Exhibit 10.2


 


Execution Copy


 




 





SENIOR SUBORDINATED LOAN AGREEMENT


 


Dated as of April 6, 2005,


 


among


 


STILE U.S. ACQUISITION CORP., 

as the US Borrower,


 


STILE ACQUISITION CORP.,

as the Canadian Borrower,


 


STILE CONSOLIDATED CORP.,

as Guarantor,


 


The Several Lenders

from Time to Time Parties Hereto


 


and


 


THE BANK OF NOVA SCOTIA,

as US Administrative Agent and as 

Canadian Administrative Agent


 






 


THE BANK OF NOVA SCOTIA,

as Joint Lead Arranger and Joint Bookrunner


 


DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arranger, Joint Bookrunner

and Co-Syndication Agent



UBS SECURITIES LLC,

as Joint Bookrunner and Co-Syndication Agent


 




BANK OF MONTREAL and SUNTRUST BANK,

as Co-Documentation Agents


 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Defined
  Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  Amount and Terms of Credit

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.

  	
   

  	
  Commitments

  	
   

  	
  39

  
	
  2.2.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  40

  
	
  2.3.

  	
   

  	
  Notice of
  Borrowing

  	
   

  	
  40

  
	
  2.4.

  	
   

  	
  Disbursement
  of Funds

  	
   

  	
  41

  
	
  2.5.

  	
   

  	
  Repayment of
  Loans; Evidence of Debt

  	
   

  	
  42

  
	
  2.6.

  	
   

  	
  Conversions
  and Continuations

  	
   

  	
  43

  
	
  2.7.

  	
   

  	
  Pro Rata
  Borrowings

  	
   

  	
  44

  
	
  2.8.

  	
   

  	
  Interest

  	
   

  	
  44

  
	
  2.9.

  	
   

  	
  Interest
  Periods

  	
   

  	
  45

  
	
  2.10.

  	
   

  	
  Increased
  Costs, Illegality, etc

  	
   

  	
  46

  
	
  2.11.

  	
   

  	
  Compensation

  	
   

  	
  48

  
	
  2.12.

  	
   

  	
  Change of
  Lending Office

  	
   

  	
  48

  
	
  2.13.

  	
   

  	
  Notice of
  Certain Costs

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  Subordination

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1.

  	
   

  	
  Agreement to
  Subordinate

  	
   

  	
  49

  
	
  3.2.

  	
   

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  	
  49

  
	
  3.3.

  	
   

  	
  Default on
  Designated Senior Indebtedness of the Company

  	
   

  	
  49

  
	
  3.4.

  	
   

  	
  Acceleration
  of Payment of the Loans

  	
   

  	
  51

  
	
  3.5.

  	
   

  	
  When
  Distribution Must Be Paid Over

  	
   

  	
  51

  
	
  3.6.

  	
   

  	
  Subrogation

  	
   

  	
  51

  
	
  3.7.

  	
   

  	
  Relative
  Rights

  	
   

  	
  51

  
	
  3.8.

  	
   

  	
  Subordination
  May Not Be Impaired by the Borrowers

  	
   

  	
  51

  
	
  3.9.

  	
   

  	
  Rights of
  Administrative Agents

  	
   

  	
  51

  
	
  3.10.

  	
   

  	
  Distribution
  or Notice to Representative

  	
   

  	
  52

  
	
  3.11.

  	
   

  	
  Section 3
  Not To Prevent Events of Default or Limit Right To Accelerate

  	
   

  	
  52

  
	
  3.12.

  	
   

  	
  Administrative
  Agents Entitled To Rely

  	
   

  	
  52

  
	
  3.13.

  	
   

  	
  US
  Administrative Agent To Effectuate Subordination

  	
   

  	
  52

  
	
  3.14.

  	
   

  	
  Administrative
  Agents Not Fiduciary for Holders of Senior Indebtedness

  	
   

  	
  52

  
	
  3.15.

  	
   

  	
  Reliance by
  Holders of Senior Indebtedness on Subordination Provisions

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  Fees; Commitments

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.

  	
   

  	
  Fees

  	
   

  	
  53

  
	
  4.2.

  	
   

  	
  Mandatory
  Termination of Commitments

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  Payments

  	
   

  	
  53

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.

  	
   

  	
  Voluntary
  Prepayments

  	
   

  	
  53

  
	
  5.2.

  	
   

  	
  Mandatory
  Prepayments

  	
   

  	
  54

  
	
  5.3.

  	
   

  	
  Method and
  Place of Payment

  	
   

  	
  55

  
	
  5.4.

  	
   

  	
  Net Payments

  	
   

  	
  56

  
	
  5.5.

  	
   

  	
  Computations
  of Interest and Fees

  	
   

  	
  59

  
	
  5.6.

  	
   

  	
  Limit on
  Rate of Interest

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Conditions Precedent to Initial Credit Event

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1.

  	
   

  	
  Loan
  Documents

  	
   

  	
  60

  
	
  6.2.

  	
   

  	
  Legal
  Opinions

  	
   

  	
  61

  
	
  6.3.

  	
   

  	
  Representations
  and Warranties; No Default

  	
   

  	
  61

  
	
  6.4.

  	
   

  	
  Equity
  Contributions

  	
   

  	
  61

  
	
  6.5.

  	
   

  	
  Closing
  Certificates

  	
   

  	
  61

  
	
  6.6.

  	
   

  	
  Corporate
  Proceedings of Each Credit Party

  	
   

  	
  61

  
	
  6.7.

  	
   

  	
  Corporate
  Loan Documents

  	
   

  	
  62

  
	
  6.8.

  	
   

  	
  Fees

  	
   

  	
  62

  
	
  6.9.

  	
   

  	
  Acquisition
  Agreement

  	
   

  	
  62

  
	
  6.10.

  	
   

  	
  Solvency
  Certificate

  	
   

  	
  62

  
	
  6.11.

  	
   

  	
  Governmental
  Authorizations and Consents

  	
   

  	
  62

  
	
  6.12.

  	
   

  	
  Historical
  Financial Statements

  	
   

  	
  62

  
	
  6.13.

  	
   

  	
  Pro Forma
  Financial Statements

  	
   

  	
  62

  
	
  6.14.

  	
   

  	
  Acquisition

  	
   

  	
  62

  
	
  6.15.

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  62

  
	
  6.16.

  	
   

  	
  Notice of
  Borrowing

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  63

  
	
  SECTION 8.

  	
   

  	
  Representations, Warranties and Agreements

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1.

  	
   

  	
  Corporate
  Status

  	
   

  	
  63

  
	
  8.2.

  	
   

  	
  Corporate
  Power and Authority

  	
   

  	
  63

  
	
  8.3.

  	
   

  	
  Authorization;
  No Violation

  	
   

  	
  64

  
	
  8.4.

  	
   

  	
  Litigation

  	
   

  	
  64

  
	
  8.5.

  	
   

  	
  Margin
  Regulations

  	
   

  	
  64

  
	
  8.6.

  	
   

  	
  Governmental
  Approvals

  	
   

  	
  64

  
	
  8.7.

  	
   

  	
  Investment
  Company Act

  	
   

  	
  64

  
	
  8.8.

  	
   

  	
  True and Complete
  Disclosure

  	
   

  	
  64

  
	
  8.9.

  	
   

  	
  Financial
  Statements; Financial Condition

  	
   

  	
  65

  
	
  8.10.

  	
   

  	
  Tax Returns
  and Payments

  	
   

  	
  65

  
	
  8.11.

  	
   

  	
  Compliance
  with ERISA

  	
   

  	
  65

  
	
  8.12.

  	
   

  	
  Subsidiaries

  	
   

  	
  67

  
	
  8.13.

  	
   

  	
  Patents, etc

  	
   

  	
  67

  
	
  8.14.

  	
   

  	
  Environmental
  Laws

  	
   

  	
  67

  
	
  8.15.

  	
   

  	
  Properties

  	
   

  	
  67

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.16.

  	
   

  	
  Solvency

  	
   

  	
  67

  
	
  8.17.

  	
   

  	
  Public
  Utility Holding Company Act

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  Affirmative Covenants

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1.

  	
   

  	
  Information
  Covenants

  	
   

  	
  68

  
	
  9.2.

  	
   

  	
  Books,
  Records and Inspections

  	
   

  	
  70

  
	
  9.3.

  	
   

  	
  Maintenance
  of Insurance

  	
   

  	
  71

  
	
  9.4.

  	
   

  	
  Payment of
  Taxes

  	
   

  	
  71

  
	
  9.5.

  	
   

  	
  Consolidated
  Corporate Franchises

  	
   

  	
  71

  
	
  9.6.

  	
   

  	
  Compliance
  with Statutes, Regulations, etc

  	
   

  	
  71

  
	
  9.7.

  	
   

  	
  ERISA;
  Canadian Benefit Matters

  	
   

  	
  71

  
	
  9.8.

  	
   

  	
  Good Repair

  	
   

  	
  73

  
	
  9.9.

  	
   

  	
  Refinancing
  the Loans

  	
   

  	
  73

  
	
  9.10.

  	
   

  	
  End of
  Fiscal Years

  	
   

  	
  73

  
	
  9.11.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  74

  
	
  9.12.

  	
   

  	
  Use of
  Proceeds

  	
   

  	
  74

  
	
  9.13.

  	
   

  	
  Changes in
  Business

  	
   

  	
  74

  
	
  9.14.

  	
   

  	
  Exchange
  Notes

  	
   

  	
  74

  
	
  9.15.

  	
   

  	
  Change of
  Control

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  Negative Covenants

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Limitation
  on Asset Sales

  	
   

  	
  76

  
	
  10.2.

  	
   

  	
  Limitation
  on Restricted Payments

  	
   

  	
  76

  
	
  10.3.

  	
   

  	
  Limitations
  on Incurrence of Indebtedness and Issuance of Disqualified Stock

  	
   

  	
  80

  
	
  10.4.

  	
   

  	
  Limitation
  on Liens

  	
   

  	
  84

  
	
  10.5.

  	
   

  	
  Merger,
  Consolidation or Sale of All or Substantially All Assets

  	
   

  	
  85

  
	
  10.6.

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  86

  
	
  10.7.

  	
   

  	
  Dividend and
  Other Payment Restrictions Affecting Subsidiaries

  	
   

  	
  87

  
	
  10.8.

  	
   

  	
  Limitation
  on Other Pari Passu Indebtedness; etc

  	
   

  	
  89

  
	
  10.9.

  	
   

  	
  Guarantees
  of Indebtedness by Restricted Subsidiaries

  	
   

  	
  89

  
	
  10.10.

  	
   

  	
  Amendments
  or Waivers of Certain Loan Documents

  	
   

  	
  90

  
	
  10.11.

  	
   

  	
  Payments for
  Consent

  	
   

  	
  90

  
	
  10.12.

  	
   

  	
  Restricted
  Subsidiaries

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  Events of Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1.

  	
   

  	
  Payments

  	
   

  	
  91

  
	
  11.2.

  	
   

  	
  Representations,
  etc

  	
   

  	
  91

  
	
  11.3.

  	
   

  	
  Covenants

  	
   

  	
  91

  
	
  11.4.

  	
   

  	
  Defaults
  Under Other Agreement

  	
   

  	
  91

  
	
  11.5.

  	
   

  	
  Bankruptcy,
  etc

  	
   

  	
  91

  



 


iii

















 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.6.

  	
   

  	
  ERISA

  	
   

  	
  92

  
	
  11.7.

  	
   

  	
  Guarantee

  	
   

  	
  93

  
	
  11.8.

  	
   

  	
  Judgments

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  The Administrative Agents

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1.

  	
   

  	
  Appointment

  	
   

  	
  93

  
	
  12.2.

  	
   

  	
  Delegation
  of Duties

  	
   

  	
  94

  
	
  12.3.

  	
   

  	
  Exculpatory
  Provisions

  	
   

  	
  94

  
	
  12.4.

  	
   

  	
  Reliance by
  US Administrative Agent

  	
   

  	
  94

  
	
  12.5.

  	
   

  	
  Notice of
  Default

  	
   

  	
  95

  
	
  12.6.

  	
   

  	
  Non-Reliance
  on US Administrative Agent and Other Lenders

  	
   

  	
  95

  
	
  12.7.

  	
   

  	
  Indemnification

  	
   

  	
  96

  
	
  12.8.

  	
   

  	
  US
  Administrative Agent in its Individual Capacity

  	
   

  	
  96

  
	
  12.9.

  	
   

  	
  Successor
  Agent

  	
   

  	
  96

  
	
  12.10.

  	
   

  	
  Withholding
  Tax

  	
   

  	
  97

  
	
  12.11.

  	
   

  	
  Canadian
  Administrative Agent

  	
   

  	
  97

  
	
  12.12.

  	
   

  	
  Other
  Agents; Arrangers and Bookrunners

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  Miscellaneous

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1.

  	
   

  	
  Amendments
  and Waivers

  	
   

  	
  97

  
	
  13.2.

  	
   

  	
  Notices

  	
   

  	
  99

  
	
  13.3.

  	
   

  	
  No Waiver;
  Cumulative Remedies

  	
   

  	
  101

  
	
  13.4.

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  101

  
	
  13.5.

  	
   

  	
  Payment of
  Expenses

  	
   

  	
  101

  
	
  13.6.

  	
   

  	
  Successors
  and Assigns; Participations and Assignments

  	
   

  	
  102

  
	
  13.7.

  	
   

  	
  Replacements
  of Lenders under Certain Circumstances

  	
   

  	
  105

  
	
  13.8.

  	
   

  	
  Adjustments;
  Set-off

  	
   

  	
  106

  
	
  13.9.

  	
   

  	
  Counterparts

  	
   

  	
  107

  
	
  13.10.

  	
   

  	
  Severability

  	
   

  	
  107

  
	
  13.11.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  107

  
	
  13.12.

  	
   

  	
  GOVERNING
  LAW

  	
   

  	
  107

  
	
  13.13.

  	
   

  	
  Submission
  to Jurisdiction; Waivers

  	
   

  	
  107

  
	
  13.14.

  	
   

  	
  Acknowledgments

  	
   

  	
  108

  
	
  13.15.

  	
   

  	
  WAIVERS OF
  JURY TRIAL

  	
   

  	
  108

  
	
  13.16.

  	
   

  	
  Confidentiality

  	
   

  	
  108

  
	
  13.17.

  	
   

  	
  Language

  	
   

  	
  109

  
	
  13.18.

  	
   

  	
  Judgment
  Currency

  	
   

  	
  109

  
	
  13.19.

  	
   

  	
  National
  Security Laws

  	
   

  	
  109

  



 


iv

















 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  Commitments and Addresses of Lenders

  
	
  Schedule 1.1(b)

  	
   

  	
  Closing Date Investments

  
	
  Schedule 8.11(b)

  	
   

  	
  Canadian Pension Plan Matters

  
	
  Schedule 8.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 10.3(b)(iii)

  	
   

  	
  Closing Date Indebtedness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit B-1

  	
   

  	
  Form of US Guarantee

  
	
  Exhibit B-2

  	
   

  	
  Form of Canadian Guarantee

  
	
  Exhibit B-3

  	
   

  	
  Form of Chilean Guarantee

  
	
  Exhibit B-4

  	
   

  	
  Form of Mexican Guarantee

  
	
  Exhibit B-5

  	
   

  	
  Form of Irish Guarantee

  
	
  Exhibit B-6

  	
   

  	
  Form of UK Guarantee

  
	
  Exhibit C-1

  	
   

  	
  Form of Closing Certificate

  
	
  Exhibit C-2

  	
   

  	
  Form of Credit Party Closing Certificate

  
	
  Exhibit D

  	
   

  	
  Form of Promissory Note

  
	
  Exhibit E-1

  	
   

  	
  Form of US Borrowing Request

  
	
  Exhibit E-2

  	
   

  	
  Form of Canadian Borrowing Request

  
	
  Exhibit F

  	
   

  	
  Form of Exchange Note Indenture

  
					



 


i

















 


THIS SENIOR
SUBORDINATED LOAN AGREEMENT, dated as of April 6, 2005, is among STILE U.S.
ACQUISITION CORP., a Delaware
corporation (the “US Borrower”), STILE ACQUISITION CORP., a corporation
organized under the laws of Ontario (the “Canadian Borrower” and,
together with the US Borrower, the “Borrowers”), STILE CONSOLIDATED
CORP., a corporation formed under the federal laws of Canada (“Holdings”),
the lending institutions from time to time parties hereto (each a “Lender”
and, collectively, the “Lenders”), THE BANK OF NOVA SCOTIA, as the US
Administrative Agent, the Canadian Administrative Agent and Joint Lead Arranger
and Joint Bookrunner, DEUTSCHE BANK SECURITIES INC., as Joint Lead Arranger and
Joint Bookrunner and as Co-Syndication Agent, UBS SECURITIES LLC, as Joint
Bookrunner and Co-Syndication Agent, and BANK OF MONTREAL and SUNTRUST BANK, as
Co-Documentation Agents.


 


Pursuant to or
in connection with the Acquisition Agreement (such term and each other
capitalized term used but not defined in this introductory statement having the
meaning provided in Section 1), (a) the Canadian Borrower will
acquire (the “Acquisition”) all of the issued and outstanding Capital
Stock of Masonite International Corporation, a corporation governed by the laws
of Ontario, and shall subsequently be amalgamated with Masonite International
Corporation in accordance with applicable law, (b) affiliates of KKR will make
the KKR Equity Contribution, (c) on the Closing Date, the Management Investors
will acquire equity interests in Stile Holding Corp., a corporation continued
under the federal laws of Canada and the direct parent of Holdings (“Parent”)
in an aggregate amount that, when combined with the KKR Equity Amount, equals
not less than 20.0% of the aggregate pro forma capitalization of Parent on the
Closing Date (such equity interests, the “Rollover Equity Contribution”,
and, together with the KKR Equity Contribution, the “Equity Contributions”),
(d) the US Borrower and the Canadian Borrower will incur loans, in each case,
under the Senior Credit Facilities and (e) the Borrowers will incur the Loans
hereunder.


 


In connection
with the foregoing, the parties hereto agree as follows:


 


SECTION 1. Definitions.


 


1.1.  Defined
Terms. (a)    As used herein, the following terms shall
have the meanings specified in this Section 1.1 (it being
understood that defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular):


 


“ABR”
shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%. If
the US Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
US Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the ABR shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. Any change in the ABR due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.


 

















 


“Acquired
EBITDA” shall mean, with respect to any Acquired Entity or Business or any
Converted Restricted Subsidiary (any of the foregoing, a “Pro Forma Acquired
Entity”), for any period, the amount for such period of EBITDA of such Pro
Forma Acquired Entity (determined using such definitions as if references to
Holdings and its Subsidiaries therein were to such Pro Forma Acquired Entity
and its Subsidiaries), all as determined on a consolidated basis for such Pro
Forma Acquired Entity in accordance with GAAP.


 


“Acquired
Entity or Business” shall mean any Person, property, business or asset
(other than an Unrestricted Subsidiary) acquired to the extent not subsequently
sold, transferred or otherwise disposed of by Holdings or any Restricted
Subsidiary.


 


“Acquired
Indebtedness” shall mean, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Restricted Subsidiary of such specified
Person, including Indebtedness incurred in connection with, or in contemplation
of, such other Person merging with or into or becoming a Restricted Subsidiary
of such specified Person, and (b) Indebtedness secured by a Lien encumbering
any asset acquired by such specified Person.


 


“Acquisition”
shall have the meaning provided in the preamble to this Agreement.


 


“Acquisition
Agreement” shall mean the Second Amended and Restated Combination
Agreement, dated February 17, 2005 between Stile Acquisition Corp. and Masonite
International Corporation (amending and restating that certain Amended and
Restated Combination Agreement dated January 16, 2005 amending and restating
that certain Combination Agreement dated December 22, 2004), and all other
material documents and instruments entered into in connection therewith, each
as in effect on the date of this Agreement.


 


“Adjusted
Commitment” shall mean at any time the Commitment less the Commitments of
all Defaulting Lenders.


 


“Adjusted
Credit Exposure” shall, at any date, mean the sum of (a) the portion
of the Adjusted Commitment that relates to Commitments at such date and
(b) the outstanding principal amount of the Loans (excluding the Loans
held by Defaulting Lenders) in the aggregate at such date.


 


“Administrative
Agent” shall mean, as the context may require, either the US Administrative
Agent, the Canadian Administrative Agent, or both.


 


“Administrative
Agent’s Office” shall mean (a) in respect of all Credit Events for the
account of the US Borrower, the office of the US Administrative Agent located
at 720 King Street West, 3rd
Floor, Toronto, Ontario  M5V 2T3,
or such other office as the US Administrative Agent may hereafter designate in
writing as such to the other parties hereto and (b) in respect of all Credit
Events for the account of the Canadian Borrower, the office of the Canadian
Administrative Agent located at 720
King Street West, 3rd Floor, Toronto, Ontario  M5V 2T3, or such other office in
Canada as the Canadian Administrative Agent may hereafter designate in writing
as such to the other parties hereto and all references to the term “Canadian
Administrative Agent’s Office” shall mean the office referred to in this clause
(b).


