Credit
  Agreement

  	
  1

  
	
  SECTION 1.02.

  	
  Other
  Defined Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Guarantee

  	
  7

  
	
  SECTION 2.02.

  	
  Guarantee
  of Payment

  	
  7

  
	
  SECTION 2.03.

  	
  No
  Limitations

  	
  7

  
	
  SECTION 2.04.

  	
  Reinstatement

  	
  8

  
	
  SECTION 2.05.

  	
  Agreement
  To Pay; Subrogation

  	
  8

  
	
  SECTION 2.06.

  	
  Information

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Pledge of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Pledge

  	
  9

  
	
  SECTION 3.02.

  	
  Delivery
  of the Pledged Collateral

  	
  10

  
	
  SECTION 3.03.

  	
  Representations,
  Warranties and Covenants

  	
  11

  
	
  SECTION 3.04.

  	
  Certification
  of Limited Liability Company and Limited Partnership Interests

  	
  12

  
	
  SECTION 3.05.

  	
  Registration
  in Nominee Name; Denominations

  	
  13

  
	
  SECTION 3.06.

  	
  Voting
  Rights; Dividends and Interest

  	
  13

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Security Interests in Personal Property

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Security
  Interest

  	
  16

  
	
  SECTION 4.02.

  	
  Representations
  and Warranties

  	
  18

  
	
  SECTION 4.03.

  	
  Covenants

  	
  20

  
	
  SECTION 4.04.

  	
  Other
  Actions

  	
  24

  
	
  SECTION 4.05.

  	
  Covenants
  Regarding Patent, Trademark and Copyright Collateral

  	
  28

  



 


i

















 


	
   

  	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Remedies
  Upon Default

  	
  30

  
	
  SECTION 5.02.

  	
  Application
  of Proceeds

  	
  32

  
	
  SECTION 5.03.

  	
  Grant
  of License to Use Intellectual Property

  	
  32

  
	
  SECTION 5.04.

  	
  Securities
  Act

  	
  33

  
	
  SECTION 5.05.

  	
  Registration

  	
  33

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Indemnity, Subrogation and Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Indemnity
  and Subrogation

  	
  34

  
	
  SECTION 6.02.

  	
  Contribution
  and Subrogation

  	
  34

  
	
  SECTION 6.03.

  	
  Subordination

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Notices

  	
  35

  
	
  SECTION 7.02.

  	
  Waivers;
  Amendment

  	
  35

  
	
  SECTION 7.03.

  	
  Security
  Agent’s Fees and Expenses; Indemnification

  	
  36

  
	
  SECTION 7.04.

  	
  Successors
  and Assigns

  	
  37

  
	
  SECTION 7.05.

  	
  Survival
  of Agreement

  	
  37

  
	
  SECTION 7.06.

  	
  Counterparts;
  Effectiveness; Several Agreement

  	
  37

  
	
  SECTION 7.07.

  	
  Severability

  	
  37

  
	
  SECTION 7.08.

  	
  Right
  of Set-Off

  	
  38

  
	
  SECTION 7.09.

  	
  Governing
  Law; Jurisdiction; Consent to Service of Process

  	
  38

  
	
  SECTION 7.10.

  	
  WAIVER
  OF JURY TRIAL

  	
  39

  
	
  SECTION 7.11.

  	
  Headings

  	
  39

  
	
  SECTION 7.12.

  	
  Security
  Interest Absolute

  	
  39

  
	
  SECTION 7.13.

  	
  Termination
  or Release

  	
  40

  
	
  SECTION 7.14.

  	
  Additional
  Subsidiaries

  	
  41

  
	
  SECTION 7.15.

  	
  Security
  Agent Appointed Attorney-in-Fact

  	
  41

  
	
  SECTION 7.16.

  	
  Recourse

  	
  42

  
	
  SECTION 7.17.

  	
  Intercreditor
  Agreement; Possession and Control of Term Priority Collateral

  	
  42

  
	
  SECTION 7.18.

  	
  Waivers
  by Loan Parties with Respect to California Real Property

  	
  42

  
	
  SECTION 7.19.

  	
  The Security Agent and the other Secured Parties

  	
  43

  



 


ii

















 


	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule
  I

  	
  Subsidiary
  Parties

  
	
  Schedule
  II

  	
  Pledged
  Equity Interests; Pledged Debt Securities

  
	
  Schedule
  III

  	
  Intellectual
  Property

  
	
  Schedule
  IV

  	
  Commercial
  Tort Claims

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit I

  	
  Form of
  Supplement

  
	
  Exhibit II

  	
  Form of
  Patent and Trademark Security Agreement

  
	
  Exhibit III

  	
  Form of
  Copyright Security Agreement

  



 


iii

















 


GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”)
dated as of [       ], 2010, among
SMURFIT-STONE CONTAINER CORPORATION (formerly known as Smurfit-Stone Container
Enterprises, Inc.)(1), the Subsidiaries party hereto and DEUTSCHE BANK AG
NEW YORK BRANCH (“DBNY”),
as Security Agent.


 


Reference is made to the ABL Credit Agreement
dated as of [     ], 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”),
among Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Subsidiaries from time to time party thereto, the Lenders party thereto
and DBNY, as Administrative Agent.  The Lenders have agreed to extend credit to
the Borrowers subject to the terms and conditions set forth in the Credit
Agreement.  The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. 
The Subsidiary Parties are affiliates of the Borrowers, will derive
substantial benefits from the extension of credit to the Borrowers pursuant to
the Credit Agreement and are willing to execute and deliver this Agreement in
order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as
follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.01.  Credit Agreement.  (a) 
Capitalized terms used in this Agreement, including the preamble and
introductory paragraph hereto, and not otherwise defined herein have the
meanings specified in the Credit Agreement. 
All terms defined in the New York UCC (as defined herein) and not
defined in this Agreement have the meanings specified therein; the term “instrument”
shall have the meaning specified in Article 9 of the New York UCC.


 


(b)  The rules of construction
specified in Section 1.03 of the Credit Agreement also apply to
this Agreement.


 


SECTION 1.02.  Other
Defined Terms.  As used in this
Agreement, the following terms have the meanings specified below:


 


“Account
Debtor” means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.


 


“Accounts
Receivable” means all Accounts and other rights to payment for the
sale, lease, license, assignment or other disposal of any Inventory or the


 






(1) Form assumes
agreement to be entered into following the merger of Smurfit-Stone Container
Corporation into Smurfit-Stone Enterprises, Inc., after which the
surviving corporation shall change its name to Smurfit-Stone Container
Corporation.


 

















 


performance of services (whether performed or to be
performed), existing on the date of this Agreement or hereafter arising,
whether or not earned by performance.


 


“Article 9
Collateral” has the meaning assigned to such term in Section 4.01.


 


“Canadian Collateral” has the meaning
assigned to such term in the IntercreditorAgreement.


 


“Cash Collateral Account” means a
non-interest bearing cash collateral account maintained with, and in the sole
dominion and control of, the Security Agent for the benefit of the Secured
Parties.


 


“Claiming Party” has the meaning
assigned to such term in Section 6.02.


 


“Collateral” means all Article 9
Collateral in which a security interest has been granted hereunder and all
Pledged Collateral.


 


“Collateral Access Agreement” means
any landlord waiver or other agreement, in form and substance reasonably
satisfactory to the Security Agent, between the Security Agent and any third
party (including any bailee, consignee, customs broker, or other similar
Person) (which landlord waiver or other agreement may also be for the benefit
of the Term Loan Agent or Permitted Notes Agent) in possession of any
Collateral or any landlord of any Loan Party for any real property where any
Collateral is located, as such landlord waiver or other agreement may be
amended, restated, or otherwise modified from time to time.


 


“Contract Rights” means all rights of
any Grantor under each Contract, including, without limitation, (i) any
and all rights to receive and demand payments under any or all Contracts, (ii) any
and all rights to receive and compel performance under any or all Contracts and
(iii) any and all other rights, interests and claims now existing or in
the future arising in connection with any or all Contracts.


 


“Contracts” means all contracts
between any Grantor and one or more additional parties (including, without
limitation, any Hedging Agreements, licensing agreements and any partnership
agreements, joint venture agreements and limited liability company agreements).


 


“Contributing Party” has the meaning
assigned to such term in Section 6.02.


 


“Copyright
License” means any written agreement, now or
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.


 


2

















 


“Copyright Security Agreement” means
the Copyright Security Agreement dated as of the date hereof, among Holdings,
the Subsidiaries party thereto and DBNY, as the Security Agent, substantially
in the form of Exhibit III.


 


“Copyrights” means all of
the following now owned or hereafter acquired by any Grantor:  (a) all copyright rights in any work
subject to the copyright laws of the United States, whether as author,
assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule III.


 


“Credit
Agreement” has the meaning assigned to such term in the
preliminary statement of this Agreement.


 


“DBNY” has the meaning assigned to
such term in the preliminary statement of this Agreement.


 


“Discharge” has the meaning assigned
to such term in the Intercreditor Agreement.


 


“Excluded Investment Property” means,
at any time, Investment Property (other than those subject to Article III)
held by any Grantor in the form of Equity Interests or other securities, in
each case, (a) that are not publicly traded, (b) with respect to
which a grant of a security interest is not prohibited or does not constitute
or result in a breach or termination under the terms of, or a default under,
any contract or agreement relating to such Investment Property and (c) whose
book value, together with the aggregate book value of all other Excluded
Investment Property, does not exceed $50,000,000 in the aggregate at such time.


 


“Federal
Securities Laws” has the meaning assigned to such term in Section 5.04.


 


“Fixtures” means, with
respect to any real property of any Grantor, goods that have become so related
to such real property that an interest in them arises under real property law,
including all plant fixtures, trade fixtures, business fixtures, other fixtures
and storage office facilities, and all additions and accessions thereto and
replacements therefor.


 


“General
Intangibles” means all choses in action and causes of
action and all other intangible personal property of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
corporate or other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Hedging
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.


 


3

















 


“Grantors” means Holdings
and the Subsidiary Parties.


 


“Guaranteed
Party” means Holdings, each other Borrower and each other Loan Party.


 


“Guarantors” means each Subsidiary Party (other than any
U.S. Borrower) with respect to any U.S. Secured Obligations and each U.S.
Borrower (including Holdings) with respect to any U.S. Secured Obligations (other
than monetary obligations owed by such U.S. Borrower under (i) each Loan
Document, (ii) each Secured Hedging Agreement that is treated as a “Hedging
Obligation” pursuant to the terms of Section 13.21 of the Credit Agreement
and (iii) each Secured Cash Management Agreement that is treated as a “Cash
Management Services Obligation” pursuant to the terms of Section 13.21 of
the Credit Agreement).


 


“Intellectual
Property” means all intellectual and similar property
of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business information,
know-how, show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.


 


“IP Security Agreements” means the
Patent and Trademark Security Agreement and the Copyright Security Agreement.


 


“License” means any
Patent License, Trademark License, Copyright License or other license or
sublicense agreement relating to intellectual property to which any Grantor is
a party, including those listed on Schedule III but excluding any
license agreement that validly prohibits the collateral assignment or grant of
a security interest by such Grantor.


 


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


 


“Patent
and Trademark Security Agreement” means the Patent and Trademark
Security Agreement dated as of the date thereof, among Holdings, the
Subsidiaries party thereto and DBNY, as the Security Agent, substantially in
the form of Exhibit II.


 


“Patent
License” means any written agreement, now or
hereafter in effect, granting to any third party any right to make, use or sell
any invention on which a Patent, now or hereafter owned by any Grantor or that
any Grantor otherwise has the right to license, is in existence, or granting to
any Grantor any right to make, use or sell any invention on which a patent, now
or hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.


 


4

















 


“Patents” means all of
the following now owned or hereafter acquired by any Grantor:  (a) all letters patent of the United
States, all registrations and recordings thereof, and all applications for
letters patent of the United States, including registrations, recordings and
pending applications in the United States Patent and Trademark Office,
including those listed on Schedule III, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right
to make, use and/or sell the inventions disclosed or claimed therein.


 


“Permitted Notes Agent” has the
meaning assigned to such term in the Intercreditor Agreement.


 


“Permitted Notes Documents” has the
meaning assigned to such term in the Intercreditor Agreement.


 


“Pledged
Collateral” has the meaning assigned to such term in Section 3.01.


 


“Pledged
Debt Securities” has the meaning assigned to such term
in Section 3.01.


 


“Pledged Equity Interests” has the
meaning assigned to such term in Section 3.01.


 


“Pledged
Securities” means any promissory notes, stock
certificates or other securities certificates or instruments now or hereafter
included in the Pledged Collateral, including all certificates, instruments or
other documents representing or evidencing any Pledged Collateral.


 


“Security
Interest” has the meaning assigned to such term in Section 4.01.


 


“SSCE” has the
meaning assigned to such term in the preliminary statement of this Agreement
and includes any successor by merger or consolidation.


 


“subsidiary” shall mean, with respect
to any Person (herein referred to as the “parent”), any corporation,
partnership, association or other business entity of which securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or more than 50% of the general partnership or
membership interests are, at the time any determination is being made, owned,
controlled or held by, or otherwise Controlled by, the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.


 


“Subsidiary” shall mean any direct or
indirect subsidiary of Holdings.


 


“Subsidiary
Parties” means (a) the Subsidiaries identified
on Schedule I and (b) each other Subsidiary that becomes a
party to this Agreement as a Subsidiary Party after the Funding Date, other
than any such Subsidiary (excluding any U.S. 


 


5

















 


Borrower) that is released
from its obligations hereunder in accordance with the Credit Agreement.


 


“Term Loan Credit Documents” has the
meaning assigned to such term in the Intercreditor Agreement.


 


“Term Loan Credit Obligations” shall (i) prior
to the Funding Date, have the meaning assigned to such term in the form of
Intercreditor Agreement attached as Exhibit F to the Credit
Agreement, and (ii) from and after the Funding Date, have the meaning
assigned to such term in the Intercreditor Agreement.


 


“Trademark
License” means any written agreement, now or
hereafter in effect, granting to any third party any right to use any Trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.


 


“Trademarks” means all of
the following now owned or hereafter acquired by any Grantor:  (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and General Intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States
Patent and Trademark Office or any similar offices in any State of the United
States, and all extensions or renewals thereof, including those listed on Schedule III,
(b) all goodwill associated therewith or symbolized thereby and (c) all
other assets, rights and interests that uniquely reflect or embody such goodwill.


 


“ULC”
means an issuer that is an unlimited company or unlimited liability company.


 


“ULC Laws” means the Companies Act
(Nova Scotia), the Business Corporations Act (Alberta), the Business
Corporations Act (British Columbia), and any other present or future Laws
governing ULCs.


 


“ULC Shares” means shares or other
equity interests in the capital stock of a ULC.


 


SECTION 1.03.  References to “UCC”.  To the extent required in the
context of the pledge of Equity Interests in the Canadian entities referred to
in Section 3.01(a)(ii) below, (i) any term defined herein by reference to the “UCC” shall also
have any extended, alternative or analogous meaning given to such term in
applicable Canadian personal property security, securities transfer and other
laws, in all cases for the extension, preservation or betterment of the
security and rights of the Administrative Agent, and (ii) all references
herein to a financing statement, continuation statement, amendment or
termination statement shall be deemed to refer also to the analogous documents
used under applicable Canadian personal property security laws.


 


6
















 


ARTICLE
II


 


Guarantee


 


SECTION 2.01.  Guarantee.  Each Guarantor unconditionally and
irrevocably guarantees, jointly with the other Guarantors and severally, as the
primary obligation and debt of each Guarantor and not merely as a surety, the
due, prompt and complete payment and performance of the U.S. Secured
Obligations.  Each of the Guarantors
further agrees that the U.S. Secured Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
U.S. Secured Obligation.  Each of the
Guarantors waives presentment to, demand of payment from and protest to any
Borrower or any other Guaranteed Party of any of the U.S. Secured Obligations,
and also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.


 


SECTION 2.02.  Guarantee
of Payment.  Each of the Guarantors
further agrees that its guarantee hereunder constitutes a guarantee of payment
when due and not of collection, and waives any right to require that any resort
be had by the Security Agent or any other Secured Party to any other Guarantor
or any Guaranteed Party to any security held for the payment of the U.S.
Secured Obligations or to any balance of any deposit account or credit on the
books of the Security Agent or any other Secured Party in favor of any Borrower
or any other Person.


 


SECTION 2.03.  No
Limitations. 
(a)  Except for termination or release of a Guarantor’s obligations
hereunder as expressly provided in Section 7.13, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense (other than defense of payment in full in cash) or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the U.S. Secured Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be discharged
or impaired or otherwise affected by (i) the failure of the Security Agent
or any other Secured Party to assert any claim or demand or to enforce any
right or remedy under the provisions of any Loan Document, Secured Hedging
Agreement, Secured Cash Management Agreement or otherwise; (ii) any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, any Loan Document, Secured Hedging Agreement,
Secured Cash Management Agreement or any other agreement, including with
respect to any other Guarantor under this Agreement; (iii) the release of
any security held by the Security Agent or any other Secured Party for the U.S.
Secured Obligations or any of them; (iv) any default, failure or delay,
wilful or otherwise, in the performance of the U.S. Secured Obligations; or (v) any
other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the indefeasible 


 


7

















 


payment
in full in cash of all the U.S. Secured Obligations).  Each Guarantor expressly authorizes the
Secured Parties to take and hold security for the payment and performance of
the U.S. Secured Obligations, to exchange, waive or release any or all such
security (with or without consideration), to enforce or apply such security and
direct the order and manner of any sale thereof in their sole discretion or to
release or substitute any one or more other guarantors or obligors upon or in
respect of the U.S. Secured Obligations, all without affecting the obligations
of any Guarantor hereunder.


 


(b)  To the fullest extent permitted by
applicable law, each Guarantor waives any defense based on or arising out of
any defense of any Borrower or any other Guaranteed Party or the
unenforceability of the U.S. Secured Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any Borrower or any
other Guaranteed Party, other than the indefeasible payment in full in cash of
all the U.S. Secured Obligations.  The
Security Agent and the other Secured Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the U.S. Secured Obligations,
make any other accommodation with any Borrower or any other Guaranteed Party or
exercise any other right or remedy available to them against any Borrower or
any other Guaranteed Party, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the U.S. Secured
Obligations have been fully and indefeasibly paid in full in cash.  To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy
of such Guarantor against any Borrower or any other Guaranteed Party, as the
case may be, or any security.


 


SECTION 2.04.  Reinstatement.  Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any U.S. Secured
Obligations is rescinded or must otherwise be restored by the Security Agent or
any other Secured Party upon the bankruptcy or reorganization of any Borrower,
any other Guaranteed Party or otherwise.


 


SECTION 2.05.  Agreement
To Pay; Subrogation.  In furtherance
of the foregoing and not in limitation of any other right that the Security
Agent or any other Secured Party has at law or in equity against any Guarantor
by virtue hereof, upon the failure of any Borrower or any other Guaranteed
Party to pay any U.S. Secured Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will forthwith pay, or cause to be paid,
to the Security Agent for distribution to the applicable Secured Parties in
cash the amount of such unpaid U.S. Secured Obligation.  Upon payment by or on behalf of any Guarantor
of any sums to the Security Agent as provided above, all rights of such
Guarantor against any Borrower or any other Guaranteed Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article VI.


 


8

















 


SECTION 2.06.  Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of each Borrower’s and each other Guaranteed
Party’s financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the U.S. Secured Obligations and the nature, scope
and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Security Agent or the other Secured Parties will have
any duty to advise such Guarantor of information known to it or any of them
regarding such circumstances or risks.


 


ARTICLE
III


 


Pledge
of Securities


 


SECTION 3.01.  Pledge.  As security for the payment or performance,
as the case may be, in full of the U.S. Secured Obligations, each Grantor
hereby collaterally assigns and pledges to the Security Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, and hereby grants
to the Security Agent, its successors and assigns, for the ratable benefit of
the Secured Parties, a security interest in, all of such Grantor’s right, title
and interest in, to and under:


 


(a)  the shares of capital stock and
other Equity Interests of (i) each Guarantor (other than Holdings) owned
by such Grantor including those listed on Schedule II, (ii)  SSC
Canada (or, if applicable, each Foreign Subsidiary of Holdings that owns,
directly or indirectly, any Equity Interests of SSC Canada and the Equity
Interests of which are owed directly by such Grantor) owned by such Grantor on
the date hereof and listed on Schedule II, (iii) each other
Foreign Subsidiary of Holdings that is a Material Subsidiary and the Equity
Interests of which are owned directly by such Grantor including those listed on
Schedule II and (iv) any other Equity Interests obtained in
the future by such Grantor in (A) any Domestic Subsidiary of Holdings that
is a Material Subsidiary, (B) SSC Canada (or, if applicable, each Foreign
Subsidiary of Holdings that owns, directly or indirectly, any Equity Interests
of SSC Canada and the Equity Interests of which are owed directly by such
Grantor) and (C) any Foreign Subsidiary of Holdings that is a Material
Subsidiary and the Equity Interests of which are owned directly by such
Grantor, and the certificates representing all such Equity Interests (all such
Equity Interests referred to in clauses (i), (ii), (iii),
and (iv) above being referred to as the “Pledged Equity
Interests”); provided that the Pledged Equity Interests shall not
include (x)  to the extent that applicable law requires that a Subsidiary
issue directors’ qualifying shares, any such qualifying shares, and (y) more
than 65% of the issued and outstanding voting Equity Interests of SSC Canada or
any other Foreign Subsidiary of Holdings;


 


(b)  (i) the promissory notes owned
by it on the date hereof and listed opposite the name of such Grantor on Schedule II,
(ii) each promissory note evidencing intercompany Indebtedness among
Holdings and/or any Subsidiary (including amounts owed in connection with the
intercompany settlements with respect to collections from accounts receivable
and inventory of U.S. Loan Parties deposited into accounts of Canadian Loan
Parties and other intercompany receivables) owned by and owed to such Grantor
after the date hereof and (iii) each other promissory note evidencing
Indebtedness on or after the date hereof owed to such Grantor other than
Indebtedness in 


 


9

















 


a principal amount of less than $5,000,000, so long as the aggregate
principal amount of Indebtedness not so pledged under this exclusion does not
exceed $10,000,000 (the promissory notes referenced in the preceding clauses (i),
(ii) and (iii) being referred to as the “Pledged
Debt Securities”) ;


 


(c)  subject to Section 3.06,
all payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the securities referred to in clauses (a) and
(b) above; and


 


(d)   all Proceeds of any of the
foregoing (the items referred to in clauses (a), (b), (c) and (d) of
this Section 3.01 above being collectively referred to as the “Pledged
Collateral”) .


 


TO HAVE AND TO HOLD the Pledged Collateral,
together with all right, title, interest, powers, privileges and preferences
pertaining or incidental thereto, unto the Security Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, as security for the
payment or performance, as the case may be, in full of the U.S. Secured Obligations;
subject, however, to the terms, covenants
and conditions hereinafter set forth.


 


SECTION 3.02.  Delivery
of the Pledged Collateral.  (a) 
Each Grantor agrees promptly to deliver or cause to be delivered to the
Security Agent (or the Term Loan Agent or Permitted Notes Agent or a designated
bailee for purposes of perfection, in accordance with the Intercreditor
Agreement) any and all Pledged Securities at any time owned by such Grantor.


 


(b)  Each Grantor will cause any
Indebtedness for borrowed money owed to such Grantor by Holdings and/or any
Subsidiary (including amounts owed in connection with the intercompany
settlements with respect to collections from accounts receivable and inventory
of U.S. Loan Parties deposited into accounts of Canadian Loan Parties and other
intercompany receivables) (other than any Investment Property on deposit with a
Securities Intermediary) to be evidenced by a duly executed promissory note
that is pledged and delivered to the Security Agent (or the Term Loan Agent or
Permitted Notes Agent or a designated bailee for purposes of perfection, in
accordance with the Intercreditor Agreement) pursuant to the terms hereof.


 


(c)  Upon delivery to the Security
Agent, (i) any Pledged Securities shall be accompanied by undated stock
powers duly executed in blank or other instruments of transfer reasonably
satisfactory to the Security Agent and by such other instruments and documents
as the Security Agent may reasonably request and (ii) all other property
comprising part of the Pledged Collateral shall be accompanied by proper
instruments of assignment duly executed by the applicable Grantor and such
other instruments or documents as the Security Agent may reasonably
request.  Each delivery of Pledged
Securities after the date of this Agreement shall be accompanied by a schedule
describing the Pledged Securities so delivered, which schedule shall be
attached hereto as a 


 


10

















 


supplement to Schedule II and made a part hereof; provided that failure to attach
any such schedule hereto shall not affect the validity of such pledge of such
Pledged Securities.


 


(d)  The assignment, pledges and
security interests granted in Section 3.01 are granted as security
only and shall not subject the Security Agent or any other Secured Party to, or
in any way alter or modify, any obligation or liability of any Grantor with
respect to or arising out of the Pledged Collateral.


 


SECTION 3.03.  Representations,
Warranties and Covenants.  The
Grantors jointly and severally represent, warrant and covenant to and with the
Security Agent, for the benefit of the Secured Parties, that:


 


(a) Schedule
II correctly sets forth, as of the Funding Date, with respect to each
Grantor, (i) all of the Equity Interests owned by such Grantor and
required to be pledged hereunder on the Funding Date, the percentage of the
issued and outstanding units of each class of the Equity Interests of the
issuer thereof so represented by the Pledged Equity Interests and the number of
each certificate representing the same and (ii) all promissory notes owned
by each Grantor and required to be pledged hereunder on the Funding Date;


 


(b) the
Pledged Equity Interests and Pledged Debt Securities, in each case issued by
Subsidiaries, have been duly and validly authorized and issued by the issuers
thereof and (i) in the case of Pledged Equity Interests, are fully paid
and nonassessable and (ii) in the case of Pledged Debt Securities, are
legal, valid and binding obligations of the issuers thereof, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law;


 


(c) except
for the security interests granted hereunder, each of the Grantors (i) is
and, subject to any sales, transfers or other dispositions, and mergers,
consolidations and amalgamations, made in compliance with the Credit Agreement,
will continue to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II as owned by such Grantor, (ii) holds
the same free and clear of all Liens (other than Permitted Liens and other
Liens contemplated in the Intercreditor Agreement), (iii) except for Liens
contemplated in the Intercreditor Agreement, will not pledge or hypothecate, or
otherwise create a consensual Lien on, the Pledged Collateral, and (iv) will
defend its title or interest thereto or therein against any and all Liens
(other than the Lien created by this Agreement, Permitted Liens and Liens
contemplated in the Intercreditor Agreement), however arising, of all Persons
whomsoever;


 


(d) except
for restrictions and limitations imposed by the Loan Documents, the Term Loan
Credit Documents, the Permitted Notes Documents, the Intercreditor Agreement or
applicable laws (including securities laws) generally, and expect for the
requirement in the articles or other constating 


 


11

















 


documents of any Canadian
Subsidiary for the approval of the directors and/or shareholders of such
Canadian Subsidiary for any transfers of its shares, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to (i) any option, right of first
refusal, shareholders agreement or charter or by-law provisions that might
prohibit, impair, delay (except pursuant to any applicable notice or like
provisions) or otherwise adversely affect the pledge of such Pledged Collateral
hereunder, the sale or disposition thereof pursuant hereto or the exercise by
the Security Agent of its rights and remedies hereunder with respect thereto,
or (ii) any other contractual restriction of any nature that might prohibit
the pledge of such Pledged Collateral hereunder or prohibit or in any material
manner impair, delay or otherwise adversely affect the sale or disposition of
such Pledged Collateral pursuant hereto or the exercise by the Security Agent
of its rights and remedies hereunder with respect thereto;


 


(e) each
of the Grantors has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;


 


(f) no
consent or approval of any Governmental Authority, any securities exchange or
any other Person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force and
effect);


 


(g) by
virtue of the execution and delivery by the Grantors of this Agreement, when
any Pledged Securities are delivered to the Security Agent or Prior Agent in
accordance with this Agreement and the Intercreditor Agreement, the Security
Agent will obtain a legal, valid and perfected lien upon and security interest
in such Pledged Securities as security for the payment and performance of the
U.S. Secured Obligations; and


 


(h) the
pledge effected hereby is, subject to the terms of the Intercreditor Agreement,
effective to vest in the Security Agent, for the benefit of the Secured
Parties, the rights of the Security Agent in the Pledged Collateral as set
forth herein.


 


SECTION 3.04.  Certification
of Limited Liability Company and Limited Partnership Interests.  Each Grantor acknowledges and agrees that (i) to
the extent any interest in any limited liability company or limited partnership
controlled on or after the date hereof by such Grantor and pledged hereunder is
a “security” within the meaning of Article 8 of the New York UCC and is
governed by Article 8 of the New York UCC, such interest shall be
certificated and (ii) each such interest shall at all times hereafter
continue to be such a security and represented by such certificate.  Each Grantor further acknowledges and agrees
that with respect to any interest in any limited liability company or limited
partnership controlled on or after the date hereof by such Grantor and pledged
hereunder that is not a “security” within the meaning of Article 8 of the
New York UCC, such Grantor shall at no time elect to treat any such interest as
a “security” within the meaning of Article 8 of the New York UCC, nor
shall such interest be 


 


12

















 


represented
by a certificate, unless such election and such interest is thereafter
represented by a certificate that is promptly delivered to the Security Agent
pursuant to the terms hereof.


 


SECTION 3.05.  Registration
in Nominee Name; Denominations.  The
Security Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion), subject to the terms of the Intercreditor
Agreement, to hold the Pledged Securities in its own name as pledgee, the name
of its nominee (as pledgee or as sub-agent) or the name of the applicable
Grantor, endorsed or assigned in blank or in favor of the Security Agent.  The Security Agent shall, at any time after
the occurrence and during the continuance of an Event of Default, have the
right, subject to the terms of the Intercreditor Agreement, to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.


 


SECTION 3.06.  Voting
Rights; Dividends and Interest.  (a) 
Unless and until an Event of Default shall have occurred and be continuing and
the Security Agent shall have notified the Grantors in writing that their
rights under this Section 3.06 are being suspended:


 


(i) Each
Grantor shall be entitled to exercise any and all voting and/or other rights
and powers inuring to an owner of Pledged Equity Interests or Pledged Debt
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents; provided that such rights and
powers shall not be exercised in any manner that could reasonably be expected
to materially and adversely affect the rights inuring to a holder of any
Pledged Equity Interests or Pledged Debt Securities or the rights and remedies
of any of the Security Agent or the other Secured Parties under this Agreement,
the Credit Agreement or any other Loan Document or the ability of the Security
Agent or the Secured Parties to exercise the same.


 


(ii) The
Security Agent shall execute and deliver to each Grantor, or cause to be
executed and delivered to such Grantor, all such proxies, powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting rights and powers it is entitled
to exercise pursuant to paragraph (i) above and to receive the cash
dividends, interest, principal and other distributions it is entitled to
receive and retain pursuant to paragraph (iii) below.


 


(iii) Each
Grantor shall be entitled to receive and retain any and all dividends,
interest, principal, cash, instruments and other property and all distributions
from time to time received, receivable or otherwise paid on or distributed in
respect of, in exchange for or upon conversion of, the Pledged Equity Interests
or Pledged Debt Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided  


 


13

















 


that any noncash dividends,
interest, principal or other distributions that would constitute Pledged Equity
Interests or Pledged Debt Securities, whether resulting from a subdivision,
combination or reclassification of the outstanding Equity Interests of the
issuer of any Pledged Securities or received in exchange for Pledged Securities
or any part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise, shall be and become part of the Pledged Collateral,
and, if received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart therefrom,
shall be held in trust for the benefit of the Security Agent and shall be
forthwith delivered to the Security Agent in the same form as so received (with
any necessary endorsement).


 


(b)  Upon the occurrence and during the
continuance of an Event of Default, after the Security Agent shall have
notified the Grantors in writing of the suspension of their rights under paragraph
(a)(iii) above, all rights of any Grantor to dividends, interest,
principal or other distributions that such Grantor is authorized to receive
pursuant to paragraph (a)(iii) above, and the obligations of
the Security Agent under paragraph (a)(ii) above, shall cease, and
all such rights shall thereupon become vested in the Security Agent, which
shall, subject to the terms of the Intercreditor Agreement, have the sole and
exclusive right and authority to receive and retain such dividends, interest,
principal or other distributions.  All
dividends, interest, principal or other distributions received by any Grantor
contrary to the provisions of this Section 3.06 shall be held in
trust for the benefit of the Security Agent, shall be segregated from other
property or funds of such Grantor and, subject to the rights of the Term Loan
Agent and the Permitted Notes Agent under the Intercreditor Agreement, shall be
forthwith delivered to the Security Agent upon demand in the same form as so
received (with any necessary endorsement). 
Any and all money and other property paid over to or received by the
Security Agent pursuant to the provisions of this paragraph (b) shall
be retained by the Security Agent in an account to be established by the
Security Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02.  After all Events of Default have been cured
or waived and Holdings has delivered to the Security Agent a certificate to
that effect, the Security Agent shall promptly repay to each Grantor (without
interest) all dividends, interest, principal or other distributions that such
Grantor would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) above and that remain in such account.


 


(c)  Upon the occurrence and during the
continuance of an Event of Default, after the Security Agent shall have
notified the Grantors in writing of the suspension of their rights under paragraph
(a)(i) above, all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) above,
and the obligations of the Security Agent under paragraph (a)(ii) above,
shall cease, and all such rights shall thereupon become, subject to the rights
of the Term Loan Agent and the Permitted Notes Agent under the Intercreditor
Agreement, vested in the Security Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers; provided that, unless otherwise directed by
the Required Lenders, the Security Agent shall have the right from time to 


 


14

















 


time following and during the continuance of an Event of Default to
permit the Grantors to exercise such rights.


 


(d)  Any notice given by the Security
Agent to the Grantors suspending their rights under paragraph (a) of
this Section 3.06 (i) may be given by telephone if promptly
confirmed in writing, (ii) may be given to one or more of the Grantors at
the same or different times and (iii) may suspend the rights of the
Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without
suspending all such rights (as specified by the Security Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the Security
Agent’s right to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.


 


SECTION 3.07.    Restriction on Transfer.  If the constating documents of any issuer
(other than a ULC) of any Pledged Securities restrict the transfer of such
Pledged Securities, then the applicable Grantor will deliver to the Security
Agent a certified copy of a resolution of the directors, shareholders,
unitholders or partners of such issuer, as applicable, consenting to the
transfer(s) contemplated by this Agreement, including any prospective
transfer of such Pledged Securities by the Security Agent on enforcement of its
rights under this Agreement.