 


2

















 


“Administrative
Questionnaire” shall have the meaning provided in Section 13.6(b).


 


“Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any 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 agreement or otherwise.


 


“Affiliate Transaction” is defined in Section 10.6.


 


“Agents”
shall mean the US Administrative Agent, the Canadian Administrative Agent, the
Guarantee Agents, the Joint Lead Arrangers and Joint Bookrunners, the
Co-Syndication Agents and the Co-Documentation Agents.


 


“Agreement”
shall mean this Senior Subordinated Loan Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.


 


“Applicable
Spread” shall mean, initially 0.0% from the Closing Date to, but excluding,
the Designated 2 Date and thereafter increasing by 0.50% on the Designated 2
Date and on the first day of each subsequent 90-day period.


 


“Approved
Fund” shall have the meaning provided in Section 13.6.


 


“Asset Sale” shall
mean (x) the sale, conveyance, transfer or other disposition (whether in a
single transaction or a series of related transactions) of property or assets
(including by way of a Sale Leaseback) of Holdings, any Borrower or any Restricted
Subsidiary (each referred to in this definition as a “disposition”) or (y) the sale of Equity Interests of
any Restricted Subsidiary (whether in a single transaction or a series of
related transactions), in each case other than:


 


(a)  a disposition of Cash Equivalents or
Investment Grade Securities or obsolete or worn out equipment in the ordinary
course of business or inventory or goods held for sale in the ordinary course
of business;


 


(b)  the disposition of all or substantially all
of the assets of Holdings, any Borrower or any Restricted Subsidiary in a
manner permitted pursuant to Section 10.5 or any disposition that
constitutes a Change of Control;


 


(c)  the making of any Restricted Payment or
Permitted Investment that is permitted to be made, and is made, under Section
10.2;


 


(d)  any disposition of assets in a single
transaction or a series of transactions with an aggregate fair market value of
less than $10.0 million;


 


3

















 


(e)  any disposition of property or assets or
issuance of securities by a Restricted Subsidiary to a Borrower or by a
Borrower or a Restricted Subsidiary to a Restricted Subsidiary;


 


(f)  to the extent allowable under Section 1031 of
the Code, any exchange of like property (excluding any boot thereon) for use in
a Similar Business;


 


(g)  the lease, assignment or sub-lease of any
real or personal property in the ordinary course of business;


 


(h)  foreclosures on assets pursuant to the
enforcement of a Lien permitted under Section 10.4; and


 


(i)  sales of accounts receivable, or
participations therein, in connection with any Receivables Facility.


 


“Asset Sale
Prepayment Event” shall mean the consummation of any Asset Sale.


 


“Assignment
and Acceptance” shall mean an assignment and acceptance substantially in
the form of Exhibit A.


 


“Authorized
Officer” shall mean the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer or any other senior officer of Holdings, the
US Borrower or the Canadian Borrower, as the case may be, designated as such in
writing to the US Administrative Agent by Holdings, the US Borrower or the
Canadian Borrower, as applicable.


 


“Bankruptcy
Code” shall have the meaning provided in Section 11.5.


 


“Blockage
Notice” has the meaning specified in Section 3.3.


 


“Board”
shall mean the Board of Governors of the Federal Reserve System of the United
States (or any successor).


 


“Borrowers”
shall have the meaning provided in the preamble to this Agreement.


 


“Borrowing”
shall mean and include the incurrence of one Type of Loan on (or, with respect
to the Term Loan, after) the Closing Date (or resulting from conversions on a
given date after the Closing Date) having, in the case of LIBOR Loans, the same
Interest Period (provided that CR Loans incurred pursuant to Section 2.10(b)
shall be considered part of any related Borrowing of LIBOR Loans).


 


“Business
Day” shall mean any day excluding Saturday, Sunday and any day that shall
be in The City of New York, New York or Toronto, Ontario a legal holiday or a
day on which banking institutions are authorized by law or other governmental
actions to close; provided, however, that when used in connection
with a LIBOR Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.


 


4

















 


“Canadian
Administrative Agent” shall mean The Bank of Nova Scotia, a Schedule I bank
under the Bank Act (Canada), as
the Canadian administrative agent for the holders of Canadian Loans and all
Obligations in respect thereof under this Agreement and the other Loan
Documents, together with any of its permitted successors appointed pursuant to Section 12.


 


“Canadian
Benefit Plans” shall mean all material employee benefit plans, programs,
policies, practices or other arrangements of any nature or kind whatsoever that
are not Canadian Pension Plans and are maintained or contributed to by any
Credit Party, or under which any Credit Party has any liability or contingent
liability, in relation to employees or former employees that it may have in
Canada.


 


“Canadian
Borrower” shall have the meaning provided in the preamble to this Agreement.


 


“Canadian
Borrowing” shall mean a Borrowing by the Canadian Borrower.


 


“Canadian
Commitment” shall mean (a) in the case of each Lender that is a Lender on
the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “Canadian Commitment” and (b) in the case of any
Lender that becomes a Lender after the date hereof, the amount specified as
such Lender’s “Canadian Commitment” in the Assignment and Acceptance pursuant
to which such Lender assumed a portion of the Commitment, in each case as the
same may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Canadian Commitments as of the Closing Date is
$358,000,000.


 


“Canadian
Dollars” shall mean the lawful money of Canada.


 


“Canadian
Guarantee” shall mean the Canadian Senior Subordinated Guarantee made by
Holdings, the Canadian Borrower (with respect to Credit Parties other than
itself) and each Canadian Subsidiary Guarantor, respectively, in favor of the
Canadian Administrative Agent for the ratable benefit of the Loan Parties, each
substantially in the form of Exhibit B-2, and any guarantee governed by
Canadian law entered into by a Subsidiary pursuant to Section 10.9, in
each case, as the same may be amended, supplemented or otherwise modified from
time to time.


 


“Canadian
Insolvency Laws” shall have the meaning provided in Section 11.5.


 


“Canadian
Loans” shall mean at any time (i) prior to the Initial Loan Repayment
Date, the Initial Canadian Loans, and (ii) on or after the Initial Loan
Repayment Date, the Canadian Term Loans.


 


“Canadian
Pension Plans” shall mean each plan which is a registered pension plan for
the purposes of the Tax Act established, maintained or contributed to by either
Borrower or any of its Subsidiaries, or under which either Borrower or any of
its Subsidiaries has any liability or contingent liability, in relation to any
employees or former employees that it may have in Canada.


 


5

















 


“Canadian
Resident” shall mean, at any time, a Person who at that time is (a) not a
non-resident of Canada for purposes of the Tax Act or (b) an authorized foreign
bank deemed to be resident in Canada for purposes of the Tax Act in respect of
all amounts paid or credited to such Person.


 


“Canadian
Subsidiary” shall mean each Subsidiary of either Borrower that is organized
under the laws of Canada or any province or territory thereof.


 


“Canadian
Subsidiary Guarantors” shall mean each Canadian Subsidiary of Holdings that
is a party to the Canadian Guarantee or becomes a party thereto after the
Closing Date pursuant to Section 10.9 or otherwise.


 


“Canadian
Term Loan” shall have the meaning provided in Section 2.1(b).


 


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


 


“Capitalized
Lease Obligations” shall mean, as applied to any Person, all obligations
under Capital Leases of such Person and its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.


 


“Capital
Stock” shall mean (a) in the case of a corporation, corporate stock, (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited), and (d) any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.


 


“Cash
Equivalents” shall mean (a) Dollars; (b) Canadian Dollars;
(c) (i) euros, or any national currency of any participating member state
in the European Union, or (ii) in the case of any Foreign Subsidiary that
is a Restricted Subsidiary, such local currencies held by them from time to
time in the ordinary course of business; (d) securities issued or directly
and fully and unconditionally guaranteed or insured by the Canadian or US
government or any agency or instrumentality thereof the securities of which are
unconditionally guaranteed as a full faith and credit obligation of such
government with maturities of 24 months or less from the date of acquisition;
(e) certificates of deposit, time deposits and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any commercial bank having capital and surplus of not less
than $250.0 million in the case of US banks and $100.0 million (or the
Dollar equivalent as of the date of determination) in the case of non-US banks;
(f) repurchase obligations for underlying securities of the types
described in clauses (d) and (e) entered into with any financial
institution meeting the qualifications specified in clause (e) above;
(g) commercial paper rated at least P-1 by Moody’s or at least A-1 by
S&P and in each case maturing within 12 months after the date of creation
thereof; (h) marketable short-term money market and similar securities
having a rating of at least P-2 or A-2 from either Moody’s or S&P, 


 


6

















 


respectively, and in each case maturing within 12 months after the date
of creation thereof; (i) investment funds investing 95% of their assets in
securities of the types described in clauses (a) through (h)
above; (j) readily marketable direct obligations issued by any state of
the United States or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody’s or S&P with
maturities of 24 months or less from the date of acquisition; and
(k) Indebtedness or Preferred Stock issued by Persons with a rating of “A”
or higher from S&P or “A2” or higher from Moody’s with maturities of 12
months or less from the date of acquisition; provided, however,
that notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than those set forth in clauses (a)
through (c) above, provided
that such amounts are converted into any currency listed in clauses (a)
through (c) as promptly as practicable and in any event within ten
Business Days following the receipt of such amounts.


 


“Casualty
Event” shall mean, with respect to any property of any Person, any loss of
or damage to, or any condemnation or other taking by a Governmental Authority
of such property for which such Person or any of its Restricted Subsidiaries
receives insurance proceeds, or proceeds of a condemnation award or other
compensation.


 


“Change of
Control” shall mean and be deemed to have occurred if (a) (i) the
Sponsor and the Management Investors shall at any time not own, in the
aggregate, directly or indirectly, beneficially and of record, at least 35% of
the voting power of the outstanding Voting Stock of Holdings (other than as the
result of one or more widely distributed offerings of common stock of Parent or
Holdings, in each case whether by Parent, Holdings, the Sponsor or Management Investors)
and/or (ii) any person, entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
or “offeror” (within the meaning of Section 89(1) of the Securities Act
(Ontario)), other than Sponsor, shall at any time have acquired direct or
indirect beneficial ownership of a percentage of the voting power of the
outstanding Voting Stock of Holdings that exceeds the percentage of the voting
power of such Voting Stock then beneficially owned, in the aggregate, by the
Sponsor and the Management Investors, unless, in the case of either clause (i)
or (ii) above, the Sponsor and the Management Investors have, at such
time, the right or the ability by voting power, contract or otherwise to elect
or designate for election at least a majority of the Board of Directors of
Holdings; and/or (b) at any time Continuing Directors shall not constitute
at least a majority of the Board of Directors of Holdings; and/or (c) at any
time, Holdings shall cease to directly own, beneficially and of record, 100% of
the issued and outstanding Voting Stock and other equity interests of either
Borrower.


 


“Change of
Control Payment” shall have the meaning provided in Section 9.15(a).


 


“Chilean
Guarantee” shall mean the Chilean Guarantee, made by Masonite Chile
Holdings S.A. in favor of the Guarantee Agent for the benefit of the Loan
Parties, substantially in the form of Exhibit B-3, and any guarantee
governed by Chilean law entered into by a Subsidiary pursuant to Section 10.9,
in each case, as the same may be amended, supplemented or otherwise modified
from time to time.


 


“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are US Loans or Canadian Loans and,
when 


 


7

















 


used in reference to any Commitment, refers to whether such Commitment
is a US Commitment or a Canadian Commitment.


 


“Closing
Date” shall mean the date of the initial Borrowing hereunder.


 


“Closing
Date Material Adverse Change” shall mean any change, effect, event or
occurrence with respect to the condition (financial or otherwise), properties,
assets, liabilities, obligations (whether absolute, accrued, conditional or
otherwise), businesses, operations or results of operations or prospects of the
Borrowers and their Subsidiaries that is, or would reasonably be expected to
be, material and adverse to Borrowers and their Subsidiaries on a consolidated
basis (other than a change, effect, event or occurrence caused by or arising
from (a) changes in the markets in which the Borrowers and their Subsidiaries
operate (other than changes in reaction to the announcement of the
Transactions) or (b) macroeconomic factors, interest rates, general financial
market conditions, war, terrorism or hostilities, except, in each case, to the
extent any change, effect, event or occurrence has had a disproportionate
effect on the Borrowers and their Subsidiaries as compared to other Persons in
the industry in which the Borrowers and their Subsidiaries operate).


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued 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.


 


“Co-Documentation
Agents” shall mean Bank of Montreal and SunTrust Bank, together with their
affiliates, as the co-documentation agents under this Agreement and the other
Loan Documents.


 


“Commitment”
shall mean, with respect to each Lender and as the context may require, such
Lender’s US Commitment, such Lender’s Canadian Commitment, or both.


 


“Confidential
Information” shall have the meaning provided in Section 13.16.


 


“Confidential
Information Memorandum” shall mean the Confidential Information Memorandum
of the Borrowers dated March 2005, delivered to the Lenders in connection with
this Agreement.


 


“Consolidated
Depreciation and Amortization Expense” shall mean with respect to any
Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.


 


“Consolidated
Interest Expense” shall mean, with respect to any Person for any period,
the sum, without duplication, of:


 


(a)  consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, to the extent such expense was
deducted in computing Consolidated Net Income (including amortization of
original issue discount resulting from the issuance of Indebtedness at 


 


8

















 


less than par, non-cash interest payments (but excluding any non-cash
interest expense attributable to the movement in the mark to market valuation
of Hedging Obligations or other derivative instruments pursuant to GAAP), the
interest component of Capitalized Lease Obligations and net payments, if any,
pursuant to interest rate Hedging Obligations with respect to Indebtedness, and
excluding amortization of deferred financing fees, debt issuance costs,
commissions, fees and expenses and any expensing of bridge, commitment and
other financing fees), and


 


(b)  consolidated capitalized interest of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
less


 


(c)  interest income for such period.


 


For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by such Person to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP.


 


“Consolidated
Net Income” shall mean, with respect to any Person for any period, the
aggregate of the Net Income, of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, and otherwise determined in accordance
with GAAP; provided, however, that, without duplication,


 


(a)  any after tax effect of extraordinary,
non-recurring or unusual gains or losses (less all fees and expenses relating
thereto) or expenses (including relating to severance, relocation costs,
curtailments or modifications to pension and post-retirement employee benefit
plans, inventory provisions and write downs, new product introductions, one
time compensation charges and the Transactions) shall be excluded,


 


(b)  the Net Income for such period shall not
include the cumulative effect of a change in accounting principles during such
period,


 


(c)  any after tax effect of income (loss) from
disposed or discontinued operations and any net after tax gains or losses on
disposal of disposed, abandoned or discontinued operations shall be excluded,


 


(d)  any after tax effect of gains or losses (less
all fees and expenses relating thereto) attributable to asset dispositions
other than in the ordinary course of business, as determined in good faith by
the Board of Directors of Holdings, shall be excluded,


 


(e)  the Net Income for such period of any Person
that is not a Subsidiary of Holdings, or that is an Unrestricted Subsidiary, or
that is accounted for by the equity method of accounting, shall be excluded;
provided that Consolidated Net Income of Holdings shall be increased by the
amount of dividends or distributions or other payments that are actually paid
in cash (or to the extent converted into cash) to the referent Person or a
Restricted Subsidiary thereof in respect of such period,


 


(f)  [Intentionally Omitted],


 


9

















 


(g)  effects of adjustments (including the effects
of such adjustments pushed down to Holdings, the Borrowers and their
subsidiaries) in any line item in such Person’s consolidated financial
statements pursuant to GAAP resulting from the application of purchase
accounting in relation to the Transaction or any acquisition that is consummated
after the Closing Date, net of taxes, shall be excluded,


 


(h)  any after tax effect of income (loss) from
the early extinguishment of Indebtedness or Hedging Obligations or other
derivative instruments shall be excluded,


 


(i)  any impairment charge or asset write off
pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP
shall be excluded, and


 


(j)  any non cash compensation expense recorded
from grants of stock appreciation or similar rights, stock options, restricted
stock or other rights shall be excluded.


 


“Contingent
Obligations” means, with respect to any Person, any obligation of such
Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent,


 


(a)  to purchase any such primary obligation or
any property constituting direct or indirect security therefor,


 


(b)  to advance or supply funds


 


(i)  for the purchase or payment
of any such primary obligation or


 


(ii)  to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, or


 


(c)  to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation against loss in respect thereof.


 


“Continuing
Director” shall mean, at any date, an individual (a) who is a member
of the Board of Directors of Holdings or either Borrower on the date hereof,
(b) who, as at such date, has been a member of such Board of Directors for
at least the 12 preceding months, (c) who has been nominated to be a
member of such Board of Directors, directly or indirectly, by a Sponsor or
Persons nominated by a Sponsor or (d) who has been nominated to be a
member of such Board of Directors by a majority of the other Continuing Directors
then in office.


 


“Contract
Rate” shall mean, as of any date of determination, (a) from the Closing
Date to, but excluding, the Designated 1 Date, a rate per annum (the “First
Contract Rate”) equal to the greater of (i) 8.50% and (ii) the sum of
the ABR plus 5.00%, (b) on and after the Designated 1 Date to, but
excluding, the Designated 2 Date, a rate per annum (the “Second Contract
Rate”) equal to the sum of the First Contract Rate plus 1.00%, (c)
on and after the Designated 2 Date, but excluding the Initial Loan Repayment
Date, a rate per annum (the “Third 


 


10

















 


Contract Rate”) equal to the sum of the Second
Contract Rate plus the Applicable Spread and (d) on and after the
Initial Loan Repayment Date, a rate per annum equal to the sum of the Third
Contract Rate plus the Term Spread.


 


“Converted
Restricted Subsidiary” shall mean any Unrestricted Subsidiary that is
converted into a Restricted Subsidiary.


 


“Co-Syndication
Agents” shall mean Deutsche Bank Securities Inc. and UBS Securities LLC,
together with their affiliates, as co-syndication agents under this Agreement
and the other Loan Documents.


 


“Credit
Event” shall mean and include the making (but not the conversion or continuation)
of a Loan.


 


“Credit
Party” shall mean each of Holdings, the US Borrower, the Canadian Borrower,
the US Subsidiary Guarantors, the Canadian Subsidiary Guarantors, the Foreign
Subsidiary Guarantors and each other Subsidiary of Holdings that is a party to
a Loan Document.


 


“CR Loan”
shall mean any Loan bearing interest at a rate determined by reference to the
Contract Rate.


 


“Debt
Incurrence Prepayment Event” shall mean any issuance or incurrence by
Holdings, either Borrower or any of the Restricted Subsidiaries of any
Refinancing Indebtedness.


 


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


 


“Defaulting
Lender” shall mean any Lender with respect to which a Lender Default is in
effect.


 


“Designated
1 Date” shall mean October 6, 2005.


 


“Designated
2 Date” shall mean January 6, 2006.


 


“Designated
Default” shall mean any Default listed in Section 11.1 or Section
11.5.


 


“Designated
Non-Cash Consideration” shall mean the fair market value of non-cash
consideration received by a Holdings or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-Cash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such
valuation, executed by a senior vice president and the principal financial
officer of Holdings, less the amount of cash or Cash Equivalents received in
connection with a subsequent sale of or collection on such Designated Non-Cash
Consideration.


 


“Designated
Preferred Stock” means Preferred Stock of Holdings or any parent
corporation thereof (in each case other than Disqualified Stock) that is issued
for cash (other than to a Restricted Subsidiary) and is so designated as
Designated Preferred Stock, pursuant to an Officers’ Certificate executed by a
senior vice president and the principal financial officer of 


 


11

















 


Holdings or the applicable parent corporation thereof, as the case may
be, on the issuance date thereof.


 


“Designated
Senior Indebtedness” shall mean


 


(1)           any Indebtedness
outstanding under the Senior Credit Facilities; and


 


(2)           any other Senior
Indebtedness permitted under this Agreement, the principal amount of which is
$25.0 million or more and that has been designated by Holdings as “Designated
Senior Indebtedness.”


 


“Directing
Lenders” shall mean, at any date, Non-Defaulting Lenders and holders of
Exchange Notes having or holding at least 33 1/3% (or a majority at any time
that the Agents and their respective Affiliates hold a majority of the sum of
the aggregate principal amount of Exchange Notes outstanding at such time plus
the Adjusted Credit Exposure) of the Adjusted Credit Exposure.


 


“Disqualified
Stock” shall mean, with respect to any Person, any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is puttable or exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable or retractable (other than
as a result of a change of control or asset sale), pursuant to a sinking fund
obligation or otherwise, or is redeemable or retractable at the option of the
holder thereof (other than as a result of a change of control or asset sale),
in whole or in part, in each case prior to the date 91 days after the earlier
of the Maturity Date or the date the Loans are no longer outstanding; provided,
however, that if such Capital Stock is issued to any Plan or Canadian
Pension Plan, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the issuer thereof in order to
satisfy applicable statutory or regulatory obligations.


 


“Dollars”
and “$” shall mean dollars in lawful currency of the United States of
America.


 


“Dollar Equivalent”
shall mean, on any date of determination, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount denominated
in Canadian Dollars, the equivalent in Dollars of such amount, determined by
the US Administrative Agent using the Exchange Rate.


 


“EBITDA”
shall mean, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period


 


(a)  increased
(without duplication) by:


 


(i)            provision for taxes based on income or profits, plus
franchise or similar taxes, foreign withholding taxes and provincial capital
taxes of such Person for such period deducted in computing Consolidated Net
Income, plus


 


12

















 


(ii)           Consolidated Interest Expense of such Person for such
period (together with charges in connection with the sale of receivables for
such Person for such period to the extent not included in Consolidated Interest
Expense) to the extent the same was deducted in calculating such Consolidated
Net Income, plus


 


(iii)          Consolidated Depreciation and Amortization Expense of such
Person for such period to the extent the same were deducted in computing
Consolidated Net Income, plus


 


(iv)          any expenses or charges (other than depreciation or amortization
expense) related to any Equity Offering, Permitted Investment, acquisition,
disposition, recapitalization or the incurrence of Indebtedness permitted to be
incurred by this Agreement (including a refinancing thereof) (whether or not
successful), including (A) such fees, expenses or charges related to the Senior
Credit Facilities and the Loans and (B) any amendment or other modification of
the Documents, and, in each case, deducted in computing Consolidated Net
Income, plus


 


(v)           the amount of any restructuring charge deducted in such
period in computing Consolidated Net Income, including any one time costs
incurred in connection with acquisitions after the Closing Date and costs
related to the closure and/or consolidation of facilities, plus


 


(vi)          any other non cash charges, including any write off or
write downs, reducing Consolidated Net Income for such period, (provided that
if any such non-cash charges represent an accrual or reserve for potential cash
items in any future period, the cash payment in respect thereof in such future
period shall be subtracted from EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period), plus


 


(vii)         the amount of any minority interest expense deducted in such
period in calculating Consolidated Net Income (less the amount of any cash
dividends paid to the holders of such minority interests), plus


 


(viii)        the amount of management, monitoring, consulting and advisory
fees and related expenses paid in such period to the Investors or any of their
respective Affiliates, plus


 


(ix)           costs of surety bonds incurred in such period in
connection with financing activities;


 


(b)  decreased
by (without duplication) non cash items increasing Consolidated Net Income of
such Person for such period, excluding any items which represent the reversal
of any accrual of, or cash reserve for, anticipated cash charges in any prior
period; and


 


(c)  increased
or decreased by (without duplication):


 


13

















 


(i)            any net gain or loss resulting in such period from
Hedging Obligations, plus or minus, as applicable,


 


(ii)           any net gain or loss resulting in such period from
currency transaction gains or losses related to currency remeasurements
(including any net loss or gain resulting from hedge agreements for currency
exchange risk), plus or minus, as applicable,


 


(iii)          without duplication, the Historical Adjustments incurred in
such period.


 


“Environmental
Claims” shall mean any and all actions, suits, orders, decrees, demands,
demand letters, claims, liens, notices of noncompliance, violation or potential
responsibility or investigation (other than internal reports prepared by
Holdings, either Borrower or any of their respective Subsidiaries (a) in the
ordinary course of such Person’s business or (b) as required in connection with
a financing transaction or an acquisition or disposition of real estate) or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereinafter, “Claims”),
including (i) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (ii) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief relating to the presence, release
or threatened release of Hazardous Materials or arising from alleged injury or
threat of injury to health or safety (to the extent relating to human exposure
to Hazardous Materials), or the environment including ambient air, surface
water, groundwater, land surface and subsurface strata and natural resources
such as wetlands.


 


“Environmental
Law” shall mean any applicable federal, state, provincial, territorial,
foreign or local statute, law, rule, regulation, ordinance, code and rule of
common law now or hereafter in effect and in each case as amended, and any
binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment relating
to the protection of the environment, including ambient air, surface water,
groundwater, land surface and subsurface strata and natural resources such as
wetlands, or health or safety (to the extent relating to human exposure to
Hazardous Materials), or Hazardous Materials, including the Canadian
Environmental Protection Act, 1999, the Fisheries Act (Canada), the
Transportation of Dangerous Goods Act, 1992 (Canada), the Environmental
Protection Act (Ontario), the Ontario Water Resources Act, the Environment
Quality Act (Québec), the Hazardous Products Act (Canada), the Canada Shipping
Act, and the Canada Wildlife Act.


 


“Equity
Contributions” shall have the meaning provided in the preamble to this
Agreement.


 


“Equity
Interests” shall mean Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.


 


14

















 


“Equity
Issuance Prepayment Event” shall mean any issuance or sale or other
disposition by Holdings, either Borrower or any of the Restricted Subsidiaries
of any Capital Stock after the Closing Date other than any such issuance, sale
or other disposition that is (x)  to a Borrower, a Restricted Subsidiary
or any members of management, directors or consultants of a Borrower, any
direct or indirect parent corporation of a Borrower or a Borrower’s
Subsidiaries, (y) used to finance any Permitted Acquisition or
(z) pursuant to a Plan or Canadian Pension Plan.


 


“Equity
Offering” means any public or private sale of common stock or Preferred
Stock of Holdings or any of its direct or indirect parent companies (excluding
Disqualified Stock), other than


 


(a)           public offerings
with respect to Holdings’ or any direct or indirect parent company’s common
stock registered on Form S-8;


 


(b)           issuances to any
Subsidiary of Holdings; and


 


(c)           any such public or
private sale that constitutes an Excluded Contribution.


 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time. Section references to ERISA are to ERISA as in effect at the
date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.


 


“ERISA
Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) that together with either Borrower or a Subsidiary would be deemed to be
a “single employer” within the meaning of Section 414(b) or (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.


 


“Event of
Default” shall have the meaning provided in Section 11.


 


“Exchange
Loan Documents” means the Exchange Note Indenture and the Exchange Notes.


 


“Exchange
Note Holders” shall mean the registered holders of the Exchange Notes.


 


“Exchange
Note Indenture” shall mean the indenture to be entered into relating to the
Exchange Notes to be issued by each of the US Borrower and the Canadian
Borrower, substantially in the form of Exhibit F (with such changes as
are noted in Exhibit F to reflect differences between the terms
applicable to the Exchange Notes issued by the US Borrower and Exchange Notes
issued by the Canadian Borrower and with such changes to cure any ambiguity,
omission, defect or inconsistency as the US Administrative Agent and the
Borrowers shall approve), as the same may be amended, modified or supplemented.


 


“Exchange
Notes” shall mean the securities issued under the Exchange Note Indenture.


 


15














 


“Exchange
Note Trustee” shall mean the trustee under the Exchange Note Indenture.


 


“Exchange
Rate” shall mean on any day the rate at which Canadian Dollars may be
exchanged into Dollars, computed by the Canadian Administrative Agent at the
Bank of Canada noon spot rate, after 12:00 noon (Toronto time) on such day; provided
that if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Canadian Administrative Agent, after consultation
with Holdings, may use any reasonable method it deems appropriate to determine
such rate, and such determination shall be conclusive absent manifest error.


 


“Exchange
Request” is defined in Section 9.14(b).


 


“Excluded
Contribution” shall mean
net cash proceeds, marketable securities or Qualified Proceeds, in each case
received by Holdings in an aggregate amount not to exceed the sum of (a) $50.0
million plus (b) 50% of net cash proceeds, marketable securities or Qualified
Proceeds received by Holdings or either Borrower in excess of $50.0 million
from:


 


(a)  contributions
to its common equity capital; and


 


(b)  the
sale (other than to a Subsidiary of Holdings or to any management equity plan
or stock option plan or any other management or employee benefit plan or
agreement of Holdings) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of Holdings;


 


in each case designated
as Excluded Contributions pursuant to an Officers’ Certificate executed by an
executive vice president and the principal financial officer of Holdings on the
date such capital contributions are made or the date such Equity Interests are
sold, as the case may be.


 


“Exempt
Receivables Transactions” shall mean sales of accounts receivable from The
Home Depot, Inc., The Home Depot U.S.A., Inc., Home Depot of Canada Inc. Lowe’s
Companies, Inc., their respective Affiliates and any other Person, including
pursuant to (a) the Receivables Purchase Facility and (b) the Supplier
Agreement, dated as of April 7, 2004 (the “Orbian Facility”), by and
between Masonite International Corporation, an Ontario corporation, and
Citibank, N.A.; provided that such sales are substantially consistent
with sales of receivables under the Receivables Purchase Facility or the Orbian
Facility as in effect on the date hereof.


 


“Federal
Funds Effective Rate” shall mean, for any day, the weighted average of the per annum rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day of such transactions received by
the US Administrative Agent from three federal funds brokers of recognized
standing selected by it.


 


“Fixed
Charge Coverage Ratio” shall mean, with respect to any Person for any
period, the ratio of EBITDA of such Person for such period to the Fixed Charges
of such Person for such period. In the event that Holdings or any Restricted
Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any
Indebtedness or issues or redeems Disqualified 


 


16

















 


Stock or Preferred Stock subsequent to the commencement of the period
for which the Fixed Charge Coverage Ratio is being calculated but prior to or
simultaneously with the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the “Fixed
Charge Coverage Ratio Calculation Date”), then the Fixed Charge
Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee, redemption,
retirement or extinguishment of Indebtedness, or such issuance or redemption of
Disqualified Stock or Preferred Stock, as if the same had occurred at the
beginning of the applicable four-quarter period.


 


For purposes
of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and disposed operations (as determined in
accordance with GAAP) that have been made by Holdings or any Restricted
Subsidiary during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Fixed Charge
Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, mergers, consolidations and disposed
operations (and the change in any associated fixed charge obligations and the
change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter
reference period. If since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into Holdings
or any Restricted Subsidiary since the beginning of such period) shall have
made any Investment, acquisition, disposition, merger, consolidation or
disposed operation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period
as if such Investment, acquisition, disposition, merger, consolidation or
disposed operation had occurred at the beginning of the applicable four-quarter
period.


 


For purposes
of this definition, whenever pro forma
effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of Holdings. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Fixed Charge Coverage Ratio
Calculation Date had been the applicable rate for the entire period (taking
into account any Hedging Obligations applicable to such Indebtedness). Interest
on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of
Holdings to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma
basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period. Interest on Indebtedness that may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then
based upon such optional rate chosen as Holdings may designate.


 


“Fixed
Charges” shall mean, with respect to any Person for any period, the sum of


 


(a)           Consolidated Interest Expense of such
Person for such period,


 


17

















 


(b)           all cash dividend payments (excluding
items eliminated in consolidation) on any series of Preferred Stock (including
any Designated Preferred Stock) or any Refunding Capital Stock of such Person
made during such period, and


 


(c)           all cash dividend payments (excluding
items eliminated in consolidation) on any series of Disqualified Stock made
during such period.


 


“Foreign
Asset Sale” shall have the meaning provided in Section 5.2(f).


 


“Foreign
Plan” shall mean any employee benefit plan, program, policy, arrangement or
agreement maintained or contributed to by either Borrower or any of its
Subsidiaries with respect to employees employed outside the United States.


 


“Foreign
Subsidiary” shall mean each Subsidiary of either Borrower that is not a US
Subsidiary.


 


“Foreign
Subsidiary Guarantees” shall mean, collectively, (a) the UK Guarantee, (b)
the Irish Guarantee, (c) the Chilean Guarantee, (d) the Mexican Guarantee, (e)
any guarantee agreement entered into by a Foreign Subsidiary (other than a
Canadian Subsidiary) pursuant to Section 10.9 and (f) any other
guarantee agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) to guarantee any of the Obligations.


 


“Foreign Subsidiary Guarantors” shall mean,
collectively, each Foreign Subsidiary (other than a Canadian Subsidiary) that
is a party to a Foreign Subsidiary Guarantee or becomes a party thereto after
the Closing Date pursuant to Section 10.9 or otherwise.


 


“Funded
Debt” shall mean all indebtedness of Holdings and its Restricted
Subsidiaries for borrowed money that matures more than one year from the date
of its creation or matures within one year from such date that is renewable or
extendable, at the option of such Person, to a date more than one year from
such date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more than
one year from such date, including all amounts of Funded Debt required to be
paid or prepaid within one year from the date of its creation and, in the case
of the Borrowers, Indebtedness in respect of the Loans, and the Loans and
Letter of Credit Exposures (each as defined in the Senior Credit Facilities).


 


“GAAP”
shall mean generally accepted accounting principles in Canada in effect on the
Closing Date.


 


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


 


“Guarantee”
shall have the meaning set forth in the definition of “Guarantee Obligations”.


 


“Guarantee
Agent” shall have the meaning provided in the Guarantee Agreements, as
applicable.


 


18

















 


“Guarantee
Agreements” shall mean, collectively, the US Guarantee, the Canadian
Guarantees and the Foreign Subsidiary Guarantees.


 


“Guarantee
Obligations” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or any such property or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such Indebtedness of the ability of the primary obligor to make
payment of such Indebtedness or (d) otherwise to assure or hold harmless the
owner of such Indebtedness against loss in respect thereof; provided, however,
that the term “Guarantee Obligations” shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the Indebtedness in respect of which such
Guarantee Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith. The
term “Guarantee” when used as a verb shall mean to provide or incur a
Guarantee Obligation and when used as a noun shall have a correlative meaning.


 


“Guarantors”
shall mean (a) Holdings, (b) the US Borrower (with respect to the Obligations
of Credit Parties other than itself), (c) the Canadian Borrower (with respect
to the Obligations of Credit Parties other than itself) and (d) the US
Subsidiary Guarantors, the Canadian Subsidiary Guarantors and the Foreign
Subsidiary Guarantors.


 


“Hazardous
Materials” shall mean (a) any petroleum or petroleum products, radioactive
materials, asbestos, urea formaldehyde foam insulation, urea  formaldehyde 
or phenol formaldehyde resin, polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances”, “hazardous waste”, “hazardous materials”,
“extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic
pollutants”, “contaminants”, or “pollutants”, or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, which is prohibited, limited or regulated by, or that may give rise
to liability under, any Environmental Law.


 


“Hedging
Obligations” shall mean, with respect to any Person, the obligations of
such Person under any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, commodity swap agreement, commodity
cap agreement, commodity collar agreement, foreign exchange contract, currency
swap agreement or similar agreement providing for the transfer or mitigation of
interest rate or currency risks either generally or under specific
contingencies.


 


“Historical
Adjustments” means with respect to any Person, without duplication, the
following items to the extent incurred prior to the Closing Date (or, with
respect to clause (i) below, prior to December 31, 2005) and, in
each case, during the applicable period:


 


19

















 


(a)  extraordinary
losses and unusual or non-recurring charges, including severance, relocation
costs, curtailments or modifications to pension and post-retirement employee
benefit plans, costs related to labor disruptions or strikes, direct costs of
extreme weather conditions such as hurricanes (it being agreed that the
aggregate amount of such costs related to labor disruptions or strikes and
direct costs of extreme weather conditions shall be $1,800,000 for the third
fiscal quarter of fiscal year 2004), inventory provisions and write downs and
one-time compensation charges;


 


(b)  gains
(losses) from the early extinguishment of Indebtedness;


 


(c)  the
cumulative effect of a change in accounting principles;


 


(d)  gains
(losses), net of tax, from disposed or discontinued operations;


 


(e)  non-cash
adjustments to LIFO reserves;


 


(f)  gains
(losses) attributable to the disposition of fixed assets;


 


(g)  other
costs consisting of (i) one-time restructuring charges, (ii) one-time severance
costs in connection with former employees, (iii) debt financing costs, (iv)
fees and expenses related to acquisitions, (v) consulting services in
connection with acquisitions and (vi) non-cash charges related to stock based
awards expense (including charges related to effect of the increase in the
value of the stock of Masonite International Corporation on restricted stock
units and deferred stock units prior to the occurrence of the Transactions);


 


(h)  with
respect to any entity acquired by or consolidated with Holdings during the
twelve months ended December 31, 2004, the amount of EBITDA for such entity for
the period from January 1, 2004 through the date of such acquisition or
consolidation, all as determined on a consolidated basis for such entity in
accordance with GAAP; and


 


(i)  the
estimated cost savings that would have been achieved had (a) the supply
contract, dated March 28, 2002, between Masonite International Corporation and
Craftmaster been terminated at the beginning of such period and (b) the molded
door facings purchased by Florida Made from Craftmaster instead been
manufactured by Masonite during such period (it being agreed that such cost
savings relating to the contracts in (a) and (b), in the aggregate, for each of
the fiscal quarters in fiscal year 2004 would have been $2,550,000 and for the
first fiscal quarter in fiscal year 2005 would have been $1,250,000).


 


“Historical
Audited Financial Statements” shall mean as of the Closing Date, the
audited financial statements of the Predecessor Company and its consolidated
Subsidiaries, in each case for the three most recently completed fiscal years,
consisting of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such fiscal years.


 


“Historical
Unaudited Financial Statements” shall mean as of the Closing Date, the
unaudited financial statements of the Predecessor Company and its consolidated
Subsidiaries for each fiscal quarter subsequent to the most recent Historical
Audited Financial Statement and 


 


20

















 


ended 45 days before the Closing Date, consisting of balance sheets and
the related consolidated statements of income, stockholders’ equity and cash
flows of the Predecessor Company.


 


“Holdings”
shall have the meaning provided in the preamble to this Agreement.


 


“Indebtedness”
shall mean, with respect to any Person, without duplication,


 


(a)  any
indebtedness (including principal and premium) of such Person, whether or not
contingent


 


(i)            in respect of borrowed money,


 


(ii)           evidenced by bonds, notes, debentures or similar
instruments or letters of credit or bankers’ acceptances (or, without double
counting, reimbursement agreements in respect thereof),


 


(iii)          representing the balance deferred and unpaid of the
purchase price of any property (including Capitalized Lease Obligations),
except any such balance that constitutes a trade payable or similar obligation
to a trade creditor, in each case accrued in the ordinary course of business,
or


 


(iv)          representing any Hedging Obligations,


 


if and to the extent that any of the foregoing Indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet (excluding the footnotes thereto) of such Person prepared in
accordance with GAAP,


 


(b)  to
the extent not otherwise included, any obligation by such Person to be liable
for, or to pay, as obligor, guarantor or otherwise, on the obligations of the
type referred to in clause (a) above of another Person (whether or not
such items would appear upon the balance sheet of the such obligor or
guarantor), other than by endorsement of negotiable instruments for collection
in the ordinary course of business, and


 


(c)  to
the extent not otherwise included, the obligations of the type referred to in clause
(a) above of another Person secured by a Lien on any asset owned by such
Person, whether or not such Indebtedness is assumed by such Person;


 


provided, however, that notwithstanding
the foregoing, Indebtedness shall be deemed not to include (a) Contingent
Obligations incurred in the ordinary course of business or (b) obligations
under or in respect of Receivables Facilities.


 


“Independent
Financial Advisor” shall mean an accounting, appraisal, investment banking
firm or consultant to Persons engaged in similar businesses of nationally
recognized standing that is, in the good faith judgment of Holdings, qualified
to perform the task for which it has been engaged.


 


“Initial
Canadian Loan” shall have the meaning provided in Section 2.1(a).


 


21

















 


“Initial
Loan Repayment Date” shall mean October 6, 2006.


 


“Initial
Loans” shall mean, collectively, the Initial US Loans and the Initial
Canadian Loans.


 


“Initial US
Loan” shall have the meaning provided in Section 2.1(a).


 


“Interest
Period” shall mean, with respect to any Loan, the interest period
applicable thereto, as determined pursuant to Section 2.9.


 


“Investment
Grade Securities” shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents); (b) debt securities
or debt instruments with a rating of BBB- or higher by S&P or Baa3 or
higher by Moody’s or the equivalent of such rating by such rating organization,
or, if no rating of S&P or Moody’s then exists, the equivalent of such
rating by any other nationally recognized securities rating agency, but
excluding any debt securities or instruments constituting loans or advances
among Holdings, either Borrower, and the Restricted Subsidiaries;
(c) investments in any fund that invests exclusively in investments of the
type described in clauses (a) and (b) which fund may also hold
immaterial amounts of cash pending investment or distribution; and
(d) corresponding instruments in countries other than the United States
customarily utilized for high quality investments.