 


SECTION 3.08.  ULC Shares.  Each Grantor acknowledges that certain
Collateral may now or in the future consist of ULC Shares, and that it is the
intention of the Security Agent and each Grantor that the Security Agent should
not under any circumstances prior to realization thereon be held to be a “member”
or a “shareholder”, as applicable, of a ULC for the purposes of any ULC
Laws.  Therefore, notwithstanding any provisions
to the contrary contained in this Agreement, the Credit Agreement or any other
Loan Document, where a Grantor is the registered owner of ULC Shares that are
Collateral, such Grantor will remain the sole registered owner of such ULC
Shares until such time as such ULC Shares are effectively transferred into the
name of the Security Agent or any other Person on the books and records of the
applicable ULC.  Accordingly, such
Grantor shall be entitled to receive and retain for its own account any dividend
on or other distribution, if any, in respect of such ULC Shares (other than any
dividend or distribution comprised of additional ULC Shares of such issuer,
which shall be delivered to the Security Agent to hold hereunder) and shall
have the right to vote such ULC Shares and to control the direction, management
and policies of the applicable ULC to the same extent as such Grantor would if
such ULC Shares were not pledged to the Security Agent hereunder.  Nothing in this Agreement, the Credit
Agreement or any other Loan Document is intended to, and nothing in this
Agreement, the Credit Agreement or any other Loan Document shall, constitute
the Security Agent or any Person other than such Grantor as a member or
shareholder of a ULC for the purposes of any ULC Laws (whether listed or
unlisted, registered or beneficial), until upon the occurrence and during the
continuance of an Event of Default, the Security Agent shall have notified such
Grantor in writing of the suspension of its rights under Section 3.06(a) and
further steps are taken pursuant hereto or thereto to register the Security
Agent or such other Person, as specified in such notice, as the holder of the
ULC Shares.  To the extent any provision
hereof would have the effect of constituting the Security Agent as a member or
a shareholder, as applicable, of any ULC prior to such time, such provision
shall be severed 


 


15

















 


herefrom and shall be ineffective with respect to ULC Shares that are
Collateral without otherwise invalidating or rendering unenforceable this
Agreement or invalidating or rendering unenforceable such provision insofar as
it relates to Collateral that is not ULC Shares.  Except upon the exercise of rights of the
Security Agent to sell, transfer or otherwise dispose of ULC Shares in
accordance with this Agreement, such Grantor shall not cause or permit, or
enable an issuer that is a ULC to cause or permit, the Security Agent to: (a) be
registered as a shareholder or member of such issuer; (b) have any
notation entered in its favour in the share register of such issuer; (c) be
held out as a shareholder or member of such issuer; (d) receive, directly
or indirectly, any dividends, property or other distributions from such issuer
by reason of the Security Agent holding a security interest in the ULC Shares;
or (e) act as a shareholder of such issuer, or exercise any rights of a
shareholder, including the right to attend a meeting of shareholders of such
issuer or to vote the ULC  Shares


 


ARTICLE
IV


 


Security
Interests in Personal Property


 


SECTION 4.01.  Security
Interest.  (a)  As security for
the payment or performance, as the case may be, in full of the U.S. Secured
Obligations, each Grantor hereby collaterally assigns and pledges to the
Security Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Security Agent, its successors and assigns,
for the benefit of the Secured Parties, a security interest (the “Security
Interest” ) in, all right, title and interest in, to or under any and all
of the following assets and properties now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the  “Article 9 Collateral”):


 


(i) all Accounts;


 


(ii) all
Chattel Paper (including, without limitation, all Tangible Chattel Paper and
all Electronic Chattel Paper);


 


(iii) all cash and all Deposit
Accounts and all monies deposited therein;


 


(iv) all
Equipment (including all Fixtures);


 


(v) all
Documents;


 


(vi) all
General Intangibles (including Intellectual Property);


 


(vii) all
Instruments;


 


(viii) all
Inventory;


 


(ix) all
Investment Property (including all Commodities Contracts,
Commodities Accounts, Securities and Securities Accounts and
Security Entitlements or Financial Assets credited thereto);


 


16
















 


(x) all
Letter of Credit Rights (whether or not the respective letter of credit is
evidenced by a writing);


 


(xi)
all Commercial Tort Claims described on Schedule IV, as such Schedule
may be supplemented from time to time;


 


(xii)
Contracts, together with all Contract Rights arising thereunder;


 


(xiii)
all Goods;


 


(xiv)
all Supporting Obligations;


 


(xv)
all books and Records pertaining to the Article 9 Collateral; and


 


(xvi)
all products and Proceeds of the foregoing (including, without limitation, all
insurance and claims for insurance effected or held for the benefit of the
Grantors or the Secured Parties in respect thereof and all
collateral security and guarantees given by any Person with respect to any of
the foregoing).


 


(b)  Each Grantor hereby irrevocably
authorizes the Security Agent at any time and from time to time to file in any
relevant jurisdiction any financing statements (including fixture filings with
respect to Fixtures appurtenant to any Mortgaged Property) with respect to the Article 9
Collateral or any part thereof and amendments thereto that (i) indicate
the Collateral as all assets of such Grantor or words of similar effect as
being of an equal or lesser scope or with greater detail, and (ii) contain
the information required by Article 9 of the Uniform Commercial Code or
other applicable law of each applicable jurisdiction for the filing of any
financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor and (B) in the case of a financing statement
filed as a fixture filing or covering Article 9 Collateral constituting
minerals or the like to be extracted or timber to be cut, a sufficient
description of the real property to which such Article 9 Collateral
relates.  Each Grantor agrees to provide
such information to the Security Agent promptly upon request.


 


Each Grantor also ratifies its authorization
for the Security Agent to file in any relevant jurisdiction any financing
statements or amendments thereto if filed prior to the date hereof.


 


The Security Agent is further authorized to
file with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) such documents as may be necessary or advisable for the purpose of
perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor, without the signature of any Grantor, and
naming any Grantor or the Grantors as debtors and the Security Agent as secured
party.  Each Grantor will pay any
applicable filing fees, recordation taxes and related expenses relating to its
Collateral.


 


17

















 


(c)  The Security Interest is granted as
security only and shall not subject the Security Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Article 9 Collateral.


 


(d)  Notwithstanding anything herein to
the contrary, in no event shall the security interest granted hereunder attach
to (i) any shares of capital stock or other Equity Interests (other than
those subject to Article III) held by any Grantor with respect to which a
grant of a security interest is prohibited or shall constitute or result in a
breach or termination under the terms of, or a default under, any contract or
agreement relating to such capital stock or Equity Interests, (ii) any
contract or other agreement to which any Grantor is a party or to any of its
rights, title or interest arising thereunder if and for so long as the grant of
such security interest is prohibited or shall constitute or result in a breach
or termination under the terms of, or a default under, any such contract or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New
York UCC or any other applicable law or principles of equity), (iii) any
rights, assets or property to the extent and for so long as any valid
enforceable law or regulation applicable to such rights, assets or property
prohibits the creation of a security interest therein and (iv) any rights,
assets or property to the extent and for so long as the grant of such security
interest would result in material and adverse tax consequences; provided,
however, that such security interest shall attach immediately at such
time as (A) with respect to clauses (i) and (ii), the
condition causing such prohibition, unenforceability, breach or termination
shall be remedied or shall otherwise cease to exist, (B) with respect to clause
(iii), the expiration of such prohibition and (C) with respect to clause
(iv), the termination or lapse of such result, and, to the extent
severable, shall attach immediately to any portion of such contract, agreement,
rights, assets or property that does not result in any of the consequences
specified in this paragraph, including any Proceeds of such contract,
agreement, rights, assets or property.


 


SECTION 4.02.  Representations
and Warranties.  The Grantors jointly
and severally represent and warrant to the Security Agent and the Secured
Parties that:


 


(a)  Each Grantor has good and valid
rights in and title to the Article 9 Collateral with respect to which it
has purported to grant a Security Interest hereunder and has full power and
authority to grant to the Security Agent the Security Interest in such Article 9
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained.


 


(b)  The U.S. Perfection Certificate has
been duly prepared, completed and executed and the information set forth
therein, including the exact legal name of each Grantor, is correct and
complete in all material respects as of the Funding Date.  The Uniform Commercial Code financing
statements (including fixture filings, as applicable) prepared by the Security
Agent based upon the information provided to the Security Agent in the U.S.
Perfection Certificate for filing in each governmental, municipal or other
office specified in Schedule 2 to the U.S. Perfection Certificate
(or specified by 


 


18

















 


notice from Holdings to the Security Agent after the Funding Date in
the case of filings, recordings or registrations required by Section 9.09
of the Credit Agreement), are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and
Trademark Office and the United States Copyright Office in order to perfect the
Security Interest in Article 9 Collateral consisting of United States
Patents, Trademarks and Copyrights and other than filings, recordings or
registrations with respect to federally documented vessels, registered vehicles
and railcars and other similar rolling stock) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Security Agent (for the benefit of
the Secured Parties) in respect of all Article 9 Collateral in which the
Security Interest may be perfected by filing a Uniform Commercial Code
financing statement in the United States (or any political subdivision
thereof), and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in the United States
for any such Article 9 Collateral, except as provided under applicable law
with respect to the filing of continuation statements.  Each Grantor shall execute and deliver to the
Security Agent on the date hereof each of the IP Security Agreements, containing
(i) in the case of the Patent and Trademark Security Agreement, a
description of all Article 9 Collateral consisting of the United States
Patents and a description of all Article 9 Collateral consisting of United
States registered Trademarks (and Trademarks for which United States registration
applications are pending) and (ii) in the case of the Copyright Security
Agreement, a description of all Article 9 Collateral consisting of
Copyrights, for recording by the United States Patent and Trademark Office and
the United States Copyright Office pursuant to 35 U.S.C. § 261,
15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable,  to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Security Agent (for the benefit of the Secured Parties) in respect
of all Article 9 Collateral consisting of United States Patents,
Trademarks and Copyrights in which a security interest may be perfected by
filing, recording or registration in the United States Patent and Trademark
Office or the United State Copyright Office, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in the United States for any such United States Patents, Trademarks
and Copyrights (other than such actions as are necessary to perfect the
Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).


 


(c)  The Security Interest constitutes (i) a
legal and valid security interest in all the Article 9 Collateral securing
the payment and performance of the U.S. Secured Obligations, (ii) subject
to the filings described in Section 4.02(b), a perfected security
interest in all Article 9 Collateral in which a security interest may be
perfected by filing Uniform Commercial Code financing statements in the United
States (or any political subdivision thereof) and (iii) a security
interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of the IP
Security Agreements with the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, on or promptly after the Funding
Date.  The Security Interest is and shall
be prior to any other Lien on any of the Article 9 Collateral, other than
Permitted Liens or as otherwise contemplated in the Intercreditor Agreement.


 


19

















 


(d)  The Article 9 Collateral is
owned by the Grantors free and clear of any Lien, except for Permitted Liens or
other Liens contemplated in the Intercreditor Agreement.  None of the Grantors has filed or consented
to the filing of (i) any financing statement or analogous document under
the Uniform Commercial Code or any other applicable laws covering any Article 9
Collateral, or (ii) any assignment in which any Grantor assigns any
Collateral as security or any security agreement or similar instrument covering
any Article 9 Collateral with the United States Patent and Trademark
Office or the United States Copyright Office, except in each case of clauses (i) and
(ii) for Permitted Liens or as otherwise contemplated in the Intercreditor
Agreement.


 


(e)  Schedule III hereto sets
forth, as of the date hereof, for each Grantor (i) all United States
registered Patents and Patent applications owned by such Grantor, including the
name of the registered owner, type, registration or application number and the
expiration date (if already registered) thereof, (ii) all United States
registered Trademarks and Trademark applications owned by such Grantor,
including the name of the registered owner, the registration or application
number and the expiration date (if already registered) thereof, and (iii) all
United States registered Copyrights and Copyright applications owned by such
Grantor, including the name of the registered owner, title and, if applicable,
the registration number of each such Copyright or Copyright application.


 


(f)  Schedule IV hereto sets
forth, as of the date hereof, each Commercial Tort Claim in respect of which a
compliant or a counterclaim has been filed by any Grantor seeking damages that
exceed $5,000,000 in reasonable estimated value and which arose in the course
of such Grantor’s business.


 


SECTION 4.03.  Covenants.  (a)  
Each Grantor agrees promptly to notify the Security Agent in writing of
any change (i) in corporate name, (ii) in the location of its chief
executive office or its principal place of business, (iii) in its identity
or type of organization or corporate structure, (iv) in its Federal
Taxpayer Identification Number or organizational identification number or (v) in
its jurisdiction of organization.  Each
Grantor agrees to promptly provide the Security Agent with certified
organizational documents reflecting any of the changes described in the first
sentence of this paragraph (a). 
Each Grantor agrees not to effect or permit any change referred to in
the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Security Agent
to continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Article 9 Collateral.  Each Grantor agrees promptly to notify the
Security Agent if any material portion of the Article 9 Collateral owned
or held by such Grantor is damaged or destroyed.


 


(b)  Each Grantor agrees to maintain, at
its own cost and expense, such complete and accurate records with respect to
the Article 9 Collateral owned by it as is consistent with its current
practices and in accordance with such prudent and standard practices used in
industries that are the same as or similar to those in which such Grantor is
engaged and, at such time or times, after the occurrence and during the
continuance of an Event of Default as the Security Agent may reasonably
request, promptly to prepare


 


20

















 


and deliver to the Security Agent a duly certified schedule or
schedules in form and detail satisfactory to the Security Agent showing the
identity, amount and location of any and all Article 9 Collateral.


 


(c)  Each Grantor shall, at its own
expense, take any and all actions reasonably necessary to defend title to the Article 9
Collateral against all Persons and to defend the Security Interest of the
Security Agent in the Article 9 Collateral and the priority thereof
against any Liens other than any Permitted Lien or other Liens contemplated in
the Intercreditor Agreement.


 


(d)  Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Security
Agent may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith.


 


Without limiting the generality of the
foregoing, each Grantor hereby authorizes the Security Agent, with prompt
notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III
or adding additional schedules hereto to identify specifically any asset or
item that may constitute Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall
have the right, exercisable within 30 days after it has been notified by
the Security Agent of the specific identification of such Collateral, to advise
the Security Agent in writing of any inaccuracy of the representations and
warranties made by such Grantor hereunder with respect to such Collateral.  Each Grantor agrees that it will use its
commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Collateral within 45 days after the date it has
been notified by the Security Agent of the specific identification of such
Collateral.


 


(e)  The Security Agent and such Persons
as the Security Agent may reasonably designate shall have the right, at the
Grantors’ own cost and expense, to inspect the Article 9 Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Article 9 Collateral is located, to
discuss the Grantors’ affairs with the officers of the Grantors and their
independent accountants, all in accordance with and subject to the terms and
conditions relating to inspections as set forth in Section 9.06 of
the Credit Agreement, and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Article 9 Collateral, including, in the case of Accounts
or Article 9 Collateral in the possession of any third person, by
contacting, with advance notice to and in coordination with the Grantors
(unless an Event of Default has occurred and is continuing) Account Debtors or
the third person possessing such Article 9 Collateral for the purpose of
making such a verification.  The Security
Agent shall have the absolute right to share any information it gains from such
inspection or


 


21

















 


verification with any Lender (it being understood that any such
information shall be deemed to be “Confidential Information” subject to the
provisions of Section 13.16 of the Credit Agreement).


 


(f)  At its option, the Security Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Article 9
Collateral and not permitted pursuant to the Credit Agreement, and may pay for
the maintenance and preservation of the Article 9 Collateral to the extent
any Grantor fails to do so as required by the Credit Agreement or this
Agreement after written notice thereof is delivered to Holdings by the Security
Agent, and each Grantor jointly and severally agrees to reimburse the Security
Agent on demand for any payment made or any expense incurred by the Security
Agent pursuant to the foregoing authorization; provided that nothing in this paragraph (f) shall
be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Security Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.


 


(g)  Each Grantor shall remain liable to
observe and perform all the conditions and obligations to be observed and
performed by it under each contract, Agreement or instrument relating to the Article 9
Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the
Security Agent and the Secured Parties from and against any and all liability
for such performance.


 


(h)  None of the Grantors shall make or
permit to be made an assignment, pledge or hypothecation of the Article 9
Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Credit Agreement.  None of the Grantors shall make or permit to
be made any transfer of the Article 9 Collateral except that unless and
until the Security Agent shall notify the Grantors in writing that an Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Article 9 Collateral, the Grantors may use and
dispose of the Article 9 Collateral in any lawful manner not inconsistent
with the provisions of this Agreement, the Credit Agreement or any other Loan
Document.


 


(i)  None of the Grantors will, without
the Security Agent’s prior written consent, grant any extension of the time of
payment of any Accounts included in the Article 9 Collateral, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, compromises,
settlements, releases, credits or discounts granted or made in the ordinary
course of business.


 


(j)  The Grantors, at their own expense,
shall maintain or cause to be maintained insurance covering physical loss or
damage to the Inventory and Equipment 


 


22

















 


in accordance with the requirements set forth in Section 9.02
of the Credit Agreement.  Each Grantor
irrevocably makes, constitutes and appoints the Security Agent (and all
officers, employees or agents designated by the Security Agent) as such Grantor’s
true and lawful agent (and attorney-in-fact) for the purpose, during the
continuance of an Event of Default, of making, settling and adjusting claims in
respect of Article 9 Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto.  In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Security Agent may, without waiving or releasing any obligation or liability of
the Grantors hereunder or any Event of Default, in its sole discretion, upon
notice to Holdings obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Security Agent
deems advisable.  All sums disbursed by
the Security Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto,
shall be payable, upon demand, by the Grantors to the Security Agent and shall
be additional U.S. Secured Obligations secured hereby.


 


(k)  Each Grantor shall maintain, in
form and manner reasonably satisfactory to the Security Agent, records of its
Chattel Paper and its books, records and documents evidencing or pertaining
thereto.


 


(l)  Each Grantor will keep and maintain
at its own cost and expense accurate records of its Accounts and Contracts,
including, but not limited to, originals or copies of all material
documentation (including each Contract) with respect thereto, material records
of all payments received, all credits granted thereon, all merchandise returned
and all other dealings therewith, and such Grantor will make the same available,
in accordance with and subject to the terms and conditions relating to
inspections set forth in the Credit Agreement to the Security Agent for
inspection at such Grantor’s own cost and expense.  Upon the occurrence and during the
continuance of an Event of Default and at the request of the Security Agent,
such Grantor shall, at its own cost and expense, deliver all tangible evidence
of its Accounts and Contract Rights (including, without limitation, all
documents evidencing the Accounts and all Contracts) and such books and records
to the Security Agent or to its representatives (copies of which evidence and
books and records may be retained by such Grantor).  If the Security Agent so directs, upon the
occurrence and during the continuance of an Event of Default, such Grantor
shall legend, in form and manner satisfactory to the Security Agent, the
Accounts and the Contracts, as well as books, records and documents (if any) of
such Grantor evidencing or pertaining to such Accounts and Contracts with an
appropriate reference to the fact that such Accounts and Contracts have been
assigned to the Security Agent and that the Security Agent has a security
interest therein.


 


(m)  Upon the occurrence and during the
continuance of an Event of Default, if the Security Agent so directs any
Grantor in writing, such Grantor agrees (x) to cause all payments on
account of the Accounts and Contracts to be made directly to a Cash Collateral
Account, (y) that the Security Agent may, at its option, directly notify


 


23

















 


the obligors with respect to any Accounts and/or under any Contracts to
make payments with respect thereto as provided in the preceding clause (x), and
(z) that the Security Agent may enforce collection of any such Accounts
and Contracts and may adjust, settle or compromise the amount of payment
thereof, in the same manner and to the same extent as such Grantor.  Without notice to or assent by any Grantor,
the Security Agent may, upon the occurrence and during the continuance of an
Event of Default, apply any or all amounts then in, or thereafter deposited in,
a Cash Collateral Account toward the payment of the U.S. Secured Obligations in
the manner provided in Section 5.02 of this Agreement.  The reasonable costs and expenses of
collection (including reasonable attorneys’ fees), whether incurred by a
Grantor or the Security Agent, shall be borne by the relevant Grantor.  The Security Agent shall deliver a copy of
each notice referred to in the preceding clause (y) to the relevant
Grantor, provided that the failure by the Security Agent to so notify
such Grantor shall not affect the effectiveness of such notice or the other
rights of the Security Agent created by this clause (m).


 


(n)  Except as permitted by clause (i) above,
each Grantor shall endeavor in accordance with reasonable business practices to
cause to be collected from the account debtor named in each of its Accounts or
obligor under any Contract, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing
under or on account of such Account or Contract, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account or under such Contract.


 


(o)  Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Accounts
and Contracts to observe and perform all of the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to such Accounts or such Contracts, as the case may
be.  Neither the Security Agent nor any
other Secured Party shall have any obligation or liability under any Account
(or any agreement giving rise thereto) or any Contract by reason of or arising
out of this Agreement or the receipt by the Security Agent or any other Secured
Party of any payment relating to such Account or Contract, as the case may be,
pursuant hereto, nor shall the Security Agent or any other Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Account (or any agreement giving rise thereto) or any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by them or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto) or any Contract, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have
been assigned to them or to which they may be entitled at any time or times.


 


SECTION 4.04.  Other
Actions.  In order to further insure
the attachment, perfection and priority of, and the ability of the Security
Agent to enforce, the Security Interest, each Grantor agrees, in each case at
such Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:


 


24
















 


(a) Instruments
and Tangible Chattel Paper.  In
accordance with and in furtherance of Article III, if any Grantor
shall at any time hold or acquire any Instruments (other than any Instrument
with a face amount of less than $5,000,000 so long as the aggregate principal
amount of Instruments under this exclusion does not exceed $10,000,000 ) or
Tangible Chattel Paper with a value of $2,500,000 or more, such Grantor shall
forthwith endorse, assign and deliver the same to the Security Agent (or the
Term Loan Agent or a designated bailee for purposes of perfection, in
accordance with the Intercreditor Agreement), accompanied by such instruments
of transfer or assignment duly executed in blank as the Security Agent may from
time to time reasonably request.


 


(b) Deposit
Accounts.  For each Deposit Account
(or any other demand, time, savings, passbook or similar account whose
jurisdiction (determined in accordance with Section 9-304 of the UCC) is
within a State of the United States) that any Grantor at any time opens or
maintains (other than Excluded Accounts but including each Term Sweep Account
that is a Deposit Account), such Grantor shall cause the depositary bank to
enter into a Control Agreement with such Grantor and the Security Agent (which
Control Agreement may also be for the benefit of the Term Loan Agent); provided
that so long as no Dominion Period then exists no Control Agreement shall be
required to be entered into until the later of (A) the date that is 60
days after the Funding Date (or such later date as agreed in writing by the
Administrative Agent in its sole discretion, or, with respect to any extension
of the period for compliance with this paragraph beyond 90 days from the date
that is 60 days after the Funding Date, as agreed in writing by the Co-Collateral
Agents in their sole discretion) and (B) in the case of deposit accounts
opened after the Funding Date, at the time of the establishment of the
respective deposit account (or such later date as agreed in writing by the
Administrative Agent in its sole discretion). 
The Security Agent agrees with each Grantor that the Security Agent
shall not exercise dominion and control over, or give any instructions or
withhold any withdrawal rights from any Grantor, with respect to such accounts
or any funds in such accounts, unless an Event of Default or Dominion Period
has occurred and is continuing.


 


(c) Investment
Property.  Except with respect to any
Equity Interest issued by any Subsidiary, if any Grantor shall at any time hold
or acquire any certificated securities (other than any Excluded Investment
Property) required to be pledged hereunder, such Grantor shall forthwith
endorse, assign and deliver the same to the Security Agent (or the Term Loan
Agent or a designated bailee for purposes of perfection, in accordance with the
Intercreditor Agreement), accompanied by such instruments of transfer or
assignment duly executed in blank as the Security Agent may from time to time
specify.  Except with respect to any Equity
Interest issued by any Subsidiary, if any securities (other than any Excluded
Investment Property) now or hereafter acquired by any Grantor are
uncertificated and are issued to such Grantor or its nominee directly by the
issuer thereof, such Grantor shall promptly notify the Security Agent thereof
and, at the Security Agent’s request and option, pursuant to an agreement in
form and substance reasonably satisfactory to the Security Agent, (i) cause
such securities to be certificated and 


 


25

















 


comply with the requirements
of the foregoing sentence, (ii) cause the issuer to agree to comply with
instructions from the Security Agent (or the Term Loan Agent or Permitted Notes
Agent or a designated bailee for purposes of perfection, in accordance with the
Intercreditor Agreement) as to such securities, without further consent of any
Grantor or such nominee, or (iii) arrange for the Security Agent (or the
Term Loan Agent or a designated bailee for purposes of perfection, in
accordance with the Intercreditor Agreement), 
to become the registered owner of such securities.  If any Grantor holds any Investment Property
(other than any Excluded Investment Property), whether certificated or
uncertificated, or other Investment Property (other than any Excluded
Investment Property) now or hereafter acquired by any Grantor are held by such
Grantor or its nominee through a Securities Intermediary or Commodity
Intermediary, except with respect to any Equity Interest issued by any
Subsidiary, Grantor shall promptly notify the Security Agent thereof and, at
the Security Agent’s request and option, pursuant to a Control Agreement (which
Control Agreement may also be for the benefit of the Term Loan Agent or
Permitted Notes Agent) in form and substance reasonably satisfactory to the
Security Agent, either (i) cause such Securities Intermediary or Commodity
Intermediary, as the case may be, to agree to comply with Entitlement Orders or
other Instructions from the Security Agent (or the Term Loan Agent or Permitted
Notes Agent or a designated bailee for purposes of perfection, in accordance
with the Intercreditor Agreement) to such Securities Intermediary as to such
Security Entitlements or to apply any value distributed on account of any
Commodity Contract as directed by the Security Agent (or the Term Loan Agent or
Permitted Notes Agent or a designated bailee for purposes of perfection, in
accordance with the Intercreditor Agreement) to such Commodity Intermediary, as
the case may be, in each case without further consent of any Grantor, such
nominee, or any other Person, or (ii) in the case of Financial Assets or
other Investment Property (other than any Excluded Investment Property) held
through a Securities Intermediary, arrange for the Security Agent (or the Term
Loan Agent or a designated bailee for purposes of perfection, in accordance
with the Intercreditor Agreement) to become the Entitlement Holder with respect
to such Investment Property, with the Grantor being permitted, only with the
consent of the Security Agent, to exercise rights to withdraw or otherwise deal
with such Investment Property; provided that so long as no Dominion
Period then exists no Control Agreement shall be required to be entered into
pursuant to this Section 4.04(c) until the later of (A) the
date that is 60 days after the Funding Date (or such later date as agreed in
writing by the Administrative Agent in its sole discretion, or, with respect to
any extension of the period for compliance with this paragraph beyond 90 days
from the date that is 60 days after the Funding Date, as agreed in writing by
the Co-Collateral Agents in their sole discretion) and (B) in the case of
Securities Accounts and Commodities Accounts opened after the Funding Date, at
the time of the establishment of the respective Securities Accounts or
Commodities Accounts, as the case may be (or such later date as agreed in
writing by the Administrative Agent in its sole discretion).  The Security Agent agrees with each of the
Grantors that the Security Agent (or the Term Loan Agent or Permitted Notes
Agent or a designated bailee for purposes of perfection, 


 


26

















 


in accordance with the
Intercreditor Agreement) shall not give any such Entitlement Orders or
Instructions or directions to any such issuer, Securities Intermediary or
Commodity Intermediary, and shall not exercise dominion and control over, or
withhold its consent to, the exercise of any withdrawal or dealing rights by
any Grantor, unless an Event of Default or Dominion Period has occurred and is
continuing, or, after giving effect to any such investment and withdrawal
rights, would occur.


 


(d) Intentionally
Omitted.


 


(e) Electronic
Chattel Paper and Transferable Records. 
If any Grantor at any time holds or acquires an interest in any
Electronic Chattel Paper or any “transferable record”, as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act
as in effect in any relevant jurisdiction, such Grantor shall promptly notify
the Security Agent thereof and, at the request of the Security Agent, and
subject to the rights of the Term Loan Agent and Permitted Notes Agent under
the Intercreditor Agreement, shall take such action as the Security Agent may
reasonably request to vest in the Security Agent control under New York
UCC Section 9-105 of such Electronic Chattel Paper or control under Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, Section 16 of the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record.  The Security Agent agrees with such Grantor
that the Security Agent will arrange, pursuant to procedures reasonably
satisfactory to the Security Agent and so long as such procedures will not
result in the Security Agent’s loss of control, for the Grantor to make
alterations to the Electronic Chattel Paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Grantor
with respect to such Electronic Chattel Paper or transferable record.


 


(f) Letter-of-Credit
Rights.  If any Grantor is at any
time a beneficiary under a letter of credit now or hereafter issued in favor of
such Grantor with a face amount greater than $2,500,000, such Grantor shall
promptly notify the Security Agent thereof and, at the request and option of
the Security Agent, and subject to the rights of the Term Loan Agent and
Permitted Notes Agent under the Intercreditor Agreement, such Grantor shall use
commercially reasonable efforts to, pursuant to an agreement in form and
substance reasonably satisfactory to the Security Agent, either (i) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to the Security Agent of the proceeds of any drawing under the
letter of credit or (ii) arrange for the Security Agent to become the
transferee beneficiary of the letter of credit, with the Security Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be


 


27

















 


paid to the applicable
Grantor unless an Event of Default has occurred or is continuing.


 


(g)  Commercial
Tort Claims.  If any Grantor shall at
any time hold a Commercial Tort Claim in which such Grantor is claimant that
exceeds $5,000,000 in reasonable estimated value, the Grantor shall promptly
notify the Security Agent thereof in a writing signed by such Grantor,
including a summary description of such claim, and grant to the Security Agent,
subject to the rights of the Term Loan Agent and Permitted Notes Agent under
the Intercreditor Agreement, in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance reasonably satisfactory to the Security Agent.  Each such summary description delivered after
the date of this Agreement shall be attached hereto as a supplement to Schedule
IV and made a part hereof.


 


(h) Collateral
Access Agreements.  Each Grantor
shall use commercially reasonable efforts to obtain a Collateral Access
Agreement from (i) the lessor of each leased property which is leased by
such Grantor or the mortgagee of any real property owned by such Grantor and
which is subject to a mortgage or deed of trust (other than a mortgage or deed
of trust that is contemplated in the Intercreditor Agreement), in each case
where the fair market value of the Collateral located at such leased or
mortgaged property exceeds $5,000,000 and (ii) the bailee or consignee
with respect to any third party warehouse, processor converter facility or
other similar location where Collateral with a fair market value exceeding
$2,000,000 is stored or located, which agreement or letter shall provide access
rights and shall otherwise be reasonably satisfactory in form and substance to
the Security Agent.  Each Grantor shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or third party warehouse where
any Collateral is or may be located, except where the failure to pay or perform
could not reasonably be expected to have a Material Adverse Effect.


 


(i) Each
Grantor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Security Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements,
transfer endorsements, certificates, reports and other assurances or
instruments and take such further steps, including any and all actions as may
be necessary or required under the Federal Assignment of Claims Act, relating
to its Accounts, Contracts, Instruments and other property or rights covered by
the security interest hereby granted, as the Security Agent may reasonably
require and consistent with the other terms and conditions of this Agreement
and the Credit Agreement.


 


SECTION 4.05.  Covenants
Regarding Patent, Trademark and Copyright Collateral.  (a)  Each Grantor agrees that it will
not do any act or omit to do any act (and will exercise commercially reasonable
efforts to prevent its licensees from doing any act or omitting to do any act)
whereby any Patent may become invalidated or dedicated to


 


28

















 


the
public, except where failure to comply with the foregoing could not reasonably
be expected to have a Material Adverse Effect, and agrees that it shall
continue to mark any products covered by a Patent that is material to the
conduct of such Grantor’s business with the relevant patent number as necessary
and sufficient to establish and preserve its maximum rights under applicable
patent laws except where the failure to comply with the foregoing could not
reasonably be expected to have a Material Adverse Effect.


 


(b)  Each Grantor (either itself or
through its licensees or its sublicensees) will, for each Trademark material to
the conduct of the business of Holdings and its Subsidiaries, taken as a whole,
(i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such
Trademark with notice of Federal or foreign registration to the extent
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights, except where the failure
to comply with the foregoing could not reasonably be expected to have a
Material Adverse Effect.


 


(c)  Each Grantor (either itself or
through its licensees or sublicensees) will, for each work covered by a
Copyright material to the business of Holdings and its Subsidiaries, taken as a
whole, continue to publish, reproduce, display, adopt and distribute the work
with appropriate copyright notice as necessary and sufficient to establish and
preserve its maximum rights under applicable copyright laws, except where the
failure to comply with the foregoing could not reasonably be expected to have a
Material Adverse Effect.


 


(d)  Each Grantor shall notify the
Security Agent promptly if it knows or has reason to know that any Patent, Trademark
or Copyright material to the conduct of the business of Holdings and its
Subsidiaries, taken as a whole, may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, United States Copyright
Office or any court or similar office of any country) regarding such Grantor’s
ownership of any Patent, Trademark or Copyright material to the conduct of the
business of Holdings and its Subsidiaries, taken as a whole, its right to
register the same, or its right to keep and maintain the same.


 


(e)  Each Grantor agrees to promptly
notify the Security Agent if such Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark
or Copyright (or for the registration of any Trademark or Copyright) which is
material to the Grantor’s business taken as a whole with the United States
Patent and Trademark Office or the United States Copyright Office, and, upon
request of the Security Agent, such Grantor agrees to execute and deliver IP
Security Agreements (in a form similar to the IP Security Agreements executed
and delivered on the date hereof) as the Security Agent may reasonably request
to evidence the Security Agent’s security interest in such Patent, Trademark or
Copyright, and each Grantor hereby appoints the Security Agent as its
attorney-in-fact to execute 


 


29

















 


and file such agreements for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.


 


(f)  Each Grantor will take all reasonably
necessary steps that are consistent with the practice in any proceeding before
the United States Patent and Trademark Office, United States Copyright Office
or any office or agency in any political subdivision of the United States, to
maintain and pursue each material application relating to the Patents,
Trademarks and/or Copyrights (and to obtain the relevant grant or registration)
and to maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of the business of Holdings and the
Subsidiaries, taken as a whole, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancelation proceedings against third parties; provided
that, to the extent consistent with the Credit Agreement, no Grantor shall be
obligated to pursue, preserve or maintain any Patent, Trademark or Copyright in
the event such Grantor determines, in its reasonable business judgment, that
the preservation of such Patent, Trademark or Copyright is no longer desirable
in the conduct of its business.


 


(g)  Upon and during the continuance of
an Event of Default, each Grantor shall, if requested by the Security Agent,
use its commercially reasonable efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all such Grantor’s right, title
and interest thereunder to the Security Agent or its designee.


 


ARTICLE V


 


Remedies


 


SECTION 5.01.  Remedies
Upon Default.  Upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to
deliver each item of Collateral to the Security Agent (or the Term Loan Agent
or Permitted Notes Agent or a designated bailee for purposes of perfection, in
accordance with the Intercreditor Agreement) on demand, and it is agreed that
the Security Agent shall have the right to take any of or all the following
actions at the same or different times:  (a) with
respect to any Article 9 Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Article 9 Collateral by the applicable
Grantors to the Security Agent, or to license or sublicense, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, any
such Article 9 Collateral throughout the world on such terms and
conditions and in such manner as the Security Agent shall determine (other than
in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and
with or without prior notice or demand for performance, to take possession of
the Article 9 Collateral and without liability for trespass to enter any
premises where the Article 9 Collateral may be located for the purpose of
taking possession of or removing the Article 9 Collateral and, generally,
to exercise any and all rights afforded to a secured party under this
Agreement, 


 


30

















 


the
Uniform Commercial Code or other applicable law.  Without limiting the generality of the
foregoing, upon the occurrence and during the continuance of an Event of
Default, each Grantor agrees that the Security Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral at a public or private sale or at
any broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Security Agent shall deem appropriate.  The Security Agent shall be authorized at any
such sale of securities (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Security Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral
shall hold the property sold absolutely, free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
law) all rights of redemption, stay and appraisal which such Grantor now has or
may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.


 


The Security Agent shall give the applicable
Grantors 10 days’ prior written notice (which each Grantor agrees is
reasonable notice within the meaning of Section 9-611 of the New York
UCC or its equivalent in other jurisdictions) of the Security Agent’s intention
to make any sale of Collateral.  Such
notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange,
shall state the board or exchange at which such sale is to be made and the day
on which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange.  Any such public
sale shall be held at such time or times within ordinary business hours and at
such place or places as the Security Agent may fix and state in the notice (if
any) of such sale.  At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Security Agent may (in its sole and
absolute discretion) determine.  The
Security Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of
such Collateral shall have been given. 
The Security Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned.  In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Security Agent until the sale price
is paid by the purchaser or purchasers thereof, but the Security Agent shall
not incur any liability in case any such purchaser or purchasers shall fail to
take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by
law, private) sale made pursuant to this Agreement, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a


 


31

















 


credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale,
hold, retain and dispose of such property without further accountability to any
Grantor therefor.  For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Security Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of
the Collateral or any portion thereof subject thereto, notwithstanding the fact
that after the Security Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the U.S. Secured Obligations
paid in full.  As an alternative to
exercising the power of sale herein conferred upon it, the Security Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to
conform to the commercially reasonable standards as provided in Section 9-610(b) of
the New York UCC or its equivalent in other jurisdictions.


 


SECTION 5.02.  Application
of Proceeds.  The Security Agent
shall, subject to the applicable provisions of the Intercreditor Agreement,
apply the proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, and the amounts paid or caused to be paid by any
Guarantor in accordance with Article II, as set forth in Section 11.02
of the Credit Agreement.


 


The Security Agent shall have absolute
discretion as to the time of application of any such proceeds, moneys or
balances in accordance with this Agreement. 
Upon any sale of Collateral by the Security Agent (including pursuant to
a power of sale granted by statute or under a judicial proceeding), the receipt
of the Security Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Security Agent or such officer or
be answerable in any way for the misapplication thereof.  It is understood that the Grantors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral and the aggregate amount of the U.S.
Secured Obligations.


 


SECTION 5.03.  Grant of
License to Use Intellectual Property. 
For the purpose of enabling the Security Agent to exercise rights and
remedies under this Agreement at such time as the Security Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Security Agent an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sublicense any of the Article 9 Collateral consisting of
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or
stored and to all computer software and programs used for the compilation or
printout thereof.  The use of such
license by the Security Agent may only be exercised, at the option of the
Security Agent, upon the occurrence and during the continuation of an Event of
Default after written notice is given to Holdings of the Security Agent’s
election to exercise such license; provided that 


 


32

















 


any
license, sublicense or other transaction entered into by the Security Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default. 
In operating under the license granted by each Grantor pursuant to this Section 5.03,
the Security Agent agrees that the goods sold and services rendered under any
Trademarks shall be of a nature and quality substantially consistent with those
theretofore offered under such Trademarks by such Grantor and such Grantor
shall have the right to inspect during the term of such license, at any
reasonable time or times upon reasonable notice to the Security Agent, and at
such Grantor’s own cost and expense, representative samples of goods sold and
services rendered under such Trademarks.


 


SECTION 5.04.  Securities
Act.  In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to
time in effect being called the “Federal Securities
Laws”) with respect to any disposition
of the Pledged Collateral permitted hereunder. 
Each Grantor understands that compliance with the Federal Securities
Laws might very strictly limit the course of conduct of the Security Agent if
the Security Agent were to attempt to dispose of all or any part of the Pledged
Collateral, and might also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal
restrictions or limitations affecting the Security Agent in any attempt to
dispose of all or part of the Pledged Collateral under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect.  Each Grantor recognizes that in
light of such restrictions and limitations the Security Agent may, with respect
to any sale of the Pledged Collateral, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Collateral for their own
account, for investment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in
light of such restrictions and limitations, the Security Agent, in its sole and
absolute discretion (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral
or part thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such
sale.  Each Grantor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such
restrictions.  In the event of any such
sale, the Security Agent shall incur no responsibility or liability for selling
all or any part of the Pledged Collateral at a price that the Security Agent,
in its sole and absolute discretion, may in good faith deem reasonable under
the circumstances, notwithstanding the possibility that a substantially higher
price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were
approached.  The provisions of this Section 5.04
will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at
which the Security Agent sells.


 


SECTION 5.05.  Registration.  Each Grantor agrees that, upon the occurrence
and during the continuance of an Event of Default, if for any reason the 


 


33

















 


Security
Agent desires to sell any of the Pledged Collateral at a public sale, it will,
at any time and from time to time, upon the written request of the Security
Agent, use commercially reasonable efforts to take or to cause the issuer of
such Pledged Collateral to take such action and prepare, distribute and/or file
such documents, as are required or advisable in the reasonable opinion of
counsel for the Security Agent to permit the public sale of such Pledged
Collateral.  Each Grantor further agrees
to indemnify, defend and hold harmless the Security Agent, each other Secured
Party, any underwriter and their respective affiliates and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including reasonable fees and
expenses to the Security Agent of legal counsel), and claims (including the
costs of investigation) that they may incur insofar as such loss, liability,
expense or claim arises out of or is based upon any alleged untrue statement of
a material fact contained in any prospectus (or any amendment or supplement
thereto) or in any notification or offering circular, or arises out of or is
based upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in any thereof not misleading,
except insofar as the same may have been caused by any untrue statement or
omission based upon information furnished in writing to such Grantor or the
issuer of such Pledged Collateral by the Security Agent or any other Secured
Party expressly for use therein.  Each
Grantor further agrees, upon such written request referred to above, to use
commercially reasonable efforts to qualify, file or register, or cause the
issuer of such Pledged Collateral to qualify, file or register, any of the
Pledged Collateral under the Blue Sky or other securities laws of such states
as may be requested by the Security Agent and keep effective, or cause to be
kept effective, all such qualifications, filings or registrations.  Each Grantor will bear all costs and expenses
of carrying out its obligations under this Section 5.05.  Each Grantor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this Section 5.05
and that such failure would not be adequately compensable in damages, and
therefore agrees that its agreements contained in this Section 5.05
may be specifically enforced.


 


ARTICLE VI


 


Indemnity, Subrogation and Subordination


 


SECTION 6.01.  Indemnity
and Subrogation.  In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 6.03), Holdings agrees that (a) in
the event a payment of an obligation shall be made by any Guarantor under this
Agreement, Holdings shall indemnify such Guarantor for the full amount of such
payment and such Guarantor shall be subrogated to the rights of the Person to
whom such payment shall have been made to the extent of such payment and (b) in
the event any assets of any Grantor shall be sold pursuant to this Agreement or
any other Security Document to satisfy in whole or in part an obligation owed
to any Secured Party, Holdings shall indemnify such Grantor in an amount equal
to the greater of the book value or the fair market value of the assets so
sold.


 


SECTION 6.02.  Contribution
and Subrogation.  Each Guarantor and
Grantor (a “Contributing Party”)
agrees (subject to Section 6.03) that, in the event a payment shall
be made by any other Guarantor hereunder in respect of any U.S. Secured 


 


34

















 


Obligation
or assets of any other Grantor (other than any Borrower) shall be sold pursuant
to any Security Document to satisfy any U.S. Secured Obligation owed to any
Secured Party and such other Guarantor or Grantor (the “Claiming
Party”) shall not have been fully
indemnified by Holdings as provided in Section 6.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market
value of such assets, as the case may be, in each case multiplied by a fraction
of which the numerator shall be the net worth of the Contributing Party on the
date hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, in the case of any Guarantor or
Grantor becoming a party hereto pursuant to Section 7.14, the date
of the supplement hereto executed and delivered by such Guarantor or
Grantor).  Any Contributing Party making
any payment to a Claiming Party pursuant to this Section 6.02 shall
be subrogated to the rights of such Claiming Party under Section 6.01
to the extent of such payment.


 


SECTION 6.03.  Subordination.  (a)  Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the U.S. Secured
Obligations.  No failure on the part of
any Borrower or any Guarantor or Grantor to make the payments required by Sections 6.01
and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the
obligations of such Guarantor or Grantor hereunder.


 


(b)  Each Guarantor and Grantor hereby
agrees that all Indebtedness and other monetary obligations owed to it by, or
by it to, as the case may be, any other Guarantor, Grantor or any other
Subsidiary shall be fully subordinated to the indefeasible payment in full in
cash of the U.S. Secured Obligations.


 


ARTICLE VII


 


Miscellaneous


 


SECTION 7.01.  Notices.  All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 13.03 of the Credit Agreement.  All communications and notices hereunder to
any Subsidiary Party shall be given to it in care of Holdings as provided in Section 13.03
of the Credit Agreement.


 


SECTION 7.02.  Waivers;
Amendment.  (a)  No failure or delay
by the Security Agent or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Security Agent
and 


 


35

















 


the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by any U.S. Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. 
Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Security Agent or any Lender may have had
notice or knowledge of such Default at the time.  No notice or demand on any U.S. Loan Party in
any case shall entitle any U.S. Loan Party to any other or further notice or
demand in similar or other circumstances.


 


(b)  Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Security Agent and the
U.S. Loan Party or U.S. Loan Parties with respect to which such waiver,
amendment or modification is to apply, subject to any consent required in
accordance with Section 13.12 of the Credit Agreement.


 


SECTION 7.03.  Security
Agent’s Fees and Expenses; Indemnification. 
(a)  The parties hereto agree that the Security Agent shall be
entitled to reimbursement of its reasonable out-of-pocket expenses incurred
hereunder as provided in Section 13.01 of the Credit Agreement.


 


(b)  Without limitation of its
indemnification obligations under the other Loan Documents, each Grantor and
each Guarantor jointly and severally agrees to indemnify the Security Agent
against, and hold the Security Agent harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
disbursements and other charges, incurred by or asserted against the Security
Agent arising out of, in connection with, or as a result of, the execution,
delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any of the foregoing, or any agreement
or instrument contemplated hereby, or to the Collateral, whether or not any
Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses have
resulted from the gross negligence or wilful misconduct of the Security Agent.


 


(c)  Any such amounts payable as
provided hereunder shall be additional U.S. Secured Obligations secured hereby
and by the other Security Documents.  The
provisions of this Section 7.03 shall remain operative and in full
force and effect regardless of the termination of this Agreement or any other
Loan Document, the consummation of the transactions contemplated hereby, the
repayment of any of the U.S. Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan Document,
or any investigation made by or on behalf of the Security Agent or any other
Secured Party.  All amounts due under
this Section 7.03 shall be payable on written demand therefor.


 


36






 












 


SECTION 7.04.  Successors
and Assigns.  Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Security Agent that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns.


 


SECTION 7.05.  Survival
of Agreement.  All covenants,
agreements, representations and warranties made by the U.S. Loan Parties in the
Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans or issuance of any Letters of Credit, regardless of any investigation
made by any Lender or on its behalf and notwithstanding that the Security Agent
or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as any Loan
Document Obligation or any other amount payable under any Loan Document is
outstanding and unpaid and so long as the Commitments have not expired or
terminated.


 


SECTION 7.06.  Counterparts;
Effectiveness; Several Agreement. 
This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  Delivery of an executed signature page to
this Agreement by facsimile or other electronic imaging shall be as effective
as delivery of a manually signed counterpart of this Agreement.  This Agreement shall become effective as to
any U.S. Loan Party when a counterpart hereof executed on behalf of such U.S.
Loan Party shall have been delivered to the Security Agent and a counterpart
hereof shall have been executed on behalf of the Security Agent, and thereafter
shall be binding upon such U.S. Loan Party and the Security Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
such U.S. Loan Party, the Security Agent and the other Secured Parties and
their respective successors and assigns, except that no U.S. Loan Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein (and any such assignment or transfer shall be void) except as
expressly permitted by the Credit Agreement. 
This Agreement shall be construed as a separate agreement with respect
to each U.S. Loan Party and may be amended, modified, supplemented, waived or
released with respect to any U.S. Loan Party without the approval of any other
U.S. Loan Party and without affecting the obligations of any other U.S. Loan
Party hereunder.


 


SECTION 7.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the


 


37

















 


economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.


 


SECTION 7.08.  Right of
Set-Off.  (a)  Each U.S. Loan
Party expressly agrees to the provisions set forth in Section 13.02
of the Credit Agreement with the same force and effect as if such provisions
were set forth in full herein.


 


(b)  Notwithstanding anything to the
contrary contained in this Agreement, at any time that the U.S. Secured
Obligations shall be secured by any real property located in the State of
California, no Secured Party shall exercise any right of set-off, lien or
counterclaim or take any court or administrative action or institute any proceedings
to enforce any provision of this Agreement without the prior consent of the
Security Agent or the Required Lenders or, to the extent required by Section 13.12  of the Credit
Agreement, all of the Lenders, if such setoff or action or proceeding would or
might (pursuant to Sections 580a, 580b, 580d and 726 of the California Code of
Civil Procedure or Section 2924 of the California Civil Code, if
applicable, or otherwise) affect or impair the validity, priority, or
enforceability of the liens granted to the Security Agent pursuant to this
Agreement or the other Security Documents or the enforceability of the
Obligations hereunder, and any attempted exercise by any Secured Party or the
Security Agent of any such right without obtaining such consent of the Required
Lenders or the Security Agent shall be null and void.  It is understood and agreed that the
foregoing sentence of this Section 7.08(b) is for the sole
benefit of the Secured Parties and may be amended, modified or waived in any
respect by the Required Lenders (without any requirement of prior notice to or
consent by any U.S. Loan Party or any other Person) and does not constitute a
waiver of any rights against any U.S. Loan Party or against any Collateral.


 


SECTION 7.09.  Governing
Law; Jurisdiction; Consent to Service of Process.  (a)  This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
including Sections 5-1401 and 5-1402 of Title 14 of the New York
General Obligations Law but excluding all other choice of law and conflicts of
laws rules thereof.


 


(b)  Each of the U.S. Loan Parties
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law,
in such Federal court.  Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement or any other U.S.
Loan Document shall affect any right that the Security Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other U.S. Loan


 


38

















 


Document against any Grantor or Guarantor, or its properties in the
courts of any jurisdiction.


 


(c)  Each of the U.S. Loan Parties
hereby irrevocably and unconditionally waives, to the fullest extent permitted
by law, any objection that it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) above.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


(d)  Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 7.01.  Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.


 


SECTION 7.10.  WAIVER OF
JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.


 


SECTION 7.11.  Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.


 


SECTION 7.12.  Security
Interest Absolute.  All rights of the
Security Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the U.S. Secured Obligations or
any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the U.S. Secured Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any other Loan Document
or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or


 


39

















 


departure
from any guarantee, securing or guaranteeing all or any of the U.S. Secured
Obligations, or (d) any other circumstance that might otherwise constitute
a defense available to, or a discharge of, any Grantor or Guarantor in respect
of the U.S. Secured Obligations or this Agreement.


 


SECTION 7.13.  Termination
or Release.  (a)  This
Agreement, the Guarantees made herein, the Security Interest, the grant of a
security interest in the Pledged Collateral and all other security interests
granted hereby shall terminate upon the payment in full in cash of the Loans
and all the other Loan Document Obligations (other than unasserted contingent
and indemnification obligations), termination of all Commitments and
Incremental Commitments and reduction of all exposure under any Letters of
Credit issued and any Bankers’ Acceptances to zero (or the making of other
arrangements satisfactory to the issuers thereof).


 


(b)  A Subsidiary Party (other than any
Borrower) shall automatically be released from its obligations hereunder and
the Security Interest in the Collateral of such Subsidiary Party (other than
any Borrower) shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Subsidiary Party (other than any Borrower) ceases to be a Subsidiary; provided that the Required
Lenders shall have consented to such transaction (to the extent required by the
Credit Agreement) and the terms of such consent did not provide otherwise.


 


(c)  Upon any sale or other transfer by
any Grantor of any Collateral that is permitted under the Credit Agreement
(other than a sale or other transfer to a U.S. Loan Party), or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 12.10 of the
Credit Agreement, the security interest in such Collateral shall be
automatically released.


 


(d)  At any time that a Grantor desires
that the Security Agent take any action to acknowledge or give effect to any
release of a Grantor or Collateral pursuant to the foregoing Section 7.13(a),
(b) or (c), Holdings shall deliver to the Security Agent a
certificate signed by a principal executive officer of Holdings stating that
the release of the respective Grantor or Collateral is permitted pursuant to
such Section 7.13(a), (b) or (c).  In connection with any termination or release
pursuant to paragraph (a), (b) or (c), the Security
Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination or release; provided, however, that (i) the
Security Agent shall not be required to execute any such document on terms
which, in its opinion, would expose it to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect
or impair the U.S. Secured Obligations or any Liens upon (or obligations of
Holdings or any of the Subsidiaries in respect of) all interests in Collateral
retained by Holdings or any of the Subsidiaries.  Any execution and delivery of documents
pursuant to this Section 7.13 shall be without recourse to or warranty
by the Security Agent.


 


(e)  The Security Agent shall have no
liability whatsoever to any other Secured Party as the result of any release of
any Subsidiary Party or Collateral by it in


 


40

















 


accordance with (or which the Security Agent in good faith believes to
be in accordance with) this Section 7.13.


 


SECTION 7.14.  Additional
Subsidiaries.  Pursuant to Sections 9.09,
10.05(f) and 10.15 of the Credit Agreement, certain Domestic
Subsidiaries of Holdings are required to enter into this Agreement as a
Subsidiary Party.  Upon execution and
delivery by the Security Agent and a Subsidiary of an instrument in the form of
Exhibit I hereto, such Subsidiary shall become a Subsidiary Party
hereunder with the same force and effect as if originally named as a Subsidiary
Party herein.  The execution and delivery
of any such instrument shall not require the consent of any other U.S. Loan
Party hereunder.  The rights and
obligations of each U.S. Loan Party hereunder shall remain in full force and
effect notwithstanding the addition of any new U.S. Loan Party as a party to
this Agreement.


 


SECTION 7.15.  Security
Agent Appointed Attorney-in-Fact. 
Each Grantor hereby appoints the Security Agent the attorney-in-fact of
such Grantor for the purpose of carrying out the provisions of this Agreement
and taking any action and executing any instrument that the Security Agent may
deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest.  Without limiting the generality of the
foregoing, the Security Agent shall have the right, upon the occurrence and during
the continuance of an Event of Default, with full power of substitution either
in the Security Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral
or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Collateral; (c) to
sign the name of any Grantor on any invoice or bill of lading relating to any
of the Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to collect
or otherwise realize on all or any of the Collateral or to enforce any rights
in respect of any Collateral; (f) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to make, settle and adjust claims in respect of Article 9
Collateral under policies of insurance and to endorse the name of such Grantor
on any check, draft, instrument or any other item of payment for the proceeds
of such policies of insurance and for making all determinations and decisions
with respect thereto; (h) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Security Agent; and (i) to
use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise
deal with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely
as though the Security Agent were the absolute owner of the Collateral for all
purposes; provided that nothing herein contained shall be construed as
requiring or obligating the Security Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Security Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby.  The Security Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers


 


41

















 


granted
to them herein, and neither they nor their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or wilful misconduct.


 


SECTION 7.16.  Recourse.  This Agreement is made with full recourse to
each U.S. Loan Party and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of such U.S. Loan Party
contained herein, in the Loan Documents, Hedging Agreements or Secured Cash
Management Agreements and otherwise in writing in connection herewith or
therewith.


 


SECTION 7.17.  Intercreditor Agreement; Possession and Control of
Term Priority Collateral. 
Notwithstanding anything herein to the contrary, the Liens granted to
the Security Agent under this Agreement and the exercise of the rights and
remedies of the Security Agent hereunder are subject to the provisions of the
Intercreditor Agreement.  In the event of
any conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern and control.  At any time prior to the Discharge of Term
Loan Credit Obligations, no Grantor shall be required to take or refrain from
taking any action at the request of the Security Agent with respect to any Term
Priority Collateral if such action or inaction would be inconsistent with (i) any
action or inaction affirmatively requested by the Term Loan Agent in accordance
with the Term Facility Documents or (ii) any action or inaction
affirmatively required by any of the provisions of the Term Facility
Documents.  Without limiting the
foregoing, at any time prior to the Discharge of Term Loan Credit Obligations,
any provision hereof (a) requiring Grantors to deliver possession of any
Term Priority Collateral to the Security Agent or its representatives, or to
cause the Security Agent or its representatives to control any Term Priority
Collateral, shall be deemed to have been complied with if and for so long as
the Term Loan Agent shall have such possession or control for the benefit of
the Secured Parties and as bailee or sub-agent of the Security Agent as
provided in the Intercreditor Agreement or (b) requiring Grantors to name
the Security Agent as an additional insured or a loss payee under any insurance
policy or a beneficiary of any letter of credit, such requirement shall have
been complied with if any such insurance policy or letter of credit also names
the Term Loan Agent as an additional insured, loss payee or beneficiary, as the
case may be, in each pursuant to the terms of the Intercreditor Agreement.  Notwithstanding anything to the contrary
herein but subject to the Intercreditor Agreement, in the event the Term Loan
Credit Documents or the Permitted Notes Documents provide for the grant of a
security interest or pledge over the assets of any Grantor and such assets do
not otherwise constitute Collateral under this Agreement or any other Loan
Document, such Grantor shall (a) promptly grant a security interest in or
pledge such assets to secure the U.S. Secured Obligations (including by
consenting to any control agreement with respect to Investment Property in any
Securities Account), (b) promptly take any actions necessary to perfect
such security interest or pledge that is required under the Term Loan Credit
Documents or Permitted Notes Documents, as applicable, and (c) take all
other steps reasonably requested by the Security Agent in connection with the
foregoing.


 


SECTION 7.18.  Waivers by
Loan Parties with Respect to California Real Property.  (a)  Each U.S. Loan Party hereby
acknowledges and affirms that it


 


42

















 


understands
that to the extent the U.S. Secured Obligations are secured by real property
located in the State of California, such U.S. Loan Party shall be liable for
the full amount of the liability hereunder notwithstanding foreclosure on such
real property by trustee sale or any other reason impairing such U.S. Loan
Party’s or any Secured Parties’ right to proceed against any Borrower, any
other Guaranteed Party or any other guarantor of the U.S. Secured Obligations.


 


(b)  Each U.S. Loan Party hereby waives (to
the fullest extent permitted by applicable law) all rights and benefits under Section 580a,
580b, 580d and 726 of the California Code of Civil Procedure.  Each U.S. Loan Party hereby further waives (to
the fullest extent permitted by applicable law), without limiting the
generality of the foregoing or any other provision hereof, all rights and
benefits which might otherwise be available to such U.S. Loan Party under
Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and
3433 of the California Civil Code.


 


(c)  Until the U.S. Secured Obligations
have been paid in full in cash, each U.S. Loan Party waives its rights of
subrogation and reimbursement and any other rights and defenses available to
such U.S. Loan Party by reason of Sections 2787 to 2855, inclusive, of the
California Civil Code, including, without limitation, (1) any defenses
such U.S. Loan Party may have to this Agreement by reason of an election of
remedies by the Secured Parties and (2) any rights or defenses such U.S.
Loan Party may have by reason of protection afforded to any Borrower or any
other Guaranteed Party pursuant to the antideficiency or other laws of
California limiting or discharging such Borrower’s or such other Guaranteed
Party’s indebtedness, including, without limitation, Section 580a, 580b,
580d or 726 of the California Code of Civil Procedure.  In furtherance of such provisions, each U.S.
Loan Party hereby waives all rights and defenses arising out of an election of
remedies by the Secured Parties, even though that election of remedies, such as
a nonjudicial foreclosure, destroys such U.S. Loan Party’s rights of
subrogation and reimbursement against any Borrower or any other Guaranteed
Party by the operation of Section 580d of the California Code of Civil
Procedure or otherwise.


 


SECTION 7.19.  The
Security Agent and the other Secured Parties.  The Security Agent will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement.  It is expressly understood
and agreed that the obligations of the Security Agent as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement, the Intercreditor Agreement and in Section 12 of the Credit
Agreement.  The Security Agent shall act
hereunder on the terms and conditions set forth herein and in Section 12
of the Credit Agreement.


 


43

















 


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


 


 


	
   

  	
  [SMURFIT-STONE
  CONTAINER CORPORATION]

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH, as Security Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I to


the Guarantee and


Collateral Agreement


 


SUBSIDIARY PARTIES


 






 












 


Schedule II to


the Guarantee and


Collateral Agreement


 


PLEDGED EQUITY INTERESTS


 


	
  Holder

  	
   

  	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage

  of Equity

  Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


PLEDGED DEBT SECURITIES


 


	
  Holder

  	
   

  	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule III to


the Guarantee and


Collateral Agreement


 


U.S. COPYRIGHTS OWNED BY [NAME OF GRANTOR]


 


[Create a separate page of
Schedule III for each Grantor and state if no copyrights are owned.  List in numerical order by Registration No.]


 


U.S. Copyright Registrations


 


	
  Title

  	
   

  	
  Reg. No.

  	
   

  	
  Author

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pending U.S. Copyright
Applications for Registration


 


	
  Title

  	
   

  	
  Author

  	
   

  	
  Class

  	
   

  	
  Date Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


LICENSES


 


[Create a separate page of Schedule III
for each Grantor, and state if any Grantor is not a party to a
license/sublicense.]


 


I.  Material Licenses/Sublicensees of [Name of
Grantor] as Licensor on Date Hereof


 


A.  Copyrights


 


[List material U.S. copyrights in numerical
order by Registration No.]


 


U.S. Copyrights


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  Title of

  U.S.

  Copyright

  	
   

  	
  Author

  	
   

  	
  Reg. No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B.  Patents


 


[List material U.S. patent nos. and U.S.
patent application nos. in numerical order.]


 


U.S.
Patents


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date
  of License/

  Sublicense

  	
   

  	
  Issue
  Date

  	
   

  	
  Patent
  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


U.S. Patent Applications


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  Date Filed

  	
   

  	
  Application No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


C.  Trademarks


 


[List material U.S. trademark nos. and U.S.
trademark application nos. in numerical order.]


 


2

















 


U.S. Trademarks


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


U.S. Trademark Applications


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Date Filed

  	
   

  	
  Application

  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3

















 


II. Material  Licensees/Sublicenses of [Name of Grantor] as
Licensee on Date Hereof


 


A.  Copyrights


 


[List material U.S. copyrights in numerical
order by Registration No.]


 


U.S. Copyrights


 


	
  Licensor
  Name and

  Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  Title of

  U.S. Copyright

  	
   

  	
  Author

  	
   

  	
  Reg. No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B.  Patents


 


[List material U.S. patent nos. and U.S.
patent application nos. in numerical order.]


 


U.S. Patents


 


	
  Licensor
  Name

  and Address

  	
   

  	
  Date of

  License/

  Sublicense

  	
   

  	
  Issue Date

  	
   

  	
  Patent No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


U.S.
Patent Applications


 


	
  Licensor Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  Date Filed

  	
   

  	
  Application No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


C.  Trademarks


 


[List material U.S. trademark nos. and U.S.
trademark application nos. in numerical order.]


 


 


U.S. Trademarks


 


	
  Licensor
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


4

















 


U.S.
Trademark Applications


 


	
  Licensor Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Date

  Filed

  	
   

  	
  Application

  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


5

















 


PATENTS OWNED BY [NAME OF GRANTOR]


 


[Create a separate page of Schedule III
for each Grantor and state if no patents are owned.  List in numerical order by Patent No./Patent
Application No.]


 


U.S. Patent Registrations


 


	
  Patent
  Numbers

  	
   

  	
  Issue Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


U.S. Patent Applications


 


	
  Patent
  Application No.

  	
   

  	
  Filing Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


6

















 


TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]


 


[Create a separate page of Schedule III
for each Grantor and state if no trademarks/trade names are owned.  List in numerical order by trademark
registration/application no.]


 


U.S. Trademark Registrations


 


	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


U.S. Trademark Applications


 


	
  Mark

  	
   

  	
  Filing Date

  	
   

  	
  Application No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


7
















 


Schedule IV to


the Guarantee and


Collateral
Agreement


 


COMMERCIAL TORT CLAIMS


 

















 


Exhibit I to the


Guarantee and


Collateral Agreement


 


SUPPLEMENT NO.      dated as of
[            ], to
the Guarantee and Collateral Agreement dated as of [      ], 2010, among SMURFIT-STONE CONTAINER
CORPORATION, a Delaware corporation, each Subsidiary party thereto (each such
subsidiary individually a “Subsidiary
Guarantor” and
collectively, the “Subsidiary Guarantors”;
the Subsidiary Guarantors and Holdings are referred to collectively herein as
the “Grantors”)
and DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”),
as Security Agent (in such capacity, the “Security
Agent”)(the “Guaranty and Collateral
Agreement”).


 


A. 
Reference is made to the ABL Credit Agreement dated as of [     ],
2010 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Subsidiaries of Holdings from time to time party thereto, the lenders
from time to time party thereto and Deutsche Bank AG New York Branch, as
Administrative Agent.


 


B. 
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the Guarantee
and Collateral Agreement referred to therein.


 


C.  The
Grantors have entered into the Guarantee and Collateral Agreement in order to
induce the Lenders to make Loans and issue Letters of Credit to the
Borrowers.  Section 7.14 of
Guarantee and Collateral Agreement provides that additional Domestic
Subsidiaries of Holdings may become Subsidiary Parties under the Guarantee and
Collateral Agreement by execution and delivery of an instrument in the form of
this Supplement.  The undersigned
Subsidiary (the “New Subsidiary”)
is executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and issue
Letters of Credit to the Borrowers and as consideration for Loans previously
made to the Borrowers and Letters of Credit previously issued.


 


Accordingly, the Security Agent and the New
Subsidiary agree as follows:


 


SECTION 1.  In accordance with Section 7.14
of the Guarantee and Collateral Agreement, the New Subsidiary by its signature
below becomes a Subsidiary Party, Grantor and Guarantor under the Guarantee and
Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party, Grantor and Guarantor and the New Subsidiary
hereby (a) agrees to all the terms and provisions of the Guarantee and
Collateral Agreement applicable to it as a Subsidiary Party, Grantor and
Guarantor thereunder and (b) represents and warrants that the representations
and warranties made by it as a Grantor and Guarantor thereunder are true and
correct on and


 

















 


as of the date hereof.  In furtherance of the foregoing, the New
Subsidiary, as security for the payment and performance in full of the U.S.
Secured Obligations (as defined in the Credit Agreement), does hereby create
and grant to the Security Agent, its successors and assigns, for the benefit of
the Secured Parties, their successors and assigns, a security interest in and
lien on all of the New Subsidiary’s right, title and interest in and to the
Collateral (as defined in the Guarantee and Collateral Agreement) of the New
Subsidiary.  Each reference to a “Guarantor”
or “Grantor” in the Guarantee and
Collateral Agreement shall be deemed to include the New Subsidiary.  The Guarantee and Collateral Agreement is
hereby incorporated herein by reference.


 


SECTION 2.  The New Subsidiary represents and warrants to
the Security Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and subject to general principles of equity
(whether enforcement is sought by a proceeding in equity or at law).


 


SECTION 3.  This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Security Agent shall have received a counterpart of this Supplement that
bears the signature of the New Subsidiary and the Security Agent has executed a
counterpart hereof.  Delivery of an
executed signature page to this Supplement by facsimile transmission shall
be as effective as delivery of a manually signed counterpart of this
Supplement.


 


SECTION 4.  The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a
true and correct schedule with the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office, (b) set forth on Schedule II attached hereto
is a true and correct schedule, as of the date hereof, of (i) all the
Equity Interests owned by the New Subsidiary required to be pledged under Article III,
setting forth the percentage of the issued and outstanding units of each class
of the Equity Interests of the issuer thereof so owned by the New Subsidiary
and the number of each certificate representing the same, and (ii) all
debt securities and promissory notes owned by the New Subsidiary required to be
pledged under Article III or Section 4.04 (c) set forth on Schedule III
attached hereto is a true and correct schedule, as of the date hereof, of all
Intellectual Property of the New Subsidiary that would have been required to be
set forth on Schedule III to the Guarantee and Collateral Agreement
and (d) set forth on Schedule IV attached hereto is a true and
correct schedule, as of the date hereof, of all Commercial Tort Claims required
to be disclosed under Section 4.04(g) of the Guarantee and Collateral
Agreement.  The New Subsidiary shall
deliver to the Security Agent a certificate executed by an Authorized Officer
of the New Subsidiary setting forth the information (other than that set forth
on the Schedules described above) required pursuant to the U.S. Perfection
Certificate.


 


2

















 


SECTION 5.  Except as expressly supplemented hereby, the
Guarantee and Collateral Agreement shall remain in full force and effect.


 


SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES THEREOF.


 


SECTION 7.  In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Guarantee and Collateral Agreement shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.


 


SECTION 8.  All communications and notices hereunder
shall be in writing and given as provided in Section 7.01 of the
Guarantee and Collateral Agreement.


 


SECTION 9.  The New Subsidiary agrees to reimburse the
Security Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Security Agent.


 


3

















 


IN WITNESS WHEREOF, the New Subsidiary and
the Security Agent have duly executed this Supplement to the Collateral
Agreement as of the day and year first above written.


 


	
   

  	
  [NAME
  OF NEW SUBSIDIARY],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH, as Security Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I


to Supplement No.      to the


Guarantee and


Collateral Agreement


 


NEW SUBSIDIARY INFORMATION


 


	
  Name

  	
   

  	
  Jurisdiction of Formation

  	
   

  	
  Chief Executive Office

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule II


to the Supplement No.      to the


Guarantee and


Collateral Agreement


 


EQUITY INTERESTS


 


	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interests

  	
   

  	
  Percentage

  of Equity Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


DEBT SECURITIES


 


	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule III


to the Supplement No.      to the


Guarantee and


Collateral
Agreement


 


INTELLECTUAL PROPERTY


 

















 


Schedule IV


to the Supplement No.      to the


Guarantee and


Collateral
Agreement


 


COMMERCIAL TORT CLAIMS


 

















 


Exhibit II to the


Guarantee and


Collateral Agreement


 


[FORM OF] PATENT AND TRADEMARK SECURITY
AGREEMENT dated as of [  ] [  ], 20[ 
] (this “Agreement”), among [    
] (the “Grantors”) and DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”),
as Security Agent.


 


Reference is made to (a) the Credit
Agreement dated as of [     ], 2010 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Subsidiaries of Holdings from time to time party thereto, the Lenders
from time to time party thereto and DBNY, as Administrative Agent, and (b) the
Guarantee and Collateral Agreement dated as of [      ], 2010 (as amended, supplemented or
otherwise modified from time to time, the “Collateral Agreement”), among
Smurfit-Stone Container Corporation (formerly known as Smurfit-Stone Container
Enterprises, Inc.), the Subsidiaries of Holdings party thereto and DBNY,
as Security Agent.  The Lenders have
agreed to extend credit to the Borrowers on the terms and subject to the
conditions set forth in the Credit Agreement. 
The obligations of the Lenders to extend such credit are conditioned on,
among other things, the execution and delivery of this Agreement.  The Grantors are affiliates of the Borrowers,
will derive substantial benefits from the extension of credit to the Borrowers
pursuant to the Credit Agreement and are willing to execute and deliver this Agreement
in order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as
follows:


 


SECTION 1.  Terms. 
Capitalized terms used in this Agreement and not otherwise defined
herein have the meanings specified in the Collateral Agreement or the Credit
Agreement, as applicable.  The rules of
construction specified in Section 1.02 of the Credit Agreement also apply
to this Agreement.


 


SECTION 2.  Grant of Security Interest. As
security for the payment or performance, as the case may be, in full of the
U.S. Secured Obligations, the Grantor hereby grants to the Security Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest (the “Security Interest”) in all of such Grantor’s right, title
and interest in, to and under any Patents now owned or at any time hereafter
acquired by such Grantor, including those listed on Schedule I (the “Patent
Collateral”) and any Trademarks now owned or at any time hereafter acquired
by such Grantor, including those listed on Schedule II (the “Trademark
Collateral”, and together with the Patent Collateral, the “Patent and
Trademark Collateral”).


 


SECTION 3. Collateral Agreement.  The security interests granted to the
Security Agent herein are granted in furtherance, and not in limitation of, the
security interests granted to the Security Agent pursuant to the Collateral
Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of the Security Agent
with respect to the Patent and Trademark Collateral are more fully set forth in
the Collateral Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.  In the event of any conflict between the
terms of 


 

















 


this Agreement and the
Collateral Agreement, the terms of the Collateral Agreement shall govern.


 


SECTION 4. Counterparts.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract. 
Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.


 


[Remainder of this page intentionally left blank]


 


2
















 


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


 


 


	
   

  	
  [               ]

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH, as Security Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I


 

















 


Schedule II


 

















 


Exhibit III to the


Guarantee and


Collateral Agreement


 


[FORM OF] COPYRIGHT SECURITY AGREEMENT dated as
of [  ] [ 
], 20[  ] (this “Agreement”),
among [     ] (the “Grantors”) and
DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”), as Security Agent.


 


Reference is made to (a) the
Credit Agreement dated as of [     ],
2010 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Subsidiaries of Holdings from time to time party thereto, the Lenders
from time to time party thereto and DBNY, as Administrative Agent, and (b) the
Guarantee and Collateral Agreement dated as of [      ], 2010 (as amended, supplemented or
otherwise modified from time to time, the “Collateral Agreement”), among
Smurfit-Stone Container Corporation (formerly known as Smurfit-Stone Container
Enterprises, Inc.), the Subsidiaries of Holdings party thereto and DBNY,
as Security Agent.  The Lenders have
agreed to extend credit to the Borrowers on the terms and subject to the
conditions set forth in the Credit Agreement. 
The obligations of the Lenders to extend such credit are conditioned on,
among other things, the execution and delivery of this Agreement.  The Grantors are affiliates of the Borrowers,
will derive substantial benefits from the extension of credit to the Borrowers
pursuant to the Credit Agreement and are willing to execute and deliver this Agreement
in order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as
follows:


 


SECTION 1.  Terms. 
Capitalized terms used in this Agreement and not otherwise defined
herein have the meanings specified in the Collateral Agreement or the Credit
Agreement, as applicable.  The rules of
construction specified in Section 1.02 of the Credit Agreement also apply
to this Agreement.


 


SECTION 2.  Grant of Security Interest.  As security for the payment or performance,
as the case may be, in full of the U.S. Secured Obligations, the Grantor hereby
grants to the Security Agent, its successors and assigns, for the benefit of
the Secured Parties, a security interest (the “Security Interest”) in
all of such Grantor’s right, title and interest in, to and under any Copyrights
now owned or at any time hereafter acquired by such Grantor, including those
listed on Schedule I, and any Copyright Licenses under which such Grantor is a
licensee, including those listed on Schedule II (collectively, the “Copyright
Collateral”).


 


SECTION 3. Collateral
Agreement.  The security interests
granted to the Security Agent herein are granted in furtherance, and not in
limitation of, the security interests granted to the Security Agent pursuant to
the Collateral Agreement.  Each Grantor
hereby acknowledges and affirms that the rights and remedies of the Security
Agent with respect to the Copyright Collateral are more fully set forth in the
Collateral Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.  In the event of any conflict between the
terms of this Agreement and the Collateral Agreement, the terms of the
Collateral Agreement shall govern.