 


“Investments”
shall mean, for any Person, all investments by such Person in other Persons
(including Affiliates) in the form of loans (including guarantees), advances or
capital contributions (excluding accounts receivable, trade credit, advances to
customers, commission, travel and similar advances to officers and employees,
in each case made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities issued by any other Person and investments that are required by GAAP
to be classified on the balance sheet (excluding the footnotes) of Holdings in
the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property. For
purposes of the definition of “Unrestricted Subsidiary” and Section 10.2,


 


(a)           “Investments” shall include the portion
(proportionate to Holdings’ equity interest in such Subsidiary) of the fair
market value of the net assets of a Subsidiary of Holdings at the time that
such Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
Holdings shall be deemed to continue to have a permanent “Investment” in an
Unrestricted Subsidiary in an amount (if positive) equal to


 


(i)            Holdings’ “Investment” in such Subsidiary at the time of
such redesignation less


 


(ii)           the portion (proportionate to Holdings’ equity interest in
such Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; and


 


22

















 


(b)           any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the Board of
Directors of Holdings.


 


“Irish
Guarantee” shall mean the Irish Subordinated Guarantee, made by Masonite
Ireland, Masonite Europe and Masonite Components in favor of the Guarantee
Agent for the benefit of the Loan Parties, substantially in the form of Exhibit
B-5, and any guarantee governed by Irish law entered into by a Subsidiary
pursuant to Section 10.9, in each case, as the same may be amended,
supplemented or otherwise modified from time to time.


 


“Joint
Bookrunners” shall mean The Bank of Nova Scotia, Deutsche Bank Securities
Inc. and UBS Securities LLC, together with their affiliates, as joint
bookrunners under this Agreement and the other Loan Documents.


 


“Joint Lead
Arrangers” shall mean The Bank of Nova Scotia and Deutsche Bank Securities
Inc., together with their affiliates, as joint lead arrangers under this
Agreement and the other Loan Documents.


 


“Judgment
Currency” shall have the meaning set forth in Section 13.18.


 


“Judgment
Currency Conversion Date” shall have the meaning set forth in Section 13.18.


 


“KKR”
shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR Associates, L.P.


 


“KKR Equity
Amount” shall mean an amount equal to not less than 95% of the Equity
Contribution.


 


“KKR Equity
Contribution” shall mean the contribution by affiliates of KKR of an amount
of cash equal to not less than the KKR Equity Amount to Parent, in exchange for
the issuance to KKR of 95% of the issued and outstanding equity interests of
Parent.


 


“Lender”
shall have the meaning provided in the preamble to this Agreement.


 


“Lender
Default” shall mean the failure (which has not been cured) of a Lender to
make available its portion of any Borrowing required to be made available or
funded by it hereunder.


 


“LIBO Rate”
shall mean, as of any date of determination, (a) from the Closing Date to, but
excluding, the Designated 1 Date, a rate per annum (the “First LIBO Rate”)
equal to the greater of (i) 8.50% and (ii) the sum of six month LIBOR plus
6.00%, (b) on and after the Designated 1 Date to, but excluding, the Designated
2 Date, a rate per annum (the “Second LIBO Rate”) equal to the sum of
the First LIBO Rate plus 1.00%, (c) on and after the Designated 2 Date
to, but excluding the Initial Loan Repayment Date, a rate per annum (the “Third
LIBO Rate”) equal to the sum of the Second LIBO Rate plus the
Applicable Spread and (d) on and after the Initial Loan Repayment Date, a rate
per annum equal to the sum of the Third LIBO Rate plus the Term Spread.


 


23

















 


“LIBOR”
shall mean, in the case of any LIBOR Loan, with respect to each day during each
Interest Period pertaining to such LIBOR Loan, the rate per annum
determined by the US Administrative Agent at approximately 11:00 a.m. (London
time), on the date that is two Business Days prior to the commencement of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in dollars (as set forth by any service selected
by the US Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period (or, to the extent that
an interest rate is not so ascertainable, the rate per annum
determined by the US Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such
Interest Period to major banks in the London interbank market in London,
England by the US Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period).


 


“LIBOR Loan”
shall mean any Loan bearing interest at a rate determined by reference to
LIBOR.


 


“LIBOR
Unavailability Event” shall mean any event or circumstance described in clause
(i), (ii) or (iii) of Section 2.10(a).


 


“Lien”
shall mean with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided that in no event shall an operating lease be deemed to
constitute a Lien.


 


“Loan
Documents” shall mean this Agreement, the Guarantee Agreements, any
promissory notes issued by either Borrower hereunder and the Exchange Loan
Documents.


 


“Loan
Parties” shall mean (a) the Lenders, (b) the US Administrative Agent, (c)
the Canadian Administrative Agent, (d) the other Agents, (e) each counterparty
(that is not a Credit Party) to an agreement the obligations under which
constitute Obligations as set forth in clause (iii) of the definition of
“Obligations”, (f) the beneficiaries of each indemnification obligation undertaken
by any Credit Party under any Loan Document and (g) any successors, indorsees,
transferees and assigns of each of the foregoing.


 


“Loans”
shall mean, as the context may require, either US Loans, Canadian Loans, or
both.


 


“Management
Investors” shall mean the management, officers and employees of Holdings or
any Restricted Subsidiaries on the Closing Date who are or become investors in
Parent.


 


“Material
Adverse Change” shall mean any event or circumstance which has resulted or
is reasonably likely to result in a material adverse change in the business,
assets, operations, properties or financial condition of Holdings, the
Borrowers and their respective 


 


24

















 


Subsidiaries, taken as a whole, or that would materially adversely
affect the ability of Holdings, the Borrowers and the other Credit Parties,
taken as a whole, to perform their obligations under this Agreement or any of
the other Loan Documents.


 


“Material
Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of Holdings and
its Subsidiaries, taken as a whole, that would materially adversely affect (a)
the ability of Holdings, the Borrowers and the other Credit Parties, taken as a
whole, to perform their obligations under this Agreement or any of the other
Loan Documents or (b) the rights and remedies of the Administrative Agents
and the Lenders under this Agreement or any of the other Loan Documents.


 


“Material
Subsidiary” shall mean, at any date of determination, each Restricted
Subsidiary of Holdings (a) whose total assets at the last day of the Test
Period ending on the last day of the most recent fiscal period for which
Section 9.1 Financials have been delivered were equal to or greater than
5% of the consolidated total assets of Holdings and its Restricted Subsidiaries
at such date or (b) whose gross revenues for such Test Period were equal
to or greater than 5% of the consolidated gross revenues of Holdings and its
Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP.


 


“Maturity
Date” shall mean the date that is ten years after the Closing Date, or, if
such date is not a Business Day, the immediately preceding Business Day.


 


“Mexican
Guarantee” shall mean the Mexican Senior Subordinated Subsidiary Guarantee,
made by Masonite Mexico S.A. de C.V. in favor of the Guarantee Agent for the
benefit of the Loan Parties, substantially in the form of Exhibit B-4,
and any guarantee governed by Mexican law entered into by a Subsidiary pursuant
to Section 10.9, in each case, as the same may be amended,
supplemented or otherwise modified from time to time.


 


“Minimum
Borrowing Amount” shall mean $1,000,000.


 


“Minority
Investment” shall mean any Person (other than a Subsidiary) in which either
Borrower or any Restricted Subsidiary owns Capital Stock or other equity
interests.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.


 


“National
Security Laws” shall have the meaning provided in Section 13.19.


 


“Net Cash
Proceeds” shall mean, with respect to any Prepayment Event, (a) the
gross cash proceeds (including payments from time to time in respect of
installment obligations, if applicable) received by or on behalf of Holdings or
any of the Restricted Subsidiaries in respect of such Prepayment Event, less
(b) the sum of:


 


(i)            in the case of any Prepayment Event,
the amount, if any, of all taxes paid or estimated to be payable by Holdings or
any of the Restricted Subsidiaries in connection with such Prepayment Event;


 


25

















 


(ii)           in the case of any Prepayment Event,
the amount of any reasonable reserve established in accordance with GAAP
against any liabilities (other than any taxes deducted pursuant to clause
(i) above) (x) associated with the assets that are the subject of
such Prepayment Event and (y) retained by Holdings or any of the
Restricted Subsidiaries; provided that the amount of any subsequent reduction
of such reserve (other than in connection with a payment in respect of any such
liability) shall be deemed to be Net Cash Proceeds of such Prepayment Event
occurring on the date of such reduction;


 


(iii)          in the case of any Prepayment Event,
the amount of any Indebtedness secured by a Lien on the assets that are the
subject of such Prepayment Event to the extent that the instrument creating or
evidencing such Indebtedness requires that such Indebtedness be repaid upon
consummation of such Prepayment Event;


 


(iv)          in the case of any Asset Sale
Prepayment Event or Casualty Event, the amount of any proceeds of such Asset
Sale Prepayment Event that (x) is applied to permanently reduce obligations
under the Senior Credit Facility and which correspondingly reduces commitments
with respect thereto and (y) Holdings or any Subsidiary has reinvested (or
intends to reinvest within the Reinvestment Period or has entered into a
binding commitment prior to the last day of the Reinvestment Period to
reinvest) in the business of Holdings or any of the Restricted Subsidiaries
(subject to Section 9.13); provided that any portion of such
proceeds that has not been so reinvested within such Reinvestment Period shall,
unless Holdings or a Subsidiary has entered into a binding commitment prior to
the last day of such Reinvestment Period to so reinvest such proceeds, (x) be
deemed to be Net Cash Proceeds of an Asset Sale Prepayment Event or Casualty
Event occurring on the last day of such Reinvestment Period and (y) be applied
to the repayment of Term Loans in accordance with Section 5.2(a); and


 


(v)           in the case of any Prepayment Event,
reasonable and customary fees, commissions, expenses, and other costs paid by
Holdings, either Borrower or any of the Restricted Subsidiaries, as applicable,
in connection with such Prepayment Event (other than those payable to Holdings,
either Borrower or any Subsidiary of Holdings), in each case only to the extent
not already deducted in arriving at the amount referred to in clause (a)
above.


 


“Net Income”
means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends.


 


“Non-Defaulting
Lender” shall mean and include each Lender other than a Defaulting Lender.


 


“Non-Excluded
Taxes” shall have the meaning provided in Section 5.4(a).


 


“Non-Payment
Default” shall mean any Default other than a Payment Default.


 


“Non-US
Lender” shall have the meaning provided in Section 5.4(a).


 


“Notice of
Borrowing” shall have the meaning provided in Section 2.3(a).


 


26

















 


“Notice of
Conversion or Continuation” shall have the meaning provided in Section 2.6.


 


“Obligations”
shall mean the collective reference to (i) the due and punctual payment of (x)
the principal of and premium, if any, and interest at the applicable rate
provided under this Agreement (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (y) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrowers or any other Credit Party to any of the Loan
Parties under this Agreement and the other Loan Documents, (ii) the due and
punctual payment and performance of all covenants, agreements, obligations and
liabilities of the Borrowers and each other Credit Party under or pursuant to
this Agreement and the other Loan Documents and (iii) the due and punctual
payment and performance of all Hedging Obligations of each Credit Party under
an agreement that (x) is in effect on the Closing Date with a counterparty that
is a Lender or an affiliate of a Lender as of the Closing Date or (y) is
entered into after the Closing Date with any counterparty that is a Lender or
an affiliate of a Lender at the time the underlying agreement is entered into.


 


“Parent”
shall have the meaning provided in the preamble to this Agreement.


 


“Pari Passu
Indebtedness” shall mean (a) with respect to either Borrower, Indebtedness
which ranks pari passu in right of payment to the Loans and Exchange Notes and
(b) with respect to any Guarantor, Indebtedness which ranks pari passu in right
of payment to the guarantee of such Guarantor as set forth in its Guarantee
Agreement.


 


“Participant”
shall have the meaning provided in Section 13.6(c)(i).


 


“pay the
Loans” has the meaning specified in Section 3.3.


 


“Payment
Blockage Period” has the meaning specified in Section 3.3 of
this Agreement.


 


“Payment
Default” has the meaning specified in Section 3.3 of this
Agreement.


 


“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.


 


“Permitted
Acquisition” shall mean any acquisition, by merger, amalgamation or
otherwise, set forth in clause (j) of the definition of Permitted
Investments.


 


“Permitted
Asset Swap” shall mean the concurrent purchase and sale or exchange of
Related Business Assets or a combination of Related Business Assets and cash or
Cash Equivalents between Holdings or any of its Restricted Subsidiaries and
another Person; provided


 


27

















 


that any cash or Cash Equivalents received must be applied in
accordance with the “Asset Sales” covenant.


 


“Permitted
Holders” shall mean each of Sponsors and members of management of Holdings
(or its direct parent) who are shareholders of Holdings (or its direct parent)
on the Closing Date and any group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act or any successor provision) of which any
of the foregoing are members; provided, that, in the case of such group and
without giving effect to the existence of such group or any other group, such
Sponsors and members of management, collectively, have beneficial ownership of
more than 50% of the total voting power of the Voting Stock of Holdings or any
of its direct or indirect parent companies.


 


“Permitted Investments” shall
mean (a) any Investment in Holdings, any Borrower or any Restricted Subsidiary;
(b) any Investment in cash and Cash Equivalents or Investment Grade Securities;
(c) any Investment by any Borrower or any Restricted Subsidiary in a Person
that is engaged in a Similar Business if as a result of such Investment (i)
such Person becomes a Restricted Subsidiary or (ii) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, a Borrower or a Restricted Subsidiary; (d)
any Investment in securities or other assets not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to Section
10.1 or any other disposition of assets not constituting an Asset Sale;
(e) any Investment existing on the Closing Date as listed on Schedule
1.1(b); (f) advances to employees not in excess of $10.0 million
outstanding at any one time, in the aggregate; (g) any Investment acquired by
Holdings, any Borrower or any Restricted Subsidiary (i) in exchange for any
other Investment or accounts receivable held by any Borrower or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (ii) as a result of a foreclosure by any Borrower
or any Restricted Subsidiary with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default; (h)
Hedging Obligations permitted under Section 10.3(b)(x); (i) loans and
advances to officers, directors and employees for business-related travel
expenses, moving expenses and other similar expenses, in each case incurred in
the ordinary course of business; (j) any Investment in a Similar Business
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (j) that are at the time
outstanding (without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash and/or marketable
securities, not to exceed $125.0 million (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (k) Investments the payment for which consists of
Equity Interests of Holdings or any of its direct or indirect parent
corporations (exclusive of Disqualified Stock); (l) guarantees (including
Guarantees) of Indebtedness permitted under Section 10.3; (m) any
transaction to the extent it constitutes an investment that is permitted and
made in accordance with Section 10.6(b) (except transactions described
in clauses (ii), (vi), (vii) and (xi) of Section
10.6(b)); (n) Investments consisting of purchases and acquisitions of
inventory, supplies, material or equipment, (o) Investments relating to
any special purpose Wholly-Owned Subsidiary of Holdings organized in connection
with an Receivables Facility that, in the good faith determination of the Board
of Directors of Holdings, are necessary or advisable to effect such Receivables
Facility; 


 


28

















 


(p) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (p)
that are at that time outstanding (without giving effect to the sale of an Unrestricted
Subsidiary to the extent the proceeds of such sale do not consist of cash or
marketable securities), not to exceed $25.0 million (with the fair market value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value).


 


“Permitted
Junior Securities” shall mean (a) Equity Interests in Holdings, any
Borrower, any Guarantor or any direct or indirect parent of Holdings; or (b)
unsecured debt securities that are subordinated to all Senior Indebtedness (and
any debt securities issued in exchange for Senior Indebtedness) to
substantially the same extent as, or to a greater extent than, the Indebtedness
in respect of the Loans are subordinated to Senior Indebtedness under this
Agreement; provided, however, that the term “Permitted Junior
Securities” shall not include any securities distributed pursuant to a plan of
reorganization if the Indebtedness under the Senior Credit Facilities is
treated as part of the same class as the Indebtedness issued or incurred hereunder
or under the related Guarantee Agreements for purposes of such plan of
reorganization.


 


“Person”
shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any Governmental
Authority.


 


“Plan”
shall mean any multiemployer, multiple-employer or single-employer plan, as
defined in Section 4001 of ERISA and subject to Title IV of ERISA, that is
or was within any of the preceding six plan years maintained or contributed to
by (or to which there is or was an obligation to contribute or to make payments
to) Holdings, either Borrower, a Subsidiary or an ERISA Affiliate.


 


“Predecessor
Company” shall mean Masonite International Corporation, a corporation
governed by the laws of Ontario, as existing prior to the consummation of the
Acquisition.


 


“Preferred
Stock” shall mean any Equity Interest with preferential rights of payment
of dividends or upon liquidation, dissolution or winding up.


 


“Prepayment
Event” shall mean any Asset Sale Prepayment Event, Debt Incurrence
Prepayment Event, Casualty Event, the issuance of any Subordinated Notes or any
Equity Issuance Prepayment Event.


 


“Prime Rate”
shall mean the rate of interest per annum
determined from time to time by the US Administrative Agent as its reference
rate in effect at its principal office in New York City.


 


“Pro Forma
Adjustment” shall mean, for any Test Period that includes any of the six
consecutive fiscal quarters first ending following any Permitted Acquisition,
with respect to the Acquired EBITDA of the applicable Acquired Entity or
Business or the EBITDA of the relevant Borrower affected by such acquisition,
the pro forma increase or decrease in such Acquired EBITDA or such EBITDA, as
the case may be, projected by the relevant Borrower in good faith as a result
of reasonably identifiable and factually supportable net cost savings or 


 


29

















 


additional net costs, as the case may be, realizable during such period
by combining the operations of such Acquired Entity or Business with the
operations of the relevant Borrower and its Subsidiaries; provided that
so long as such net cost savings or additional net costs will be realizable at
any time during such six-quarter period, it may be assumed, for purposes of
projecting such pro forma increase or decrease to such Acquired EBITDA or
such EBITDA, as the case may be, that such net cost savings or additional net
costs will be realizable during the entire such period; provided, further,
that any such pro forma increase or decrease to such Acquired EBITDA or
such EBITDA, as the case may be, shall be without duplication for net cost
savings or additional net costs actually realized during such period and
already included in such Acquired EBITDA or such EBITDA, as the case may be.


 


“Pro Forma
Adjustment Certificate” shall mean any certificate of an Authorized Officer
of either Borrower delivered pursuant to Section 9.1(h) or setting
forth the information described in clause (iv) to Section 9.1(d).


 


“Pro Forma
Financial Statements” shall mean the unaudited pro forma balance sheet of
Holdings and its consolidated Subsidiaries at December 31, 2004, and the
related unaudited pro forma consolidated statement
of income of Holdings and its consolidated Subsidiaries for the twelve months
ended December 31, 2004, in each case prepared giving effect to the
Transactions as if they had occurred, with respect to such balance sheet, on
such date, and with respect to such statement of income, on the first day of
such twelve-month period.


 


“Qualified
Proceeds” shall mean assets that are used or useful in, or Capital Stock of
any Person engaged in, a Similar Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the board of
directors in good faith.


 


“Real
Estate” shall have the meaning provided in Section 9.1(f).


 


“Receivables
Facility” shall mean one or more receivables financing facilities, as
amended from time to time, the Indebtedness of which is non-recourse (except
for standard representations, warranties, covenants and indemnities made in
connection with such facilities) to Holdings and the Restricted Subsidiaries
pursuant to which Holdings or any of its Restricted Subsidiaries sells its
accounts receivable to a Person that is not a Restricted Subsidiary.


 


“Receivables
Facility Outstandings” shall mean, at any date of determination with
respect to any Receivables Transaction (other than Exempt Receivables
Transactions), the aggregate cash purchase price received by Holdings or any of
its Restricted Subsidiaries from the buyer in connection with its purchase of
accounts receivable under such Receivables Transaction (including any bills of
exchange) less the amount of collections received in respect of such accounts
receivable and paid to such buyer, excluding any amounts applied to purchase
fees or discounts or in the nature of interest, in each case as determined in
good faith and in a consistent and commercially reasonable manner by Holdings
and reasonably acceptable to the US Administrative Agent.


 


“Receivables
Fees” shall mean distributions or payments made directly or by means of
discounts with respect to any participation interest issued or sold in
connection with, 


 


30

















 


and other fees paid to a Person that is not a Restricted Subsidiary in
connection with, any Receivables Facility.


 


“Receivables
Purchase Facility” shall mean the Trade Receivable Purchase Facility
Agreement, dated as of June 25, 2004, by and between Masonite Door Corporation
and SunTrust Bank, as amended.


 


“Receivables
Transactions” shall mean (a) the Exempt Receivables Transactions and (b)
any transaction providing for the sale or financing of accounts receivable of
Holdings or any of the Restricted Subsidiaries having limited recourse based on
the collectability of the accounts receivable sold or financed, with any such
sales or financing in the case of the preceding clause (b) being on
customary terms.


 


“Refinancing
Indebtedness” shall have the meaning set forth in Section 10.3(b)(xv).


 


“Register”
shall have the meaning provided in Section 13.6(b)(iv).


 


“Registration
Rights Agreement” shall mean the Registration Rights Agreement to be
entered into pursuant to the Exchange Note Indenture.


 


“Regulation D”
shall mean Regulation D of the Board as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.


 


“Regulation T”
shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.


 


“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Reinvestment
Period”  shall mean 12 months
following the date of the applicable Asset Sale Prepayment Event or Casualty
Event.


 


“Related
Business Assets” shall mean assets (other than cash or Cash Equivalents)
used or useful in a Similar Business, provided
that any assets received by a Borrower or a Restricted Subsidiary in exchange
for assets transferred by a Borrower or a Restricted Subsidiary shall not be
deemed to be Related Business Assets if they consist of securities of a Person,
unless upon receipt of the securities of such Person, such Person would become
a Restricted Subsidiary.


 


“Related
Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors
of such Person and any Person that possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise.


 


31

















 


“Reportable
Event” shall mean an event described in Section 4043 of ERISA and the
regulations thereunder.


 


“Representative”
shall mean (a) with respect to Senior Indebtedness under or in respect of the
Senior Credit Facilities, the Senior Administrative Agent (or its successor or
assign pursuant to the Senior Credit Facilities) and (b) with respect to any
other Senior Indebtedness, any trustee, agent or representative (if any) as may
be designated by the holders thereof and notified in writing to the US
Administrative Agent and the Borrowers.


 


“Required
Lenders” shall mean, at any date, Non-Defaulting Lenders and holders of
Exchange Notes having or holding a majority of the sum of (a) the portion
of the Adjusted Commitment that relates to Commitments at such date,
(b) the outstanding principal amount of the Loans (excluding the Loans
held by Defaulting Lenders) in the aggregate at such date and (c) the aggregate
principal amount of the Exchange Notes outstanding at such time.


 


“Requirement
of Law” shall mean, as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or assets or to which such Person or any of its
property or assets is subject.


 


“Restricted
Foreign Subsidiary” shall mean a Foreign Subsidiary that is a Restricted
Subsidiary.


 


“Restricted
Investment” shall mean an Investment other than a Permitted Investment.


 


“Restricted
Subsidiary” shall mean any Subsidiary of Holdings other than an
Unrestricted Subsidiary.


 


“Restricted
US Subsidiary” shall mean a US Subsidiary that is a Restricted Subsidiary.


 


“Rollover
Equity Contribution” shall have the meaning provided in the preamble to
this Agreement.


 


“S&P”
shall mean Standard & Poor’s Ratings Services or any successor by
merger or consolidation to its business.


 


“Sale
Leaseback” shall mean any transaction or series of related transactions pursuant
to which either Borrower or any of the Restricted Subsidiaries (a) sells,
transfers or otherwise disposes of any property, real or personal, whether now
owned or hereafter acquired, and (b) as part of such transaction, thereafter
rents or leases such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold,
transferred or disposed.


 


“Schedule I
Lender” shall mean any Lender named in Schedule I to the Bank Act (Canada).


 


32

















 


“SEC”
shall mean the Securities and Exchange Commission or any successor thereto.


 


“Section 9.1
Financials” shall mean the financial statements delivered, or required to
be delivered, pursuant to Section 9.1(a) or (b) together
with the accompanying officer’s certificate delivered, or required to be
delivered, pursuant to Section 9.1(d).


 


“Senior
Administrative Agent” shall mean the “Administrative Agent” as defined in
the Senior Credit Facilities.


 


“Senior
Credit Facilities” shall mean the Senior Credit Agreement, dated the date
hereof, by and among Holdings, the Borrowers, the lenders party thereto in
their capacities as lenders thereunder, The Bank of Nova Scotia, as US
Administrative Agent, Canadian Administrative Agent, joint lead arranger and
joint bookrunner, Deutsche Bank Securities Inc., as joint lead arranger, joint
bookrunner and co-syndication agent, UBS Securities LLC, as joint bookrunner
and co-syndication agent and Bank of Montreal and Sun Trust Bank as
co-documentation agents, and any guarantees, collateral documents, instruments
and agreements executed in connection therewith, and any amendments,
supplements, modifications, extensions, renewals, restatements, refundings or
refinancings thereof and any indentures or credit facilities or commercial
paper facilities with banks or other institutional lenders or investors that
replace, refund or refinance any part of the loans, notes, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility or indenture that increases the amount borrowable
thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under
Section 10.1).


 


“Senior
Guarantor” shall mean a “Guarantor” (as defined in the Senior Credit
Facilities) which has a Guarantee Obligation in respect of Senior Indebtedness.


 


“Senior
Indebtedness” shall mean


 


(a)           all Indebtedness of
Holdings, any Borrower or any Senior Guarantor arising or outstanding under the
Senior Credit Facilities and related Guarantee Obligations in respect thereof
(including interest accruing on or after the filing of any petition in
bankruptcy or similar proceeding or for reorganization of Holdings, any
Borrower or any Senior Guarantor (at the rate provided for in the documentation
with respect thereto, regardless of whether or not a claim for post-filing
interest is allowed in such proceedings)), and any and all other fees, expense
reimbursement obligations, indemnification amounts, penalties, and other
amounts (whether existing on the date of the initial Borrowing hereunder or
thereafter created or incurred) and all obligations of Holdings, any Borrower
or any Senior Guarantor to reimburse any bank or other Person in respect of
amounts paid under letters of credit, acceptances or other similar instruments
issued under the Senior Credit Facilities;


 


(b)           all Hedging
Obligations (and guarantees thereof) owing to a Lender (as defined in the
Senior Credit Facilities) or any Affiliate of such Lender (or any Person that
was a Lender (as defined in the Senior Credit Facilities) or an 


 


33

















 


Affiliate of such Lender at the time the
applicable agreement giving rise to such obligation was entered into); provided that such obligations
are permitted to be incurred under the terms of this Agreement;


 


(c)           any other
Indebtedness of either Borrower permitted to be incurred under the terms of
this Agreement, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to any or all of the Obligations incurred or arising hereunder or in
respect hereof or any related Guarantee;


 


(d)           all Obligations (as
defined in the Senior Credit Facilities as of the date hereof) with respect to
the items listed in the preceding clauses (a), (b) and (c);


 


provided, however, that Senior
Indebtedness shall not include:


 


(1)           any obligation of
such Person to Holdings or any of its Subsidiaries;


 


(2)           any liability for
federal, state, local or other taxes owed or owing by such Person or any other
Affiliate of either Borrower or any Subsidiary of any such Affiliate;


 


(3)           any accounts payable
or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities);


 


(4)           any Indebtedness or
other liabilities or obligation of such Person which is subordinate or junior
in any respect to any other Indebtedness or other liability or obligation of
such Person;


 


(5)           that portion of any
Indebtedness which at the time of incurrence is incurred in violation of this
Agreement; provided, however, that such Indebtedness shall be deemed
not to have been incurred in violation of this Agreement for purposes of this
clause if such Indebtedness consists of Designated Senior Indebtedness, and the
holder(s) of such Indebtedness or their agent or representative (x) had no
actual knowledge at the time of incurrence that the incurrence of such
Indebtedness violated this Agreement and (y) shall have received a certificate
from an officer of the applicable Borrower to the effect that the incurrence of
such Indebtedness does not violate the provisions of this Agreement;


 


(6)           any Indebtedness of
either Borrower which, when incurred and without regard to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to such
Borrower;


 


(7)           any Indebtedness
evidenced by the Loans;


 


34

















 


(8)  any Capital Stock of
Holdings, either Borrower or any Subsidiary Guarantor; or


 


(9)  any amounts owing under
leases (other than Capitalized Lease Obligations).


 


“Similar
Business” shall mean any business conducted or proposed to be conducted by
Holdings, either Borrower and the Restricted Subsidiaries on the Closing Date
or any business that is similar, reasonably related, incidental or ancillary
thereto.


 


“Sold
Entity or Business” shall mean any Person, property, business or asset
(other than an Unrestricted Subsidiary) sold, transferred or otherwise disposed
of, closed or classified as discontinued operations by Holdings or any
Restricted Subsidiary.


 


“Solvent”
shall mean, with respect to each Borrower, that as of the Closing Date, both
(i) (a) the sum of such Borrower’s debt (including contingent liabilities) does
not exceed the present fair saleable value of such Borrower’s present assets;
(b) such Borrower’s capital is not unreasonably small in relation to its
business as contemplated on the Closing Date; and (c) such Borrower has not
incurred and does not intend to incur, or believe that it will incur, debts
including current obligations beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Borrower is “solvent”
(and is not “insolvent”, if applicable) within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under GAAP).


 


“Specified
Subsidiary” shall mean, at any date of determination (a) any Material
Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets at
the last day of the Test Period ending on the last day of the most recent
fiscal period for which Section 9.1 Financials have been delivered were
equal to or greater than 10% of the consolidated total assets of the Borrowers
and their respective Subsidiaries at such date, (ii) whose gross revenues
for such Test Period were equal to or greater than 10% of the consolidated
gross revenues of the Borrowers and their respective Subsidiaries for such
period, in each case determined in accordance with GAAP and (c) each other
Subsidiary that, when combined with any other Subsidiary that is the subject of
an Event of Default under Section 11.5 would constitute a Specified
Subsidiary under clause (a) or (b) above.


 


“Sponsor”
shall mean KKR and its Affiliates.


 


“Statutory
Reserve Rate” shall mean for any day as applied to any LIBOR Loan, a
fraction (expressed as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages that are in effect on that day (including any marginal,
special, emergency or supplemental reserves), expressed as a decimal, as
prescribed by the Board and to which the US Administrative Agent is subject,
for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in 


 


35














 


Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed
to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change
in any reserve percentage.


 


“Subordinated
Indebtedness” shall mean (a) with respect to either Borrower, Indebtedness
which is subordinated in right of payment to the Loans and the Exchange Notes
and (b) with respect to any Guarantor, Indebtedness which is subordinated in
right of payment to the obligations of such Guarantor under its Guarantee
Agreement.


 


“Subordinated
Notes” shall have the meaning provided in Section 9.9.


 


“Subsidiary”
means, with respect to any Person,


 


(a)  any
corporation, association, or other business entity (other than a partnership,
joint venture, limited liability company or similar entity) of which more than
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof or is consolidated
under GAAP with such Person at such time and


 


(b)  any
partnership, joint venture, limited liability company or similar entity which
is consolidated under GAAP with such Person at such time or of which


 


(x)            more
than 50% of the capital accounts, distribution rights, total equity and voting
interests or general or limited partnership interests, as applicable, are owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof whether in the form
of membership, general, special or limited partnership or otherwise, and


 


(y)           such
Person or any Restricted Subsidiary of such Person is a controlling general
partner or otherwise controls such entity.


 


“Subsidiary
Guarantor” shall mean a US Subsidiary Guarantor, a Canadian Subsidiary
Guarantor and a Foreign Subsidiary Guarantor, as applicable.


 


“Successor
Canadian Borrower” shall have the meaning provided in Section 10.5(b).


 


“Successor
US Borrower” shall have the meaning provided in Section 10.5(a).


 


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


 


36

















 


“Taxes”
shall mean any and all present or future taxes, duties, levies, imposts, assessments,
deductions, withholdings or other similar charges imposed by any Governmental Authority
whether computed on a separate, consolidated, unitary, combined or other basis
and any and all liabilities (including interest, fines, penalties or additions
to tax) with respect to the foregoing.


 


“Term Loans”
shall mean, collectively, the US Term Loans and the Canadian Term Loans.


 


“Term
Spread” shall mean, with respect to any Term Loan, initially 0.50% from the
date of issue thereof, being the Initial Loan Repayment Date, to the date
ending 3 months subsequent thereto and increasing by 0.50% on the first day of
each subsequent 3 month period.


 


“Test
Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrowers then last ended.


 


“Total
Assets” shall mean the total assets of Holdings, the Borrowers and the
Restricted Subsidiaries on a consolidated basis, as shown on the most recent
balance sheet of Holdings.


 


“Total
Credit Exposure” shall mean, at any date, the sum of (a) the
Commitment at such date and (b) the outstanding principal amount of all
Loans at such date.


 


“Transactions”
shall mean, collectively, the transactions contemplated by this Agreement and
the Senior Credit Facilities, including the Acquisition and the Equity
Contributions.


 


“Transaction
Expenses” shall mean any fees or expenses incurred or paid by the Borrowers
or any of their respective Subsidiaries in connection with the Transactions,
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby.


 


“Transferee”
shall have the meaning provided in Section 13.6(e).


 


“Type”
shall mean as to any Loan, its nature as a CR Loan or a LIBOR Loan.


 


“UK
Guarantee” shall mean the UK Senior Subordinated Guarantee, made by Bonlea
Limited, Premdor Crosby Limited, Premdor U.K. Holdings Limited and Masonite
Europe Limited in favor of the Guarantee Agent for the benefit of the Loan
Parties, substantially in the form of Exhibit B-6, and any guarantee
governed by English law entered into by a Subsidiary pursuant to Section 10.9,
as the same may be amended, supplemented or otherwise modified from time to
time.


 


“Unfunded
Current Liability” of any Plan shall mean the amount, if any, by which the
Accumulated Benefit Obligation (as defined under Statement of Financial
Accounting Standards No. 87 (“SFAS 87”)) under the Plan as of the close
of its most recent plan year, determined in accordance with SFAS 87, exceeds
the fair market value of the assets allocable thereto and in relation to a
Canadian Pension Plan or Foreign Plan shall mean the amount, if any, 


 


 


37

















 


by which (A)
the present value of the accrued benefits under the Canadian Pension Plan or
Foreign Plan as of the close of business of its most recent plan year,
determined in accordance with (I) the SFAS 87 as in effect on the date hereof,
or (II) if in the normal course of business, no such determination is made in
relation to the Canadian Pension Plan or Foreign Plan, the Canadian or
applicable foreign equivalent of SFAS 87 as in effect on the date hereof, in
either case such determination being based upon the actuarial assumptions that
would be used by the actuary for the Canadian Pension Plan or Foreign Plan in
the termination of that Canadian Pension Plan or Foreign Plan, exceeds (B) the
fair market value of the assets allocable thereto.


 


“Unrestricted Subsidiary” shall mean (i) any
Subsidiary of Holdings which at the time of determination is an Unrestricted Subsidiary
(as designated by the Board of Directors of Holdings, as provided below) and
(ii) any Subsidiary of an Unrestricted Subsidiary, provided that
no Credit Party shall be an Unrestricted Subsidiary. The Board of Directors of
the Borrowers may designate any Subsidiary of Holdings (including any existing
Subsidiary and any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries own
any Equity Interests or Indebtedness of, or own or hold any Lien on, any
property of, Holdings or any Subsidiary of Holdings (other than any Subsidiary
of the Subsidiary to be so designated), provided that
(a) any Unrestricted Subsidiary must be an entity of which shares of the
Capital Stock or other equity interests (including partnership interests)
entitled to cast at least a majority of the votes that may be cast by all
shares or equity interests having ordinary voting power for the election of
directors or other governing body are owned, directly or indirectly, by a
Borrower, (b) such designation complies with the covenants described in Section
10.12 and (c) each of (I) the Subsidiary to be so designated and (II) its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of Holdings or any Restricted Subsidiary. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to
such designation no Default or Event of Default shall have occurred and be
continuing and either (i) the Fixed Charge Coverage Ratio for Holdings and the
Restricted Subsidiaries on a consolidated basis would be at least 2.0:1.0 or
(ii) the Fixed Charge Coverage Ratio for Holdings and the Restricted
Subsidiaries on a consolidated basis would be greater than such ratio for
Holdings and the Restricted Subsidiaries on a consolidated basis immediately
prior to such designation, in each case on a pro forma basis taking into
account such designation. Any such designation by the Board of Directors shall be notified by
Holdings to the US Administrative Agent by promptly filing with the US
Administrative Agent a copy of the board resolution giving effect to such
designation and an Officers’ Certificate certifying that such designation
complied with the foregoing provisions.


 


“US
Administrative Agent” shall mean The Bank of Nova Scotia, as the
administrative agent for the US Lenders and other holders of US Loans and all
Obligations with respect thereof.


 


“US
Borrower” shall have the meaning provided in the preamble to this
Agreement.


 


38

















 


“US
Commitment” shall mean (a) in the case of each Lender that is a Lender on
the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “US Commitment” and (b) in the case of any Lender
that becomes a Lender after the date hereof, the amount specified as such
Lender’s “US Commitment” in the Assignment and Acceptance pursuant to which
such Lender assumed a portion of the Commitment, in each case as the same may
be changed from time to time pursuant to the terms hereof. The aggregate amount
of the US Commitments as of the Closing Date is $412,000,000.


 


“US
Guarantee” shall mean the US Senior Subordinated Guarantee, made by the US
Borrower (with respect to the Obligations of Credit Parties other than itself)
and each US Subsidiary Guarantor in favor of the Guarantee Agent for the
ratable benefit of the Loan Parties, substantially in the form of Exhibit
B-1, and any guarantee governed by United States law entered into by a
Subsidiary pursuant to Section 10.9, in each case, as the same may
be amended, supplemented or otherwise modified from time to time.


 


“US Loans”
shall mean at any time (i) prior to the Initial Loan Repayment Date, the
Initial US Loans, and (ii) on or after the Initial Loan Repayment Date,
the US Term Loans.


 


“US
Subsidiary” shall mean each Subsidiary of Holdings that is organized under
the laws of the United States, any state thereof, or the District of Columbia.


 


“US Term
Loan” shall have the meaning provided in Section 2.1(b).


 


“Voting Stock”
shall mean, with respect to any Person, shares of such Person’s Capital Stock
having the right to vote for the election of directors (or comparable governing
body) of such Person under ordinary circumstances.


 


“Weighted
Average Life to Maturity” shall mean, when applied to any Indebtedness or
Disqualified Stock, as the case may be, at any date, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the date of each successive principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (ii) the sum of all such
payments.


 


(b)           The words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to Sections of this Agreement unless
otherwise specified. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”.


 


SECTION 2. Amount
and Terms of Credit.


 


2.1.  Commitments.
(a)   Subject to and upon the terms and conditions herein set forth,
(x) each Lender having a US Commitment severally (and not jointly) agrees
to make a loan (each an “Initial US Loan”) to the US Borrower in
Dollars, which Initial US Loans shall not exceed for any such Lender the US
Commitment of such Lender and (y) each Lender having a Canadian Commitment
severally agrees to make a loan or loans (each an “Initial Canadian Loan”)
to the Canadian Borrower in Dollars, which Initial Canadian Loans shall not
exceed for 


 


39

















 


any such Lender the Canadian Commitment of such
Lender; and such Loans (i) shall be made on the Closing Date, (ii) shall
be incurred as CR Loans and automatically converted to LIBOR Loans three
Business Days after the Closing Date, (iii) may be repaid or prepaid in accordance
with the provisions hereof, but once repaid or prepaid, may not be reborrowed,
(iv) shall not exceed for any such Lender the Commitment of such Lender and
(v) shall not exceed in the aggregate the total of all Commitments.


 


(b)  Subject
to the terms and conditions hereof, the US Borrower and each Lender which had a
US Commitment severally (and not jointly) agrees, if the Initial US Loans have
not been repaid, and so long as no Designated Default has occurred and is
continuing, that the then outstanding principal amount of its Initial US Loan
shall be repaid in full by the issuance of a new debt obligation (individually
a “US Term Loan” and collectively the “US Term Loans”) by the US
Borrower to such Lender, on the Initial Loan Repayment Date, in a principal
amount equal to the then outstanding principal amount of the Initial US Loan
held by such Lender (for certainty, including any capitalized interest) and the
US Borrower and such Lender shall be released from their respective obligations
under such Initial US Loan. Subject to the terms and conditions hereof, the
Canadian Borrower and each Lender which had a Canadian Commitment severally
agrees, if the Initial Canadian Loans have not been repaid, and so long as no
Designated Default has occurred and is continuing, that the then outstanding
principal amount of its Initial Canadian Loan shall be repaid in full by the
issuance of a new debt obligation (individually a “Canadian Term Loan”
and collectively the “Canadian Term Loans”) by the Canadian Borrower to
such Lender, on the Initial Loan Repayment Date, in a principal amount equal to
the then outstanding principal amount of the Initial Canadian Loan held by such
Lender (for certainty, including any capitalized interest and the Canadian
Borrower) and such Lender shall be released from their respective obligations
under such Initial Canadian Loan. Upon the repayment of and release in respect
of the Initial Loans and the replacement thereof by Term Loans, each Lender
shall amend its records to reflect the repayment of the principal amount of the
Initial Loan held by such Lender corresponding to the principal amount of the
Initial Loan issued to such Lender and the advance of the corresponding Term
Loan. The Term Loans shall incorporate the terms of the Exchange Note Indenture
as set forth in the second sentence of Section 13.1. If a Default or an
Event of Default shall have occurred and be continuing on the Initial Loan
Repayment Date, any notices given or cure periods commenced while any Initial
Loan was outstanding shall be deemed given or commenced (as of the actual dates
thereof) for all purposes with respect to the Term Loans (with the same effect
as if the Term Loans had been outstanding as of the actual dates thereof),
notwithstanding that the Term Loans constitute separate indebtedness from the
Initial Loans.