 

















 


SECTION 4. Counterparts.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract. 
Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.


 


[Remainder of this page intentionally left blank]


 


2

















 


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


 


 


	
   

  	
  [               ],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH, as Security Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I


 

















 


Schedule II


 
















 


Exhibit
N


to
the Credit Agreement


	
   

  



 


FORM OF

CANADIAN GUARANTEE AND COLLATERAL AGREEMENT


 


dated as of


 


[      ],
2010,


 


among


 


SMURFIT-STONE
CONTAINER CANADA, L.P.


 


THE CANADIAN
SUBSIDIARIES PARTIES HERETO

and


 


DEUTSCHE BANK AG
NEW YORK BRANCH,


 


as Security Agent


	
   

  



 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I

  DEFINITIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Credit Agreement

  	
   

  	
  1

  
	
  SECTION 1.02.

  	
  Other Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  GUARANTEE

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Guarantee

  	
   

  	
  5

  
	
  SECTION 2.02.

  	
  Guarantee of Payment

  	
   

  	
  6

  
	
  SECTION 2.03.

  	
  No Limitations

  	
   

  	
  6

  
	
  SECTION 2.04.

  	
  Reinstatement

  	
   

  	
  7

  
	
  SECTION 2.05.

  	
  Agreement To Pay; Subrogation

  	
   

  	
  7

  
	
  SECTION 2.06.

  	
  Information

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  PLEDGE OF SECURITIES

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Pledge

  	
   

  	
  7

  
	
  SECTION 3.02.

  	
  Delivery of the Pledged Collateral

  	
   

  	
  8

  
	
  SECTION 3.03.

  	
  Representations, Warranties and Covenants

  	
   

  	
  9

  
	
  SECTION 3.04.

  	
  Certification of Limited Liability Company and Partnership Interests

  	
   

  	
  10

  
	
  SECTION 3.05.

  	
  Registration in Nominee Name; Denominations

  	
   

  	
  10

  
	
  SECTION 3.06.

  	
  Voting Rights; Dividends and Interest

  	
   

  	
  11

  
	
  SECTION 3.07.

  	
  Restriction on Transfer

  	
   

  	
  12

  
	
  SECTION 3.08.

  	
  ULC Shares

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  SECURITY INTERESTS IN PERSONAL PROPERTY

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Security Interest

  	
   

  	
  13

  
	
  SECTION 4.02.

  	
  Representations and Warranties

  	
   

  	
  15

  
	
  SECTION 4.03.

  	
  Covenants

  	
   

  	
  16

  
	
  SECTION 4.04.

  	
  Other Actions

  	
   

  	
  20

  
	
  SECTION 4.05.

  	
  [Intentionally Deleted]

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  REMEDIES

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Remedies Upon Default

  	
   

  	
  22

  



 


i

















 


	
  SECTION 5.02.

  	
  Application of Proceeds

  	
   

  	
  24

  
	
  SECTION 5.03.

  	
  Grant of License to Use Intellectual Property

  	
   

  	
  24

  
	
  SECTION 5.04.

  	
  Securities Laws

  	
   

  	
  24

  
	
  SECTION 5.05.

  	
  Public Offering

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  INDEMNITY, SUBROGATION AND SUBORDINATION

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Indemnity and Subrogation

  	
   

  	
  26

  
	
  SECTION 6.02.

  	
  Contribution and Subrogation

  	
   

  	
  26

  
	
  SECTION 6.03.

  	
  Subordination

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Notices

  	
   

  	
  27

  
	
  SECTION 7.02.

  	
  Waivers; Amendment

  	
   

  	
  27

  
	
  SECTION 7.03.

  	
  Security Agent’s Fees and Expenses; Indemnification

  	
   

  	
  27

  
	
  SECTION 7.04.

  	
  Successors and Assigns

  	
   

  	
  28

  
	
  SECTION 7.05.

  	
  Survival of Agreement

  	
   

  	
  28

  
	
  SECTION 7.06.

  	
  Counterparts; Effectiveness; Several Agreement

  	
   

  	
  28

  
	
  SECTION 7.07.

  	
  Severability

  	
   

  	
  29

  
	
  SECTION 7.08.

  	
  Right of Set-Off

  	
   

  	
  29

  
	
  SECTION 7.09.

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
   

  	
  29

  
	
  SECTION 7.10.

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  30

  
	
  SECTION 7.11.

  	
  Headings

  	
   

  	
  30

  
	
  SECTION 7.12.

  	
  Security Interest Absolute

  	
   

  	
  30

  
	
  SECTION 7.13.

  	
  Termination or Release

  	
   

  	
  31

  
	
  SECTION 7.14.

  	
  Additional Canadian Subsidiaries

  	
   

  	
  32

  
	
  SECTION 7.15.

  	
  Security Agent Appointed Attorney-in-Fact

  	
   

  	
  32

  
	
  SECTION 7.16.

  	
  Recourse

  	
   

  	
  33

  
	
  SECTION 7.17.

  	
  [Intentionally Deleted]

  	
   

  	
  33

  
	
  SECTION 7.18.

  	
  [Intentionally Deleted]

  	
   

  	
  33

  
	
  SECTION 7.19.

  	
  The Security Agent and the other Secured
  Parties

  	
   

  	
  33

  



 


Schedules


Schedule I                                        Canadian
Subsidiary Parties


Schedule II                                    Pledged
Equity Interests; Pledged Debt Securities


 


ii

















 


Exhibits


 


Exhibit I  Form of Supplement


 


iii

















 


CANADIAN GUARANTEE AND
COLLATERAL AGREEMENT (this “Agreement”) dated as of [       ], 2010, among SMURFIT-STONE CONTAINER
CANADA, L.P., an Ontario limited partnership, the Canadian Subsidiaries party
hereto and DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”), as Security Agent.


 


Reference is made to the ABL
Credit Agreement dated as of [     ],
2010 (as amended, restated, supplemented or otherwise modified from time to
time (the “Credit Agreement”), among Smurfit-Stone Container
Corporation, Smurfit-Stone Container Enterprises, Inc., certain
Subsidiaries from time to time party thereto, the Lenders party thereto, DBNY,
as Administrative Agent and Security Agent, and DBNY, JPMorgan Chase Bank, N.A.
and General Electric Capital Corporation, as Co-Collateral Agents.  The Lenders have agreed to extend credit to
the Borrowers subject to the terms and conditions set forth in the Credit
Agreement.  The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. 
The Canadian Subsidiary Parties are affiliates of the Borrowers, will
derive substantial benefits from the extension of credit to the Borrowers
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as
follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.01. 
Credit Agreement.  (a) 
Capitalized terms used in this Agreement, including the preamble and
introductory paragraph hereto, and not otherwise defined herein have the
meanings specified in the Credit Agreement. 
All terms defined in the PPSA (as defined herein) and not defined in
this Agreement have the meanings specified therein.


 


(b)  The rules of construction specified in Section 1.03
of the Credit Agreement also apply to this Agreement.


 


SECTION 1.02. 
Other Defined Terms.  As
used in this Agreement, the following terms have the meanings specified below:


 


“Account Debtor”
means any Person who is or who may become obligated to any Grantor under, with
respect to or on account of an Account.


 


“Accounts Receivable”
means all Accounts and other rights to payment for the sale, lease, license,
assignment or other disposal of any Inventory or the performance of services
(whether performed or to be performed), existing on the date of this Agreement
or hereafter arising, whether or not earned by performance.


 


“Canadian Borrower”
means each Canadian Subsidiary of Holdings identified on the signature pages to
the Credit Agreement (together with each other Canadian Subsidiary of Holdings
that becomes a Canadian Borrower pursuant to Section 9.09(b) of the Credit
Agreement).


 

















 


“Canadian Subsidiary”
shall mean any direct or indirect subsidiary of Holdings that is incorporated
or organized in Canada or any province or territory thereof.


 


“Canadian Subsidiary
Parties” means (a) the Canadian Subsidiaries identified on Schedule
I and (b) each other Canadian Subsidiary that becomes a party to this
Agreement as a Canadian Subsidiary Party after the Funding Date, other than any
such Canadian Subsidiary that is released from its obligations hereunder in
accordance with the Credit Agreement.


 


“Cash Collateral Account”
means a non-interest bearing cash collateral account maintained with, and in
the sole dominion and control of, the Security Agent for the benefit of the
Secured Parties.


 


“Claiming Party” has
the meaning assigned to such term in Section 6.02.


 


“Collateral” means
all PPSA Collateral in which a security interest has been granted hereunder and
all Pledged Collateral.


 


“Collateral Access
Agreement” means any landlord waiver or other agreement, in form and
substance reasonably satisfactory to the Security Agent, between the Security
Agent and any third party (including any bailee, consignee, customs broker, or
other similar Person) in possession of any Collateral or any landlord of any
Grantor for any real property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, or otherwise modified from
time to time.


 


“Contract Rights”
means all rights of any Grantor under each Contract, including, without
limitation, (i) any and all rights to receive and demand payments under
any or all Contracts, (ii) any and all rights to receive and compel
performance under any or all Contracts and (iii) any and all other rights,
interests and claims now existing or in the future arising in connection with
any or all Contracts.


 


“Contracts” means all
contracts between any Grantor and one or more additional parties (including,
without limitation, any Hedging Agreements, licensing agreements and any
partnership agreements, joint venture agreements and limited liability company
agreements).


 


“Contributing Party”
has the meaning assigned to such term in Section 6.02.


 


“Copyright License”
means any written agreement, now or hereafter in effect, granting any right to
any third party under any Copyright now or hereafter owned by any Grantor or
that such Grantor otherwise has the right to license, or granting any right to
any Grantor under any copyright now or hereafter owned by any third party, and
all rights of such Grantor under any such agreement.


 


“Copyrights” means
all of the following now owned or hereafter acquired by any Grantor: (a) all
copyright rights in any work subject to the copyright laws of Canada, the
United States or any other jurisdiction, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in Canada, the United States or any other
jurisdiction, including registrations, recordings, supplemental registrations
and 


 


2

















 


pending
applications for registration in the Canadian Intellectual Property Office, the
United States Copyright Office or similar office in any other jurisdiction.


 


“Credit Agreement”
has the meaning assigned to such term in the preliminary statement of this
Agreement.


 


“DBNY” has the
meaning assigned to such term in the preliminary statement of this Agreement.


 


“Excluded Investment
Property” means, at any time, Investment Property (other than those subject
to Article III) held by any Grantor in the form of Equity Interests or
other securities, in each case, (a) that are not publicly traded, (b) with
respect to which a grant of a security interest is not prohibited or does not
constitute or result in a breach or termination under the terms of, or a
default under, any contract or agreement relating to such Investment Property
and (c) whose book value, together with the aggregate book value of all
other Excluded Investment Property, does not exceed $50,000,000 in the
aggregate at such time.


 


“Intangibles” has the
meaning given to such term in the PPSA, and includes, without limitation, all
choses in action and causes of action and all other intangible personal
property of every kind and nature (other than Accounts) now owned or hereafter
acquired by any Grantor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Hedging Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to any Grantor to secure payment by an Account Debtor of any
of the Accounts.


 


“Grantors” means each
of the Canadian Subsidiary Parties.


 


“Guaranteed Party”
means each Canadian Borrower and each other Canadian Loan Party.


 


“Guarantors” means
each Canadian Subsidiary Party (other than any Canadian Borrower) with respect
to any Canadian Secured Obligations and each Canadian Borrower with respect to
any Canadian Secured Obligations (other than monetary obligations owed by such
Canadian Borrower under (i) each Loan Document, (ii) each Secured
Hedging Agreement that is treated as a “Hedging Obligation” pursuant to the
terms of Section 13.21 of the Credit Agreement, and (iii) each
Secured Cash Management Agreement that is treated as a “Cash Management
Services Obligation” pursuant to the terms of Section 13.21 of the Credit
Agreement).


 


“Holdings” means
Smurfit-Stone Container Corporation (formerly known as Smurfit-Stone Container
Enterprises, Inc.).


 


“Intellectual Property”
means all intellectual and similar property of every kind and nature now owned
or hereafter acquired by any Grantor, including inventions, designs, Patents,
Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary
technical and business information, know-how, show-how or other data or
information, software and 


 


3

















 


databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.


 


“License” means any
Patent License, Trademark License, Copyright License or other license or
sublicense agreement relating to intellectual property to which any Grantor is
a party.


 


“Patent License”
means any written agreement, now or hereafter in effect, granting to any third
party any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, is in existence, or granting to any Grantor any right to make, use or
sell any invention on which a patent, now or hereafter owned by any third
party, is in existence, and all rights of any Grantor under any such agreement.


 


“Patents” means all
of the following now owned or hereafter acquired by any Grantor:  (a) all letters patent of Canada, the
United States or any other jurisdiction, all registrations and recordings
thereof, and all applications for letters patent of Canada, the United States
or any other jurisdiction, including registrations, recordings and pending
applications in the Canadian Intellectual Property Office, United States Patent
and Trademark Office or similar office in any other jurisdiction, and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right
to make, use and/or sell the inventions disclosed or claimed therein.


 


“Pledged Collateral”
has the meaning assigned to such term in Section 3.01.


 


“Pledged Debt Securities”
has the meaning assigned to such term in Section 3.01.


 


“Pledged Equity Interests”
has the meaning assigned to such term in Section 3.01.


 


“Pledged Securities”
means any promissory notes, stock certificates or other securities certificates
or instruments now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.


 


“PPSA” means the Personal Property Security Act (Ontario), and all
regulations made thereunder, as in effect from time to time; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by a Personal Property Security
Act as in effect in a Canadian jurisdiction other than Ontario, or by the Civil
Code of Quebec, “PPSA” means the Personal Property Security Act as in effect
from time to time in such other jurisdiction or the Civil Code of Quebec, as
applicable, for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority in such Collateral.


 


“PPSA Collateral” has
the meaning assigned to such term in Section 4.01.


 


“Securities Laws” has
the meaning assigned to such term in Section 5.04.


 


4

















 


“Security Interest”
has the meaning assigned to such term in Section 4.01.


 


“subsidiary” shall
mean, with respect to any Person (herein referred to as the “parent”),
any corporation, partnership, association or other business entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership or membership interests are, at the time any determination
is being made, owned, controlled or held by, or otherwise controlled by, the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.


 


“Trademark License”
means any written agreement, now or hereafter in effect, granting to any third
party any right to use any Trademark now or hereafter owned by any Grantor or
that any Grantor otherwise has the right to license, or granting to any Grantor
any right to use any trademark now or hereafter owned by any third party, and
all rights of any Grantor under any such agreement.


 


“Trademarks” means
all of the following now owned or hereafter acquired by any Grantor:  (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and Intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the Canadian Intellectual Property Office, the
United States Patent and Trademark Office or similar office in any other
jurisdiction, and all extensions or renewals thereof, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.


 


“ULC” means an issuer
that is an unlimited company or unlimited liability company.


 


“ULC Laws” means the Companies Act (Nova Scotia), the Business
Corporations Act (Alberta), the Business Corporations Act
(British Columbia), and any other present or future Laws governing ULCs.


 


“ULC Shares” means
shares or other equity interests in the capital stock of a ULC.


 


ARTICLE II


 


Guarantee


 


SECTION 2.01. 
Guarantee.  Each Guarantor
unconditionally and irrevocably guarantees, jointly with the other Guarantors
and severally, as the primary obligation and debt of each Guarantor and not
merely as a surety, the due, prompt and complete payment and performance of the
Canadian Secured Obligations.  Each of
the Guarantors further agrees that the Canadian Secured Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Canadian Secured Obligation.  Each of the 


 


5

















 


Guarantors waives presentment to, demand of payment from and protest to
any Canadian Borrower or any other Guaranteed Party of any of the Canadian
Secured Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.


 


SECTION 2.02. 
Guarantee of Payment.  Each
of the Guarantors further agrees that its guarantee hereunder constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Security Agent or any other Secured Party
to any other Guarantor or any Guaranteed Party to any security held for the
payment of the Canadian Secured Obligations or to any balance of any deposit
account or credit on the books of the Security Agent or any other Secured Party
in favour of any Canadian Borrower or any other Person.


 


SECTION 2.03. 
No Limitations.  (a) 
Except for termination or release of a Guarantor’s obligations hereunder as
expressly provided in Section 7.13, the obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense (other than defense of payment in full in cash) or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Canadian Secured Obligations or
otherwise.  Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by (i) the failure of
the Security Agent or any other Secured Party to assert any claim or demand or
to enforce any right or remedy under the provisions of any Loan Document,
Secured Hedging Agreement, Secured Cash Management Agreement or otherwise; (ii) any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, any Loan Document, Secured Hedging Agreement,
Secured Cash Management Agreement or any other agreement, including with
respect to any other Guarantor under this Agreement; (iii) the release of
any security held by the Security Agent or any other Secured Party for the
Canadian Secured Obligations or any of them; (iv) any default, failure or
delay, wilful or otherwise, in the performance of the Canadian Secured
Obligations; or (v) any other act or omission that may or might in any
manner or to any extent vary the risk of any Guarantor or otherwise operate as
a discharge of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Canadian Secured
Obligations).  Each Guarantor expressly
authorizes the Secured Parties to take and hold security for the payment and
performance of the Canadian Secured Obligations, to exchange, waive or release
any or all such security (with or without consideration), to enforce or apply
such security and direct the order and manner of any sale thereof in their sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Canadian Secured Obligations, all without
affecting the obligations of any Guarantor hereunder.


 


(b)  To the fullest extent permitted by
applicable law, each Guarantor waives any defense based on or arising out of
any defense of any Canadian Borrower or any other Guaranteed Party or the
unenforceability of the Canadian Secured Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of any Canadian
Borrower or any other Guaranteed Party, other than the indefeasible payment in
full in cash of all the Canadian Secured Obligations.  The Security Agent and the other Secured
Parties may, at their election, enforce any security held by one or more of
them, compromise or adjust any part of the Canadian 


 


6

















 


Secured Obligations, make any other accommodation with any Canadian
Borrower or any other Guaranteed Party or exercise any other right or remedy
available to them against any Canadian Borrower or any other Guaranteed Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Canadian Secured Obligations have been fully
and indefeasibly paid in full in cash. 
To the fullest extent permitted by applicable law, each Guarantor waives
any defense arising out of any such action even though such action operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any Canadian Borrower or any other Guaranteed Party, as the case may be, or any
security.


 


SECTION 2.04. 
Reinstatement.  Each of the
Guarantors agrees that its guarantee hereunder shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Canadian Secured Obligations is rescinded or must otherwise be
restored by the Security Agent or any other Secured Party upon the bankruptcy
or reorganization of any Canadian Borrower, any other Guaranteed Party or
otherwise.


 


SECTION 2.05. 
Agreement To Pay; Subrogation. 
In furtherance of the foregoing and not in limitation of any other right
that the Security Agent or any other Secured Party has at law or in equity
against any Guarantor by virtue hereof, upon the failure of any Canadian
Borrower or any other Guaranteed Party to pay any Canadian Secured Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Security Agent for distribution
to the applicable Secured Parties in cash the amount of such unpaid Canadian
Secured Obligation.  Upon payment by or
on behalf of any Guarantor of any sums to the Security Agent as provided above,
all rights of such Guarantor against any Canadian Borrower or any other
Guaranteed Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.


 


SECTION 2.06. 
Information.  Each
Guarantor assumes all responsibility for being and keeping itself informed of
each Canadian Borrower’s and each other Guaranteed Party’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Canadian Secured Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Security Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.


 


ARTICLE III


 


Pledge of Securities


 


SECTION 3.01. 
Pledge.  As security for
the payment or performance, as the case may be, in full of the Canadian Secured
Obligations, each Grantor hereby collaterally assigns and pledges to the
Security Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Security Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest
in, all of such Grantor’s right, title and interest in, to and under:


 


7
















 


(a)                                  the shares of capital stock and other
Equity Interests of (i) each Canadian Loan Party owned by such Grantor,
and of each other subsidiary owned by such Grantor that is a Material
Subsidiary of such Grantor, including those listed on Schedule II, (ii) any
other shares of capital stock and other Equity Interests in such Canadian Loan
Party or other subsidiary that is a Canadian Loan Party owned in the future by
such Grantor, and the certificates representing all such Equity Interests (all
such Equity Interests referred to in clauses  (i) and (ii) above
being referred to as the “Pledged Equity Interests”); provided
that the Pledged Equity Interests shall not include, to the extent that
applicable law requires that a non-Canadian subsidiary issue directors’
qualifying shares, any such qualifying shares;


 


(b)                                 each promissory note evidencing
intercompany Indebtedness among Canadian Loan Parties owned by and owed to such
Grantor after the date hereof (the “Pledged Debt Securities”);


 


(c)  subject to Section 3.06, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the securities referred to in clauses (a) and
(b) above; and


 


(d)  all Proceeds of any of the foregoing (the
items referred to in clauses  (a), (b), (c) and
(d) of this Section 3.01 above being collectively referred to
as the “Pledged Collateral”).


 


TO HAVE AND TO HOLD the
Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Security
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, as security for the payment or performance, as the case may be, in
full of the Canadian Secured Obligations; subject, however, to
the terms, covenants and conditions hereinafter set forth.


 


SECTION 3.02. 
Delivery of the Pledged Collateral.  (a)  Each Grantor agrees promptly to
deliver or cause to be delivered to the Security Agent any and all Pledged
Securities at any time owned by such Grantor.


 


(b)  Each Grantor will cause any Indebtedness for
borrowed money owed to such Grantor by any Canadian Loan Party (other than any
Investment Property on deposit with a Securities Intermediary) to be evidenced
by a duly executed promissory note that is pledged and delivered to the
Security Agent pursuant to the terms hereof.


 


(c)  Upon delivery to the Security Agent, (i) any
Pledged Securities shall be accompanied by undated stock powers duly executed
in blank or other instruments of transfer reasonably satisfactory to the
Security Agent and by such other instruments and documents as the Security
Agent may reasonably request and (ii) all other property comprising part
of the Pledged Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Grantor and such other instruments
or documents as the Security Agent may reasonably request.  Each delivery of Pledged Securities after the
date of this Agreement shall be accompanied by a schedule describing the
Pledged Securities so delivered, which schedule shall be attached hereto as a
supplement to Schedule II and made a part hereof; provided that failure
to 


 


8

















 


attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities.


 


(d)  The assignment, pledges and security
interests granted in Section 3.01 are granted as security only and
shall not subject the Security Agent or any other Secured Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Pledged Collateral.


 


SECTION 3.03. 
Representations, Warranties and Covenants.  The Grantors jointly and severally represent,
warrant and covenant to and with the Security Agent, for the benefit of the
Secured Parties, that:


 


(a) 
Schedule II correctly sets forth, as of the Funding Date, with respect
to each Grantor, (i) all of the Equity Interests owned by such Grantor and
required to be pledged hereunder on the Funding Date, the percentage of the
issued and outstanding units of each class of the Equity Interests of the
issuer thereof so represented by the Pledged Equity Interests and the number of
each certificate representing the same and (ii) all promissory notes owned
by each Grantor and required to be pledged hereunder on the Funding Date;


 


(b) 
the Pledged Equity Interests and Pledged Debt Securities, in each case issued
by Canadian Loan Parties, have been duly and validly authorized and issued by
the issuers thereof and (i) in the case of Pledged Equity Interests, are
fully paid and nonassessable and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law;


 


(c) 
except for the security interests granted hereunder, each of the Grantors (i) is
and, subject to any sales, transfers or other dispositions, and mergers,
consolidations and amalgamations, made in compliance with the Credit Agreement,
will continue to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II as owned by such
Grantor, (ii) holds the same free and clear of all Liens (other than
Permitted Liens), (iii) will not pledge or hypothecate, or otherwise
create a consensual Lien on, the Pledged Collateral, and (iv) will defend
its title or interest thereto or therein against any and all Liens (other than
the Lien created by this Agreement and Permitted Liens), however arising, of
all Persons whomsoever;


 


(d) 
except for restrictions and limitations imposed by the Loan Documents or
applicable laws (including Securities Laws) generally, and except for the
requirement in the articles or other constating documents of any Canadian
Subsidiary for the approval of the directors and/or shareholders of such
Canadian Subsidiary for any transfers of its shares, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to (i) any option, right of first
refusal, shareholders agreement or charter or by-law provisions that might
prohibit, impair, delay (except pursuant to any applicable notice or like
provisions) or 


 


9

















 


otherwise
adversely affect the pledge of such Pledged Collateral hereunder, the sale or
disposition thereof pursuant hereto or the exercise by the Security Agent of
its rights and remedies hereunder with respect thereto, or (ii) any other
contractual restriction of any nature that might prohibit the pledge of such
Pledged Collateral hereunder or prohibit or in any material manner impair,
delay or otherwise adversely affect the sale or disposition of such Pledged
Collateral pursuant hereto or the exercise by the Security Agent of its rights
and remedies hereunder with respect thereto;


 


(e) 
each of the Grantors has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;


 


(f) 
no consent or approval of any Governmental Authority, any securities exchange
or any other Person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force and
effect);


 


(g) 
by virtue of the execution and delivery by the Grantors of this Agreement, when
any Pledged Securities are delivered to the Security Agent in accordance with
this Agreement, the Security Agent will obtain a legal, valid and perfected
lien upon and security interest in such Pledged Securities as security for the
payment and performance of the Canadian Secured Obligations; and


 


(h) 
the pledge effected hereby is effective to vest in the Security Agent, for the
benefit of the Secured Parties, the rights of the Security Agent in the Pledged
Collateral as set forth herein.


 


SECTION 3.04. 
Certification of Limited Liability Company and Partnership Interests.  Each Grantor acknowledges and agrees that (i) to
the extent any interest in any limited liability company or partnership
controlled on or after the date hereof by such Grantor and pledged hereunder is
a “security” within the meaning of the Securities Transfer Act,
2006 (Ontario) or other applicable securities transfer laws, such
interest shall be certificated and (ii) each such interest shall at all
times hereafter continue to be such a security and represented by such
certificate.  Each Grantor further
acknowledges and agrees that with respect to any interest in any limited liability
company or partnership controlled on or after the date hereof by such Grantor
and pledged hereunder that is not a “security” within the meaning of applicable
securities transfer laws, such Grantor shall at no time elect to treat any such
interest as a “security” within the meaning given to such term in applicable
securities transfer laws, nor shall such interest be represented by a
certificate, unless such election is made and such interest is thereafter
represented by a certificate that is promptly delivered to the Security Agent pursuant
to the terms hereof.


 


SECTION 3.05. 
Registration in Nominee Name; Denominations.  The Security Agent, on behalf of the Secured
Parties, shall have the right (in its sole and absolute discretion) to hold the
Pledged Securities in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or
assigned in blank or in favour of the Security Agent.  The Security Agent shall, at any time after
the occurrence and during the continuance of an Event of Default, have the
right to exchange the certificates representing 


 


10

















 


Pledged Securities for certificates of smaller or larger denominations
for any purpose consistent with this Agreement.


 


SECTION 3.06. 
Voting Rights; Dividends and Interest.  (a)  Unless and until an Event of
Default shall have occurred and be continuing and the Security Agent shall have
notified the Grantors in writing that their rights under this Section 3.06
are being suspended:


 


(i) 
Each Grantor shall be entitled to exercise any and all voting and/or other
rights and powers inuring to an owner of Pledged Equity Interests or Pledged
Debt Securities or any part thereof for any purpose consistent with the terms
of this Agreement, the Credit Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
reasonably be expected to materially and adversely affect the rights inuring to
a holder of any Pledged Equity Interests or Pledged Debt Securities or the
rights and remedies of any of the Security Agent or the other Secured Parties
under this Agreement, the Credit Agreement or any other Loan Document or the
ability of the Security Agent or the Secured Parties to exercise the same.


 


(ii) 
The Security Agent shall execute and deliver to each Grantor, or cause to be
executed and delivered to such Grantor, all such proxies, powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting rights and powers it is entitled
to exercise pursuant to paragraph (i) above and to receive the cash
dividends, interest, principal and other distributions it is entitled to
receive and retain pursuant to paragraph (iii) below.


 


(iii) 
Each Grantor shall be entitled to receive and retain any and all dividends,
interest, principal, cash, instruments and other property and all distributions
from time to time received, receivable or otherwise paid on or distributed in respect
of, in exchange for or upon conversion of, the Pledged Equity Interests or
Pledged Debt Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity Interests or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or otherwise,
shall be and become part of the Pledged Collateral, and, if received by any
Grantor, shall not be commingled by such Grantor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held in trust
for the benefit of the Security Agent and shall be forthwith delivered to the
Security Agent in the same form as so received (with any necessary
endorsement).


 


(b)  Upon the occurrence and during the
continuance of an Event of Default, after the Security Agent shall have
notified the Grantors in writing of the suspension of their rights under paragraph
(a)(iii) above, all rights of any Grantor to dividends, interest,
principal or other 


 


11

















 


distributions that such Grantor is authorized to receive pursuant to paragraph
(a)(iii) above, and the obligations of the Security Agent under paragraph
(a)(ii) above, shall cease, and all such rights shall thereupon become
vested in the Security Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions.  All dividends, interest,
principal or other distributions received by any Grantor contrary to the
provisions of this Section 3.06 shall be held in trust for the
benefit of the Security Agent, shall be segregated from other property or funds
of such Grantor and shall be forthwith delivered to the Security Agent upon
demand in the same form as so received (with any necessary endorsement).  Any and all money and other property paid
over to or received by the Security Agent pursuant to the provisions of this paragraph
(b) shall be retained by the Security Agent in an account to be
established by the Security Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 5.02.  After all Events of Default have been cured
or waived and Holdings has delivered to the Security Agent a certificate to
that effect, the Security Agent shall promptly repay to each Grantor (without
interest) all dividends, interest, principal or other distributions that such
Grantor would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) above and that remain in such account.


 


(c)  Upon the occurrence and during the
continuance of an Event of Default, after the Security Agent shall have
notified the Grantors in writing of the suspension of their rights under paragraph
(a)(i) above, all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to paragraph
(a)(i) above, and the obligations of the Security Agent under paragraph
(a)(ii) above, shall cease, and all such rights shall thereupon become
vested in the Security Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Security Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Grantors to exercise such rights.


 


(d)  Any notice given by the Security Agent to
the Grantors suspending their rights under paragraph (a) of this Section 3.06
(i) may be given by telephone if promptly confirmed in writing, (ii) may
be given to one or more of the Grantors at the same or different times and (iii) may
suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in
part without suspending all such rights (as specified by the Security Agent in
its sole and absolute discretion) and without waiving or otherwise affecting
the Security Agent’s right to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.


 


SECTION 3.07. 
Restriction on Transfer. 
If the constating documents of any issuer (other than a ULC) of any
Pledged Securities restrict the transfer of such Pledged Securities, then the
applicable Grantor will deliver to the Security Agent a certified copy of a
resolution of the directors, shareholders, unitholders or partners of such
issuer, as applicable, consenting to the transfer(s) contemplated by this
Agreement, including any prospective transfer of such Pledged Securities by the
Security Agent on enforcement of its rights under this Agreement.


 


12

















 


SECTION 3.08. 
ULC Shares.  Each Grantor acknowledges
that certain Collateral may now or in the future consist of ULC Shares, and
that it is the intention of the Security Agent and each Grantor that the
Security Agent should not under any circumstances prior to realization thereon
be held to be a “member” or a “shareholder”, as applicable, of a ULC for the
purposes of any ULC Laws.  Therefore,
notwithstanding any provisions to the contrary contained in this Agreement, the
Credit Agreement or any other Loan Document, where a Grantor is the registered
owner of ULC Shares that are Collateral, such Grantor will remain the sole
registered owner of such ULC Shares until such time as such ULC Shares are
effectively transferred into the name of the Security Agent or any other Person
on the books and records of the applicable ULC. 
Accordingly, such Grantor shall be entitled to receive and retain for
its own account any dividend on or other distribution, if any, in respect of
such ULC Shares (other than any dividend or distribution comprised of
additional ULC Shares of such issuer, which shall be delivered to the Security
Agent to hold hereunder) and shall have the right to vote such ULC Shares and
to control the direction, management and policies of the applicable ULC to the
same extent as such Grantor would if such ULC Shares were not pledged to the
Security Agent hereunder.  Nothing in
this Agreement, the Credit Agreement or any other Loan Document is intended to,
and nothing in this Agreement, the Credit Agreement or any other Loan Document
shall, constitute the Security Agent or any Person other than such Grantor as a
member or shareholder of a ULC for the purposes of any ULC Laws (whether listed
or unlisted, registered or beneficial), until, upon the occurrence and during
the continuance of an Event of Default, the Security Agent shall have notified
such Grantor in writing of the suspension of its rights under section 3.06(a) and
further steps are taken pursuant hereto or thereto to register the Security
Agent or such other Person, as specified in such notice, as the holder of the
ULC Shares.  To the extent any provision
hereof would have the effect of constituting the Security Agent as a member or
a shareholder, as applicable, of any ULC prior to such time, such provision
shall be severed herefrom and shall be ineffective with respect to ULC Shares
that are Collateral without otherwise invalidating or rendering unenforceable
this Agreement or invalidating or rendering unenforceable such provision
insofar as it relates to Collateral that is not ULC Shares.  Except upon the exercise of rights of the
Security Agent to sell, transfer or otherwise dispose of ULC Shares in
accordance with this Agreement, such Grantor shall not cause or permit, or
enable an issuer that is a ULC to cause or permit, the Security Agent to: (a) be
registered as a shareholder or member of such issuer; (b) have any
notation entered in its favour in the share register of such issuer; (c) be
held out as a shareholder or member of such issuer; (d) receive, directly
or indirectly, any dividends, property or other distributions from such issuer
by reason of the Security Agent holding a security interest in the ULC Shares;
or (e) act as a shareholder of such issuer, or exercise any rights of a
shareholder, including the right to attend a meeting of shareholders of such
issuer or to vote the ULC Shares.


 


ARTICLE IV


 


Security Interests in Personal Property


 


SECTION 4.01. 
Security Interest.  (a) 
As security for the payment or performance, as the case may be, in full of the
Canadian Secured Obligations, each Grantor hereby collaterally assigns and
pledges to the Security Agent, its successors and assigns, for the benefit of
the Secured Parties, and hereby grants to the Security Agent, its successors
and 


 


13

















 


assigns, for the benefit of the Secured Parties, a security interest
(the “Security Interest”) in, all right, title and interest in, to or
under any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “PPSA Collateral”):


 


(i)                                   all Accounts;


 


(ii)                                all Chattel Paper;


 


(iii)                             all Money and all bank accounts and all
monies deposited therein;


 


(iv)                            all Documents of Title;


 


(v)                               all Intangibles (excluding all Intellectual
Property);


 


(vi)                            all Instruments;


 


(vii)                         all Inventory;


 


(viii)                      all Investment Property (including all Futures
Contracts, Futures Accounts, Securities and Securities Accounts and Security
Entitlements or Financial Assets credited thereto);


 


(ix)                              all Contracts, together with all Contract
Rights arising thereunder;


 


(x)                                 all Goods (excluding all Equipment and
Consumer Goods);


 


(xi)                              all books and Records pertaining to the PPSA
Collateral; and


 


(xii)                           all products and Proceeds of the foregoing
(including, without limitation, all insurance and claims for insurance effected
or held for the benefit of the Grantors or the Secured Parties in respect
thereof and all collateral security and guarantees given by any Person with
respect to any of the foregoing).


 


(b)  Each Grantor hereby irrevocably authorizes
the Security Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements with respect to the PPSA Collateral or
any part thereof and amendments thereto that (i) indicate the PPSA Collateral
as all assets of such Grantor or words of similar effect as being of an equal
or lesser scope or with greater detail, and (ii) contain the information
required by the PPSA or other applicable law of each applicable jurisdiction
for the filing of any financing statement or financing change statement.  Each Grantor agrees to provide such
information to the Security Agent promptly upon request.


 


Each Grantor also ratifies
its authorization for the Security Agent to file in any relevant jurisdiction
any financing statements or financing change statements from time to time.  


 


14

















 


Each Grantor will
pay any applicable filing fees, recordation taxes and related expenses relating
to its PPSA Collateral.


 


(c)  The Security Interest is granted as security
only and shall not subject the Security Agent or any other Secured Party to, or
in any way alter or modify, any obligation or liability of any Grantor with
respect to or arising out of the PPSA Collateral.