 


2.2.  [Intentionally
Omitted].


 


2.3.  Notice
of Borrowing. (a)     Each Borrower shall give the US
Administrative Agent at the Administrative Agent’s Office prior written
notice (or telephonic notice promptly confirmed in writing) prior to 10:00 a.m.
(New York time) on the same Business Day of the Borrowing of Loans. Such notice
(a “Notice of Borrowing”) shall be irrevocable and shall specify
(i) the aggregate principal amount of the Loans to be made pursuant to the
Borrowing, (ii) the date of the Borrowing (which shall be the Closing
Date) and (iii) the Interest Period to be applicable upon the initial
conversion, which, shall be six months. The US Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly confirmed
in 


 


40

















 


writing) of the proposed Borrowing of Loans, of such
Lender’s proportionate share thereof and of the other matters covered by the
related Notice of Borrowing.


 


(b)  Without
in any way limiting the obligation of the US Borrower or the Canadian Borrower,
as the case may be, to confirm in writing any notice it may give hereunder by
telephone, the US Administrative Agent and the Canadian Administrative Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by the US Administrative Agent and the
Canadian Administrative Agent in good faith to be from an Authorized Officer of
the US Borrower or the Canadian Borrower, as the case may be. In each such
case, the US Borrower and the Canadian Borrower each hereby waives the right to
dispute the US Administrative Agent’s and the Canadian Administrative Agent’s
record of the terms of any such telephonic notice.


 


2.4.  Disbursement
of Funds. (a)     No later than 12:00 Noon (New York
time) on the date specified in the Notice of Borrowing, each Lender will make
available its pro rata portion of the
Borrowing requested to be made on such date in the manner provided below.


 


(b)  Each
Lender shall make available all amounts it is to fund to the US Borrower under
any Borrowing in immediately available Dollars to the US Administrative Agent
at the Administrative Agent’s Office and the US Administrative Agent will
(except in the case of Borrowings made upon the conversion of another Type of
Borrowing) make available to the US Borrower by depositing to the US Borrower’s
account (as designated by it in a written notice to the US Administrative Agent
from time to time) the aggregate of the amounts so made available in Dollars. Each
Lender shall make available all amounts it is to fund to the Canadian Borrower
under any Canadian Borrowing in immediately available Dollars to the Canadian
Administrative Agent at the Canadian Administrative Agent’s Office and the
Canadian Administrative Agent will make available to the Canadian Borrower, by
depositing to the Canadian Borrower’s account (as designated by it in a written
notice to the Canadian Administrative Agent from time to time) the aggregate of
the amounts so made available in Dollars. Unless the US Administrative Agent or
the Canadian Administrative Agent (in the case of Canadian Borrowings) shall
have been notified by any Lender prior to the date of any such Borrowing that
such Lender does not intend to make available to the US Administrative Agent or
the Canadian Administrative Agent (in the case of Canadian Borrowings) its
portion of the Borrowing or Borrowings to be made on such date, the US
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) may assume that such Lender has made such amount available
to the US Administrative Agent or the Canadian Administrative Agent (in the
case of Canadian Borrowings) on such date of Borrowing, and the US
Administrative Agent and the Canadian Administrative Agent (in the case of
Canadian Borrowings), in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the US
Borrower or the Canadian Borrower, as the case may be, a corresponding amount. If
such corresponding amount is not in fact made available to the US
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) by such Lender and the US Administrative Agent or the
Canadian Administrative Agent (in the case of Canadian Borrowings) has made
available same to the US Borrower or the Canadian Borrower, as the case may be,
the US Administrative Agent or the Canadian Administrative Agent (in the case
of Canadian Borrowings) shall be entitled to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding 


 


41

















 


amount forthwith upon the US Administrative Agent’s or
the Canadian Administrative Agent’s (in the case of Canadian Borrowings) demand
therefor the US Administrative Agent or the Canadian Administrative Agent (in
the case of Canadian Borrowings) shall promptly notify the US Borrower or the
Canadian Borrower, as the case may be, and the US Borrower or the Canadian
Borrower, as the case may be, shall immediately pay such corresponding amount
to the US Administrative Agent or the Canadian Administrative Agent (in the
case of Canadian Borrowings). The US Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) shall also be
entitled to recover from such Lender or the US Borrower or the Canadian
Borrower, 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
US Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) to the US Borrower or the Canadian Borrower, as the case
may be, to the date such corresponding amount is recovered by the US Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian
Borrowings), at a rate per annum equal to (i) if paid by such Lender, the
Federal Funds Effective Rate (or, in the case of an amount owing in respect of
a Canadian Borrowing, the rate reasonably determined by the Canadian
Administrative Agent to be the cost to it of funding such amount) or (ii) if
paid by the US Borrower or the Canadian Borrower, as the case may be, the
then-applicable rate of interest or fees, calculated in accordance with Section 2.8,
for the respective Loans comprising the applicable Borrowing.


 


(c)  Nothing
in this Section 2.4 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
the US Borrower or the Canadian Borrower, as the case may be, may have against
any Lender as a result of any default by such Lender hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to fulfill its commitments hereunder).


 


2.5.  Repayment
of Loans; Evidence of Debt. (a)     The Initial Loans,
to the extent unpaid, will be repaid in full by, and the Borrower shall be
released through, the making of the Term Loans on the Initial Loan Repayment
Date pursuant to Section 2.1(b). The Term Loans will mature on the
Maturity Date. Any Term Loan shall bear interest as described in Section 2.8
from the Initial Loan Repayment Date until such Loan shall be paid in full or
continued as an Exchange Note evidencing the same underlying indebtedness
pursuant to Section 9.14. Each Borrower shall repay to the US
Administrative Agent or the Canadian Administrative Agent, as the case may be,
for the ratable benefit of the Lenders of US Loans and the Lenders of Canadian
Loans, as applicable, on the Maturity Date, the then-unpaid Loans made to such
Borrower, in Dollars.


 


(b)  Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the US Borrower and the Canadian Borrower,
as the case may be, to the appropriate lending office of such Lender resulting
from each Loan made by such lending office of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
lending office of such Lender from time to time under this Agreement.


 


(c)  The
US Administrative Agent shall maintain the Register pursuant to Section 13.6(b),
and a subaccount for each Lender, in which Register and subaccounts (taken 


 


42

















 


together) shall be recorded (i) the amount and
currency of each Loan made hereunder, the Class and Type of each Loan made and,
if applicable, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
U.S. Borrower and the Canadian Borrower, as the case may be, to each Lender
hereunder and (iii) the amount of any sum received by the US Administrative
Agent and the Canadian Administrative Agent hereunder from the US Borrower and
the Canadian Borrower, as the case may be, and each Lender’s share thereof.


 


(d)  The
entries made in the Register and accounts and subaccounts maintained pursuant
to paragraphs (b) and (c) of this Section 2.5 shall,
to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the US Borrower and the Canadian
Borrower therein recorded; provided, however, that the failure of
any Lender or the US Administrative Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the US Borrower or the Canadian Borrower to
repay (with applicable interest) the Loans made to the US Borrower or the
Canadian Borrower by such Lender in accordance with the terms of this
Agreement.


 


(e)  Subject
to Section 9.14, each Lender will have the option at any time or from
time to time after the Initial Loan Repayment Date to receive the Exchange
Notes as evidence of all or a part of the principal amount of the Term Loans of
such Lender then outstanding. The principal amount of the Exchange Notes will
equal 100% of the aggregate principal amount (for certainty, including all
accrued and capitalized interest thereon) of the Term Loans which they evidence.
If a Default or an Event of Default shall have occurred and be continuing on
the date such Exchange Notes are issued to evidence the principal amount of the
Term Loans, any notices given or cure periods commenced while the Term Loan was
outstanding shall be deemed given or commenced (as of the actual dates thereof)
for all purposes with respect to the Exchange Note (with the same effect as if
the Exchange Note had been outstanding as of the actual dates thereof).


 


2.6.  Conversions
and Continuations. (a)     The Loans advanced hereunder
on the Closing Date shall be automatically converted from CR Loans to LIBOR
Loans 3 Business Days thereafter. Upon the occurrence and during the
continuance of a LIBOR Unavailability Event of the type described in clauses
(i) and (iii) of Section 2.10 (a), outstanding LIBOR Loans
shall be converted into CR Loans as provided in such Section 2.10 (a). Upon
the occurrence and during the continuance of a LIBOR Unavailability Event of
the type described in clause (ii) of Section 2.10(a), the US
Borrower or the Canadian Borrower, as the case may be, shall have the option of
converting any LIBOR Loan adversely affected as a result of such LIBOR
Unavailability Event into a CR Loan on the last day of the Interest Period
therefore. Each conversion or continuation permitted hereunder (other than an
automatic conversion pursuant to Section 2.10(a) shall be effected by
the US Borrower or the Canadian Borrower, as the case may be, by giving the
U.S. Administrative Agent or the Canadian Administrative Agent at the
applicable Administrative Agent’s Office prior to 12:00 Noon (New York time) at
least three Business Days’ (or one Business Day’s notice in the case of a
conversion into CR Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a “Notice of Conversion or Continuation”)
specifying the Loans to be so converted or continued, the Type of Loans to be
converted or continued into and, if such Loans are to be converted into or
continued as LIBOR Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent (or the 


 


43

















 


Canadian Administrative Agent, in the case of Canadian
Loans) shall give each Lender notice as promptly as practicable of any such
proposed conversion or continuation affecting any of its Loans.


 


(b)  If
any Default or Event of Default is in existence at the time of any proposed
continuation of any LIBOR Loans, as the case may be, and the Administrative
Agent has or the Required Lenders have determined in its or their sole
discretion not to permit such continuation, such LIBOR Loans shall be
automatically converted on the last day of the then-current Interest Period in
respect of LIBOR Loans, into CR Loans. If upon the expiration of any Interest
Period in respect of LIBOR Loans, the US Borrower or the Canadian Borrower, as
the case may be, has failed to elect a new Interest Period to be applicable
thereto as provided in paragraph (a) above, the US Borrower or the
Canadian Borrower, as the case may be, shall be deemed to have elected to
continue such LIBOR Loan as a LIBOR Loan with an Interest Period of one month
in duration, effective as of the expiration date of such then-current Interest
Period. Upon the cessation of any Default, Event of Default or LIBOR
Unavailability Event, as the case may be, the applicable Borrower shall have
three Business Days after written notice of such cessation from the
Administrative Agent to provide a Notice of Conversion or Continuation to the
applicable Administrative Agent converting any Loans then being maintained as
CR Loans (as a result of such Default, Event of Default or LIBOR Unavailability
Event) into LIBOR Loans. If such Borrower fails to timely deliver such Notice
of Conversion or Continuance, such CR Loans will automatically be converted
into LIBOR Loans having an Interest Period of one month’s duration.


 


(c)  For
the avoidance of doubt, the term “conversion” (and the corresponding form of
the verb “convert”) as used in this Agreement in respect of converting a CR
Loan to a LIBOR Loan or a LIBOR Loan to a CR Loan shall mean the change in
method by which the interest payable on a Loan is calculated and shall not be
interpreted to mean the repayment and extinguishment of such Loan followed by
the advance of a new Loan.


 


2.7.  Pro
Rata Borrowings. Each Borrowing of US Loans under this Agreement shall be
advanced by the Lenders pro rata on the
basis of their then-applicable US Commitments. Each Borrowing of Canadian Loans
under this Agreement shall be advanced by the Lenders pro rata on the basis of their then-applicable Canadian Commitments.
It is understood that no Lender shall be responsible for any default by any
other Lender in its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder regardless
of the failure of any other Lender to fulfill its commitments hereunder.


 


2.8.  Interest.
(a)      (i) The unpaid principal amount of each
CR Loan shall bear interest from the date of the Borrowing thereof to but
excluding the date of conversion or repayment thereof at a rate per  annum
that shall at all times be the Contract Rate, as in effect from time to time.


 


(b)  The
unpaid principal amount of each LIBOR Loan shall bear interest from the date of
the Borrowing thereof to but excluding the date of repayment thereof at a rate
per annum that shall at all times be the LIBO Rate in effect from time to time.


 


44

















 


(c)  Notwithstanding
the foregoing clauses, the interest rate borne by the Loans shall not (subject
to Section 2.8(d)) exceed 11.0% per annum. To the extent the per annum
interest on any Loan exceeds a rate of 11.0% per annum, each Borrower may elect,
by giving written notice to the relevant Administrative Agent and the relevant
Lenders on or before the relevant Interest Payment Date, to pay such excess
interest by adding the amount thereof to the then principal amount of the Loan,
in which event the interest so capitalized shall be treated as principal for
all purposes.


 


(d)  Any
amount (whether of principal, interest or Fees) not paid when due hereunder or
under any other Loan Document (whether at the stated maturity, by acceleration
or otherwise) shall bear interest, to the extent permitted by law (after as
well as before judgment), payable on demand, (i) in the case of principal, at
the rate that would otherwise be applicable thereto plus 2% per annum and (ii)
in all other cases, at a rate per annum equal to the rate that would be
applicable to a CR Loan plus 2% per annum, in each case from and including the
date of such non-payment to but excluding the date on which such amount is paid
in full.


 


(e)  Interest
on each Loan shall accrue from and including the date of any Borrowing to but
excluding the date of any repayment thereof and, subject to Section 3.3,
shall be payable (i) in respect of each CR Loan, quarterly in arrears on the
last Business Day of each fiscal quarter of the Borrowers, (ii) in respect of
each LIBOR Loan, on the last day of each Interest Period applicable thereto and
on each date occurring at three-month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, (A) on any prepayment
(on the amount prepaid), (B) on the date the Exchange Notes are issued to
evidence the principal amount of the Term Loans evidencing the same underlying
indebtedness (but only with respect to the principal amount of the Term Loan so
evidenced), (C) in respect of each LIBOR Loan, on conversion into a CR Loan,
(D) at maturity (whether by acceleration or otherwise) and (E)  after such maturity, on demand.


 


(f)  All
computations of interest hereunder shall be made in accordance with Section 5.5.


 


(g)  The
US Administrative Agent, upon determining the interest rate for any Borrowing
of LIBOR Loans, shall promptly notify the applicable Borrower and the relevant
Lenders thereof. Each such determination shall, absent clearly demonstrable
error, be final and conclusive and binding on all parties hereto.


 


2.9.  Interest
Periods.


 


(a)  The
initial Interest Period for any Borrowing of LIBOR Loans shall commence on the
date of such Borrowing (including the date of any conversion from a Borrowing
of CR Loans, as applicable) and shall end on the numerically corresponding day
in the calendar month that is six months thereafter, and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day on
which the next preceding Interest Period expires and shall end on the
numerically corresponding day in the calendar month that is six months
thereafter.


 


45

















 


(b)  If
any Interest Period relating to a Borrowing of LIBOR Loans begins on the last
Business Day of a calendar month or 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 the calendar
month at the end of such Interest Period.


 


(c)  If
any Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day; provided
that if any Interest Period in respect of a LIBOR Loan would otherwise expire
on a day that 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 immediately preceding Business Day.


 


(d)  Neither
Borrower shall be entitled to elect any Interest Period in respect of any LIBOR
Loan if such Interest Period would extend beyond the applicable Maturity Date
of such Loan.


 


(e)  The
Interest Period for any Exchange Note shall be as set forth in the Exchange
Note Indenture.


 


2.10.  Increased
Costs, Illegality, etc. (a)      In the event that
(x) in the case of clause (i) below, the US Administrative
Agent or (y) in the case of clauses (ii) and (iii)
below, any Lender shall have reasonably determined (which determination shall,
absent clearly demonstrable error, be final and conclusive and binding upon all
parties hereto):


 


(i)  on any date for determining the LIBOR for any
Interest Period that (x) deposits in the principal amounts of the Loans
comprising such LIBOR Borrowing are not generally available in the relevant
market or (y) by reason of any changes arising on or after the Closing Date
affecting the interbank LIBOR market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR; or


 


(ii)  at any time, that such Lender shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any LIBOR Loans (other than any such increase or reduction
attributable to Taxes) because of (x) any change since the date hereof in any
applicable law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline or order), such as, for
example, a change in official reserve requirements, and/or (y) other
circumstances affecting the interbank LIBOR market or the position of such
Lender in such market; or


 


(iii)  at any time, that the making or continuance
of any LIBOR Loan has become unlawful by compliance by such Lender in good
faith with any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the date hereof that materially and adversely affects the
interbank LIBOR market;


 


46

















 


then, and in
any such event, such Lender (or the US Administrative Agent, in the case of clause (i)
above) shall within a reasonable time thereafter give notice (if by telephone,
confirmed in writing) to the applicable Borrower and to the US Administrative
Agent of such determination (which notice the US Administrative Agent shall
promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, (A) LIBOR Loans shall no longer be
available until such time as the US Administrative Agent notifies such Borrower
and the Lenders that the circumstances giving rise to such notice by the US
Administrative Agent no longer exist (which notice the US Administrative Agent
agrees to give at such time when such circumstances no longer exist),
(B) any Notice of Borrowing or Notice of Conversion given by the US
Borrower or the Canadian Borrower with respect to LIBOR Loans that have not yet
been incurred shall be deemed rescinded by the US Borrower or the Canadian
Borrower and (C) any outstanding LIBOR Loans shall be converted, on the
last day of the then current Interest Period with respect thereto, to CR Loans,
(y) in the case of clause (ii) above, the US Borrower or the
Canadian Borrower, as the case may be, shall pay to such Lender, promptly after
receipt of written demand 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 receivable hereunder (it being agreed that 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 US Borrower or the Canadian
Borrower, as the case may be, by such Lender shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the US Borrower or the
Canadian Borrower, as the case may be, 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.


 


(b)  At
any time that any LIBOR Loan is affected by the circumstances described in Section 2.10(a)(ii)
or (iii), the US Borrower or the Canadian Borrower, as the case may be,
may (and in the case of a LIBOR Loan affected pursuant to Section 2.10(a)(iii)
shall) either (x) if the affected LIBOR Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the US Administrative Agent
telephonic notice (confirmed promptly in writing) thereof on the same date that
the US Borrower or the Canadian Borrower, as the case may be, was notified by a
Lender pursuant to Section 2.10(a)(ii) or (iii) or
(y) if the affected LIBOR Loan is then outstanding, upon at least three
Business Days’ notice to the US Administrative Agent, require the affected
Lender to convert each such LIBOR Loan into a CR Loan; provided that if
more than one Lender is affected at any time, then all affected Lenders must be
treated in the same manner pursuant to this Section 2.10(b).


 


(c)  [Intentionally
Omitted].


 


(d)  If,
after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, the
National Association of Insurance Commissioners, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by a Lender or its parent with any request or directive made or adopted after
the date hereof regarding capital adequacy (whether or not having the force of
law) of any such authority, association, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender’s or its
parent’s or its Affiliate’s 


 


47

















 


capital or assets as a consequence of such Lender’s
commitments or obligations hereunder to a level below that which such Lender or
its parent could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s or its parent’s policies
with respect to capital adequacy), then from time to time, promptly after
demand by such Lender (with a copy to the US Administrative Agent), the US
Borrower or the Canadian Borrower, as the case may be, shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
for such reduction, it being understood and agreed, however, that no Lender
shall be entitled to such compensation as a result of such Lender’s compliance
with, or pursuant to any request or directive to comply with, any such law,
rule or regulation as in effect on the date hereof. Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 2.10(d), will give prompt written notice thereof to
the applicable Borrower which notice shall set forth in reasonable detail the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not, subject to Section 2.13, release or
diminish any of the US Borrower’s or the Canadian Borrower’s, as the case may
be, obligations to pay additional amounts pursuant to this Section 2.10(d)
upon receipt of such notice.


 


(e)  It
is understood that this Section 2.10 shall not apply to Taxes.


 


2.11.  Compensation.
If (a) any payment of principal of any LIBOR Loan is made by the US
Borrower or the Canadian Borrower (or, with respect to Section 13.7,
is purchased by a replacement bank or institution), as the case may be, to or
for the account of a Lender other than on the last day of the Interest Period
for such LIBOR Loan as a result of a payment or conversion pursuant to Section 2.5,
2.6, 2.10, 5.1, 5.2 or 13.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or
for any other reason, (b) any Borrowing of LIBOR Loans is not made as a
result of a withdrawn Notice of Borrowing, (c) any CR Loan is not
converted into a LIBOR Loan as a result of a withdrawn Notice of Conversion or
Continuation, (d) any LIBOR Loan is not continued as a LIBOR Loan, as the
case may be, as a result of a withdrawn Notice of Conversion or Continuation or
(f) any prepayment of principal of any LIBOR Loan is not made as a result
of a withdrawn notice of prepayment pursuant to Section 5.1 or 5.2,
the US Borrower or the Canadian Borrower, as the case may be, shall, after
receipt of a written request by such Lender (which request shall set forth in
reasonable detail the basis for requesting such amount), pay to the US Administrative
Agent or the Canadian Administrative Agent, as applicable, for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that such Lender may reasonably incur as a result of
such payment, failure to convert, failure to continue or failure to prepay,
including any loss, cost or expense (excluding loss of anticipated profits)
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such LIBOR Loan.