 


(d)  Notwithstanding anything herein to the
contrary, in no event shall the security interest granted hereunder attach to (i)
any shares of capital stock or other Equity Interests (other than those subject
to Article III) held by any Grantor with respect to which a grant of a
security interest is prohibited or shall constitute or result in a breach or
termination under the terms of, or a default under, any contract or agreement
relating to such capital stock or Equity Interests, (ii) any contract or
other agreement to which any Grantor is a party or to any of its rights, title
or interest arising thereunder if and for so long as the grant of such security
interest is prohibited or shall constitute or result in a breach or termination
under the terms of, or a default under, any such contract or agreement, (iii) any
rights, assets or property to the extent and for so long as any valid
enforceable law or regulation applicable to such rights, assets or property
prohibits the creation of a security interest therein, (iv) any rights,
assets or property to the extent and for so long as the grant of such security
interest would result in material and adverse tax consequences, (v) any
consumer goods of any Grantor, or (vi) the last day of any real property lease,
or any agreement to lease, to which any Grantor is now or becomes a party as
lessee, provided that any such last day shall be held in trust by such Grantor
for the Security Agent and, on the exercise by the Security Agent of its rights
and remedies hereunder, shall be assigned by such Grantor as directed by the
Security Agent; provided, however, that such security interest
shall attach immediately at such time as (A) with respect to clauses (i) and
(ii), the condition causing such prohibition, unenforceability, breach or
termination shall be remedied or shall otherwise cease to exist, (B) with
respect to clause (iii), the expiration of such prohibition and (C) with
respect to clause (iv), the termination or lapse of such result, and, to
the extent severable, shall attach immediately to any portion of such contract,
agreement, rights, assets or property that does not result in any of the
consequences specified in this paragraph, including any Proceeds of such
contract, agreement, rights, assets or property.


 


SECTION 4.02. 
Representations and Warranties. 
The Grantors jointly and severally represent and warrant to the Security
Agent and the Secured Parties that:


 


(a)                                  Each Grantor has good and valid rights in
and title to the PPSA Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant
to the Security Agent the Security Interest in such PPSA Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement, without the consent or approval of any other
Person other than any consent or approval that has been obtained.


 


(b)                                 The Canadian Perfection Certificate has
been duly prepared, completed and executed and the information set forth
therein, including the exact legal name of each Grantor, is correct and
complete in all material respects as of the Funding Date.  The PPSA financing statements prepared by the
Security Agent based upon the information provided to the Security Agent in the
Canadian Perfection Certificate are all the filings, recordings and 


 


15

















 


registrations that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in
favour of the Security Agent (for the benefit of the Secured Parties) in
respect of all PPSA Collateral in which the Security Interest may be perfected by
filing a PPSA financing statement in any province of Canada (other than
Quebec), and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary in Canada or any other jurisdiction
for any such PPSA Collateral, except as provided under applicable law with
respect to the filing of a financing change statement to effect a renewal of an
existing PPSA registration.


 


(c)                                  The Security Interest constitutes (i) a
legal and valid security interest in all the PPSA Collateral securing the
payment and performance of the Canadian Secured Obligations, (ii) subject
to registration of the financing statements described in Section 4.02(b),
a perfected security interest in all PPSA Collateral in which a security
interest may be perfected by filing PPSA financing statements (or analogous
documents) in the applicable province of Canada or other applicable
jurisdiction.  The Security Interest is
and shall be prior to any other Lien on any of the PPSA Collateral, other than
Permitted Liens.


 


(d)  The PPSA Collateral is owned by the Grantors
free and clear of any Lien, except for Permitted Liens.  None of the Grantors has filed or consented
to the filing of any financing statement or analogous document under the PPSA
or any other applicable laws covering any PPSA Collateral, except for Permitted
Liens.


 


SECTION 4.03. 
Covenants.  (a)  Each
Grantor agrees promptly to notify the Security Agent in writing of any change (i)
in corporate name, (ii) in the location of its chief executive office or
its principal place of business, (iii) in its identity or type of
organization or corporate structure, or (iv) in its jurisdiction of
organization.  Each Grantor agrees to
promptly provide the Security Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this paragraph
(a).  Each Grantor agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the PPSA or otherwise that are required in order
for the Security Agent to continue at all times following such change to have a
valid, legal and perfected first priority security interest in all the PPSA
Collateral.  Each Grantor agrees promptly
to notify the Security Agent if any material portion of the PPSA Collateral
owned or held by such Grantor is damaged or destroyed.


 


(b)  Each Grantor agrees to maintain, at its own
cost and expense, such complete and accurate records with respect to the PPSA
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged and, at such
time or times, after the occurrence and during the continuance of an Event of
Default as the Security Agent may reasonably request, promptly to prepare and
deliver to the Security Agent a duly certified schedule or schedules in form
and detail satisfactory to the Security Agent showing the identity, amount and
location of any and all PPSA Collateral.


 


(c)  Each Grantor shall, at its own expense, take
any and all actions reasonably necessary to defend title to the PPSA Collateral
against all Persons and to defend the Security Interest of the Security Agent
in the PPSA Collateral and the priority thereof against any Liens other than
any Permitted Lien.


 


16
















 


(d)  Each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Security Agent may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements or other documents in connection
herewith or therewith.


 


Each Grantor agrees that it
will use its commercially reasonable efforts to take such action as shall be
necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such PPSA Collateral within 45 days after the
date it has been notified by the Security Agent of the specific identification
of such PPSA Collateral.


 


(e)  The Security Agent and such Persons as the Security
Agent may reasonably designate shall have the right, at the Grantors’ own cost
and expense, to inspect the PPSA Collateral, all records related thereto (and
to make extracts and copies from such records) and the premises upon which any
of the PPSA Collateral is located, to discuss the Grantors’ affairs with the
officers of the Grantors and their independent accountants, all in accordance
with and subject to the terms and conditions relating to inspections as set
forth in Section 9.06 of the Credit Agreement, and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the PPSA Collateral, including,
in the case of Accounts or PPSA Collateral in the possession of any third
person, by contacting, with advance notice to and in coordination with the
Grantors (unless an Event of Default has occurred and is continuing), Account
Debtors or a third person possessing such PPSA Collateral for the purpose of
making such a verification.  The Security
Agent shall have the absolute right to share any information it gains from such
inspection or verification with any Lender (it being understood that any such
information shall be deemed to be “Confidential Information” subject to
the provisions of Section 13.16 of the Credit Agreement).


 


(f)  At its option, the Security Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the PPSA Collateral and
not permitted pursuant to the Credit Agreement, and may pay for the maintenance
and preservation of the PPSA Collateral to the extent any Grantor fails to do
so as required by the Credit Agreement or this Agreement after written notice
thereof is delivered to Holdings by the Security Agent, and each Grantor
jointly and severally agrees to reimburse the Security Agent on demand for any
payment made or any expense incurred by the Security Agent pursuant to the
foregoing authorization; provided that nothing in this paragraph (f) shall
be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Security Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.


 


(g)  Each Grantor shall remain liable to observe
and perform all the conditions and obligations to be observed and performed by
it under each contract, Agreement or instrument relating to the PPSA
Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the 


 


17

















 


Security Agent and the Secured Parties from and against any and all
liability for such performance.


 


(h)  None of the Grantors shall make or permit to
be made an assignment, pledge or hypothecation of the PPSA Collateral or shall
grant any other Lien in respect of the PPSA Collateral, except as permitted by
the Credit Agreement.  None of the
Grantors shall make or permit to be made any transfer of the PPSA Collateral
except that unless and until the Security Agent shall notify the Grantors in
writing that an Event of Default shall have occurred and be continuing and that
during the continuance thereof the Grantors shall not sell, convey, lease,
assign, transfer or otherwise dispose of any PPSA Collateral, the Grantors may
use and dispose of the PPSA Collateral in any lawful manner not inconsistent
with the provisions of this Agreement, the Credit Agreement or any other Loan
Document.


 


(i)  None of the Grantors will, without the
Security Agent’s prior written consent, grant any extension of the time of
payment of any Accounts included in the PPSA Collateral, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or discount
whatsoever thereon, other than extensions, compromises, settlements, releases,
credits or discounts granted or made in the ordinary course of business.


 


(j)  The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage
to the Inventory in accordance with the requirements set forth in Section 9.02
of the Credit Agreement.  Each Grantor
irrevocably makes, constitutes and appoints the Security Agent (and all
officers, employees or agents designated by the Security Agent) as such Grantor’s
true and lawful agent (and attorney-in-fact) for the purpose, during the
continuance of an Event of Default, of making, settling and adjusting claims in
respect of PPSA Collateral under policies of insurance, endorsing the name of
such Grantor on any cheque, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto.  In the
event that any Grantor at any time or times shall fail to obtain or maintain
any of the policies of insurance required hereby or to pay any premium in whole
or part relating thereto, the Security Agent may, without waiving or releasing
any obligation or liability of the Grantors hereunder or any Event of Default,
in its sole discretion, upon notice to Holdings obtain and maintain such
policies of insurance and pay such premium and take any other actions with
respect thereto as the Security Agent deems advisable.  All sums disbursed by the Security Agent in
connection with this paragraph, including reasonable legal fees, court costs,
expenses and other charges relating thereto, shall be payable, upon demand, by
the Grantors to the Security Agent and shall be additional Canadian Secured
Obligations secured hereby.


 


(k)  Each Grantor shall maintain, in form and
manner reasonably satisfactory to the Security Agent, records of its Chattel
Paper and its books, records and documents evidencing or pertaining thereto.


 


(l)  Each Grantor will keep and maintain at its
own cost and expense accurate records of its Accounts and Contracts, including,
but not limited to, originals or copies of all material documentation
(including each Contract) with respect thereto, material records of all
payments received, all credits granted thereon, all merchandise returned and
all other dealings 


 


18

















 


therewith, and such Grantor will make the same available, in accordance
with and subject to the terms and conditions relating to inspections set forth
in the Credit Agreement to the Security Agent for inspection at such Grantor’s
own cost and expense.  Upon the
occurrence and during the continuance of an Event of Default and at the request
of the Security Agent, such Grantor shall, at its own cost and expense, deliver
all tangible evidence of its Accounts and Contract Rights (including, without
limitation, all documents evidencing the Accounts and all Contracts) and such
books and records to the Security Agent or to its representatives (copies of
which evidence and books and records may be retained by such Grantor).  If the Security Agent so directs, upon the
occurrence and during the continuance of an Event of Default, such Grantor
shall legend, in form and manner satisfactory to the Security Agent, the
Accounts and the Contracts, as well as books, records and documents (if any) of
such Grantor evidencing or pertaining to such Accounts and Contracts with an
appropriate reference to the fact that such Accounts and Contracts have been assigned
to the Security Agent and that the Security Agent has a security interest
therein.


 


(m)  Upon the occurrence and during the
continuance of an Event of Default, if the Security Agent so directs any
Grantor in writing, such Grantor agrees (i) to cause all payments on
account of the Accounts and Contracts to be made directly to a Cash Collateral
Account, (ii) that the Security Agent may, at its option, directly notify
the obligors with respect to any Accounts and/or under any Contracts to make
payments with respect thereto as provided in the preceding clause (i), and (iii) that
the Security Agent may enforce collection of any such Accounts and Contracts
and may adjust, settle or compromise the amount of payment thereof, in the same
manner and to the same extent as such Grantor. 
Without notice to or assent by any Grantor, the Security Agent may, upon
the occurrence and during the continuance of an Event of Default, apply any or
all amounts then in, or thereafter deposited in, a Cash Collateral Account toward
the payment of the Canadian Secured Obligations in the manner provided in Section 5.02
of this Agreement.  The reasonable costs
and expenses of collection (including reasonable legal fees), whether incurred
by a Grantor or the Security Agent, shall be borne by the relevant
Grantor.  The Security Agent shall
deliver a copy of each notice referred to in the preceding clause (ii) to
the relevant Grantor, provided that the failure by the Security Agent to
so notify such Grantor shall not affect the effectiveness of such notice or the
other rights of the Security Agent created by this paragraph (m).


 


(n)  Except as permitted by paragraph (i) above,
each Grantor shall endeavor in accordance with reasonable business practices to
cause to be collected from the account debtor named in each of its Accounts or
obligor under any Contract, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing
under or on account of such Account or Contract, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account or under such Contract.


 


(o)  Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of the Accounts and Contracts to
observe and perform all of the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise to such Accounts or such Contracts, as the case may be.  Neither the Security Agent nor any other
Secured Party shall have any obligation or liability under any 


 


19

















 


Account (or any agreement giving rise thereto) or any Contract by
reason of or arising out of this Agreement or the receipt by the Security Agent
or any other Secured Party of any payment relating to such Account or Contract,
as the case may be, pursuant hereto, nor shall the Security Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Account (or any agreement giving rise
thereto) or any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any agreement
giving rise thereto) or any Contract, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.


 


SECTION 4.04. 
Other Actions.  In order to
further insure the attachment, perfection and priority of, and the ability of
the Security Agent to enforce, the Security Interest, each Grantor agrees, in
each case at such Grantor’s own expense, to take the following actions with
respect to the following PPSA Collateral:


 


(a) 
Instruments and Chattel Paper.  In
accordance with and in furtherance of Article III, if any Grantor
shall at any time hold or acquire any Instruments (other than any Instrument
with a face amount of less than $5,000,000 so long as the aggregate principal
amount of Instruments under this exclusion does not exceed $10,000,000) or
Chattel Paper with a value of $2,500,000 or more, such Grantor shall forthwith
endorse, assign and deliver the same to the Security Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Security
Agent may from time to time reasonably request.


 


(b) 
Bank Accounts.  For each bank
account that any Grantor at any time opens or maintains (other than any
Excluded Accounts), such Grantor shall cause the bank to enter into a Control
Agreement with such Grantor and the Security Agent; provided that so
long as no Dominion Period then exists no Control Agreement shall be required
to be entered into until the later of (A) the date that is 60 days after
the Funding Date (or such later date as agreed in writing by the Administrative
Agent in its sole discretion, or, with respect to any extension of the period
for compliance with this paragraph beyond 90 days from the date that is 60 days
after the Funding Date, as agreed in writing by the Co-Collateral Agents in
their sole discretion) and (B) in the case of bank accounts opened after
the Funding Date, at the time of the establishment of the respective bank
account (or such later date as agreed in writing by the Administrative Agent in
its sole discretion).  The Security Agent
agrees with each Grantor that the Security Agent shall not exercise dominion
and control over, or give any instructions or withhold any withdrawal rights
from any Grantor, with respect to such accounts or any funds in such accounts,
unless an Event of Default or Dominion Period has occurred and is continuing.


 


(c) 
Investment Property.  Except with
respect to any Equity Interest issued by any Canadian Subsidiary, if any
Grantor shall at any time hold or acquire any certificated securities (other
than any Excluded Investment Property) required to be pledged hereunder, such
Grantor shall forthwith endorse, assign and deliver the same to the Security
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as the Security Agent may from time to time specify.  Except with 


 


20

















 


respect to any
Equity Interest issued by any Canadian Subsidiary, if any securities (other
than any Excluded Investment Property) now or hereafter acquired by any Grantor
are uncertificated and are issued to such Grantor or its nominee directly by
the issuer thereof, such Grantor shall promptly notify the Security Agent
thereof and, at the Security Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Security Agent, (i) cause
such securities to be certificated and comply with the requirements of the
foregoing sentence, (ii) cause the issuer to agree to comply with
instructions from the Security Agent as to such securities, without further
consent of any Grantor or such nominee, or (iii) arrange for the Security
Agent to become the registered owner of such securities.  If any Grantor holds any Investment Property
(other than any Excluded Investment Property), whether certificated or
uncertificated, or other Investment Property (other than any Excluded
Investment Property) now or hereafter acquired by any Grantor is held by such
Grantor or its nominee through a Securities Intermediary or Futures Intermediary,
except with respect to any Equity Interest issued by any Canadian Subsidiary,
Grantor shall promptly notify the Security Agent thereof and, at the Security
Agent’s request and option, pursuant to a Control Agreement in form and
substance reasonably satisfactory to the Security Agent, either (i) cause such
Securities Intermediary or Futures Intermediary, as the case may be, to agree
to comply with Entitlement Orders or other Instructions from the Security Agent
to such Securities Intermediary as to such Security Entitlements or to apply
any value distributed on account of any Futures Contract as directed by the
Security Agent to such Futures Intermediary, as the case may be, in each case
without further consent of any Grantor, such nominee, or any other Person, or (ii)
in the case of Financial Assets or other Investment Property (other than any
Excluded Investment Property) held through a Securities Intermediary, arrange
for the Security Agent to become the Entitlement Holder with respect to such
Investment Property, with the Grantor being permitted, only with the consent of
the Security Agent, to exercise rights to withdraw or otherwise deal with such
Investment Property; provided that so long as no Dominion Period then
exists no Control Agreement shall be required to be entered into pursuant to
this Section 4.04(c) until the later of (A) the date that
is 60 days after the Funding Date (or such later date as agreed in writing by
the Administrative Agent in its sole discretion, or, with respect to any
extension of the period for compliance with this paragraph beyond 90 days from
the date that is 60 days after the Funding Date, as agreed in writing by the
Co-Collateral Agents in their sole discretion) and (B) in the case of
Securities Accounts and Commodities Accounts opened after the Funding Date, at
the time of the establishment of the respective Securities Accounts or
Commodities Accounts, as the case may be (or such later date as agreed in
writing by the Administrative Agent in its sole discretion).  The Security Agent agrees with each of the
Grantors that the Security Agent shall not give any such Entitlement Orders or
Instructions or directions to any such issuer, Securities Intermediary or
Futures Intermediary, and shall not exercise dominion and control over, or
withhold its consent to, the exercise of any withdrawal or dealing rights by
any Grantor, unless an Event of Default or Dominion Period has occurred and is
continuing, or, after giving effect to any such investment and withdrawal
rights, would occur.


 


(d) 
Intentionally Omitted.


 


21

















 


(e) 
Intentionally Omitted.


 


(f) 
Intentionally Omitted.


 


(g) 
Intentionally Omitted.


 


(h) 
Collateral Access Agreements. 
Each Grantor shall use commercially reasonable efforts to obtain a
Collateral Access Agreement from (i) the lessor of each leased property
which is leased by such Grantor or the mortgagee of any real property owned by
such Grantor and which is subject to a mortgage or deed of trust, in each case
where the fair market value of the PPSA Collateral located at such leased or
mortgaged property exceeds $5,000,000, and (ii) the bailee or consignee
with respect to any third party warehouse, processor converter facility or
other similar location where PPSA Collateral with a fair market value exceeding
$2,000,000 is stored or located, which agreement or letter shall provide access
rights and shall otherwise be reasonably satisfactory in form and substance to
the Security Agent.  Each Grantor shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or third party warehouse where
any PPSA Collateral is or may be located, except where the failure to pay or
perform could not reasonably be expected to have a Material Adverse Effect.


 


(i) 
Each Grantor will, at its own expense, make, execute, endorse, acknowledge,
file and/or deliver to the Security Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, certificates, reports and other assurances
or instruments and take such further steps relating to its Accounts, Contracts,
Instruments and other property or rights covered by the security interest
hereby granted, as the Security Agent may reasonably require and consistent
with the other terms and conditions of this Agreement and the Credit Agreement.


 


SECTION 4.05. 
[Intentionally Deleted]


 


ARTICLE V


 


Remedies


 


SECTION 5.01. 
Remedies Upon Default. 
Upon the occurrence and during the continuance of an Event of Default,
each Grantor agrees to deliver each item of Collateral to the Security Agent on
demand, and it is agreed that the Security Agent shall have the right, at the
same or different times, with or without legal process and with or without
prior notice or demand for performance (except as required by applicable law),
to take possession of the Collateral and without liability for trespass to
enter any premises where the Collateral may be located for the purpose of
taking possession of or removing the Collateral and, generally, to exercise any
and all rights afforded to a secured party under this Agreement, the PPSA or
other applicable law.  Without limiting
the generality of the foregoing, upon the occurrence and during the continuance
of an Event of Default, each Grantor agrees that the Security Agent shall have
the right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of 


 


22

















 


the Collateral at a public or private sale or at any broker’s board or
on any securities exchange, for cash, upon credit or for future delivery as the
Security Agent shall deem appropriate. 
The Security Agent shall be authorized at any such sale of securities
(if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the distribution
or sale thereof, and upon consummation of any such sale the Security Agent
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. 
Each such purchaser at any sale of Collateral shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.


 


The Security Agent shall
give the applicable Grantors 10 days’ prior written notice, or such longer
period as may be required by applicable law (which each Grantor agrees is reasonable
notice) of the Security Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at a
broker’s board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or
portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as the
Security Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Security Agent may (in its sole and absolute discretion)
determine.  The Security Agent shall not
be obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given.  The Security Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. 
In case any sale of all or any part of the Collateral is made on credit
or for future delivery, the Collateral so sold may be retained by the Security
Agent until the sale price is paid by the purchaser or purchasers thereof, but
the Security Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by
law, private) sale made pursuant to this Agreement, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party from
any Grantor as a credit against the purchase price, and such Secured Party may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Security Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Security Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Canadian Secured 


 


23

















 


Obligations paid
in full.  As an alternative to exercising
the power of sale herein conferred upon it, the Security Agent may proceed by a
suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform
to the commercially reasonable standards.


 


SECTION 5.02. 
Application of Proceeds. 
The Security Agent shall apply the proceeds of any collection or sale of
Collateral, including any Collateral consisting of cash, and the amounts paid
or caused to be paid by any Guarantor in accordance with Article II,
as set forth in Section 11.02 of the Credit Agreement.


 


The Security Agent shall have absolute
discretion as to the time of application of any such proceeds, moneys or
balances in accordance with this Agreement. 
Upon any sale of Collateral by the Security Agent (including pursuant to
a power of sale granted by statute or under a judicial proceeding), the receipt
of the Security Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Security Agent or such officer or
be answerable in any way for the misapplication thereof.  It is understood that the Grantors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral and the aggregate amount of the
Canadian Secured Obligations.


 


SECTION 5.03. 
Grant of License to Use Intellectual Property.  For the purpose of enabling the Security
Agent to exercise rights and remedies under this Agreement at such time as the
Security Agent shall be lawfully entitled to exercise such rights and remedies,
each Grantor hereby grants to the Security Agent an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Grantors) to use, license or sublicense any Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof.  The use of such license by the Security Agent
may only be exercised, at the option of the Security Agent, upon the occurrence
and during the continuation of an Event of Default after written notice is
given to Holdings of the Security Agent’s election to exercise such license; provided
that any license, sublicense or other transaction entered into by the Security
Agent in accordance herewith shall be binding upon the Grantors notwithstanding
any subsequent cure of an Event of Default. 
In operating under the license granted by each Grantor pursuant to this Section 5.03,
the Security Agent agrees that the goods sold and services rendered under any
Trademarks shall be of a nature and quality substantially consistent with those
theretofore offered under such Trademarks by such Grantor and such Grantor shall
have the right to inspect during the term of such license, at any reasonable
time or times upon reasonable notice to the Security Agent, and at such Grantor’s
own cost and expense, representative samples of goods sold and services
rendered under such Trademarks.


 


SECTION 5.04. 
Securities Laws.  In view
of the position of the Grantors in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under
applicable securities laws (including, without limitation, the Securities Act  


 


24

















 


(Ontario) (such Act and any such similar statute as from time to time
in effect being called the “Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder.  Each Grantor understands that compliance with
the Securities Laws might very strictly limit the course of conduct of the
Security Agent if the Security Agent were to attempt to dispose of all or any
part of the Pledged Collateral, and might also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Collateral could
dispose of the same.  Each Grantor
recognizes that in light of such restrictions and limitations the Security
Agent may, with respect to any sale of the Pledged Collateral, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof.  Each
Grantor acknowledges and agrees that in light of such restrictions and
limitations, the Security Agent, in its sole and absolute discretion (a) may
proceed to make such a sale whether or not a prospectus shall have been filed
under the Securities Laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. 
Each Grantor acknowledges and agrees that any such sale might result in
prices and other terms less favourable to the seller than if such sale were a
public sale without such restrictions. 
In the event of any such sale, the Security Agent shall incur no
responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Security Agent, in its sole and absolute discretion,
may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after a prospectus had been filed as aforesaid or if
more than a single purchaser were approached. 
The provisions of this Section 5.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Security Agent sells.


 


SECTION 5.05. 
Public Offering.  Each Grantor
agrees that, upon the occurrence and during the continuance of an Event of
Default, if for any reason the Security Agent desires to sell any of the
Pledged Collateral at a public sale, it will, at any time and from time to
time, upon the written request of the Security Agent, use commercially
reasonable efforts to take or to cause the issuer of such Pledged Collateral to
take such action and prepare, distribute and/or file such documents (including
a prospectus), as are required or advisable in the reasonable opinion of
counsel for the Security Agent to permit the public sale of such Pledged
Collateral.  Each Grantor further agrees
to indemnify, defend and hold harmless the Security Agent, each other Secured
Party, any underwriter and their respective affiliates and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including reasonable fees and
expenses to the Security Agent of legal counsel), and claims (including the
costs of investigation) that they may incur insofar as such loss, liability,
expense or claim arises out of or is based upon any alleged untrue statement of
a material fact contained in any prospectus (or any amendment or supplement
thereto) or in any notification or offering circular, or arises out of or is
based upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in any thereof not misleading,
except insofar as the same may have been caused by any untrue statement or
omission based upon information furnished in writing to such Grantor or the
issuer of such Pledged Collateral by the Security Agent or any other Secured
Party expressly for use therein.  Each
Grantor will bear all costs and expenses of carrying out its obligations under
this Section 5.05.  Each
Grantor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section 5.05 and that such failure
would not be adequately compensable in 


 


25

















 


damages, and therefore agrees that its agreements contained in this Section 5.05
may be specifically enforced.


 


ARTICLE VI


 


Indemnity, Subrogation and Subordination


 


SECTION 6.01. 
Indemnity and Subrogation. 
In addition to all such rights of indemnity and subrogation as the
Guarantors may have under applicable law (but subject to Section 6.03),
each Canadian Borrower agrees that (a) in the event a payment of an
obligation shall be made by any Guarantor under this Agreement, each Canadian
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be subrogated to the rights of the Person to whom such
payment shall have been made to the extent of such payment and (b) in the
event any assets of any Grantor shall be sold pursuant to this Agreement or any
other Security Document to satisfy in whole or in part an obligation owed to
any Secured Party, each Canadian Borrower shall indemnify such Grantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold.


 


SECTION 6.02. 
Contribution and Subrogation. 
Each Guarantor and Grantor (a “Contributing Party”) agrees
(subject to Section 6.03) that, in the event a payment shall be
made by any other Guarantor hereunder in respect of any Canadian Secured
Obligation or assets of any other Grantor (other than any Canadian Borrower)
shall be sold pursuant to any Security Document to satisfy any Canadian Secured
Obligation owed to any Secured Party and such other Guarantor or Grantor (the “Claiming
Party”) shall not have been fully indemnified by each Canadian Borrower as
provided in Section 6.01, the Contributing Party shall indemnify
the Claiming Party in an amount equal to the amount of such payment or the
greater of the book value or the fair market value of such assets, as the case
may be, in each case multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Party on the date hereof and the denominator
shall be the aggregate net worth of all the Guarantors and Grantors on the date
hereof (or, in the case of any Guarantor or Grantor becoming a party hereto
pursuant to Section 7.14, the date of the supplement hereto
executed and delivered by such Guarantor or Grantor).  Any Contributing Party making any payment to
a Claiming Party pursuant to this Section 6.02 shall be subrogated
to the rights of such Claiming Party under Section 6.01 to the
extent of such payment.


 


SECTION 6.03. 
Subordination.  (a) 
Notwithstanding any provision of this Agreement to the contrary, all rights of
the Guarantors and Grantors under Sections 6.01 and 6.02 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Canadian Secured Obligations. 
No failure on the part of any Canadian Borrower or any Guarantor or
Grantor to make the payments required by Sections 6.01 and 6.02
(or any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor or Grantor with
respect to its obligations hereunder, and each Guarantor and Grantor shall
remain liable for the full amount of the obligations of such Guarantor or
Grantor hereunder.


 


26
















 


(b)  Each Guarantor and Grantor hereby
agrees that all Indebtedness and other monetary obligations owed to it by, or
by it to, as the case may be, any other Guarantor, Grantor or any other
Canadian Subsidiary shall be fully subordinated to the indefeasible payment in
full in cash of the Canadian Secured Obligations.


 


ARTICLE
VII


 


Miscellaneous


 


SECTION 7.01.  Notices.  All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 13.03 of the Credit Agreement.  All communications and notices hereunder to
any Canadian Subsidiary Party shall be given to it in care of Holdings as
provided in Section 13.03 of the Credit Agreement.


 


SECTION 7.02.  Waivers; Amendment.  (a)  No failure or delay by the Security
Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power.  The rights and remedies of the Security Agent
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise
have.  No waiver of any provision of this
Agreement or consent to any departure by any Canadian Loan Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. 
Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Security Agent or any Lender may have had
notice or knowledge of such Default at the time.  No notice or demand on any Canadian Loan Party
in any case shall entitle any Canadian Loan Party to any other or further
notice or demand in similar or other circumstances.


 


(b)  Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Security Agent and the
Canadian Loan Party or Canadian Loan Parties with respect to which such waiver,
amendment or modification is to apply, subject to any consent required in
accordance with Section 13.12 of the Credit Agreement.


 


SECTION 7.03.  Security Agent’s Fees and Expenses;
Indemnification.  (a)  The
parties hereto agree that the Security Agent shall be entitled to reimbursement
of its reasonable out-of-pocket expenses incurred hereunder as provided in Section 13.01
of the Credit Agreement.


 


(b)  Without limitation of its
indemnification obligations under the other Loan Documents, each Grantor and
each Guarantor jointly and severally agrees to indemnify the Security Agent
against, and hold the Security Agent harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
disbursements and 


 


27

















 


other charges, incurred by or asserted against the Security Agent
arising out of, in connection with, or as a result of, the execution, delivery
or performance of this Agreement or any claim, litigation, investigation or
proceeding relating to any of the foregoing, or any agreement or instrument
contemplated hereby, or to the Collateral, whether or not any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses have resulted from the gross negligence or
wilful misconduct of the Security Agent.


 


(c)  Any such amounts payable as
provided hereunder shall be additional Canadian Secured Obligations secured
hereby and by the other Security Documents. 
The provisions of this Section 7.03 shall remain operative
and in full force and effect regardless of the termination of this Agreement or
any other Loan Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Canadian Secured Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Security Agent or any other Secured Party. 
All amounts due under this Section 7.03 shall be payable on
written demand therefor.


 


SECTION 7.04.  Successors and Assigns.  Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Security Agent that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.


 


SECTION 7.05.  Survival of Agreement.  All covenants, agreements, representations
and warranties made by the Canadian Loan Parties in the Loan Documents and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans or issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its
behalf and notwithstanding that the Security Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended under the Credit Agreement, and shall continue
in full force and effect as long as any Loan Document Obligation or any other
amount payable under any Loan Document is outstanding and unpaid and so long as
the Commitments have not expired or terminated.


 


SECTION 7.06.  Counterparts; Effectiveness; Several
Agreement.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  Delivery of an executed signature page to
this Agreement by facsimile or other electronic imaging shall be as effective
as delivery of a manually signed counterpart of this Agreement.  This Agreement shall become effective as to
any Canadian Loan Party when a counterpart hereof executed on behalf of such
Canadian Loan Party shall have been delivered to the Security Agent and a
counterpart hereof shall have been executed on behalf of the Security Agent,
and thereafter shall be binding upon such Canadian Loan Party and the Security
Agent and their respective permitted successors and assigns, and shall inure to
the benefit of such Canadian Loan Party, the Security Agent and the other
Secured Parties and their respective successors and assigns, except that no
Canadian Loan Party shall have the right to 


 


28

















 


assign or transfer its rights or obligations hereunder or any interest
herein (and any such assignment or transfer shall be void) except as expressly
permitted by the Credit Agreement.  This
Agreement shall be construed as a separate agreement with respect to each
Canadian Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Canadian Loan Party without the approval of any
other Canadian Loan Party and without affecting the obligations of any other
Canadian Loan Party hereunder.


 


SECTION 7.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor
in good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.


 


SECTION 7.08.  Right of Set-Off.  Each Canadian Loan Party expressly agrees to
the provisions set forth in Section 13.02 of the Credit Agreement
with the same force and effect as if such provisions were set forth in full
herein.


 


SECTION 7.09.   Governing Law; Jurisdiction; Consent to
Service of Process.  (a)  This
Agreement shall be governed by, and construed in accordance with, (i) the
laws of the State of New York (including Sections 5-1401 and 5-1402 of Title 14
of the New York General Obligations Law but excluding all other choice of law
and conflicts of laws rules thereof) with respect to the guarantees and
other matters contemplated by Articles II and VI hereof, and
other provisions hereof as they relate to such guarantees and other matters,
and (ii) the laws of the Province of Ontario, and the laws of Canada
applicable therein, with respect to Articles III, IV and V, and
other provisions hereof as they relate to Collateral.


 


(b)  Each of the Canadian Loan Parties
hereby irrevocably and unconditionally submits, for itself and its property,
with respect to the guarantees and other matters contemplated by Articles II
and VI hereof, and other provisions hereof as they relate to such
guarantees and other matters, to the jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, exclusively, in any action or
proceeding arising out of or relating to such matters and to this Agreement or
any other Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court.  Furthermore, each of the
Canadian Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, with respect to Articles III, IV and V,
and other provisions hereof as they relate to Collateral, to the jurisdiction
of any court of the Province of Ontario, and any appellate court thereof, non-exclusively,
in any action or proceeding arising out of or relating to such matters and to
this Agreement or any other Loan Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Ontario court.  Each of the parties hereto agrees that a
final judgment in any such New York or Ontario, as applicable, action or 


 


29

















 


proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or any
other Loan Document shall affect any right that the Security Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Grantor or Guarantor, or its
properties in the courts of any jurisdiction.


 


(c)  Each of the Canadian Loan Parties
hereby irrevocably and unconditionally waives, to the fullest extent permitted
by law, any objection that it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) above.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


(d)  Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 7.01.  Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.


 


SECTION 7.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.


 


SECTION 7.11.  Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.


 


SECTION 7.12.  Security Interest Absolute.  All rights of the Security Agent hereunder,
the Security Interest, the grant of a security interest in the Pledged
Collateral and all obligations of each Grantor and Guarantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Canadian Secured Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Canadian Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan Document or
any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or 


 


30

















 


consent under or departure from any guarantee, securing or guaranteeing
all or any of the Canadian Secured Obligations, or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor or Guarantor in respect of the Canadian Secured
Obligations or this Agreement.


 


SECTION 7.13.  Termination or Release.  (a)  This Agreement, the Guarantees made
herein, the Security Interest, the grant of a security interest in the Pledged
Collateral and all other security interests granted hereby shall terminate upon
the payment in full in cash of the Loans and all the other Loan Document
Obligations (other than unasserted contingent and indemnification obligations),
termination of all Commitments and Incremental Commitments and reduction of all
exposure under any Letters of Credit issued and any Bankers’ Acceptances to
zero (or the making of other arrangements satisfactory to the issuers thereof).


 


(b)  A Canadian Subsidiary Party shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Canadian Subsidiary Party shall be
automatically released upon the consummation of any transaction permitted by
the Credit Agreement as a result of which such Canadian Subsidiary Party ceases
to be a Canadian Subsidiary; provided that (i) the Required Lenders
shall have consented to such transaction (to the extent required by the Credit
Agreement) and the terms of such consent did not provide otherwise and (ii) no
Canadian Borrower shall be released prior to the payment in full in cash of the
Canadian Facility Obligations (other than unasserted contingent and
indemnification obligations), termination of all Canadian Facility Commitments
and reduction of all exposure under any Canadian Facility Letters of Credit
issued and any Canadian Facility Bankers’ Acceptances to zero (or the making of
other arrangements satisfactory to the issuers thereof).


 


(c)  Upon any sale or other transfer
by any Grantor of any Collateral that is permitted under the Credit Agreement
(other than a sale or other transfer to a Canadian Loan Party), or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 12.10 of the
Credit Agreement, the security interest in such Collateral shall be
automatically released.


 


(d)  At any time that a Grantor
desires that the Security Agent take any action to acknowledge or give effect
to any release of a Grantor or Collateral pursuant to the foregoing Section 7.13(a),
(b) or (c), the Grantor shall cause Holdings to deliver to the
Security Agent a certificate signed by a principal executive officer of
Holdings stating that the release of the respective Grantor or Collateral is
permitted pursuant to such Section 7.13(a), (b) or (c).  In connection with any termination or release
pursuant to Section 7.13(a), (b) or (c), the Security
Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination or release; provided, however, that (i) the
Security Agent shall not be required to execute any such document on terms
which, in its opinion, would expose it to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect
or impair the Canadian Secured Obligations or any Liens upon (or obligations of
any of the Canadian Subsidiaries in respect of) all interests in Collateral
retained by any of the Canadian Subsidiaries. 
Any execution and delivery of documents pursuant to this Section 7.13
shall be without recourse to or warranty by the Security Agent.