 


2.12.  Change
of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii),
2.10(b) or 5.4 with respect to such Lender, it will, if requested
by the US Borrower or the Canadian Borrower, as the case may be, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Initial Loans 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 


 


48

















 


rise to the operation of any such Section. Nothing in
this Section 2.12 shall affect or postpone any of the obligations
of the US Borrower or the Canadian Borrower, as the case may be, or the right
of any Lender provided in Section 2.10 or 5.4.


 


2.13.  Notice
of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11
or 5.4 is given by any Lender more than 180 days after such Lender
has knowledge (or should have had knowledge) of the occurrence of the event giving
rise to the additional cost, reduction in amounts, loss, tax or other
additional amounts described in such Sections, such Lender shall not be
entitled to compensation under Section 2.10, 2.11 or 5.4,
as the case may be, for any such amounts incurred or accruing prior to the
181st day prior to the giving of such notice to the US Borrower or the Canadian
Borrower, as the case may be.


 


SECTION 3. Subordination.


 


3.1.  Agreement
to Subordinate. The Borrowers agree, and each Lender (which shall include
for purposes of this Section, each such Lender’s transferees, successors and
assigns) agrees, that the Obligations are subordinated in right of payment, to
the extent and in the manner provided in this Section 3, to the prior
payment of all Senior Indebtedness and that such subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Obligations shall in all respects rank pari passu with all other existing and
future Pari Passu Indebtedness and shall rank senior to all existing and future
Subordinated Indebtedness. Only Senior Indebtedness shall rank senior to the
Obligations in accordance with the provisions set forth herein.


 


3.2.  Liquidation,
Dissolution, Bankruptcy. Upon any payment or distribution of the assets of
any Borrower to its creditors upon a total or partial liquidation or
dissolution or reorganization of or similar proceeding relating to any Borrower
or its property:


 


(a)  holders
of Senior Indebtedness shall be entitled to receive payment in full in cash of
such Senior Indebtedness before any Lender shall be entitled to receive any
payment of principal of or interest on the Loans;


 


(b)  until
such Senior Indebtedness is paid in full in cash, any payment or distribution
to which any Lender would be entitled but for this Section 3 shall be
made to holders of such Senior Indebtedness as their interests may appear,
except that Lenders may receive Permitted Junior Securities; and


 


(c)  if
a distribution is made to the Lenders that, due to this Section 3,
should not have been made to them, the Lenders are required to hold such
distribution in trust for the holders of Senior Indebtedness and pay it over to
them as their interests may appear.


 


3.3.  Default
on Designated Senior Indebtedness of the Company. Neither Holdings, nor any
Borrower nor any Guarantor shall pay the principal of, premium, if any, or
interest on the Loans or make any deposit in respect thereof, and may not
purchase, redeem or otherwise retire any Loans (collectively, “pay the Loans”)
(except in the form of Permitted Junior Securities) if either of the following
(a “Payment Default”) occurs: (i) any Indebtedness constituting
Designated Senior Indebtedness is not paid in full in cash when due (after
giving 


 


49

















 


effect to any applicable grace period); or (ii) any
other default on Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms;
unless, in either case, the Payment Default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash. Regardless of the foregoing, the Borrowers are
permitted to pay the Loans if Holdings or the Borrowers, on the one hand, and
the US Administrative Agent, on the other hand, receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which the Payment Default has occurred. During the
continuance of any default (other than a Payment Default) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Borrowers shall not be permitted to pay the Loans (except in the form of
Permitted Junior Securities) for a period (a “Payment Blockage Period”)
commencing upon the receipt by the US Administrative Agent (with copies to the
Borrowers) of written notice (a “Blockage Notice”) of such default from
the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period, which Payment Blockage Period
shall end 179 days after receipt of such Blockage Notice. The Payment Blockage
Period will end earlier if such Payment Blockage Period is terminated: (x) by
written notice to the US Administrative Agent and the Borrowers from the
Representative which gave such Blockage Notice; (y) because the default giving
rise to such Blockage Notice is cured, waived or otherwise no longer
continuing; or (z) because such Designated Senior Indebtedness has been
discharged or repaid in full in cash.


 


Notwithstanding
the provisions described in the immediately preceding two sentences (but
subject to the provisions contained in the first sentence of this Section
3.3), unless the maturity of such Designated Senior Indebtedness shall have
been accelerated, the Borrowers and the Guarantors shall be entitled to resume
payments on the Loans after termination of such Payment Blockage Period. The
Loans shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Borrowers during such period; provided,
that if any Blockage Notice within such 360-day period is delivered to the US
Administrative Agent by or on behalf of any holders of Designated Senior
Indebtedness (other than Designated Senior Indebtedness created under the
Senior Credit Facilities), the Senior Administrative Agent shall be entitled to
give another Blockage Notice within such period; provided, however,
that in no event shall the total number of days during which any Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any consecutive 360-day period, and there must be at least 181 days during any
consecutive 360-day period during which no Payment Blockage Period is in effect.
For purposes of this Section 3.3, no Default which existed or was
continuing on the date of delivery of any Blockage Notice to the US Administrative
Agent shall be, or be made, the basis for a subsequent Blockage Period unless
such default has been waived for a period of not less than 90 days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants during the period after the date of delivery of a Blockage Notice,
that, in either case, would give rise to a Non-Payment Default pursuant to any
provisions under which a Non-Payment Default previously existed or was
continuing shall constitute a new Non-Payment Default for this purpose).


 


50

















 


3.4.  Acceleration
of Payment of the Loans. If payment of the Loans is accelerated because of
an Event of Default, the Borrowers or the US Administrative Agent shall
promptly notify the Representatives of all Designated Senior Indebtedness of
such acceleration.


 


3.5.  When
Distribution Must Be Paid Over. If a distribution or other payment is made
on or in respect of the Loans that because of this Section 3 should not
have been made, the Lenders who receive such distribution or other payment
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.


 


3.6.  Subrogation.
After all Senior Indebtedness is paid in full and until the Loans are paid in
full, the Lenders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Section 3 to holders of such Senior
Indebtedness which otherwise would have been made to the Lenders is not and
shall not be deemed to be as between the Borrowers and the Guarantors, on the
one hand, and the Lenders, on the other hand, a payment on such Senior
Indebtedness.


 


3.7.  Relative
Rights. This Section 3 defines the relative rights of the Lenders
and the holders of Senior Indebtedness. Nothing in this Agreement shall:


 


(a)  impair, as between the Borrowers and
the Lenders, the obligation of the Borrowers, which is absolute and
unconditional, to pay principal of and interest on the Loans and all other
Obligations in accordance with the terms hereof and the other Loan Documents;
or


 


(b)  prevent the Administrative Agents, any
Lender or any other holder of the Obligations from exercising its available remedies
upon a Default, subject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to the Lenders.


 


3.8.  Subordination
May Not Be Impaired by the Borrowers. No right of any holder of Senior
Indebtedness to enforce the subordination of the Indebtedness evidenced by the
Loans shall be impaired by any act or failure to act by any Borrower or by its
failure to comply with this Agreement.


 


3.9.  Rights
of Administrative Agents. Notwithstanding Section 3.3, the
Administrative Agents shall continue to make payments on the Loans and shall
not be charged with knowledge of the existence of facts that under this Section
3 would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, the US Administrative Agent
receives notice satisfactory to it that such payments are prohibited by this Section
3. Holdings, either Borrower, any Representative or any Person designated
by any Representative (as to which designation the US Administrative Agent has
received prior written notice) to act on its behalf shall be entitled to give
the notice.


 


Each
Administrative Agent in its individual or any other capacity shall be entitled
to hold Senior Indebtedness with the same rights it would have if it were not
an Administrative Agent. Each Administrative Agent shall be entitled to all the
rights set forth in this Section 3 with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent 


 


51

















 


as any other
holder of such Senior Indebtedness. Nothing in this Section 3 shall
apply to claims of, or payments to, either Administrative Agent under or
pursuant to Section 12.


 


3.10.  Distribution
or Notice to Representative. Whenever any Person is to make a distribution
or give a notice to holders of Senior Indebtedness, such Person shall be
entitled to make such distribution or give such notice to the Representative of
or in respect of such Senior Indebtedness, if any.


 


3.11.  Section
3 Not To Prevent Events of Default or Limit Right To Accelerate. The
failure to make a payment on or in respect of the Loans or any Obligations in
respect thereof under this Agreement by reason of any provision in this Section
3 shall not be construed as preventing the occurrence of a Default. Nothing
in this Section 3 shall have any effect on the right of the Lenders or
the Administrative Agents to accelerate the maturity of the Loans or other
Obligations.


 


3.12.  Administrative
Agents Entitled To Rely. Upon any payment or distribution pursuant to this Section
3, the Administrative Agents and the Lenders shall be entitled to rely (i)
upon any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 3.2 are pending, (ii)
upon a certificate of the liquidating trustee or agent or other Person making
such payment or distribution to the Administrative Agents or the Lenders or
(iii) upon any Representative for the holder of Senior Indebtedness, in each
case for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Borrowers, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 3. In the event that either Administrative
Agent determines, in good faith, that evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Section 3, such Administrative
Agent shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of such Administrative Agent as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Section 3, and, if
such evidence is not furnished, such Administrative Agent shall be entitled to
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Section 12
shall be applicable to all actions or omissions by such Administrative Agent
pursuant to this Section 3.


 


3.13.  US
Administrative Agent To Effectuate Subordination. Each Lender authorizes
and directs the US Administrative Agent on such Lender’s behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Lenders and the holders of Senior Indebtedness as
provided in this Section 3 and appoints the US Administrative Agent as
attorney-in-fact for any and all such purposes.


 


3.14.  Administrative
Agents Not Fiduciary for Holders of Senior Indebtedness. No Administrative
Agent shall be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to the Lenders or the Borrowers or any other Person,
money or assets to which any holders of Senior Indebtedness shall be entitled
by virtue of this Section 3 or otherwise.


 


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3.15.  Reliance
by Holders of Senior Indebtedness on Subordination Provisions. Each Lender
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness, whether such Senior Indebtedness was created or acquired
before or after the Closing Date, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.


 


SECTION 4. Fees;
Commitments.


 


4.1.  Fees.
The Borrowers agree to pay to each Administrative Agent the fees in the amounts
and on the dates previously agreed to in writing by such parties.


 


4.2.  Mandatory
Termination of Commitments. The US Commitments and the Canadian Commitments
shall terminate at 5:00 p.m. (New York time) on the Closing Date.


 


SECTION 5. Payments.


 


5.1.  Voluntary
Prepayments. (a)  The US Borrower shall have the right to prepay
Initial US Loans, and the Canadian Borrower shall have the right to repay
Initial Canadian Loans, in each case, without premium or penalty, in whole or
in part from time to time on the following terms and conditions: (i) the
applicable Borrower shall give the US Administrative Agent, the Canadian
Administrative Agent (at the applicable Administrative Agent’s Office) and the
Exchange Note Trustee written notice (or telephonic notice promptly confirmed
in writing) of its intent to make such prepayment, the amount of such prepayment
and (in the case of LIBOR Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be given by such Borrower no later than
10:00 a.m. (New York time) one Business Day prior to the date of such prepayment;
(ii) as promptly as practicable after receipt of such notice, the US
Administrative Agent and the Canadian Administrative Agent shall give notice to
each relevant Initial Lender, of (A) the pro
rata amount that would be payable to each such Initial Lender in respect of
its Initial Loan, and (B) the expected date of such payment; (iii) each
partial prepayment of any Borrowing of Initial Loans shall be in a multiple of
$100,000 and in an aggregate principal amount of at least $1,000,000; provided
that no partial prepayment of LIBOR Loans made pursuant to a single Borrowing
shall reduce the outstanding LIBOR Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Initial Loans; and (iv) any
prepayment of LIBOR Loans pursuant to this Section 5.1 on any day
other than the last day of an Interest Period applicable thereto shall be
subject to compliance by the US Borrower or the Canadian Borrower, as the case
may be, with the applicable provisions of Section 2.11. No prepayment
of Initial Loans of one Borrower may be made by such Borrower unless a
prepayment of a pro rata amount of the Initial Loans of the other Borrower is
also made. Each prepayment in respect of Initial US Loans pursuant to this Section 5.1
shall be applied pro  rata to all Initial US Loans. Each
prepayment in respect of Initial Canadian Loans pursuant to this Section 5.1
shall be applied pro  rata to all Initial Canadian Loans. At the
applicable Borrower’s election in connection with any prepayment pursuant to
this Section 5.1, such prepayment shall not be applied to any Loan
of a Defaulting Lender.


 


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(b)  Restriction
Regarding Term Loans. No Borrower shall offer to prepay its Term Loans
unless the other Borrower concurrently offers to pay a pro rata amount of its
Term Loans and unless each Borrower concurrently offers to prepay a pro rata
amount of its then outstanding Exchange Notes. No Borrower shall offer to
prepay its Exchange Notes unless the other Borrower concurrently offers to
prepay a pro rata amount of its Exchange Notes and unless each Borrower
concurrently offers to prepay a pro rata amount of its then outstanding Term
Loans.


 


5.2.  Mandatory
Prepayments. (a)     Prepayments. On each
occasion that a Prepayment Event occurs, the Borrowers shall, within one
Business Day after the occurrence of a Debt Incurrence Prepayment Event and
within five Business Days after the occurrence of any other Prepayment Event,
prepay, in accordance with paragraph (b) below, the principal
amount of Initial Loans in an amount equal to 100% of the Net Cash Proceeds
from such Prepayment Event.


 


(b)  [Intentionally
Omitted].


 


(c)  Application
to Initial Loans. With respect to each prepayment of Initial US Loans and
Initial Canadian Loans required by Section 5.2(a), the Borrowers
may designate the Types of Initial Loans that are to be prepaid and the
specific Borrowing(s) pursuant to which made. In the absence of a designation
by the Borrowers as described in the preceding sentence, the relevant
Administrative Agent shall, subject to the above, make such designation in its
reasonable discretion with a view, but no obligation, to minimize breakage
costs owing under Section 2.11.


 


(d)  LIBOR
Interest Periods. In lieu of making any payment pursuant to this Section 5.2
in respect of any LIBOR Loan other than on the last day of the Interest Period
therefor so long as no Default or Event of Default shall have occurred and be
continuing, the US Borrower or the Canadian Borrower, as the case may be, at
its option may deposit with the applicable Administrative Agent an amount equal
to the amount of the LIBOR Loan to be prepaid and such LIBOR Loan shall be
repaid on the last day of the Interest Period therefor in the required amount. Such
deposit shall be held by the applicable Administrative Agent in a corporate
time deposit account established on terms reasonably satisfactory to the
applicable Administrative Agent, earning interest at the then-customary rate
for accounts of such type. Such deposit shall constitute cash collateral for
the Obligations; provided that the US Borrower or the Canadian Borrower,
as the case may be, may at any time direct that such deposit be applied to make
the applicable payment required pursuant to this Section 5.2.


 


(e)  Minimum
Amount. No prepayment shall be required pursuant to Section 5.2(a)
unless and until the amount at any time of Net Cash Proceeds from Prepayment
Events required to be applied at or prior to such time pursuant to such
Section and not yet applied at or prior to such time to prepay Initial
Loans pursuant to such Section exceeds the Dollar Equivalent of
$15,000,000 in the aggregate for all such Prepayment Events.


 


(f)  Foreign
Asset Sales. Notwithstanding any other provisions of this Section 5.2,
(i) to the extent that any of or all the Net Cash Proceeds of any asset
sale by a Restricted Foreign Subsidiary giving rise to an Asset Sale Prepayment
Event (a “Foreign Asset 


 


54

















 


Sale”)
are prohibited or delayed by applicable local law from being repatriated to the
United States or Canada, as applicable, the portion of such Net Cash Proceeds
so affected will not be required to be applied to repay Initial Loans at the
times provided in this Section 5.2 but may be retained by the
applicable Restricted Foreign Subsidiary so long, but only so long, as the
applicable local law will not permit repatriation to the United States or
Canada, as applicable (the US Borrower and the Canadian Borrower hereby agreeing
to cause the applicable Restricted Foreign Subsidiary to promptly take all
actions required by the applicable local law to permit such repatriation), and
once such repatriation of any of such affected Net Cash Proceeds permitted
under the applicable local law, such repatriation will be immediately effected
and such repatriated Net Cash Proceeds will be promptly (and in any event not
later than two Business Days after such repatriation) applied (net of
additional taxes payable or reserved against as a result thereof) to the
repayment of the Initial Loans pursuant to this Section 5.2 and
(ii) to the extent that the US Borrower (or the Canadian Borrower, as
applicable) has determined in good faith that repatriation of any of or all the
Net Cash Proceeds of any Foreign Asset Sale would have a material adverse tax
cost consequence with respect to such Net Cash Proceeds, the Net Cash Proceeds
so affected may be retained by the applicable Restricted Foreign Subsidiary; provided
that, in the case of this clause (f)(ii), on or before the date on
which any Net Cash Proceeds so retained would otherwise have been required to
be applied to prepayments pursuant to Section 5.2(a), (x) the
US Borrower or the Canadian Borrower, as the case may be, applies an amount
equal to such Net Cash Proceeds to such prepayments as if such Net Cash
Proceeds had been received by the US Borrower or the Canadian Borrower, as the
case may be, rather than such Restricted Foreign Subsidiary, less the amount of
additional taxes that would have been payable or reserved against if such Net
Cash Proceeds had been repatriated (or, if less, the Net Cash Proceeds that
would be calculated if received by such Restricted Foreign Subsidiary) or
(y) such Net Cash Proceeds are applied to the repayment of Indebtedness of
a Restricted Foreign Subsidiary.


 


5.3.  Method
and Place of Payment. (a)      Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
by the US Borrower or the Canadian Borrower, as applicable, without set-off,
counterclaim or deduction of any kind, to the US Administrative Agent or the
Canadian Administrative Agent, as applicable, for the ratable account of the
Lenders entitled thereto, not later than 12:00 Noon (New York time) on the
date when due and shall be made in immediately available funds at the
Administrative Agent’s Office. All payments under each Loan Document (whether
of principal, interest or otherwise) shall be made in Dollars, except as
otherwise expressly provided herein. The US Administrative Agent or the
Canadian Administrative Agent, as applicable, will thereafter cause to be
distributed on the same day (if payment was actually received by the US Administrative
Agent or the Canadian Administrative Agent, as applicable, prior to 2:00 p.m.
(New York time) on such day) like funds relating to the payment of principal or
interest or Fees ratably to the Lenders entitled thereto.


 


(b)  Any
payments under this Agreement that are made later than 2:00 p.m. (New York
time) shall be deemed to have been made on the next succeeding Business Day. Except
as otherwise provided herein, whenever any payment to be made hereunder shall
be stated to be due on a day that 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 during such extension at the
applicable rate in effect immediately prior to such extension.


 


55














 


5.4.  Net
Payments. (a)    Subject to
the following sentence, all payments made by or on behalf of the US Borrower
and the Canadian Borrower under this Agreement or any other Loan Document shall
be made free and clear of, and without deduction or withholding for or on
account of, any current or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding (i) net income taxes and franchise taxes (imposed in lieu of net
income taxes) and capital taxes imposed on the US Administrative Agent, the
Canadian Administrative Agent or any Lender and (ii) any taxes imposed on
the US Administrative Agent, the Canadian Administrative Agent or any Lender as
a result of its carrying on business or otherwise having a current or former
connection between the US Administrative Agent, the Canadian Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the US
Administrative Agent, the Canadian Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”)
are required to be withheld from any amounts payable under this Agreement, the
US Borrower or the Canadian Borrower, as applicable, shall increase the amounts
payable to the US Administrative Agent, the Canadian Administrative Agent or
such Initial Lender to the extent necessary to yield to the US Administrative
Agent, the Canadian Administrative Agent or such Initial Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement; provided, however,
that the US Borrower shall not be required to increase any such amounts payable
to any Initial Lender that is not organized under the laws of the United States
of America or a state thereof (a “Non-US Lender”) if such Initial Lender
fails to comply with the requirements of Section 5.4(b). Whenever
any Non-Excluded Taxes are payable by the US Borrower or the Canadian Borrower,
as the case may be, as promptly as possible thereafter, such Borrower shall
send to the US Administrative Agent or the Canadian Administrative Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original receipt (or other evidence acceptable to such
Lender, acting reasonably) received by such Borrower showing payment thereof. If
the US Borrower or the Canadian Borrower, as the case may be, fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the US Administrative Agent or the Canadian Administrative Agent the
required receipts or other required documentary evidence, such Borrower shall
indemnify the US Administrative Agent, the Canadian Administrative Agent and
the Lenders for any incremental taxes, interest, costs or penalties that may
become payable by the US Administrative Agent, the Canadian Administrative
Agent or any Lender as a result of any such failure. The agreements in this Section 5.4(a)
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.