 


31

















 


(e)  The Security Agent shall have no
liability whatsoever to any other Secured Party as the result of any release of
any Canadian Subsidiary Party or Collateral by it in accordance with (or which
the Security Agent in good faith believes to be in accordance with) this Section 7.13.


 


SECTION 7.14.  Additional Canadian Subsidiaries.  Pursuant to Sections 9.09, 10.05(f) and
10.15 of the Credit Agreement, certain Canadian Subsidiaries of Holdings
are required to enter into this Agreement as a Canadian Subsidiary Party.  Upon execution and delivery by the Security
Agent and a Canadian Subsidiary of an instrument in the form of Exhibit I
hereto, such Canadian Subsidiary shall become a Canadian Subsidiary Party
hereunder with the same force and effect as if originally named as a Canadian
Subsidiary Party herein.  The execution
and delivery of any such instrument shall not require the consent of any other
Canadian Loan Party hereunder.  The
rights and obligations of each Canadian Loan Party hereunder shall remain in
full force and effect notwithstanding the addition of any new Canadian Loan
Party as a party to this Agreement.


 


SECTION 7.15.  Security Agent Appointed Attorney-in-Fact.  Each Grantor hereby appoints the Security
Agent the attorney-in-fact of such Grantor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
that the Security Agent may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an
interest.  Without limiting the
generality of the foregoing, the Security Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power
of substitution either in the Security Agent’s name or in the name of such
Grantor (a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, cheques, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof; (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral; (c) to sign the name of any Grantor on any invoice
or bill of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize
on all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to all or any of the Collateral; (g) to
make, settle and adjust claims in respect of Collateral under policies of
insurance and to endorse the name of such Grantor on any cheque, draft,
instrument or any other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto;
(h) to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Security Agent; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to
carry out the purposes of this Agreement, as fully and completely as though the
Security Agent were the absolute owner of the Collateral for all purposes; provided
that nothing herein contained shall be construed as requiring or obligating the
Security Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Security Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or
any property covered thereby.  The
Security Agent and the other Secured Parties shall be accountable only for
amounts actually received as a 


 


32

















 


result of the exercise of the powers granted to them herein, and
neither they nor their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or wilful misconduct.


 


SECTION 7.16.  Recourse.  This Agreement is made with full recourse to
each Canadian Loan Party and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of such Canadian Loan
Party contained herein, in the Loan Documents, Hedging Agreements or Secured
Cash Management Agreements and otherwise in writing in connection herewith or
therewith.


 


SECTION 7.17.  [Intentionally Deleted]


 


SECTION 7.18.  [Intentionally Deleted]


 


SECTION 7.19.  The Security Agent and the other Secured
Parties.  The Security Agent will
hold in accordance with this Agreement all items of the Collateral at any time
received under this Agreement.  It is
expressly understood and agreed that the obligations of the Security Agent as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and in Section 12 of the
Credit Agreement.  The Security Agent
shall act hereunder on the terms and conditions set forth herein and in Section 12
of the Credit Agreement.


 


33

















 


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


 


	
   

  	
  SMURFIT-STONE CONTAINER CANADA,

  L.P., by its general partner,

  3242795 Nova Scotia Limited,

  as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH,

  as Security Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I to

the Canadian Guarantee and

Collateral Agreement


 


CANADIAN
SUBSIDIARY PARTIES


 

















 


Schedule II to

the Canadian Guarantee and

Collateral Agreement


 


PLEDGED
EQUITY INTERESTS


 


	
  Holder

  	
   

  	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage of

  Equity Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


PLEDGED
DEBT SECURITIES


 


	
  Holder

  	
   

  	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


Exhibit I to the

Canadian Guarantee and

Collateral Agreement


 


SUPPLEMENT NO.      dated as of
[            ], to the Canadian Guarantee
and Collateral Agreement dated as of [     
], 2010, among SMURFIT-STONE CONTAINER CANADA, L.P., an Ontario limited
partnership, each Canadian Subsidiary party thereto (each such subsidiary
individually a “Canadian Subsidiary Guarantor” and collectively, the “Canadian
Subsidiary Guarantors”; the Canadian Subsidiary Guarantors and
Smurfit-Stone Container Canada, L.P. are referred to collectively herein as the
“Grantors”) and DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”), as
Security Agent (in such capacity, the “Security Agent”)(the “Canadian
Guarantee and Collateral Agreement”).


 


A.  Reference is made to the ABL Credit Agreement
dated as of [     ], 2010 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Smurfit-Stone Container Corporation, Smurfit-Stone Container Enterprises, Inc.,
certain Subsidiaries of Holdings from time to time party thereto, the lenders
from time to time party thereto and Deutsche Bank AG New York Branch, as
Administrative Agent.


 


B.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement and the Canadian Guarantee and Collateral Agreement referred
to therein.


 


C.  The Grantors have entered into the Canadian
Guarantee and Collateral Agreement in order to induce the Lenders to make Loans
and issue Letters of Credit to the Borrowers. 
Section 7.14 of Canadian Guarantee and Collateral Agreement
provides that additional Canadian Subsidiaries of Holdings may become Canadian
Subsidiary Parties under the Canadian Guarantee and Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement.  The undersigned Canadian Subsidiary (the “New
Canadian Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Canadian Subsidiary Party
under the Canadian Guarantee and Collateral Agreement in order to induce the
Lenders to make additional Loans and issue Letters of Credit to the Borrowers
and as consideration for Loans previously made to the Borrowers and Letters of
Credit previously issued.


 


Accordingly, the Security
Agent and the New Canadian Subsidiary agree as follows:


 


SECTION 1.  In accordance with Section 7.14
of the Canadian Guarantee and Collateral Agreement, the New Canadian Subsidiary
by its signature below becomes a Canadian Subsidiary Party, Grantor and Guarantor
under the Canadian Guarantee and Collateral Agreement with the same force and
effect as if originally named therein as a Canadian Subsidiary Party, Grantor
and Guarantor and the New Canadian Subsidiary hereby (a) agrees to all the
terms and provisions of the Canadian Guarantee and Collateral Agreement
applicable to it as a Canadian Subsidiary Party, Grantor and Guarantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor and Guarantor thereunder are true and
correct on and as of the date hereof.  In
furtherance of the foregoing, the


 

















 


New Canadian Subsidiary, as security for the payment
and performance in full of the Canadian Secured Obligations (as defined in the
Credit Agreement), does hereby create and grant to the Security Agent, its
successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Canadian Subsidiary’s right, title and interest in and to the Collateral (as
defined in the Canadian Guarantee and Collateral Agreement) of the New Canadian
Subsidiary.  Each reference to a “Guarantor”
or “Grantor” in the Canadian Guarantee and Collateral Agreement shall be deemed
to include the New Canadian Subsidiary.  The Canadian Guarantee and Collateral
Agreement is hereby incorporated herein by reference.


 


SECTION 2.  The New Canadian Subsidiary represents and
warrants to the Security Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and subject to general
principles of equity (whether enforcement is sought by a proceeding in equity
or at law).


 


SECTION 3.  This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Security Agent shall have received a counterpart of this Supplement that
bears the signature of the New Canadian Subsidiary and the Security Agent has
executed a counterpart hereof.  Delivery
of an executed signature page to this Supplement by facsimile transmission
shall be as effective as delivery of a manually signed counterpart of this
Supplement.


 


SECTION 4.  The New Canadian Subsidiary hereby represents
and warrants that (a) set forth on Schedule I attached hereto is a
true and correct schedule with the true and correct legal name of the New
Canadian Subsidiary, its jurisdiction of formation and the location of its
chief executive office, and (b) set forth on Schedule II attached
hereto is a true and correct schedule, as of the date hereof, of (i) all
the Equity Interests owned by the New Canadian Subsidiary required to be
pledged under Article III, setting forth the percentage of the
issued and outstanding units of each class of the Equity Interests of the
issuer thereof so owned by the New Canadian Subsidiary and the number of each
certificate representing the same, and (ii) all debt securities and
promissory notes owned by the New Canadian Subsidiary required to be pledged
under Article III or Section 4.04.  The New Canadian Subsidiary shall deliver to
the Security Agent a certificate executed by an Authorized Officer of the New
Canadian Subsidiary setting forth the information (other than that set forth on
the Schedules described above) required pursuant to the U.S. Perfection
Certificate.


 


SECTION 5.  Except as expressly supplemented hereby, the
Canadian Guarantee and Collateral Agreement shall remain in full force and
effect.


 


SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS SPECIFIED IN SECTION 7.09(a) OF
THE CANADIAN GUARANTEE AND COLLATERAL AGREEMENT.


 


2

















 


SECTION 7.  In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Canadian Guarantee and Collateral
Agreement shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision
in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.


 


SECTION 8.  All communications and notices hereunder
shall be in writing and given as provided in Section 7.01 of the
Canadian Guarantee and Collateral Agreement.


 


SECTION 9.  The New Canadian Subsidiary agrees to
reimburse the Security Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees, other charges
and disbursements of counsel for the Security Agent.


 


3

















 


IN WITNESS WHEREOF, the New
Canadian Subsidiary and the Security Agent have duly executed this Supplement
to the Canadian Guarantee and Collateral Agreement as of the day and year first
above written.


 


 


	
   

  	
  [NAME OF NEW CANADIAN SUBSIDIARY],

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH, as Security Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 

















 


Schedule I

to Supplement No.      to the 

Canadian Guarantee and

Collateral Agreement


 


NEW CANADIAN
SUBSIDIARY INFORMATION


 


	
  Name

  	
   

  	
  Jurisdiction of Formation

  	
   

  	
  Chief Executive Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EQUITY INTERESTS


 


	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interests

  	
   

  	
  Percentage

  of Equity Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


DEBT SECURITIES


 


	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Credit Agreement

  	
   

  	
  1

  
	
  SECTION 1.02.

  	
  Other Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  GUARANTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Guarantee

  	
   

  	
  7

  
	
  SECTION 2.02.

  	
  Guarantee of Payment

  	
   

  	
  7

  
	
  SECTION 2.03.

  	
  No Limitations

  	
   

  	
  7

  
	
  SECTION 2.04.

  	
  Reinstatement

  	
   

  	
  8

  
	
  SECTION 2.05.

  	
  Agreement To Pay; Subrogation

  	
   

  	
  8

  
	
  SECTION 2.06.

  	
  Information

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  PLEDGE OF SECURITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Pledge

  	
   

  	
  9

  
	
  SECTION 3.02.

  	
  Delivery of the Pledged Collateral

  	
   

  	
  10

  
	
  SECTION 3.03.

  	
  Representations, Warranties and Covenants

  	
   

  	
  11

  
	
  SECTION 3.04.

  	
  Certification of Limited Liability Company and Partnership Interests

  	
   

  	
  12

  
	
  SECTION 3.05.

  	
  Registration in Nominee Name; Denominations

  	
   

  	
  13

  
	
  SECTION 3.06.

  	
  Voting Rights; Dividends and Interest

  	
   

  	
  13

  
	
  SECTION 3.07.

  	
  Restriction on Transfer

  	
   

  	
  15

  
	
  SECTION 3.08.

  	
  ULC Shares

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  SECURITY INTERESTS IN PERSONAL PROPERTY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Security Interest

  	
   

  	
  16

  
	
  SECTION 4.02.

  	
  Representations and Warranties

  	
   

  	
  18

  
	
  SECTION 4.03.

  	
  Covenants

  	
   

  	
  20

  
	
  SECTION 4.04.

  	
  Other Actions

  	
   

  	
  24

  
	
  SECTION 4.05.

  	
  [Intentionally Deleted]

  	
   

  	
  28

  



 


i

















 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Remedies Upon Default

  	
   

  	
  30

  
	
  SECTION 5.02.

  	
  Application of Proceeds

  	
   

  	
  32

  
	
  SECTION 5.03.

  	
  Grant of License to Use Intellectual Property

  	
   

  	
  32

  
	
  SECTION 5.04.

  	
  Securities Laws

  	
   

  	
  33

  
	
  SECTION 5.05.

  	
  Public Offering

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  INDEMNITY, SUBROGATION AND SUBORDINATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Indemnity and Subrogation

  	
   

  	
  34

  
	
  SECTION 6.02.

  	
  Contribution and Subrogation

  	
   

  	
  34

  
	
  SECTION 6.03.

  	
  Subordination

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Notices

  	
   

  	
  35

  
	
  SECTION 7.02.

  	
  Waivers; Amendment

  	
   

  	
  35

  
	
  SECTION 7.03.

  	
  Security Agent’s Fees and Expenses; Indemnification

  	
   

  	
  36

  
	
  SECTION 7.04.

  	
  Successors and Assigns

  	
   

  	
  37

  
	
  SECTION 7.05.

  	
  Survival of Agreement

  	
   

  	
  37

  
	
  SECTION 7.06.

  	
  Counterparts; Effectiveness; Several Agreement

  	
   

  	
  37

  
	
  SECTION 7.07.

  	
  Severability

  	
   

  	
  37

  
	
  SECTION 7.08.

  	
  Right of Set-Off

  	
   

  	
  38

  
	
  SECTION 7.09.

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
   

  	
  38

  
	
  SECTION 7.10.

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  39

  
	
  SECTION 7.11.

  	
  Headings

  	
   

  	
  39

  
	
  SECTION 7.12.

  	
  Security Interest Absolute

  	
   

  	
  39

  
	
  SECTION 7.13.

  	
  Termination or Release

  	
   

  	
  40

  
	
  SECTION 7.14.

  	
  Additional Canadian Subsidiaries

  	
   

  	
  41

  
	
  SECTION 7.15.

  	
  Security Agent Appointed Attorney-in-Fact

  	
   

  	
  41

  
	
  SECTION 7.16.

  	
  Recourse

  	
   

  	
  42

  
	
  SECTION 7.17.

  	
  [Intentionally Deleted]

  	
   

  	
  42

  
	
  SECTION 7.18.

  	
  [Intentionally Deleted]

  	
   

  	
  42

  
	
  SECTION 7.19.

  	
  The Security Agent and the other Secured
  Parties

  	
   

  	
  43

  



 


ii
















 


EXHIBIT O


to the Credit Agreement


 




 





[FORM OF]


 


MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT


 


From


 


SMURFIT-STONE
CONTAINER CORPORATION, 

formerly known as Smurfit-Stone Container Enterprises, Inc.


 


To


 


DEUTSCHE
BANK AG NEW YORK BRANCH,

as Security Agent


 






 


Dated:  [·], 2010

Premises: [City], [State] (Site #[·])

[·] County


 








 





 


THIS MORTGAGE IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT (AS DEFINED BELOW), AS MORE FULLY SET FORTH IN SECTION 3.08 HEREOF.


 

















 


 


THIS
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING
STATEMENT dated and effective as of [·], 2010 (this “Mortgage”), by SMURFIT-STONE CONTAINER
CORPORATION, formerly known as Smurfit-Stone Container Enterprises, Inc.,
a Delaware corporation, having an office at Six City Place Drive, Creve Coeur,
Missouri 63141 (the “Mortgagor”),
to DEUTSCHE BANK AG NEW YORK BRANCH, having an office at 60 Wall Street, New
York, New York 10005 (the “Mortgagee”) as Security Agent for the Secured Parties (as defined
below).


 


WITNESSETH THAT:


 


Reference is made to (i) the ABL Credit
Agreement dated as of [·], 2010 (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Smurfit-Stone Container Corporation, the Mortgagor, certain Domestic
Subsidiaries and Canadian Subsidiaries of Holdings from time to time party
thereto, the Lenders from time to time a party thereto, Deutsche Bank AG New
York Branch (“DB”), as Administrative Agent and Security Agent, and DB,
JPMorgan Chase Bank, N.A. and General Electric Capital Corporation, as
Co-Collateral Agents, (ii) the Guarantee and Collateral Agreement dated as
of [·], 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Guarantee and Collateral Agreement”)
among the Mortgagor, the Domestic Subsidiaries of Holdings from time to time
party thereto and the Security Agent and (iii) the Lien Subordination and
Intercreditor Agreement dated as of [·], 2010 (as
amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”),
among Holdings, the other U.S. Loan Parties from time to time party thereto, the
Security Agent, JPMorgan Chase Bank, N.A., as Term Loan Agent, and, if
applicable, one or more Senior Representatives for holders of Permitted Second
Lien Notes.  Capitalized terms used but
not defined herein have the meanings given to them in the Credit Agreement.


 


In the Credit Agreement, the Lenders have
agreed to make Revolving Loans and Swingline Loans to, and issue, and
participate in, Letters of Credit for the account of, the Borrowers, pursuant
to, upon the terms, and subject to the conditions specified in the Credit
Agreement.  The Credit Agreement also
provides that the Mortgagor may on one or more occasions, by written notice to
the Administrative Agent, request Incremental Commitments from one or more Incremental
Lenders, which may include any existing Lender. 
The aggregate principal amount of Revolving Loans, Swingline Loans,
Letter of Credit Outstandings, Commitments, Incremental Commitments from time
to time outstanding and secured hereby, together with the aggregate amount of
obligations from time to time outstanding under Secured Hedging Agreements and
Secured Cash Management Agreements the obligations under which constitute
Obligations (as defined below) secured hereby, shall not exceed $[·          ].


 


Mortgagor is a U.S. Borrower under the Credit
Agreement and will derive substantial benefit from the making of the Loans, and
the issuance of the Letters of Credit, by the Lenders.  In order to induce the Lenders to make Loans
and issue Letters of Credit, the Mortgagor has agreed to grant this Mortgage to
secure, among other things, the due and 


 

















 


punctual payment and
performance of all of the Obligations. 
The obligations of the Lenders to make Loans and issue Letters of Credit
are conditioned upon, among other things, the execution and delivery by the
Mortgagor of this Mortgage in the form hereof to secure the Obligations.


 


As used in this Mortgage, the term “Obligations” shall mean and include (a) all Loan
Document Obligations owing by any Loan Party, (b) all Hedging Obligations
owing by any Loan Party, (c) all Cash Management Services Obligations
owing by any Loan Party and (d) all amounts paid (or incurred) by any
Indemnified Party as to which such Indemnified Party has the right to
reimbursement under Section 13.01 of the Credit Agreement or any indemnity
contained in any Security Document; it being acknowledged and agreed that the “Obligations”
shall include extensions of credit of the types described above, whether
outstanding on the date of the Credit Agreement or this Mortgage or extended
from time to time after the date of the Credit Agreement or this Mortgage.


 


As used in this Mortgage, the term “Secured Parties” shall mean (a) the
Lender Creditors, (b) the Hedging Creditors, (c) the Cash Management
Creditors, (d) the beneficiaries of each indemnification obligation
undertaken by any Loan Party under any Loan Document and (e) the
successors and assigns of each of the foregoing.


 


Pursuant to the requirements of the Credit
Agreement, the Mortgagor is granting this Mortgage to create a lien on and a
security interest in the Mortgaged Property (as hereinafter defined) to secure
the performance and payment by the Loan Parties of the Obligations.  The Credit Agreement also requires the
granting by other Loan Parties of mortgages, deeds of trust and/or deeds to
secure debt (the “Other Mortgages”)
that create liens on and security interests in certain real and personal
property other than the Mortgaged Property to secure the performance of the
Obligations.


 


Granting
Clauses


 


NOW, THEREFORE, IN CONSIDERATION OF the
foregoing and in order to secure the due and punctual payment and performance
of the Obligations for the benefit of the Secured Parties, Mortgagor hereby
grants, conveys, mortgages, assigns and pledges to the Mortgagee, a mortgage lien
on and a security interest in, all the following described property (the “Mortgaged Property”) whether now owned or
held or hereafter acquired:


 


(1) the land more particularly described on Exhibit A
hereto (the “Land”), together
with all rights appurtenant thereto, including the easements over certain other
adjoining land granted by any easement agreements, covenant or restrictive
agreements and all air rights, mineral rights, water rights, timber rights, oil
and gas rights and development rights, if any, relating thereto, and also
together with all of the other easements, rights, privileges, interests,
hereditaments and appurtenances thereunto belonging or in any way appertaining
and all of the estate, right, title, interest, claim or demand whatsoever of
Mortgagor therein and in the streets and ways adjacent thereto, either in law
or in equity, in possession or expectancy, now or hereafter acquired (the “Premises”);


 


2

















 


(2) all buildings, improvements, structures,
paving, parking areas, walkways and landscaping now or hereafter erected or
located upon the Land, and all fixtures of every kind and type affixed to the
Premises or attached to or forming part of any structures, buildings or
improvements and replacements thereof now or hereafter erected or located upon
the Land (the “Improvements”);


 


(3) all apparatus, movable appliances, building
materials, equipment, fittings, furnishings, furniture, machinery and other
articles of tangible personal property of every kind and nature, and
replacements thereof, now or at any time hereafter placed upon or used in any
way in connection with the use, enjoyment, occupancy or operation of the
Improvements or the Premises, including all of Mortgagor’s books and records
relating thereto and including all pumps, tanks, goods, machinery, tools,
equipment, lifts (including fire sprinklers and alarm systems, fire prevention
or control systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading, unloading, lighting,
power, sanitation, waste removal, entertainment, communications, computers,
recreational, window or structural, maintenance, truck or car repair and all
other equipment of every kind), restaurant, bar and all other indoor or outdoor
furniture (including tables, chairs, booths, serving stands, planters, desks,
sofas, racks, shelves, lockers and cabinets), bar equipment, glasses, cutlery,
uniforms, linens, memorabilia and other decorative items, furnishings, appliances,
supplies, inventory, rugs, carpets and other floor coverings, draperies,
drapery rods and brackets, awnings, venetian blinds, partitions, chandeliers
and other lighting fixtures, freezers, refrigerators, walk-in coolers, signs
(indoor and outdoor), computer systems, cash registers and inventory control
systems, and all other apparatus, equipment, furniture, furnishings, and
articles used in connection with the use or operation of the Improvements or
the Premises, it being understood that the enumeration of any specific articles
of property shall in no way result in or be held to exclude any items of
property not specifically mentioned (the property referred to in this
subparagraph (3), the “Personal
Property”);


 


(4) all general intangibles owned by Mortgagor
and relating to design, development, operation, management and use of the
Premises or the Improvements, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any governmental
agency in connection with the development, use, operation or management of the
Premises and Improvements, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Premises and
Improvements, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Premises and
Improvements, and all payment and performance bonds or warranties or guarantees
relating to the Premises or the Improvements, all to the extent assignable (the
“Permits, Plans and Warranties”);


 


(5) all now or hereafter existing leases or
licenses (under which Mortgagor is landlord or licensor) and subleases (under
which Mortgagor is sublandlord), 


 


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concession, management, mineral
or other agreements of a similar kind that permit the use or occupancy of the
Premises or the Improvements for any purpose in return for any payment, or the
extraction or taking of any gas, oil, water or other minerals from the Premises
in return for payment of any fee, rent or royalty (collectively, “Leases”), and all agreements or contracts
for the sale or other disposition of all or any part of the Premises or the
Improvements, now or hereafter entered into by Mortgagor, together with all
charges, fees, income, issues, profits, receipts, rents, revenues or royalties
payable thereunder (“Rents”);


 


(6) all real estate tax refunds and all
proceeds of the conversion, voluntary or involuntary, of any of the Mortgaged
Property into cash or liquidated claims (“Proceeds”),
including Proceeds of insurance maintained by the Mortgagor and condemnation
awards, any awards that may become due by reason of the taking by eminent
domain or any transfer in lieu thereof of the whole or any part of the Premises
or Improvements or any rights appurtenant thereto, and any awards for change of
grade of streets, together with any and all moneys now or hereafter on deposit
for the payment of real estate taxes, assessments or common area charges levied
against the Mortgaged Property, unearned premiums on policies of fire and other
insurance maintained by the Mortgagor covering any interest in the Mortgaged
Property or required by the Credit Agreement; and


 


(7) all extensions, improvements, betterments,
renewals, substitutes and replacements of and all additions and appurtenances
to, the Land, the Premises, the Improvements, the Personal Property, the
Permits, Plans and Warranties and the Leases, hereinafter acquired by or
released to the Mortgagor or constructed, assembled or placed by the Mortgagor
on the Land, the Premises or the Improvements, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, deed of trust, conveyance,
assignment or other act by the Mortgagor, all of which shall become subject to
the lien of this Mortgage as fully and completely, and with the same effect, as
though now owned by the Mortgagor and specifically described herein.


 


TO HAVE AND TO HOLD the Mortgaged Property
unto the Mortgagee, its successors and assigns, for the ratable benefit of the
Secured Parties, forever, subject only to Permitted Liens and to satisfaction
and release as provided in Section 3.04.


 


ARTICLE I


 


Representations, Warranties
and Covenants of Mortgagor


 


Mortgagor agrees, covenants, represents and/or
warrants as follows:


 


SECTION 1.01. 
Title, Mortgage Lien.  (a)  Mortgagor has good and marketable
fee simple title to the Mortgaged Property, subject only to Permitted Liens.


 


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(b)  The execution and delivery of this
Mortgage is within Mortgagor’s corporate powers and has been duly authorized by
all necessary corporate and, if required, stockholder action.  This Mortgage has been duly executed and
delivered by Mortgagor and constitutes a legal, valid and binding obligation of
Mortgagor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.


 


(c)  The execution, delivery and recordation of
this Mortgage (i) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect the lien of this Mortgage, (ii) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of Mortgagor or any order of any Governmental
Authority, (iii) will not violate or result in a default under any
indenture, agreement or other instrument binding upon Mortgagor or its assets,
or give rise to a right thereunder to require any payment to be made by
Mortgagor, and (iv) will not result in the creation or imposition of any
Lien on any asset of Mortgagor, except the lien of this Mortgage.


 


(d)  This Mortgage and the Uniform Commercial
Code Financing Statements described in Section 1.09 of this Mortgage, when
duly recorded in the public records identified in the U.S. Perfection
Certificate will create a valid, perfected and enforceable lien upon and
security interest in all of the Mortgaged Property.


 


(e)  Mortgagor will forever warrant and defend
its title to the Mortgaged Property, the rights of Mortgagee therein under this
Mortgage and the validity and priority of the lien of this Mortgage thereon
against the claims of all persons and parties except those having rights under
Permitted Liens to the extent of those rights.


 


SECTION 1.02. 
Credit Agreement.  This Mortgage is given pursuant to the
Credit Agreement, the other Loan Documents, the Secured Hedging Agreements and
the Secured Cash Management Agreements (collectively, the “Secured Debt Agreements”).  Mortgagor expressly covenants and agrees to
pay when due, and to timely perform, and to cause the other Loan Parties to pay
when due, and to timely perform, the Obligations in accordance with the terms
of the Secured Debt Agreements.


 


SECTION 1.03. 
Payment of Taxes, and Other
Obligations.  (a) 
Mortgagor will pay and discharge from time to time prior to the time when the
same shall become delinquent, and before any interest or penalty accrues
thereon or attaches thereto, all Taxes and other obligations with respect to
the Mortgaged Property or any part thereof or upon the Rents from the Mortgaged
Property or arising in respect of the occupancy, use or possession thereof in
accordance with, and to the extent required by, the Credit Agreement.


 


(b)  In the event of the passage of any state,
Federal, municipal or other governmental law, order, rule or regulation
subsequent to the date hereof (i) deducting from the value of real
property for the purpose of taxation any lien or encumbrance thereon or in any
manner changing or modifying the laws now in force governing the taxation of
this Mortgage or 


 


5

















 


debts secured by mortgages or deeds of trust (other than laws governing
income, franchise and similar taxes generally) or the manner of collecting
taxes thereon and (ii) imposing a tax to be paid by Mortgagee, either
directly or indirectly, on this Mortgage or any of the other Secured Debt
Agreements, or requiring an amount of taxes to be withheld or deducted
therefrom, Mortgagor will promptly (i) notify Mortgagee of such event, (ii) enter
into such further instruments as Mortgagee may determine are reasonably
necessary or desirable to obligate Mortgagor to make any additional payments
necessary to put the Lenders and Secured Parties in the same financial position
they would have been if such law, order, rule or regulation had not been
passed and (iii) make such additional payments to Mortgagee for the
benefit of the Lenders and Secured Parties.


 


SECTION 1.04. 
Maintenance of Mortgaged Property.  Mortgagor will maintain the Improvements and
the Personal Property in the manner required by the Credit Agreement.


 


SECTION 1.05. 
Insurance.  Mortgagor will keep or cause to be kept the
Improvements and Personal Property insured against such risks, and in the
manner, described in Section 9.02 of the Credit Agreement and shall
purchase such additional insurance as may be required from time to time
pursuant to the Credit Agreement. 
Federal Emergency Management Agency Standard Flood Hazard Determination
Forms will be purchased by Mortgagor for each Mortgaged Property.  If any portion of the Mortgaged Property is
located in an area identified as a special flood hazard area by Federal
Emergency Management Agency or other applicable agency, Mortgagor will purchase
flood insurance in an amount satisfactory to Mortgagee, but in no event less
than the maximum limit of coverage available under the National Flood Insurance
Act of 1968, as amended.


 


SECTION 1.06. 
Casualty Condemnation/Eminent
Domain.  Mortgagor shall
give Mortgagee prompt written notice of any casualty or other damage to the
Mortgaged Property or any proceeding for the taking of the Mortgaged Property
or any portion thereof or interest therein under power of eminent domain or by
condemnation or any similar proceeding in accordance with Section 9.05(e) of
the Credit Agreement.


 


SECTION 1.07. 
Assignment of Leases and Rents.  (a)  Mortgagor hereby irrevocably and
absolutely grants, transfers and assigns all of its right title and interest in
all Leases and Rents, together with any and all extensions and renewals of the
Leases.  Mortgagor has not assigned or
executed any assignment of, and will not assign or execute any assignment of,
any Leases or the Rents payable thereunder to anyone other than Mortgagee.


 


(b)  All material Leases, if any, shall be
subordinate to the lien of this Mortgage. 
Mortgagor will not enter into, modify or amend any Lease if such
material Lease, as entered into, modified or amended, will not be subordinate
to the lien of this Mortgage.


 


(c)  Subject to Section 1.07(d), Mortgagor
has assigned and transferred to Mortgagee all of Mortgagor’s right, title and
interest in and to the Rents now or hereafter arising from each Lease
heretofore or hereafter made or agreed to by Mortgagor, it being intended that
this assignment establish, subject to Section 1.07(d), an absolute transfer
and assignment of all Rents and all Leases to Mortgagee and not merely to grant
a security interest therein.  Subject to Section 1.07(d) and
any applicable provisions of the Credit Agreement, Mortgagee 


 


6

















 


may in Mortgagor’s name and stead (with or without first taking
possession of any of the Mortgaged Property personally or by receiver as
provided herein) operate the Mortgaged Property and rent, lease or let all or
any portion of any of the Mortgaged Property to any party or parties at such
rental and upon such terms as Mortgagee shall, in its sole discretion,
determine, and may collect and have the benefit of all of said Rents arising
from or accruing at any time thereafter or that may thereafter become due under
any Lease.


 


(d)  So long as an Event of Default shall not
have occurred and be continuing, Mortgagee will not exercise any of its rights
under Section 1.07(c), and Mortgagor shall receive and collect the Rents
accruing under any Lease; but after the happening and during the continuance of
any Event of Default, Mortgagee may, at its option, receive and collect all
Rents and enter upon the Premises and Improvements through its officers,
agents, employees or attorneys for such purpose and for the operation and
maintenance thereof.  Mortgagor hereby
irrevocably authorizes and directs each tenant, if any, and each successor, if
any, to the interest of any tenant under any Lease, respectively, to rely upon
any notice of a claimed Event of Default sent by Mortgagee to any such tenant
or any of such tenant’s successors in interest, and thereafter to pay Rents to
Mortgagee without any obligation or right to inquire as to whether an Event of
Default actually exists and even if some notice to the contrary is received
from the Mortgagor, who shall have no right or claim against any such tenant or
successor in interest for any such Rents so paid to Mortgagee.  Each tenant or any of such tenant’s
successors in interest from whom Mortgagee or any officer, agent, attorney or
employee of Mortgagee shall have collected any Rents, shall be authorized to
pay Rents to Mortgagor only after such tenant or any of their successors in
interest shall have received written notice from Mortgagee that the Event of
Default is no longer continuing, unless and until a further notice of an Event
of Default is given by Mortgagee to such tenant or any of its successors in
interest.


 


(e)  Mortgagee will not become a mortgagee in
possession so long as it does not enter or take actual possession of the
Mortgaged Property.  In addition,
Mortgagee shall not be responsible or liable for performing any of the
obligations of the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of the Mortgaged
Property, for negligence in the management, upkeep, repair or control of any of
the Mortgaged Property or any other act or omission by any other person.


 


(f)  Mortgagor shall furnish to Mortgagee,
within 30 days after a request by Mortgagee to do so, a written statement
containing the names of all tenants, subtenants and concessionaires of the
Premises or Improvements, the terms of any Lease, the space occupied and the
rentals and/or other amounts payable thereunder.


 


SECTION 1.08. 
Restrictions on Transfers and
Encumbrances.  Mortgagor
shall not directly or indirectly sell, convey, alienate, assign, lease,
sublease, license, mortgage, pledge, encumber or otherwise transfer, create,
consent to or suffer the creation of any lien, charge or other form of
encumbrance upon any interest in or any part of the Mortgaged Property, or be
divested of its title to the Mortgaged Property or any interest therein in any
manner or way, whether voluntarily or involuntarily (other than resulting from
a condemnation), or engage in any common, cooperative, joint, time-sharing or
other congregate ownership of all or part thereof, except in each case in
accordance with and to the extent permitted by the Credit 


 


7

















 


Agreement; provided, that Mortgagor may, in the ordinary course
of business and in accordance with reasonable commercial standards, enter into
easement or covenant agreements that relate to and/or benefit the operation of
the Mortgaged Property and that do not materially and adversely affect the
value, use or operation of the Mortgaged Property.


 


SECTION 1.09. 
Security Agreement.  This Mortgage is both a mortgage of real
property and a grant of a security interest in personal property, and shall
constitute and serve as a “Security Agreement” within the meaning of the
uniform commercial code as adopted in the state wherein the Premises are
located (“UCC”).  Mortgagor has hereby granted unto Mortgagee a
security interest in and to all the Mortgaged Property described in this
Mortgage that is not real property, and simultaneously with the recording of
this Mortgage, Mortgagor has filed or will file UCC financing statements, and
will file continuation statements prior to the lapse thereof, at the
appropriate offices in the jurisdiction of formation of the Mortgagor to
perfect the security interest granted by this Mortgage in all the Mortgaged
Property that is not real property. 
Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in
any and all capacities, to execute any document and to file the same in the
appropriate offices (to the extent it may lawfully do so), and to perform each
and every act and thing reasonably requisite and necessary to be done to
perfect the security interest contemplated by the preceding sentence.  Mortgagee shall have all rights with respect
to the part of the Mortgaged Property that is the subject of a security interest
afforded by the UCC in addition to, but not in limitation of, the other rights
afforded Mortgagee hereunder and under the Security Agreement.


 


SECTION 1.10. 
Filing and Recording.  Mortgagor will cause this Mortgage, the UCC
financing statements referred to in Section 1.09, any other security
instrument creating a security interest in or evidencing the lien hereof upon
the Mortgaged Property and each UCC continuation statement and instrument of
further assurance to be filed, registered or recorded and, if necessary,
refiled, rerecorded and reregistered, in such manner and in such places as may
be required by any present or future law in order to publish notice of and
fully to perfect the lien hereof upon, and the security interest of Mortgagee
in, the Mortgaged Property until this Mortgage is terminated and released in
full in accordance with Section 3.04 hereof.  Mortgagor will pay all filing, registration
and recording fees, all Federal, state, county and municipal recording,
documentary or intangible taxes and other taxes, duties, imposts, assessments
and charges, and all reasonable expenses incidental to or arising out of or in
connection with the execution, delivery and recording of this Mortgage, UCC
continuation statements any mortgage supplemental hereto, any security
instrument with respect to the Personal Property, Permits, Plans and Warranties
and Proceeds or any instrument of further assurance.


 


SECTION 1.11. 
Further Assurances.  Upon demand by Mortgagee, Mortgagor will, at
the cost of Mortgagor and without expense to Mortgagee, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as Mortgagee shall
from time to time reasonably require for the better assuring, conveying,
assigning, transferring and confirming unto Mortgagee the property and rights
hereby conveyed or assigned or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to
Mortgagee, or for carrying out the intention or facilitating the performance of
the terms of this Mortgage, 


 


8

















 


or for filing, registering or recording this Mortgage, and on demand,
Mortgagor will also execute and deliver and hereby appoints Mortgagee as its
true and lawful attorney-in-fact and agent, for Mortgagor and in its name,
place and stead, in any and all capacities, to execute and file to the extent
it may lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments reasonably requested by Mortgagee to evidence
more effectively the lien hereof upon the Personal Property and to perform each
and every act and thing requisite and necessary to be done to accomplish the
same.


 


SECTION 1.12. 
Additions to Mortgaged Property.  All right, title and interest of Mortgagor in
and to all extensions, improvements, betterments, renewals, substitutes and
replacements of, and all additions and appurtenances to, the Mortgaged Property
hereafter acquired by or released to Mortgagor or constructed, assembled or
placed by Mortgagor upon the Premises or the Improvements, and all conversions
of the security constituted thereby, immediately upon such acquisition,
release, construction, assembling, placement or conversion, as the case may be,
and in each such case without any further mortgage, conveyance, assignment or
other act by Mortgagor, shall become subject to the lien and security interest
of this Mortgage as fully and completely and with the same effect as though now
owned by Mortgagor and specifically described in the grant of the Mortgaged
Property above, but at any and all times Mortgagor will execute and deliver to
Mortgagee any and all such further assurances, mortgages, conveyances or
assignments thereof as Mortgagee may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien and security
interest of this Mortgage.


 


SECTION 1.13. 
No Claims Against Mortgagee.  Nothing contained in this Mortgage shall
constitute any consent or request by Mortgagee, express or implied, for the
performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof, nor as
giving Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof.


 


SECTION 1.14. 
Fixture Filing.  (a)  Certain portions of the Mortgaged
Property are or will become “fixtures” (as that term is defined in the UCC) on
the Land, and this Mortgage, upon being filed for record in the real estate
records of the county wherein such fixtures are situated, shall operate also as
a financing statement filed as a fixture filing in accordance with the
applicable provisions of said UCC upon such portions of the Mortgaged Property
that are or become fixtures.


 


(b)  The real property to which the fixtures
relate is described in Exhibit A hereto.  The record owner of the real property
described in Exhibit A hereto is Mortgagor.  The name, type of organization and
jurisdiction of organization of the debtor for purposes of this financing
statement are the name, type of organization and jurisdiction of organization
of the Mortgagor set forth in the first paragraph of this Mortgage, and the
name of the secured party for purposes of this financing statement is the name
of the Mortgagee set forth in the first paragraph of this Mortgage.  The mailing address of the Mortgagor/debtor
is the address of the Mortgagor set forth in the first paragraph of this
Mortgage.  The mailing address of the
Mortgagee/secured party from which information concerning the security interest
hereunder 


 


9

















 


may be obtained is the address of the Mortgagee set forth in the first
paragraph of this Mortgage.  Mortgagor’s
organizational identification number is 2123437.


 


ARTICLE II


 


Defaults and Remedies


 


SECTION 2.01. 
Events of Default.  Any Event of Default under the Credit
Agreement (as such term is defined therein) shall constitute an Event of
Default under this Mortgage.


 


SECTION 2.02. 
Demand for Payment.  If an Event of Default shall occur and be
continuing, then, upon written demand of Mortgagee, Mortgagor will pay to
Mortgagee all amounts due hereunder and under the Credit Agreement and the
other Loan Documents and such further amount as shall be sufficient to cover
the costs and expenses of collection, including attorneys’ fees, disbursements
and expenses incurred by Mortgagee, and Mortgagee shall be entitled and
empowered to institute an action or proceedings at law or in equity for the
collection of the sums so due and unpaid, to prosecute any such action or
proceedings to judgment or final decree, to enforce any such judgment or final
decree against Mortgagor and to collect, in any manner provided by law, all
moneys adjudged or decreed to be payable.


 


SECTION 2.03. 
Rights To Take Possession, Operate
and Apply Revenues.  (a) 
If an Event of Default shall occur and be continuing, Mortgagor shall, upon
demand of Mortgagee, forthwith surrender to Mortgagee actual possession of the
Mortgaged Property and, if and to the extent not prohibited by applicable law,
Mortgagee itself, or by such officers or agents as it may appoint, may then
enter and take possession of all the Mortgaged Property without the appointment
of a receiver or an application therefor, exclude Mortgagor and its agents and
employees wholly therefrom, and have access to the books, papers and accounts
of Mortgagor.


 


(b)  If Mortgagor shall for any reason fail to
surrender or deliver the Mortgaged Property or any part thereof after such
demand by Mortgagee, Mortgagee may to the extent not prohibited by applicable
law, obtain a judgment or decree conferring upon Mortgagee the right to
immediate possession or requiring Mortgagor to deliver immediate possession of
the Mortgaged Property to Mortgagee, to the entry of which judgment or decree
Mortgagor hereby specifically consents. 
Mortgagor will pay to Mortgagee, upon demand, all reasonable expenses of
obtaining such judgment or decree, including reasonable compensation to
Mortgagee’s attorneys and agents with interest thereon at the rate per annum
applicable to overdue amounts under the Credit Agreement as provided in Section 2.08(b) of
the Credit Agreement (the “Interest Rate”);
and all such expenses and compensation shall, until paid, be secured by this
Mortgage.


 


(c)  Upon every such entry or taking of
possession, Mortgagee may, to the extent not prohibited by applicable law,
hold, store, use, operate, manage and control the Mortgaged Property, conduct
the business thereof and, from time to time, (i) make all necessary and 


 


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proper maintenance, repairs, renewals, replacements, additions,
betterments and improvements thereto and thereon, (ii) purchase or
otherwise acquire additional fixtures, personalty and other property, (iii) insure
or keep the Mortgaged Property insured, (iv) manage and operate the
Mortgaged Property and exercise all the rights and powers of Mortgagor to the
same extent as Mortgagor could in its own name or otherwise with respect to the
same, or (v) enter into any and all agreements with respect to the
exercise by others of any of the powers herein granted Mortgagee, all as may
from time to time be directed or determined by Mortgagee to be in its best
interest and Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in
any and all capacities, to perform any of the foregoing acts. Mortgagee may
collect and receive all the Rents, issues, profits and revenues from the
Mortgaged Property, including those past due as well as those accruing
thereafter, and, after deducting (i) all expenses of taking, holding,
managing and operating the Mortgaged Property (including compensation for the
services of all persons employed for such purposes), (ii) the costs of all
such maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions, (iii) the costs of insurance, (iv) such
taxes, assessments and other similar charges as Mortgagee may at its option
pay, (v) other proper charges upon the Mortgaged Property or any part
thereof and (vi) the compensation, expenses and disbursements of the
attorneys and agents of Mortgagee, Mortgagee shall apply the remainder of the
moneys and proceeds so received first to the payment of the Mortgagee for the
satisfaction of the Obligations, and second, if there is any surplus, to
Mortgagor, subject to the entitlement of others thereto under applicable law.


 


(d)  Whenever, before any sale of the Mortgaged
Property under Section 2.06, all Obligations that are then due shall have
been paid and all Events of Default fully cured, Mortgagee will surrender
possession of the Mortgaged Property back to Mortgagor, its successors or
assigns.  The same right of taking
possession shall, however, arise again if any subsequent Event of Default shall
occur and be continuing.


 


SECTION 2.04. 
Right To Cure Mortgagor’s Failure
to Perform.  Should
Mortgagor fail in the payment, performance or observance of any term, covenant
or condition required by this Mortgage or the Credit Agreement (with respect to
the Mortgaged Property), Mortgagee may pay, perform or observe the same, and
all payments made or costs or expenses incurred by Mortgagee in connection
therewith shall be secured hereby and shall be, without demand, immediately repaid
by Mortgagor to Mortgagee with interest thereon at the Interest Rate.  Mortgagee shall be the judge using reasonable
discretion of the necessity for any such actions and of the amounts to be paid.  Mortgagee is hereby empowered to enter and to
authorize others to enter upon the Premises or the Improvements or any part
thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without having any obligation to so perform or observe
and without thereby becoming liable to Mortgagor, to any person in possession
holding under Mortgagor or to any other person.


 


SECTION 2.05. 
Right to a Receiver.  If an Event of Default shall occur and be
continuing, Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Mortgaged Property and to collect and apply
the Rents.  The receiver shall have all
of the rights and powers permitted under the laws of the state wherein the
Mortgaged Property is 


 


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located.  Mortgagor shall pay to
Mortgagee upon demand all reasonable expenses, including receiver’s fees,
reasonable attorney’s fees and disbursements, costs and agent’s compensation
incurred pursuant to the provisions of this Section 2.05; and all such
expenses shall be secured by this Mortgage and shall be, without demand,
immediately repaid by Mortgagor to Mortgagee with interest thereon at the
Interest Rate.


 


SECTION 2.06. 
Foreclosure and Sale.  (a)  If an Event of Default shall occur
and be continuing, Mortgagee may elect to sell the Mortgaged Property or any
part of the Mortgaged Property by exercise of the power of foreclosure or of
sale granted to Mortgagee by applicable law or this Mortgage.  In such case, Mortgagee may commence a civil
action to foreclose this Mortgage, or it may proceed and sell the Mortgaged
Property to satisfy any Obligation. 
Mortgagee or an officer appointed by a judgment of foreclosure to sell
the Mortgaged Property, may sell all or such parts of the Mortgaged Property as
may be chosen by Mortgagee at the time and place of sale fixed by it in a
notice of sale, either as a whole or in separate lots, parcels or items as
Mortgagee shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder. 
Mortgagee or an officer appointed by a judgment of foreclosure to sell
the Mortgaged Property may postpone any foreclosure or other sale of all or any
portion of the Mortgaged Property by public announcement at such time and place
of sale, and from time to time thereafter may postpone such sale by public
announcement or subsequently noticed sale. 
Without further notice, Mortgagee or an officer appointed to sell the
Mortgaged Property may make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.  Any person, including Mortgagor or Mortgagee
or any designee or affiliate thereof, may purchase at such sale.


 


(b)  The Mortgaged Property may be sold subject
to unpaid taxes and Permitted Liens, and, after deducting all costs, fees and
expenses of Mortgagee (including costs of evidence of title in connection with
the sale), Mortgagee or an officer that makes any sale shall apply the proceeds
of sale in the manner set forth in Section 2.08.


 


(c)  Any foreclosure or other sale of less than
the whole of the Mortgaged Property or any defective or irregular sale made
hereunder shall not exhaust the power of foreclosure or of sale provided for
herein; and subsequent sales may be made hereunder until the Obligations have
been satisfied, or the entirety of the Mortgaged Property has been sold.


 


(d)  If an Event of Default shall occur and be
continuing, Mortgagee may instead of, or in addition to, exercising the rights
described in Section 2.06(a) above and either with or without entry
or taking possession as herein permitted, proceed by a suit or suits in law or
in equity or by any other appropriate proceeding or remedy (i) to
specifically enforce payment of some or all of the Obligations, or the
performance of any term, covenant, condition or agreement of this Mortgage or
any other Loan Document or any other right, or (ii) to pursue any other
remedy available to Mortgagee, all as Mortgagee shall determine most effectual
for such purposes.


 


SECTION 2.07. 
Other Remedies.  (a)  In case an Event of Default shall
occur and be continuing, Mortgagee may also exercise, to the extent not
prohibited by law, any or all of the remedies available to a secured party
under the UCC.


 


12
















 


(b)  In connection with a sale of the Mortgaged
Property or any Personal Property and the application of the proceeds of sale
as provided in Section 2.08, Mortgagee shall be entitled to enforce
payment of and to receive up to the principal amount of the Obligations, plus
all other charges, payments and costs due under this Mortgage, and to recover a
deficiency judgment for any portion of the aggregate principal amount of the
Obligations remaining unpaid, with interest.


 


SECTION 2.08. 
Application of Sale Proceeds and
Rents.  After any
foreclosure sale of all or any of the Mortgaged Property, Mortgagee shall,
subject to the applicable provisions of the Intercreditor Agreement, receive
and apply the proceeds of the sale, together with any Rents that may have been
collected and any other sums that then may be held by Mortgagee under this
Mortgage, in accordance with Section 11.02 of the Credit Agreement.  The Mortgagee shall have absolute discretion
as to the time of application of any such proceeds, moneys or balances in
accordance with this Mortgage.  Upon any
sale of the Mortgaged Property by the Mortgagee (including pursuant to a power
of sale granted by statute or under a judicial proceeding), the receipt of the
Mortgagee or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Mortgaged Property so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Mortgagee or such officer or be
answerable in any way for the misapplication thereof.


 


SECTION 2.09. 
Mortgagor as Tenant Holding Over.  If Mortgagor remains in possession of any of
the Mortgaged Property after any foreclosure sale by Mortgagee, at Mortgagee’s
election Mortgagor shall be deemed a tenant holding over and shall forthwith
surrender possession to the purchaser or purchasers at such sale or be
summarily dispossessed or evicted according to provisions of law applicable to
tenants holding over.


 


SECTION 2.10. 
Waiver of Appraisement, Valuation,
Stay, Extension and Redemption Laws. 
Mortgagor waives, to the extent not prohibited by law, (i) the
benefit of all laws now existing or that hereafter may be enacted (x) providing
for any appraisement or valuation of any portion of the Mortgaged Property
and/or (y) in any way extending the time for the enforcement or the
collection of amounts due under any of the Obligations or creating or extending
a period of redemption from any sale made in collecting said debt or any other
amounts due Mortgagee, (ii) any right to at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any homestead exemption, stay, statute of limitations, extension
or redemption, or sale of the Mortgaged Property as separate tracts, units or
estates or as a single parcel in the event of foreclosure or notice of
deficiency, and (iii) all rights of redemption, valuation, appraisement,
stay of execution, notice of election to mature or declare due the whole of or
each of the Obligations and marshaling in the event of foreclosure of this
Mortgage.


 


SECTION 2.11. 
Discontinuance of Proceedings.  In case Mortgagee shall proceed to enforce
any right, power or remedy under this Mortgage by foreclosure, entry or
otherwise, and such proceedings shall be discontinued or abandoned for any
reason, or shall be determined adversely to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Mortgagee shall
continue as if no such proceeding had been taken.


 


13

















 


SECTION 2.12. 
Suits To Protect the Mortgaged
Property.  Mortgagee shall
have power (a) to institute and maintain suits and proceedings to prevent
any impairment of the Mortgaged Property by any acts that may be unlawful or in
violation of this Mortgage, (b) to preserve or protect its interest in the
Mortgaged Property and in the Rents arising therefrom and (c) to restrain
the enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid
if the enforcement of or compliance with such enactment, rule or order
would impair the security or be prejudicial to the interest of Mortgagee
hereunder.


 


SECTION 2.13. 
Filing Proofs of Claim.  In case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor, Mortgagee shall, to the extent permitted by
law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Mortgagee allowed in such
proceedings for the Obligations secured by this Mortgage at the date of the
institution of such proceedings and for any interest accrued, late charges and
additional interest or other amounts due or that may become due and payable
hereunder after such date.


 


SECTION 2.14. 
Possession by Mortgagee.  Notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor, any of its property or the
Mortgaged Property, Mortgagee shall be entitled, to the extent not prohibited
by law, to remain in possession and control of all parts of the Mortgaged Property
now or hereafter granted under this Mortgage to Mortgagee in accordance with
the terms hereof and applicable law.


 


SECTION 2.15. 
Waiver.  (a)  No delay or failure by Mortgagee to
exercise any right, power or remedy accruing upon any breach or Event of
Default shall exhaust or impair any such right, power or remedy or be construed
to be a waiver of any such breach or Event of Default or acquiescence therein;
and every right, power and remedy given by this Mortgage to Mortgagee may be
exercised from time to time and as often as may be deemed expedient by
Mortgagee.  No consent or waiver by
Mortgagee to or of any breach or Event of Default by Mortgagor in the
performance of the Obligations shall be deemed or construed to be a consent or
waiver to or of any other breach or Event of Default in the performance of the
same or of any other Obligations by Mortgagor hereunder.  No failure on the part of Mortgagee to
complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall constitute a waiver by
Mortgagee of its rights hereunder or impair any rights, powers or remedies
consequent on any future Event of Default by Mortgagor.


 


(b)  Even if Mortgagee (i) grants some
forbearance or an extension of time for the payment of any sums secured hereby,
(ii) takes other or additional security for the payment of any sums
secured hereby, (iii) waives or does not exercise some right granted
herein or under the Secured Debt Agreements, (iv) releases a part of the
Mortgaged Property from this Mortgage, (v) agrees to change some of the
terms, covenants, conditions or agreements of any of the Secured Debt
Agreements, (vi) consents to the filing of a map, plat or replat affecting
the Premises, (vii) consents to the granting of an easement or other right
affecting the Premises or (viii) makes or consents to an agreement
subordinating Mortgagee’s lien on the Mortgaged Property hereunder; no such act
or omission shall preclude Mortgagee from 


 


14

















 


exercising any other right, power or privilege herein granted or
intended to be granted in the event of any breach or Event of Default then made
or of any subsequent default; nor, except as otherwise expressly provided in an
instrument executed by Mortgagee, shall this Mortgage be altered thereby.  In the event of the sale or transfer by
operation of law or otherwise of all or part of the Mortgaged Property,
Mortgagee is hereby authorized and empowered to deal with any vendee or transferee
with reference to the Mortgaged Property secured hereby, or with reference to
any of the terms, covenants, conditions or agreements hereof, as fully and to
the same extent as it might deal with the original parties hereto and without
in any way releasing or discharging any liabilities, obligations or
undertakings.


 


SECTION 2.16. 
Waiver of Trial by Jury.  To the fullest extent permitted by applicable
law, Mortgagor and Mortgagee each hereby irrevocably and unconditionally waive
trial by jury in any action, claim, suit or proceeding relating to this
Mortgage and for any counterclaim brought therein.  Mortgagor hereby waives all rights to
interpose any counterclaim in any suit brought by Mortgagee hereunder and all
rights to have any such suit consolidated with any separate suit, action or
proceeding.


 


SECTION 2.17. 
Remedies Cumulative.  No right, power or remedy conferred upon or
reserved to Mortgagee by this Mortgage is intended to be exclusive of any other
right, power or remedy, and each and every such right, power and remedy shall
be cumulative and concurrent and in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.


 


ARTICLE III


 


Miscellaneous


 


SECTION 3.01. 
Partial Invalidity.  In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such validity, illegality or
unenforceability shall, at the option of Mortgagee, not affect any other
provision of this Mortgage, and this Mortgage shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.


 


SECTION 3.02. 
Notices.  All notices and communications hereunder
shall be in writing and given to Mortgagor in accordance with the terms of the
Credit Agreement at the address set forth on the first page of this
Mortgage and to the Mortgagee as provided in the Credit Agreement.


 


SECTION 3.03. 
Successors and Assigns.  All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
permitted successors and assigns of Mortgagor and the successors and assigns of
Mortgagee.


 


SECTION 3.04. 
Satisfaction and Cancelation.  (a)  The conveyance to Mortgagee of the
Mortgaged Property as security created and consummated by this Mortgage shall
be null and void upon the payment in full in cash of the Loans and all the
other Loan Document Obligations (other than unasserted contingent and
indemnification obligations), termination 


 


15

















 


of all Commitments and Incremental Commitments and reduction of all
exposure under any Letters of Credit issued and any Bankers’ Acceptances to
zero (or the making of other arrangements satisfactory to the issuers thereof).


 


(b)  Upon any sale or other transfer by
Mortgagor of all or any portion of the Mortgaged Property that is permitted
under the Credit Agreement (other than a sale or other transfer to a U.S. Loan
Party), or upon the effectiveness of any written consent to the release of the
Lien granted hereby in all or any portion of the Mortgaged Property pursuant to
Section 12.10 of the Credit Agreement, the Lien in all or such portion of
the Mortgaged Property, as applicable, shall be automatically released.


 


(c)  In connection with any termination or
release pursuant to paragraph (a) or (b) of this Section 3.04,
the Mortgagee shall execute and deliver to Mortgagor, at Mortgagor’s expense,
all documents that Mortgagor shall reasonably request to evidence such
termination or release; provided, however, that (i) the
Mortgagee shall not be required to execute any such document on terms which, in
its reasonable opinion, would expose it to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge,
affect or impair the Obligations or any Liens upon (or obligations of the
Mortgagor or any of the Subsidiaries in respect of) all interests in the
Mortgaged Property (if any) retained by the Mortgagor or any of the
Subsidiaries.  Any execution and delivery
of documents pursuant to this Section 3.04 shall be without recourse to or
warranty by the Mortgagee.


 


SECTION 3.05. 
Definitions.  The rules of construction specified in Section 1.02
of the Credit Agreement also apply to this Mortgage.  As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) “including”
shall mean “including but not limited to”; (b) “provisions” shall mean “provisions, terms, covenants and/or
conditions”; (c) “lien”
shall mean “lien, charge, encumbrance, security interest, mortgage or deed of
trust”; (d) “obligation”
shall mean “obligation, duty, covenant and/or condition”; and (e) “any of
the Mortgaged Property” shall mean “the Mortgaged Property or any part thereof
or interest therein”.  Any act that
Mortgagee is permitted to perform hereunder may be performed at any time and
from time to time by Mortgagee or any person or entity designated by
Mortgagee.  Any act that is prohibited to
Mortgagor hereunder is also prohibited to all lessees of any of the Mortgaged
Property.  Each appointment of Mortgagee
as attorney-in-fact for Mortgagor under the Mortgage is irrevocable, with power
of substitution and coupled with an interest.


 


SECTION 3.06. 
Multisite Real Estate Transaction.  Mortgagor acknowledges that this Mortgage is
one of a number of Other Mortgages and Security Documents that secure the
Obligations.  Mortgagor agrees that the
lien of this Mortgage shall be absolute and unconditional and shall not in any
manner be affected or impaired by any acts or omissions whatsoever of
Mortgagee, and without limiting the generality of the foregoing, the lien
hereof shall not be impaired by any acceptance by the Mortgagee of any security
for or guarantees of any of the Obligations hereby secured, or by any failure,
neglect or omission on the part of Mortgagee to realize upon or protect any
Obligation or indebtedness hereby secured or any collateral security therefor
including the Other Mortgages and other Security Documents.  The lien hereof shall not in any manner be
impaired or affected by any release 


 


16





















 


(except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations secured or of any of the
collateral security therefor, including the Other Mortgages and other Security
Documents or of any guarantee thereof, and Mortgagee may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy available
to it under any or all of the Other Mortgages and other Security Documents
without first exercising or enforcing any of its rights and remedies
hereunder.  Such exercise of Mortgagee’s
rights and remedies under any or all of the Other Mortgages and other Security
Documents shall not in any manner impair the indebtedness hereby secured or the
lien of this Mortgage and any exercise of the rights or remedies of Mortgagee
hereunder shall not impair the lien of any of the Other Mortgages and other
Security Documents or any of Mortgagee’s rights and remedies thereunder.  Mortgagor specifically consents and agrees
that Mortgagee may exercise its rights and remedies hereunder and under the
Other Mortgages and other Security Documents separately or concurrently and in
any order that it may deem appropriate and waives any rights of subrogation.


 


SECTION 3.07. 
No Oral Modification.  This Mortgage may not be changed or
terminated orally.  Any agreement made by
Mortgagor and Mortgagee after the date of this Mortgage relating to this
Mortgage shall be superior to the rights of the holder of any intervening or
subordinate Mortgage, lien or encumbrance.


 


SECTION 3.08. 
Intercreditor
Agreement.   Notwithstanding anything herein to the
contrary, the Liens granted to the Mortgagee under this Mortgage and the
exercise of the rights and remedies of the Mortgagee hereunder are subject to
the provisions of the Intercreditor Agreement. 
In the event of any conflict between the terms of the Intercreditor
Agreement and this Mortgage, the terms of the Intercreditor Agreement shall
govern and control.


 


SECTION 3.09. 
Reduction of Secured Amount.  In the event the maximum principal amount
secured by this Mortgage is less than the aggregate Obligations, then the
amount secured hereby shall be reduced only by the last and final sums that
Mortgagor or any other Loan Party repays with respect to the Obligations and
shall not be reduced by any intervening repayments of the Obligations.  So long as the balance of the Obligations
exceeds the amount secured hereby, any payments of the Obligations shall not be
deemed to be applied against, or reduce, the portion of the Obligations secured
by this Mortgage.


 


SECTION 3.10. 
Future Advances.  This Mortgage is given to secure the
Obligations under, or in respect of, the Secured Debt Agreements and shall
secure not only Obligations with respect to presently existing indebtedness
under the foregoing documents and agreements but also any and all other
Obligations which may hereafter be owing to the Secured Parties under the
Secured Debt Agreements, however incurred, whether interest, discount or
otherwise, and whether the same shall be deferred, accrued or capitalized,
including future advances and re-advances and other obligations, pursuant to
the Secured Debt Agreements, whether such advances or obligations are
obligatory or to be made at the option of the Secured Parties, or otherwise, to
the same extent as if such future advances or obligations were made on the date
of the execution of this Mortgage.  The
Lien of this Mortgage shall be valid as to all Obligations secured hereby,
including future advances and 


 


17





















 


obligations, from the time of its filing for record in the recorder’s
office of the county in which the Mortgaged Property is located.  This Mortgage is intended to and shall be
valid and have priority over all subsequent Liens and encumbrances, including
statutory Liens, excepting solely taxes and assessments levied on the real
estate, to the extent of the maximum amount secured hereby and Permitted Liens
related thereto.  Although this Mortgage
is given to secure all future advances and obligations made by Mortgagee and/or
the other Secured Parties to or for the benefit of the Borrowers, Mortgagor
and/or the Mortgaged Property, whether obligatory or optional, Mortgagor and
Mortgagee hereby acknowledge and agree that Mortgagee and the other Secured
Parties are obligated by the terms of the Secured Debt Agreements to make
certain future advances or obligations, including advances of a revolving
nature, subject to the fulfillment of the relevant conditions set forth in the
Secured Debt Agreements.


 


ARTICLE IV


 


Particular Provisions


 


This Mortgage is subject to the following
provisions relating to the particular laws of the state wherein the Premises
are located:


 


SECTION 4.01. 
Applicable Law; Certain Particular
Provisions.  This Mortgage
shall be governed by and construed in accordance with the internal law of the
state where the Mortgaged Property is located, except that Mortgagor expressly
acknowledges that by their terms, the Credit Agreement and other Loan Documents
(aside from those Other Mortgages to be recorded outside New York) shall be governed
by the internal law of the State of New York, without regard to principles of
conflict of law.  Mortgagor and Mortgagee
agree to submit to jurisdiction and the laying of venue for any suit on this
Mortgage in the state where the Mortgaged Property is located.  The terms and provisions set forth in Appendix A
attached hereto are hereby incorporated by reference as though fully set forth
herein.  In the event of any conflict
between the terms and provisions contained in the body of this Mortgage and the
terms and provisions set forth in Appendix A, the terms and
provisions set forth in Appendix A shall govern and control.


 


18





















 


IN WITNESS WHEREOF, this Mortgage has been
duly executed and delivered to Mortgagee by Mortgagor and is effective as of
the date first above written.


 


	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:
  

  	
   

  
	
   

  	
  Title: 

  	
   

  



 


19

















 


[ADD LOCAL FORM OF ACKNOWLEDGMENT]


 


20

















 


Exhibit A


to Mortgage


 


Description of the Land


 

















 


Appendix A


to Mortgage


 


Local Law Provisions


 
















 


Exhibit P-1


to the Credit
Agreement


 


April     ,
2010


 


Deutsche Bank AG New York
Branch,


as Administrative Agent
and Security Agent


60 Wall Street,
NYC60-0208


2nd Floor


New York, New York
10005-2858


 


The Lenders party to the
Credit Agreement referred to below


 


Ladies and Gentlemen:


 


We have acted as special
counsel to Smurfit-Stone Container Corporation, a Delaware corporation (“SSCC”),
Smurfit-Stone Container Enterprises, Inc., a Delaware corporation (“SSCE”),
and Smurfit-Stone Container Canada, L.P., an Ontario limited partnership (“SSC
Canada”), in connection with the execution and delivery of the ABL Credit
Agreement dated as of the date hereof (the “Credit Agreement”) by and
among SSCC, SSCE, SSC Canada, Deutsche Bank AG New York Branch, as Administrative
Agent and Security Agent, Deutsche Bank AG New York Branch, JPMorgan Chase
Bank, N.A., and General Electric Capital Corporation, as Co-Collateral Agents,
and the financial institutions party thereto (the “Lenders”).  Capitalized terms used herein, but not
otherwise defined herein, shall have the meanings ascribed to such terms in the
Credit Agreement.  SSCC and SSCE are
individually referred to herein as a “Loan Party” and collectively as
the “Loan Parties”.  This opinion
letter is delivered to you at our clients’ request pursuant to Section 6.01(b) of
the Credit Agreement.


 


In rendering the opinions
set forth herein, we have examined (i) the Credit Agreement, (ii) that
certain Order dated April     , 2010 issued by the
U.S. Bankruptcy Court granting authority to enter into the Credit Agreement and
execute, deliver and perform all obligations under the Credit Agreement and
other Loan Documents, and (iii) such other agreements, instruments and
documents and such questions of law as we have deemed necessary or appropriate
to enable us to render the opinions expressed below.  Additionally, we have examined originals or
copies, certified to our satisfaction, of such certificates of public officials
and officers and representatives of the Loan Parties and we have made such
inquiries of officers and representatives of the Loan Parties as we have deemed
relevant or necessary as the basis for the opinions set forth herein.


 

















 


In rendering the opinions
expressed below, we have, with your consent, assumed the legal capacity of all
natural persons executing documents, that the signatures of persons signing all
documents in connection with which this opinion letter is rendered are genuine,
all documents submitted to us as originals or duplicate originals are authentic
and all documents submitted to us as copies, whether certified or not, conform
to authentic original documents.  In
giving the opinions expressed below, we have relied upon and assumed with your
permission and without independent investigation or verification of any kind
the correctness of (i) the opinions set forth in the separate opinion of
Craig A. Hunt, Esq., Senior Vice President, Secretary and General Counsel
of the Loan Parties, with respect to the Loan Parties, (ii) the opinions
set forth in the separate opinion of Osler, Hoskin & Harcourt LLP,
with respect to SSC Canada and 3242795 Nova Scotia Limited, a Nova Scotia
company and general partner of SSC Canada, and (iii) the opinions set
forth in the separate opinion of Stewart McKelvey Stirling Scales, with respect
to SSC Canada, 3242795 Nova Scotia Limited, a Nova Scotia company and general
partner of SSC Canada, and 3242796 Nova Scotia Limited, a Nova Scotia company
and limited partner of SSC Canada, in each case dated the date hereof and
delivered to you pursuant to Section 6.01(b) of the Credit
Agreement.  Additionally, we have, with
your consent, assumed and relied upon, the following:


 


(a)           the
accuracy and completeness of all certificates and other statements, documents,
records, financial statements and papers reviewed by us, and the accuracy and
completeness of all representations, warranties, schedules and exhibits
contained in the Credit Agreement, in each case with respect to the factual
matters set forth therein;


 


(b)           all
parties to the documents reviewed by us are duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation or formation and under the laws of all jurisdictions where they
are conducting their businesses or otherwise required to be so qualified, and
have full power and authority to execute, deliver and perform under such
documents and all such documents have been duly authorized, executed and
delivered by such parties; and


 


(c)           because
a claimant bears the burden of proof required to support its claims, the
Administrative Agent, Security Agent and the Lenders will undertake the effort
and expense necessary to fully present their claims in the prosecution of any
right or remedy accorded the Administrative Agent, Security Agent or the
Lenders under the Credit Agreement.


 


Whenever our opinion with
respect to the existence or absence of facts is indicated to be based on our
knowledge or awareness, we are referring to the actual present knowledge of the
particular Winston & Strawn LLP attorneys who have represented the
Loan Parties during the course of our limited representation of the Loan
Parties in connection with the Credit Agreement.  Except as expressly set forth herein, we have
not undertaken any independent investigation, examination or inquiry to
determine the existence or absence of any facts (and have not caused the review
of any court file or indices) and no inference as to our knowledge concerning
any facts should be drawn as a result of the limited representation undertaken
by us.


 


Based upon the foregoing
and subject to the qualifications, limitations and comments stated herein, we
are of the opinion that:


 


2

















 


1.             The
Credit Agreement constitutes the legal, valid and binding obligation of each of
the Loan Parties and SSC Canada and the Credit Agreement is enforceable against
each such Loan Party and SSC Canada in accordance with its terms.


 


2.             Each
of the Loan Party’s and SSC Canada’s execution and delivery of the Credit
Agreement and its performance of its obligations thereunder will not constitute
a violation by such Loan Party or SSC Canada of any applicable provision of any
existing State of New York or United States federal statutory law or
governmental regulation covered by this letter, or violate any existing order,
writ, injunction or decree of any court or governmental instrumentality
applicable to such Loan Party or SSC Canada of which we have knowledge.


 


3.             No Loan Party is presently required to obtain any consent,
approval, authorization or order of the State of New York or any United States
federal court or governmental agency in connection with the execution, delivery
and performance by the Loan Parties of the Credit Agreement, except for: (a) those
obtained or made on or prior to the date hereof; (b) actions or filings
required in connection with ordinary course conduct by the Loan Parties of
their respective businesses and ownership or operation by the Loan Parties of
their respective assets; and (c) actions and filings required under the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, any state “blue sky” law or related regulation and the Trust Indenture
Act of 1939, as amended (as to which matters we express no opinion).


 


4.             None
of the Loan Parties is an “investment company” registered or required to be
registered under the Investment Company Act of 1940, as amended, or, to our
knowledge, controlled by such a company.


 


5.             None
of the Loan Parties is a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of a “holding company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended.


 


6.             To our knowledge, no legal or governmental proceedings
are pending or overtly threatened to which any Loan Party is a party or to
which any of their respective properties or assets are subject that challenges
the validity or enforceability of the Credit Agreement.


 


The opinions as expressed
herein are subject to the following qualifications, limitations and comments:


 


(a)           the enforceability of the Credit Agreement and the
obligations of the Loan Parties and SSC Canada thereunder and the availability
of certain rights and remedial provisions provided for in the Credit Agreement
are subject to the effect of bankruptcy, fraudulent conveyance or transfer,
insolvency, reorganization, arrangement, liquidation, conservatorship and
moratorium laws and are subject to limitations imposed by other laws and
judicial decisions relating to or affecting the rights of creditors or secured
creditors generally, and general principles of equity (regardless of whether
enforcement is considered in proceedings at law or in equity) upon the
availability of injunctive relief or other equitable remedies, including,
without limitation, where: (i) the breach of such covenants or provisions
imposes restrictions or burdens upon a debtor and it cannot be demonstrated
that the enforcement of such remedies, restrictions or burdens is reasonably
necessary for the protection of a creditor; (ii) a creditor’s enforcement


 


3

















 


of such remedies,
covenants or provisions under the circumstances, or the manner of such
enforcement, would violate such creditor’s implied covenant of good faith and
fair dealing, or would be commercially unreasonable; or (iii) a court
having jurisdiction finds that such remedies, covenants or provisions were, at
the time made, or are in application, unconscionable as a matter of law or
contrary to public policy;


 


(b)           as to our opinions set forth in paragraph 1 hereof, we
express no opinion as to the enforceability of cumulative remedies to the
extent such cumulative remedies purport to or would have the effect of
compensating the party entitled to the benefits thereof in amounts in excess of
the actual loss suffered by such party;


 


(c)           we express no opinion as to the
creation, perfection or priority of any security interests;


 


(d)           provisions in the Credit Agreement
deemed to impose the payment of interest on interest may be unenforceable, void
or voidable under applicable law;


 


(e)           we
express no opinion as to the validity, binding effect or enforceability of any
indemnification provisions of the Credit Agreement;


 


(f)            requirements in the Credit Agreement specifying that
provisions thereof may only be waived in writing may not be valid, binding or
enforceable to the extent that an oral agreement or an implied agreement by
trade practice or course of conduct has been created modifying any provision of
such documents;


 


(g)           we
express no opinion with respect to the validity, binding effect or
enforceability of any provision of the Credit Agreement which purports to
authorize any Person to sign or file documents without the signature of the
Loan Parties or SSC Canada;


 


(h)           we express no opinion with respect to
the validity, binding effect or enforceability of any purported waiver, release
or disclaimer under the Credit Agreement relating to (i) statutory or
equitable rights and defenses of the Loan Parties or SSC Canada which are not
subject to waiver, release or disclaimer, or (ii) rights or claims of, or
duties owing to, the Loan Parties or SSC Canada to the extent limited by
applicable law, or to the extent such rights, claims and duties otherwise exist
as a matter of law except to the extent the Loan Parties or SSC Canada have
effectively so waived, released or disclaimed such rights, claims or duties in
accordance with applicable law;


 


(i)            we
express no opinion as to the severability of any provision of the Credit
Agreement;


 


(j)            certain
other rights, remedies and waivers contained in the Credit Agreement may be
rendered ineffective, or limited by, applicable laws, rules, regulations,
constitutional requirements or judicial decisions governing such provisions,
but such laws, rules, regulations, constitutional limitations and judicial
decisions do not, in our opinion (subject to the other comments and
qualifications set forth in this opinion letter), make the remedies afforded by
the Credit Agreement inadequate for the practical realization of the principal
benefits intended to


 


4

















 


be provided,
although they may result in a delay thereof (and we express no opinion with
respect to the economic consequences of any such delay);


 


(k)           we
express no opinion with respect to the applicability or effect of federal or
state anti-trust, unfair competition, tax, pension and employee benefit,
environmental, land use and subdivision, racketeering (e.g., RICO), health and
safety (e.g., OSHA), labor, (except to the extent set forth in paragraphs 4 and
5 above) securities and “blue sky” laws and regulations;


 


(l)            we express no opinion with respect
to the applicability or effect of the statutes and ordinances, the
administrative decisions and the rules and regulations of counties, towns,
municipalities and special political subdivisions and judicial decisions to the
extent that they deal with any of the foregoing;


 


(m)          we
express no opinion with respect to the validity, binding effect or enforceability
of any provision of the Credit Agreement purporting to establish evidentiary
standards or a consent to jurisdiction and venue or waiving service of process
or demand or notice and hearing or constitutional rights (including a jury
trial) or purporting to eliminate any obligation to marshall assets;


 


(n)           we
express no opinion with respect to any provisions of the Credit Agreement
purporting to appoint any Person as attorney-in-fact or agent for the Loan
Parties or SSC Canada;


 


(o)           we express no opinion as to the
effect of the legal or regulatory status or the nature of the business of the
Administrative Agent, Security Agent or any Lender on our opinions;


 


(p)           we express no opinion with respect to
Section 13.02 of the Credit Agreement to the extent that such section
permits setoff to be made without notice; and


 


(q)           although the Credit Agreement
provides for obligations of Loan Parties and SSC Canada denominated in a
currency other than United States dollars, we express no opinion as to whether
a court would award a judgment in a currency other than United States dollars.


 


The opinions expressed
herein are based upon and are limited to the laws of the State of New York and
the United States of America, and we express no opinion with respect to the laws
of any other state, jurisdiction or political subdivision.  The opinions expressed herein based on the
laws of the State of New York and the United States of America are limited to
the laws generally applicable in transactions of the type covered by the Credit
Agreement.


 


Our opinions set forth in
this letter are based upon the facts in existence and laws in effect on the
date hereof and we expressly disclaim any obligation to update our opinions
herein, regardless of whether changes in such facts or laws come to our
attention after the delivery hereof.


 


This opinion
letter is solely for the benefit of the addressees hereof in connection with
the execution and delivery of the Credit Agreement.  No attorney-client relationship exists or has



 


5

















 


existed by reason
of our preparation, execution and delivery of this opinion letter to any
addressee hereof or any other person or entity except for the Loan Parties and
SSC Canada. In permitting reliance hereon by any person or entity other than
the Loan Parties and SSC Canada, we are not acting as counsel for such other
person or entity and have not assumed and are not assuming any responsibility
to advise such other person or entity with respect to the adequacy of this
opinion letter for its purposes.  This
opinion letter may not be relied upon in any manner by any other person and may
not be disclosed, quoted, filed with a governmental agency or otherwise
referred to without our prior written consent; provided that any Person
that subsequently becomes a Lender in accordance with Section 13.04(b) of
the Credit Agreement may rely on this opinion letter as of the date of this
opinion letter as if it were addressed to such Person and delivered on the date
hereof; and provided  further, that this opinion may be furnished
by you to, but may not be relied upon in any manner by, (i) your legal
counsel and independent auditors who need to know such information and are
informed of the confidential nature of this opinion, (ii) any regulatory
authority having jurisdiction over you upon the request or demand of such
regulatory authority, (iii) any Person to the extent required pursuant to
the order of any court or administrative agency or in any pending legal or
administrative proceeding or as otherwise required by applicable law or
compulsory legal process, provided that you take reasonable steps to procure
that such Person maintains the confidentiality of this opinion, (iv) any
Person that subsequently becomes the Administrative Agent or Security Agent in
accordance with Section 12.09 of the Credit Agreement, (v) any Person
that proposes to become a Lender under the Credit Agreement, and (vi) any
Person that proposes to become or becomes a Cash Management Creditor under a
Secured Cash Management Agreement or a Hedging Creditor under a Secured Hedging
Agreement, in each case, in compliance with the requirements of the Credit
Agreement.


 


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Winston &
  Strawn LLP

  



 


6
















 


Exhibit P-2


to the Credit
Agreement


 


April     , 2010


 


Deutsche Bank AG New York
Branch,


as Administrative Agent
and Security Agent


60 Wall Street,
NYC60-0208


2nd Floor


New York, New York
10005-2858


 


The Lenders party to the
Credit Agreement referred to below


 


Ladies and Gentlemen:


 


I am general
counsel to Smurfit-Stone Container Corporation, a Delaware corporation (“SSCC”),
Smurfit-Stone Container Enterprises, Inc., a Delaware corporation (“SSCE”),
and Smurfit-Stone Container Canada, L.P., an Ontario limited partnership (“SSC
Canada”).  SSCC and SSCE are
individually referred to herein as a “Loan Party” and collectively as
the “Loan Parties”.  This opinion
is delivered to you pursuant to Section 6.01(b) of the Credit
Agreement dated as of the date hereof (the “Credit Agreement”) by and
among SSCC, SSCE, SSC Canada, Deutsche Bank AG New York Branch, as
Administrative Agent and Security Agent, Deutsche Bank AG New York Branch,
JPMorgan Chase Bank, N.A., and General Electric Capital Corporation, as
Co-Collateral Agents, and the financial institutions party thereto (the “Lenders”).  Unless otherwise indicated, capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.


 


In connection with
this opinion, I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the following:


 


(i)            the certificate of incorporation and
bylaws of SSCC and SSCE;


 


(ii)           resolutions of the board of directors
of SSCC and SSCE; and


 

















 


(iii)          the Credit Agreement.


 


In addition, I
have obtained and relied without independent investigation upon such
certificates and assurances from public officials as I have deemed necessary or
appropriate.  In my examinations, I have
assumed (a) the genuineness of all signatures of all parties other than
the Loan Parties, the conformity to original documents of all documents
submitted to me as copies or drafts and the authenticity of such originals of
such latter documents, (b) as to all parties other than the Loan Parties,
the due completion, execution, acknowledgment as indicated thereon and delivery
of documents recited herein and therein and validity and enforceability against
all parties thereto other than the Loan Parties and (c) that each Person
(other than the Loan Parties) which is a party to the Credit Agreement has full
power, authority and legal right, under its charter and other governing
documents, corporate or other entity legislation and the laws of its state of
formation, to perform its respective obligations under the Credit Agreement.


 


I have
investigated such questions of law for the purpose of rendering this opinion as
I have deemed necessary.  I am opining
herein as to United States federal laws, the General Corporation Law of the
State of Delaware and the laws of the State of Missouri only, in each case as
having effect at the date hereof.


 


On the basis of
the foregoing, and in reliance thereon, and subject to the limitations,
qualifications and exceptions set forth herein, I am of the opinion that as of
the date hereof:


 


1.             Each
of SSCC and SSCE is a corporation duly incorporated, validly existing and in
good standing under the laws of its respective state of incorporation.  Each of the Loan Parties is qualified to do
business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except, as to any Loan Party, for such
failures to be qualified and in good standing, if any, which would not have a
material adverse effect on the business, properties or operations of such Loan
Party.  Each Loan Party has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted and to execute, deliver and perform its
obligations under the Credit Agreement. 
The execution, delivery and performance by each Loan Party of the Credit
Agreement have been duly authorized by all necessary corporate action on the
part of such Loan Party and such documents have been duly executed and
delivered by each such Loan Party.


 


2.             Each
of the Loan Party’s and SSC Canada’s execution and delivery of the Credit
Agreement and its performance of its obligations under the Credit Agreement
will not (i) constitute a violation by each such Loan Party or SSC Canada
of any applicable provision of the General Corporation Law of the State of
Delaware or United States federal statutory law or governmental regulation, or
violate any existing order, writ, injunction or decree of any court or
governmental instrumentality applicable to such Loan Party or SSC Canada of
which I have knowledge; (ii) conflict with or result in any breach of any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or (other than pursuant to the Loan Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of any Loan Party pursuant to the terms of any material
note, deed of trust, license, franchise, permit, agreement or other instrument
or obligation to which such Loan 


 


2

















 


Party is a party,
or by which such Loan Party or any of its properties (whether now owned or
hereafter acquired) may be bound or affected (except that I express no opinion
with respect to breaches or defaults under cross-default or cross-acceleration
provisions or with respect to financial covenants or tests) or (iii) violate
any existing provisions of the certificate of incorporation or by-laws of the
Loan Parties.


 


3.             Other than the
Bankruptcy Proceedings (solely with respect to the Loan Parties) and the
matters disclosed on Schedule 8.09 to the Credit Agreement, there are no causes of action, claims, proceedings
or investigations pending, or to the best of my knowledge, threatened against
any of the Loan Parties or SSC Canada, relating to or affecting any of the Loan
Parties or SSC Canada (or any of their respective officers or directors in
connection with the business or affairs of such Loan Party or SSC Canada),
before any court or governmental authority, which could reasonably be expected
to have a Material Adverse Effect.  Other than
the commencement of the Bankruptcy Proceedings (solely with respect to the Loan
Parties), there are no causes of action, claims, proceedings or investigations
pending or, to the best of my knowledge, threatened, against any of the Loan
Parties or SSC Canada challenging the validity or propriety of the transactions
contemplated by the Credit Agreement or in which an injunction or order has
been entered preventing any of the transactions contemplated by the Credit
Agreement.  Other than those of the
Bankruptcy Courts (solely with respect to the Loan Parties), none of the Loan Parties
or SSC Canada is subject to any judgment, order or decree which has a
reasonable probability of having a material adverse effect on the business,
properties or operations of the Loan Parties and SSC Canada taken as a whole.


 


4.             No Loan Party is presently required
to obtain any consent, approval, authorization or order of any Delaware
governmental authority under the General Corporation Law of the State of
Delaware in connection with the execution, delivery and performance by the Loan
Parties of the Credit Agreement, except for: 
(a) those obtained or made on or prior to the date hereof; and (b) actions
or filings required in connection with ordinary course conduct by the Loan
Parties of their respective businesses and ownership or operation by the Loan
Parties of their respective assets.


 


5.             None
of the Loan Parties is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.


 


6.             None
of the Loan Parties is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or a “public utility”, as such term is defined
in the Federal Power Act, as amended.


 


This opinion is
solely for your benefit in connection with the transactions contemplated by the
Credit Agreement and is not to be used, circulated, quoted or otherwise
referred to for any other purpose without my prior written consent; provided,
however, that Winston & Strawn LLP and any Person that
subsequently becomes a Lender in accordance with Section 13.04(b) of
the Credit Agreement may rely on this opinion as of the date of this opinion as
if it were addressed to such Person and delivered on the date hereof; and provided
further, that this opinion may be 


 


3

















 


furnished by you
to, but may not be relied upon in any manner by, (i) your legal counsel
and independent auditors who need to know such information and are informed of
the confidential nature of this opinion, (ii) any regulatory authority
having jurisdiction over you upon the request or demand of such regulatory
authority, (iii) any Person to the extent required pursuant to the order
of any court or administrative agency or in any pending legal or administrative
proceeding or as otherwise required by applicable law or compulsory legal
process, provided that you take reasonable steps to procure that such Person
maintains the confidentiality of this opinion, (iv) any Person that
subsequently becomes the Administrative Agent or Security Agent in accordance
with Section 12.09 of the Credit Agreement, (v) any Person that
proposes to become a Lender under the Credit Agreement, and (vi) any
Person that proposes to become or becomes a Cash Management Creditor under a
Secured Cash Management Agreement or a Hedging Creditor under a Secured Hedging
Agreement, in each case, in compliance with the requirements of the Credit
Agreement.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Craig A. Hunt

  
	
   

  	
  General Counsel

  



 


4
















 


Exhibit P-3


to the
Credit Agreement


 


April l 2010


 


Deutsche
Bank AG New York Branch,


as
Administrative Agent and Security Agent


60 Wall
Street, NYC60-0208


2nd
Floor


New
York, New York 10005-2858


 


The
Lenders party to the Credit Agreement referred to below


 


Dear
Sirs/Mesdames:


 


RE:         ABL Credit Agreement, dated as of [   ],
2010, among Smurfit-Stone Container Corporation, a Delaware corporation (“SSCC”),
Smurfit-Stone Container Enterprises, Inc., a Delaware corporation,
Smurfit-Stone Container Canada, L.P., an Ontario limited partnership (the “Canadian
Borrower”), certain subsidiaries of SSCC party thereto from time to time, the
Lenders party thereto, Deutsche Bank AG New York Branch, as Administrative
Agent and Security Agent, and Deutsche Bank AG New York Branch, JPMorgan Chase
Bank, N.A., and General Electric Capital Corporation, as Co-Collateral Agents
(the “Credit Agreement”)


 


We have acted as counsel in the Province of
Ontario to the Canadian Borrower and 3242795 Nova Scotia Limited, a Nova Scotia company,
which is the sole general partner of the Canadian Borrower (“Canadian Borrower GP”), in connection with the Credit
Agreement.


 


Unless otherwise
defined herein, capitalized terms used in this opinion shall have the meanings
ascribed thereto in the Credit Agreement. 
This opinion letter is delivered to you at our client’s request pursuant
to Section 6.01(b) of the Credit Agreement.


 


A.            Documentation


 


We have examined
an executed copy of the Credit Agreement.


 


B.            Jurisdiction


 


Our opinion is
limited to the laws of the Province of Ontario and the federal laws of Canada
applicable therein (“Applicable Laws”).


 


C.            Scope of Examination


 


In connection
with the opinions expressed herein, we have made such investigations and
examined originals or copies, certified or otherwise identified to our
satisfaction, of such certificates of public officials and of such other
certificates, documents and records as we have


 

















 


considered
necessary or relevant for the purposes of the opinions hereinafter expressed,
including:


 


(a)                                  the limited partnership
agreement dated March 17,
2010, between the Canadian Borrower GP and 3242796 Nova Scotia
Limited  in
respect of the Canadian Borrower (the “Limited Partnership
Agreement”);


 


(b)                                 a resolution of the Canadian
Borrower GP, authorizing the execution and delivery of the Credit Agreement by
it, in its capacity as general partner of the Canadian Borrower, and the
performance by it, in its capacity as general partner of the Canadian Borrower,
of the obligations of the Canadian Borrower under the Credit Agreement; and


 


(c)                                  an officer’s certificate (the “Officer’s Certificate”) dated April l 2010 of the Canadian Borrower
GP, in its capacity as general partner of the Canadian Borrower, as to certain
factual matters, a copy of which has been delivered to you.


 


D.            Assumptions and Reliance on Factual
Certificates


 


We have assumed:


 


(a)                                  with respect to all documents
examined by us, the genuineness of all signatures, the legal capacity of
individuals signing any documents, the authenticity of all documents submitted
to us as originals and the conformity to authentic original documents of all
documents submitted to us as certified, conformed, electronic telecopied or
photocopied copies;


 


(b)                                 that the Canadian Borrower GP
and 3242796 Nova Scotia Limited (the “Canadian Borrower LP”)
are duly incorporated and existing under the laws of their jurisdiction of
formation and existence;


 


(c)                                  that the Canadian Borrower GP
has all necessary corporate power and capacity to enter into the Limited
Partnership Agreement and to act as general partner of the Canadian Borrower
and to enter into and perform its obligations, in its capacity as general
partner of the Canadian Borrower, under the Limited Partnership Agreement and
the Credit Agreement; and that the Canadian Borrower LP has all necessary
corporate power and capacity to enter into the Limited Partnership Agreement;


 


(d)                                 that all necessary corporate
action by the Canadian Borrower GP has been taken to authorize the execution,
delivery and performance of the Limited Partnership Agreement and the Credit
Agreement, in its capacity as general partner of the Canadian Borrower and that
all necessary corporate action by the Canadian Borrower LP has been taken to
authorize the execution, delivery and performance of the Limited Partnership
Agreement;


 


(e)                                  that
the Limited Partnership Agreement has been executed and delivered by all
parties to the Limited Partnership Agreement;


 


2

















 


(f)                                    that the Credit Agreement has
been duly executed and delivered by the Canadian Borrower GP, in its capacity
as general partner of the Canadian Borrower, in compliance with the laws of the
jurisdiction where execution and delivery actually occurred, if other than
Ontario; and


 


(g)                                 that all facts set forth in
all certificates supplied, or otherwise conveyed to us, by public officials and
in the Officer’s Certificate are true.


 


We have relied
exclusively upon the Officer’s Certificate with respect to the accuracy of the
factual matters contained therein and we have not performed any independent
check or verification of such factual matters.


 


In expressing the
opinion set forth in paragraph E.1, we have relied solely upon a certified
partnership report issued under the Limited Partnerships Act (Ontario)  by the Ministry of Government Services
(Ontario) dated April l , a
copy of which has been delivered to you.


 


E.             Opinions


 


Based and relying
on the foregoing, and subject to the qualifications below, we are of the
opinion that:


 


1.                                       Status:  The Canadian Borrower is a limited
partnership formed under the Limited Partnerships Act
(Ontario).  Relying solely on the Officer’s
Certificate, the Canadian Borrower has not been dissolved as of the date
hereof. The Canadian Borrower GP is duly registered as an extra-provincial
corporation under the Corporations Information
Act (Ontario).


 


2.                                       Authorization:  All necessary action in accordance with the
provisions of the Limited Partnership Agreement has been taken to authorize the
execution, delivery and performance of the Credit Agreement by the Canadian
Borrower GP, in its capacity as general partner of the Canadian Borrower.


 


3.                                       Execution
and Delivery.  To the extent Applicable Law
applies, the Canadian Borrower GP, in its capacity as general partner of the
Canadian Borrower, has executed and delivered the Credit Agreement.


 


4.                                       Authorizations
and Filings:  No authorization, consent,
permit, license or approval of, or other action by, or registration or filing
with or notice to, any governmental agency or authority, regulatory body,
court, tribunal or other similar entity having jurisdiction, is required at
this time in connection with the execution, delivery or performance by the
Canadian Borrower GP, in its capacity as general partner of the Canadian
Borrower, of the Credit Agreement.


 


5.                                       Non-contravention:  The execution and delivery of the Credit
Agreement and the performance of the Credit Agreement by the Canadian Borrower
GP, in its capacity as general partner of the Canadian Borrower,  does not contravene, breach or result in any
default under:


 


(a)                                  the Limited Partnership
Agreement or;


 


3

















 


(b)                                 any statute or regulation of
the Province of Ontario (or any federal laws of Canada applicable therein)
applicable to the Canadian Borrower;


 


(c)                                  any existing order, writ,
injunction or decree of any court or governmental instrumentality applicable to
the Canadian Borrower of which we have knowledge (pursuant to our enquiries
referred to in paragraph 6).


 


6.                                       Litigation


 


We have made enquiries of certain members of our Firm
providing legal services to the Canadian Borrower as of April l, 2010 concerning claims or
possible claims (as defined for purposes of the Joint Policy Statement of January 1978
approved by The Canadian Bar Association and the Auditing Standards Committee
of the Canadian Institute of Chartered Accountants) by or against the Canadian
Borrower in respect of which our advice has been sought, and we confirm that
the responses which we have received to such enquiry do not identify any claims
or possible claims which are not referred to in the Credit Agreement or which
might prevent, or would render unlawful, the completion of the transactions
provided for in the Credit Agreement.


 


7.                                       Application
of Foreign Law — New York Law


 


In any proceeding
in a court of competent jurisdiction in the Province of Ontario (an “Ontario Court”) for the enforcement of the Credit Agreement,
an Ontario Court would apply the laws of the State of New York (“New York Law”), in accordance with the parties’ choice of
New York Law in the Credit Agreement, to all issues which under Applicable Laws
are to be determined in accordance with the chosen law of the contract,
provided that:


 


(a)                                  the parties’ choice of New
York Law is bona fide and legal and is not contrary
to public policy, as such term is interpreted under Applicable Laws (“Public Policy”);


 


(b)                                 in any such proceeding, an
Ontario Court:


 


(i)                                     will not take judicial notice
of the provisions of New York Law but will only apply such provisions if they
are pleaded and proven by expert testimony;


 


(ii)                                  will apply Applicable Laws to
matters which would be characterized as procedural under Applicable Laws;


 


(iii)                               will apply provisions of
Applicable Laws that have overriding effect;


 


(iv)                              will not apply any New York
Law if its application would be contrary to Public Policy;


 


(v)                                 will not apply any New York
Law if such application would be characterized under Applicable Laws as the
direct or indirect enforcement of a foreign revenue, expropriatory, penal or
other public law; and


 


4

















 


(vi)                              will not enforce the
performance of any obligation that is illegal under the laws of any
jurisdiction in which the obligation is to be performed; and


 


(c)                                  an Ontario Court has
discretion to decline to hear an action if:


 


(i)                                     it is contrary to Public
Policy;


 


(ii)                                  it is not the proper forum to
hear such an action; or


 


(iii)                another action is properly pending before, or a
decision has been rendered by, a foreign authority relating to the same cause
of action.


 


8.                                       Enforcement
of a Foreign Judgment —New York Law


 


An Ontario Court
would give a judgment based upon a final and conclusive in personam
judgment of a court of competent jurisdiction in the State of New York (a “New York Court”) for a sum certain, obtained against the
Canadian Borrower or the Canadian Borrower GP, in its capacity as general
partner of the Canadian Borrower, with respect to a claim arising out of the
Credit Agreement (a “New York Judgment”)
without reconsideration of the merits provided that:


 


(a)                                  the New York Court has
jurisdiction over the Canadian Borrower and the Canadian Borrower
GP, in its capacity as general partner of the Canadian Borrower, according to Applicable
Laws;


 


(b)                                 an action to enforce the New
York Judgment must be commenced in an Ontario Court within any applicable
limitation period;


 


(c)                                  an Ontario Court has
discretion to stay or decline to hear an action on the New York Judgment if
such judgment is under appeal, or there is another subsisting judgment in any
jurisdiction relating to the same cause of action;


 


(d)                                 an Ontario Court will render
judgment only in Canadian dollars;


 


(e)                                  an action in an Ontario Court
on the New York Judgment may be affected by bankruptcy, insolvency or laws
affecting the enforcement of creditors’ rights generally; and


 


further, an
Ontario Court will not give such judgment if:


 


(f)                                    the New York Judgment was
obtained by fraud or in a manner contrary to the principles of natural justice;


 


(g)                                 the New York Judgment is for a
claim which would be characterized as based on foreign revenue, expropriatory,
or penal, or other public law under Applicable Laws;


 


(h)                                 the New York Judgment is
contrary to Public Policy or to an order made by the Attorney General of Canada
under the Foreign Extraterritorial Measures Act


 


5

















 


                                                (Canada) or by the Competition
Tribunal under the Competition Act
(Canada) in respect of certain judgments referred to in such statutes; and


 


(i)                                     the New York Judgment has been
satisfied or is void or voidable under New York Law.


 


F.             Qualifications


 


The opinions under Section E above are subject to the following
qualifications and limitations:


 


(a)                                  Costs and
Expenses
— the ability and extent to which the Agents or Lenders would be able to
recover or claim for certain costs and expenses in a legal proceeding in the
Province of Ontario may be subject to judicial discretion and the tariff
provisions of the Rules of Civil Procedure
(Ontario) notwithstanding express provision in the Credit Agreement to the
contrary.


 


The opinions
expressed in this opinion letter are given solely for the use of the Agents and
Lenders, together with their successors and permitted assigns, in connection
with the transactions referred to in this opinion letter, and may not, in whole
or in part, be relied upon by or shown or distributed to any other person or
for any other purpose without our prior written consent, provided that Winston
and Strawn LLP and any Person that subsequently becomes a Lender in accordance
with Section 13.04(b) of the Credit Agreement may rely on this
opinion as of the date of this opinion as if it were addressed to such Person
and delivered on the date hereof, provided  further that copies of this opinion may be furnished by you to,
but may not be relied on by, (i) your professional advisers and
accountants and to bank auditors and examiners, in each case in connection with
their audit and review activities, (ii) any Person as may be required by
applicable law or regulation provided that you take reasonable steps to procure
that such person maintains the confidentiality of this opinion and (iii) entities
(x) that are or become Agents or party to Secured Hedging Agreements or
Secured Cash Management Agreements or (y) to whom you propose to sell an
interest in the Commitments and/or Loans held by you or propose to enter into
Secured Hedging Agreements or Secured Cash Management Agreements with any other
Loan Party, in each case, in compliance with the requirements of the Credit
Agreement.


 


Yours very truly,


 


 


DS


 


6
















 


Exhibit P-4


to the
Credit Agreement


 


April [ ],
2010


 


Deutsche Bank AG
New York Branch,

   as
Administrative Agent and Security Agent

60 Wall Street, NYC60-0208

2nd Floor

New York, NY 10005-2858


 


The Lenders party
to the Credit Agreement referred to below


 


Dear Sirs:


 


Re:                             ABL
Credit Agreement, dated as of April [ 
], 2010, among Smurfit-Stone Container Corporation, a Delaware
corporation (“SSCC”), Smurfit-Stone Container Canada, L.P., an Ontario limited
partnership (the “Canadian Partnership”), certain subsidiaries of SSCC party
thereto from time to time, the Lenders party thereto, Deutsche Bank AG New York
Branch, as Administrative Agent and Security Agent, and Deutsche Bank AG New
York Branch, JPMorgan Chase Bank, N.A., and General Electric Capital Corporation,
as Co-Collateral Agents (the “Credit Agreement”)


 


We have acted as
local Nova Scotia counsel to the Canadian Partnership, an Ontario limited
partnership, and its partners, 3242795 Nova Scotia Limited (the “General Partner”) and 3242796 Nova
Scotia Limited (the “Limited Partner” and,
collectively with the General Partner, the “Partners”),
each being a company limited by shares incorporated under the laws of the
Province of Nova Scotia, in connection with, inter alia,
the execution and delivery of the Credit Agreement.


 


In acting as such
counsel, we have examined an original or facsimile of an executed copy of the
limited partnership agreement between the Partners forming the Canadian
Partnership dated as of March 17, 2010 (the “Partnership
Agreement”) and the Credit Agreement.


 


Where a term is
defined collectively in the plural herein, the singular use of the term means
any one of such collective.


 


In connection
with the opinions set out below, we have also examined and relied upon:


 

















 


1.                                       the
memorandum and articles of association of each Partner contained in the minute
book of such Partner;


 


2.                                       a
certificate of status for each of the Partners dated April [  ], 2010 issued on behalf of the Registrar of
Joint Stock Companies for the Province of Nova Scotia;


 


3.                                       corporate
proceedings of each of the Partners approving the Partnership Agreement;


 


4.                                       corporate
proceedings of the General Partner, on its own behalf and in its capacity as
general partner of the Canadian Partnership, approving the Credit Agreement;


 


5.                                       a
certificate dated the date hereof of an officer of each of the Partners (the “Officer’s Certificates”); and


 


6.                                       such
other records of each of the Partners, such public records and such
certificates of officers of each of the Partners and of others as we have
deemed relevant and necessary as a basis for the opinions expressed herein.


 


For purposes of
the opinions set out below, we have assumed, without independent verification
by us:


 


(a)                                  with
respect to all documents examined by us, the genuineness of all signatures on
and the authenticity and completeness of each document submitted to us as an
original and the conformity to the authentic original document of each document
we have examined as a certified, conformed, facsimile or photostatic copy, and
the genuineness of all signatures on, and the authenticity of, the originals of
such copies;


 


(b)                                 the
completeness, truth and accuracy of all facts set forth in official public
records and certificates and other documents supplied by public officials;


 


(c)                                  the
currency and accuracy of the indices and records maintained at the public
offices where we have conducted searches or made inquiries or caused searches
or inquiries to be made;


 


(d)                                 the
accuracy of all statements of fact contained in the Officer’s Certificates; and


 


(e)                                  that
each of the Credit Agreement and the Partnership Agreement has been delivered
by each of the Partners and the Canadian Partnership party thereto, as a matter
of fact, to the other parties thereto or their lawful representatives and that
no such delivery was subject to any condition or escrow which has not been
satisfied.


 


The opinions set
out below are limited to the laws of the Province of Nova Scotia, including the
federal laws of Canada applicable therein, as of the date of this opinion
letter (collectively, “Applicable Laws”).  In connection with the opinions set out
below, we have considered such matters of law as we have considered necessary
or appropriate.


 


2

















 


We express no opinion
as to whether any requirement of the Partnership Agreement has been satisfied
in connection with the authorization, execution or delivery of the Credit
Agreement.


 


Based upon and
subject to the foregoing, and to the limitations below, we are of the opinion
that:


 


1.                                       Each
of the Partners is a company limited by shares, duly incorporated and validly
existing under the Companies Act (Nova Scotia).


 


2.                                       Each
of the Partners is registered, and in good standing as to the payment of annual
fees, under the Corporations Registration Act (Nova
Scotia).


 


3.                                       The
General Partner has all requisite corporate power and capacity (i) to act
as general partner of the Canadian Partnership, (ii) to own and operate
its properties and to carry on its business, on its own behalf and on behalf of
the Canadian Partnership, in each case as described in the applicable Officer’s
Certificate, and (iii) to execute, deliver and perform the obligations of
the Canadian Partnership under the Credit Agreement and its obligations under
the Partnership Agreement.


 


4.                                       The
Limited Partner has all requisite corporate power and capacity (i) to act
as a limited partner of the Canadian Partnership, (ii) to own and operate
its properties and to carry on its business, in each case as described in the
applicable Officer’s Certificate, and (iii) to execute, deliver and
perform its obligations under the Partnership Agreement.


 


5.                                       The
execution, delivery and performance by the Partners of the Partnership
Agreement have been duly authorized by all necessary corporate action on the
part of the Partners, and the Partnership Agreement has been duly executed and
delivered by the Partners.


 


6.                                       The
execution, delivery and performance by the General Partner on behalf of the
Canadian Partnership of the Credit Agreement have been duly authorized by all
necessary corporate action on the part of the General Partner and such Credit
Agreement has been duly executed and delivered by the General Partner on behalf
of the Canadian Partnership.


 


7.                                       The
execution and delivery of the Credit Agreement by the General Partner on behalf
of the Canadian Partnership and its performance of the Canadian Partnership’s
obligations under the Credit Agreement will not constitute a violation of or
conflict with (i) the memorandum of association or articles of association
of either of the Partners, or (ii) any law, published rule or
governmental regulation of the Province of Nova Scotia or any federal law,
published rule or governmental regulation of Canada applicable therein.


 


8.                                       No
authorization, consent, permit, license or approval of, or other action by, or
registration or filing with or notice to, any governmental agency or authority,
regulatory body, court, tribunal or other similar entity having jurisdiction,
is required at this time under Applicable Laws in connection with the
execution, delivery or performance by the General Partner, in its capacity as
general partner of the Canadian Partnership, of the Credit Agreement.


 


9.                                       In
any proceeding in a court of competent jurisdiction in the Province of Nova
Scotia (a “Nova Scotia Court”) for the
enforcement of the Credit Agreement, a Nova Scotia Court 


 


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                                                would
apply the laws of the State of New York (“New York Law”),
in accordance with the parties’ choice of New York Law in the Credit Agreement,
to all issues which under Applicable Laws are to be determined in accordance
with the chosen law of the contract, provided that:


 


(a)                                  the
parties’ choice of New York Law is bona fide and legal and is not contrary to
public policy, as such term is interpreted under Applicable Laws (“Public Policy”);


 


(b)                                 in
any such proceeding, a Nova Scotia Court:


 


(i)                  will not take
judicial notice of the provisions of New York Law but will only apply such
provisions if they are pleaded and proven by expert testimony;


 


(ii)               will apply
Applicable Laws to matters which would be characterized as procedural under
Applicable Laws;


 


(iii)            will apply
provisions of Applicable Laws that have overriding effect;


 


(iv)           will not apply
any New York Law if its application would be contrary to Public Policy;


 


(v)              will not apply
any New York Law if such application would be characterized under Applicable
Laws as the direct or indirect enforcement of a foreign revenue, expropriatory,
penal or other public law; and


 


(vi)           will not enforce
the performance of any obligation that is illegal under the laws of any
jurisdiction in which the obligation is to be performed; and


 


(c)                                  a
Nova Scotia Court has discretion to decline to hear an action if:


 


(i)    it
is contrary to Public Policy;


 


(ii)   it
is not the proper forum to hear such an action; or


 


(iii)  another
action is properly pending before, or a decision has been rendered by, a
foreign authority relating to the same cause of action.


 


10.                                 Applicable
Laws permit an action to be brought in a Nova Scotia Court based upon a final
and conclusive in personam judgment of a court of
competent jurisdiction in the State of New York (a “New York Court”) for a sum certain,
obtained against the Canadian Borrower or the General Partner, in its capacity
as general partner of the Canadian Borrower, with respect to a claim arising
out of the Credit Agreement (a “New York
Judgment”), without reconsideration of the merits, provided
that:


 


(a)                                  the
New York Court has jurisdiction over the Canadian Borrower and the General
Partner, in its capacity as general partner of the Canadian Borrower, according
to Applicable Laws;


 


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(b)                                 the
Canadian Borrower or the General Partner, in its capacity as general partner of
the Canadian Borrower, was duly served with the process of the New York Court
or appeared to defend such process, and, for the purposes of service of
process, it is not sufficient that the Canadian Borrower or the General Partner
had agreed to submit to the jurisdiction of the New York Court;


 


(c)                                  an
action to enforce the New York Judgment must be commenced in a Nova Scotia
Court within any applicable limitation period;


 


(d)                                 a
Nova Scotia Court has discretion to stay or decline to hear an action on the
New York Judgment if such judgment is under appeal, or there is another
subsisting judgment in any jurisdiction relating to the same cause of action;


 


(e)                                  a
Nova Scotia Court will render judgment only in Canadian dollars;


 


(f)                                    an
action in a Nova Scotia Court on the New York Judgment may be affected by
bankruptcy, insolvency or laws affecting the enforcement of creditors’ rights
generally; and


 


further, a Nova
Scotia Court will not give such judgment if:


 


(g)                                 the
New York Judgment was obtained by fraud or in a manner contrary to the
principles of natural justice;


 


(h)                                 the
New York Judgment is for a claim which would be characterized as based on
foreign revenue, expropriatory, or penal, or other public law under Applicable
Laws;


 


(i)                                     the
New York Judgment is contrary to Public Policy or to an order made by the
Attorney General of Canada under the Foreign Extraterritorial Measures Act
(Canada) or by the Competition Tribunal under the Competition Act
(Canada) in respect of certain judgments referred to in such statutes; or


 


(j)                                     the
New York Judgment has been satisfied or is void or voidable under New York Law.


 


The opinions
expressed herein are given as of the date hereof and we undertake no, and
hereby expressly disclaim any, obligation to advise you of any change in any
matters set forth herein.


 


This opinion is
solely for your benefit, the benefit of the other Agents (as such capitalized
term is defined in the Credit Agreement) and your and their successors and
permitted assigns, in connection with the transactions contemplated by the
Credit Agreement and is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our prior written consent, provided
that Winston & Strawn LLP, Osler, Hoskin & Harcourt LLP
and any person that subsequently becomes a Lender in accordance with Section 13.04(b) of
the Credit Agreement may rely on this opinion in connection with the
transactions contemplated by the Credit Agreement as of the date of this
opinion as if it were addressed to such person and delivered on the date hereof
and provided further that copies of this opinion may be furnished by you
to, but may not be relied on by, (i) your professional advisers and
accountants and to bank 


 


5

















 


auditors and
examiners, in each case in connection with their audit and review activities, (ii) any
person as may be required by applicable law or regulation provided that you
take reasonable steps to procure that such person maintains the confidentiality
of this opinion and (iii) entities (x) that are or become Agents or
party to Secured Hedging Agreements or Secured Cash Management Agreements (as
such capitalized terms are defined in the Credit Agreement) or (y) to whom
you propose to sell an interest in the Commitments and/or Loans held by you or
propose to enter into Secured Hedging Agreements or Secured Cash Management
Agreements with any other Loan Party (as such capitalized terms are defined in
the Credit Agreement), in each case, in compliance with the requirements of the
Credit Agreement.


 


Yours very truly,


 


STEWART McKELVEY


 


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