 


(b)  Each
Non-US Lender shall:


 


(i)  deliver to the US Borrower and the US
Administrative Agent on or before the date it becomes a party to this Agreement
two copies of either (x) in the case of a Non-US Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of “portfolio interest”, United States Internal
Revenue Service Form W-8BEN (together with a 


 


56

















 


certificate representing
that such Non-US Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the US Borrower and is not a
controlled foreign corporation related to the US Borrower (within the meaning
of Section 864(d)(4) of the Code)), or (y) Internal Revenue Service Form
W-8BEN or Form W-8ECI, in each case properly completed and duly executed by
such Non-US Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the US Borrower under this Agreement;


 


(ii)  deliver to the US Borrower and the US
Administrative Agent two further copies of any such form or certification (or
any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the US
Borrower; and


 


(iii)  obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by the US
Borrower or the US Administrative Agent;


 


unless in any
such case any change in treaty, law or regulation has occurred prior to the
date on which any such delivery would otherwise be required that renders any
such form inapplicable or would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the US
Borrower and the US Administrative Agent. Each Person that shall become a
Participant pursuant to Section 13.6 or a Lender pursuant to Section 13.6
shall, upon the effectiveness of the related transfer, be required to provide
all the forms and statements required pursuant to this Section 5.4(b);
provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to such Lender from which the
related participation shall have been purchased.


 


(c)  Notwithstanding
anything to the contrary provided under this agreement, neither the US
Borrower, nor any Guarantor (as to any payment made by it in respect of the
obligations of the US Borrower pursuant to Section 5.4(a)) shall be
required to indemnify any Initial Lender or Agent pursuant to Section 5.4(a),
or to pay any additional amounts to any Initial Lender or Agent pursuant to Section
5.4(a), in respect of any withholding tax to the extent that (i) the
obligation to withhold amounts with respect to such withholding tax existed or
would have applied to payments made by the US Borrower to such Initial Lender
on the date such Lender or Agent became a party to this Agreement (or, in the
case of a Participant, on the date such Participant became a Participant
hereunder); provided, however, that this clause (c)(i)
shall not apply to the extent that (x) the indemnity payments or
additional amounts any Initial Lender (or Participant) would be entitled to
receive (without regard to this clause (c)(i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Initial Lender (or Participant) would have
been entitled to receive in the absence of such assignment, participation or
transfer, (y) such assignment, participation or transfer had been
requested by the US Borrower or the Canadian Borrower or (z) such assignment,
participation or transfer had occurred following the occurrence of and during
the continuation of an Event of Default pursuant to Section 11.1 or 11.5,
(ii) the obligation to pay such additional amounts would not have arisen
but for a failure by such Initial Lender or 


 


57

















 


Participant to comply with the provisions of Section
5.4(b) above, (iii) any of the representations or certifications made
by a Initial Lender or Participant pursuant to Section 5.4(b) above are
incorrect at the time a payment hereunder is made, other than by reason of any
change in treaty, law or regulation having effect after the date such
representations or certifications were made or (iv) such Initial Lender is
treated as a conduit entity participating in a conduit financing arrangement
within the meaning of Treasury regulations section 1.881-3 or any successor
provision with respect to the Initial Loans. The Canadian Borrower shall not be
required to indemnify or pay additional amounts to a Lender or Agent in respect
of Canadian taxes pursuant to Section 5.4(a) above to the extent that
such Non-Excluded Taxes result from a failure by the Initial Lender or Agent to
comply with any certification, identification, information, documentation or
other reporting requirement (collectively referred to in this Section 5.4(c)
as a “Reporting Requirement”) if (i) compliance is required by law, regulation,
administrative practice or any applicable tax treaty as a precondition to
exemption from or a reduction in the rate of deduction or withholding of
Non-Excluded Taxes, and (ii) the Canadian Borrower has first made written
request to such Initial Lender or Agent, as applicable, that such Initial
Lender or Agent comply with the particular Reporting Requirement (identified
specifically in such request) and such Initial Lender or Agent, as applicable,
has not complied with such Reporting Requirement within 30 Business Days of
such written request; provided, however, that the Canadian
Borrower shall not be relieved of its obligation to indemnify or pay additional
amounts to an Initial Lender or Agent (x) in respect of certain payments
where the obligation to indemnify or pay additional amounts in respect of those
payments arose prior to Canadian Borrower’s written request to such Initial
Lender or Agent, as applicable, respecting such Reporting Requirement,
(y) if, by reason of any change in any law, regulation, administrative
practice or applicable tax treaty occurring after the date hereof, the Initial
Lender or Agent, as applicable, is unable to duly comply with such Reporting
Requirement, or (z) to the extent that the additional payment or indemnity
compensates such Initial Lender or Agent for an amount to which such Initial
Lender or Agent would have been entitled to receive under Section 5.4(a)
had such Initial Lender or Agent, as applicable, complied with the Reporting
Requirement.


 


(d)  If
the US Borrower or the Canadian Borrower determines in good faith that a
reasonable basis exists for contesting any Taxes for which indemnification has
been demanded hereunder, the relevant Initial Lender, the Canadian
Administrative Agent or the US Administrative Agent, as applicable, shall
cooperate with such Borrower in challenging such taxes at such Borrower’s
expense if so requested by such Borrower. If any Initial Lender, the Canadian
Administrative Agent or the US Administrative Agent, as applicable, receives a
refund of a tax for which a payment has been made by the US Borrower or the
Canadian Borrower pursuant to this Agreement, which refund in the good faith
judgment of such Initial Lender, the Canadian Administrative Agent or US
Administrative Agent, as the case may be, is attributable to such payment made
by such Borrower, then the Initial Lender, the Canadian Administrative Agent or
the US Administrative Agent, as the case may be, shall reimburse such Borrower
for such amount (together with any interest received thereon) as the Initial
Lender, the Canadian Administrative Agent or US Administrative Agent, as the
case may be, determines to be the proportion of the refund as will leave it,
after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. An Initial Lender, the Canadian
Administrative Agent or US Administrative Agent shall claim any refund that it
determines is available to it, unless it concludes in its reasonable discretion
that it would be adversely affected by making such a claim. Neither the Initial
Lenders, the Canadian Administrative Agent nor the 


 


58

















 


US Administrative Agent shall be obliged to disclose
any information regarding their respective tax affairs or computations to the
US Borrower or the Canadian Borrower in connection with this Section 5.4(d)
or any other provision of this Section 5.4.


 


5.5.  Computations
of Interest and Fees. (a)      Interest on LIBOR Loans
and, except as provided in the last sentence of this paragraph, CR Loans shall
be calculated on the basis of a 360-day year for the actual days elapsed. For
purposes of the Interest Act (Canada), the annual rate of interest to which the
interest rate payable under the preceding sentence is equivalent is equal to
such interest rate, multiplied by the number of days in the calendar year in
which such interest rate is to be determined and divided by 360. Interest on
(i) CR Loans in respect of which the rate of interest is calculated on the
basis of the Prime Rate, and (ii) interest on overdue interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the actual
number of days elapsed.


 


(b)  All
Fees shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed.


 


5.6.  Limit
on Rate of Interest.


 


(a)  No
Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this
Agreement, neither the US Borrower nor the Canadian Borrower shall be obliged
to pay any interest or other amounts under or in connection with this Agreement
in excess of the amount or rate permitted under or consistent with any
applicable law, rule or regulation. In particular, the Canadian Borrower shall
not be obliged to pay any interest or other amounts which would result in the
receipt by any Lender of interest on credit advanced at a rate in excess of the
rate permitted under the Criminal Code (Canada). For purposes of this Section 5.6,
“interest” and “credit advanced” have the meanings ascribed in the Criminal
Code (Canada) and the “effective annual rate of interest” shall be calculated
in accordance with generally accepted actuarial practices and principles.


 


(b)  Payment
at Highest Lawful Rate. If either the US Borrower or the Canadian Borrower
is not obliged to make a payment which it would otherwise be required to make
as a result of Section 5.6(a), the US Borrower or the Canadian
Borrower, as applicable, shall make such payment to the maximum extent
permitted by or consistent with applicable laws, rules and regulations.


 


(c)  Adjustment
if any Payment exceeds Lawful Rate. If any provision of this Agreement or
any of the other Loan Documents would obligate the US Borrower or the Canadian
Borrower to make any payment of interest or other amount payable to any Lender
in an amount or calculated at a rate which would be prohibited by any applicable
law, rule or regulation, or would result in a receipt by that Lender of
interest at a criminal rate (as such terms are construed under the Criminal
Code (Canada)), then notwithstanding such provision, such amount or rate shall
be deemed to have been adjusted with retroactive effect to the maximum amount
or rate of interest, as the case may be, as would not be so prohibited by law
(in the case of the US Borrower or the Canadian Borrower) or so result in a
receipt by that Lender of interest at a criminal rate, such adjustment to be
effected, to the extent necessary, as follows:


 


59

















 


(i)  firstly, by reducing the amount or rate of
interest required to be paid by the US Borrower or the Canadian Borrower to the
affected Lender under Section 2.8; and


 


(ii)  thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid by the US Borrower
or the Canadian Borrower to the affected Lender where such amounts would
constitute interest for purposes of Section 347 of the Criminal Code
(Canada).


 


Notwithstanding
the foregoing, and after giving effect to all adjustments contemplated thereby,
if any Lender shall have received from the US Borrower or the Canadian Borrower
an amount in excess of the maximum permitted by any applicable law, rule or
regulation, or an amount in excess of the maximum permitted under the Criminal Code (Canada), then the US
Borrower or the Canadian Borrower, as applicable, shall be entitled, by notice
in writing to the US Administrative Agent or the Canadian Administrative Agent,
as applicable, to obtain reimbursement from such Lender in an amount equal to
such excess, and pending such reimbursement, such amount shall be deemed to be
an amount payable by that Lender to the US Borrower or the Canadian Borrower,
as applicable. Any amount or rate of interest referred to in this Section 5.6(c)
shall be determined in accordance with generally accepted actuarial practices
and principles as an effective annual rate of interest over the term that any
Loan remains outstanding on the assumption, with respect to Canadian
Borrowings, that any charges, fees or expenses that fall within the meaning of “interest”
(as defined in the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be pro rated over that period of time and otherwise be pro rated
over the period from the Closing Date to the Maturity Date.


 


SECTION 6. Conditions
Precedent to Initial Credit Event.


 


The initial
Credit Event under this Agreement is subject to the satisfaction of the
following conditions precedent:


 


6.1.  Loan
Documents. The US Administrative Agent, Canadian Administrative Agent or
the Guarantee Agent (as applicable) shall have received:


 


(a)  this
Agreement, executed and delivered by a duly authorized officer of Holdings, the
US Borrower, the Canadian Borrower, each Lender, the Canadian Administrative
Agent and the US Administrative Agent;


 


(b)  the
US Guarantee, executed and delivered by a duly authorized officer of the US
Borrower and each applicable Guarantor;


 


(c)  the
Canadian Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;


 


(d)  the
Chilean Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;


 


(e)  the
Irish Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;


 


60

















 


(f)  the
UK Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;


 


(g)  the
Mexican Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;


 


6.2.  Legal
Opinions. The Administrative Agents shall have received the executed legal
opinions of (a) Simpson Thacher & Bartlett LLP, special New York
counsel to each Borrower and each other Credit Party, in form and substance
reasonably satisfactory to the US Administrative Agent, (b) Osler, Hoskin
& Harcourt LLP, special Canadian counsel for Holdings, the Canadian
Borrower and each other Canadian Subsidiary Guarantor, in form and substance
reasonably satisfactory to the Canadian Administrative Agent, and
(c) local and foreign counsel to the Credit Parties in certain
jurisdictions as may be reasonably requested by the Canadian Administrative
Agent and mutually agreed upon with the Canadian Borrower in form and substance
satisfactory to the Canadian Administrative Agent. The US Borrower, the
Canadian Borrower and the other Credit Parties hereby instruct such counsel to
deliver such legal opinions.


 


6.3.  Representations
and Warranties; No Default. The US Administrative Agent shall have received
a certificate of an Authorized Officer of each Borrower, dated the Closing
Date, certifying that (a) on the Closing Date, the representations and warranties
made by such Borrowers in Section 8, as they relate to the Credit
Parties at such time, are true and correct in all material respects (after
giving effect to the Acquisition) and (b) after giving effect to the Credit
Event on the Closing Date and the other transactions contemplated hereby, no
Default or Event of Default shall have occurred and be continuing.


 


6.4.  Equity
Contributions. The Rollover Equity Contribution and the KKR Equity
Contribution shall have been made on terms and pursuant to documentation reasonably
acceptable to the US Administrative Agent.


 


6.5.  Closing
Certificates. The US Administrative Agent shall have received a certificate
of each Credit Party, dated the Closing Date, in the case of each Borrower
substantially in the form of Exhibit C-1, and in the case of each other
Credit Party, substantially in the form of Exhibit C-2, in each case
with appropriate insertions, executed by a duly authorized officer or
representative of such Credit Party and the Secretary or any Assistant Secretary
of such Credit Party, and attaching the documents referred to in Sections
6.6 and 6.7.


 


6.6.  Corporate
Proceedings of Each Credit Party. The US Administrative Agent shall have
received a copy of the resolutions, in form and substance satisfactory to the
US Administrative Agent, of the Board of Directors (or comparable governing
body) of each Credit Party (or a duly authorized committee thereof) authorizing
(a) the execution, delivery and performance of the Loan Documents (and any
agreements relating thereto) to which it is a party and (b) in the case of the
US Borrower and the Canadian Borrower, the extensions of credit contemplated
hereunder.


 


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6.7.  Corporate
Loan Documents. The US Administrative Agent shall have received true
and complete copies of the certificate of incorporation and by-laws (or
equivalent organizational documents) of each Credit Party.


 


6.8.  Fees.
The Agents and the Lenders shall have received the fees in the amounts previously
agreed in writing by the Borrowers and (as applicable) the Agents and such
Lenders to be received on the Closing Date and all expenses (including the
reasonable fees, disbursements and other charges of counsel) for which invoices
have been presented on or prior to the Closing Date shall have been paid.


 


6.9.  Acquisition
Agreement. The US Administrative Agent shall have received a fully executed
or conformed copy of the Acquisition Agreement, which shall be in full force
and effect and in form and substance reasonably satisfactory to the US
Administrative Agent.


 


6.10.  Solvency
Certificate. On the Closing Date, the US Administrative Agent shall have
received a certificate from the chief financial officer of Holdings in form,
scope and substance satisfactory to US Administrative Agent, with appropriate
attachments and demonstrating that after giving effect to the consummation of
the Transactions, Holdings on a consolidated basis with its Subsidiaries is
Solvent.


 


6.11.  Governmental
Authorizations and Consents. Each Credit Party shall have obtained all
approval and authorizations of Governmental Authorities and all consents of
other Persons, in each case that are necessary in connection with the
Transactions and the transactions contemplated by the Loan Documents and each
of the foregoing shall be in full force and effect. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Acquisition and the Loan
Documents and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.


 


6.12.  Historical
Financial Statements. The Lenders shall have received the Historical
Audited Financial Statements and the Historical Unaudited Financial Statements.


 


6.13.  Pro
Forma Financial Statements. The US Administrative Agent shall have received
the Pro Forma Financial Statements, together with a certificate of the chief
financial officer of Holdings to the effect that such statements accurately
present the pro forma financial position of Holdings and its Subsidiaries in
accordance with GAAP as of the date of the pro forma balance sheet forming part
of the Pro Forma Financial Statements and for the period covered by the related
pro forma income statement, assuming that the Transactions had actually
occurred at such date or at the beginning of such period, as the case may be.


 


6.14.  Acquisition.
Concurrently with the initial Credit Event made hereunder, the Acquisition
shall have been consummated on terms and conditions reasonably satisfactory to
the Agents.


 


6.15.  Representations
and Warranties. At the time of each Credit Event and also after giving
effect thereto all representations and warranties made by any Credit Party
contained 


 


62

















 


herein or 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 and as of the date of such
Credit Event (except where such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such earlier date).


 


6.16.  Notice
of Borrowing. Prior to the making of each Loan, the US Administrative Agent
(or, in the case of any Canadian Borrowing, the Canadian Administrative Agent)
shall have received a Notice of Borrowing (whether in writing or by telephone)
meeting the requirements of Section 2.3.


 


The acceptance
of the benefits of each Credit Event shall constitute a representation and warranty
by each Credit Party to the US Administrative Agent or the Canadian
Administrative Agent, as applicable, and each of the Lenders that all the
applicable conditions specified above shall have been satisfied as of that
time.


 


SECTION 7. [Intentionally
Omitted].


 


SECTION 8. Representations,
Warranties and Agreements.


 


In order to
induce the Lenders to enter into this Agreement, to make the Loans as provided
for herein, each of Holdings, the US Borrower (in respect of itself and on its
own behalf and to the extent such representations and warranties are applicable
to it) and the Canadian Borrower (in respect of itself and on its own behalf
and to the extent such representations and warranties are applicable to it)
makes the following representations and warranties to, and agreements with, the
Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans until one year after repayment of all of
the outstanding Loans and Exchange Notes:


 


8.1.  Corporate
Status. Each of Holdings, the US Borrower, the Canadian Borrower and each
Material Subsidiary (a) is a duly organized and validly existing corporation or
other entity in good standing under the laws of the jurisdiction of its organization
and has the corporate or other organizational power and authority to own its
property and assets and to transact the business in which it is engaged and (b)
has duly qualified and is authorized to do business and is in good standing in
all jurisdictions where it is required to be so qualified, except where the
failure to be so qualified could not reasonably be expected to result in a
Material Adverse Effect.


 


8.2.  Corporate
Power and Authority. Each Credit Party has the corporate or other
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Loan Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party (and, in
the case of the Borrowers, to borrow hereunder). Each Credit Party has duly
executed and delivered each Loan Document to which it is a party and each such
Loan Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except as the
enforceability thereof may be limited by 


 


63

















 


bankruptcy, insolvency or similar laws affecting creditors’
rights generally and subject to general principles of equity.


 


8.3.  Authorization;
No Violation. Neither the execution, delivery or performance by any Credit
Party of the Loan Documents to which it is a party nor compliance with the
terms and provisions thereof nor the consummation of the Transactions and the
other transactions contemplated hereby or thereby will (a) contravene any
applicable provision of any material law, statute, rule, regulation, order,
writ, injunction or decree of any court or governmental instrumentality,
(b) result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of Holdings or any of the Restricted Subsidiaries pursuant
to, the terms of any material indenture, loan agreement, lease agreement,
mortgage, deed of trust, agreement or other material instrument to which Holdings,
the Borrowers or any of the Restricted Subsidiaries is a party or by which it
or any of its property or assets is bound or (c) violate any provision of the
certificate of incorporation, by-laws or other constitutional documents of
Holdings, the Borrowers or any of the Restricted Subsidiaries.


 


8.4.  Litigation.
There are no actions, suits or proceedings (including Environmental Claims)
pending or, to the knowledge of Holdings, the US Borrower or the Canadian
Borrower, threatened with respect to Holdings, the Borrowers or any of their
respective Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect or a Material Adverse Change.


 


8.5.  Margin
Regulations. Neither the making of any Loan hereunder nor the use of the
proceeds thereof will violate the provisions of Regulation T, U or X of the
Board.


 


8.6.  Governmental
Approvals. The execution, delivery and performance of the Acquisition
Agreement or any Loan Document does not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except for (i) such as have been obtained or made and are in
full force and effect and (ii) such licenses, approvals, authorizations or
consents the failure to obtain or make could not reasonably be expected to have
a Material Adverse Effect.


 


8.7.  Investment
Company Act. None of Holdings, the US Borrower or the Canadian Borrower is
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.


 


8.8.  True
and Complete Disclosure. (a)      None of the factual
information and data (taken as a whole) heretofore or contemporaneously
furnished by Holdings, the US Borrower, the Canadian Borrower, any of their
respective Subsidiaries or any of their respective authorized representatives
in writing to the US Administrative Agent and/or any Lender on or before the
Closing Date (including (i) the Confidential Information Memorandum and
(ii) all information contained in the Loan Documents) for purposes of or
in connection with this Agreement or any transaction contemplated herein
contained any untrue statement or omitted to state any material fact necessary
to make such information and data (taken as a whole) not misleading at such
time in light of the circumstances under which such information or data was 


 


64

















 


furnished, it being understood and agreed that for
purposes of this Section 8.8(a), such factual information and data
shall not include projections and pro forma financial information.


 


(b)  The
projections and pro forma financial information contained in the information
and data referred to in Section 8.8(a) above were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.


 


8.9.  Financial
Statements; Financial Condition. The (a) unaudited historical
consolidated financial information of the Predecessor Company and its
Subsidiaries as set forth in the Confidential Information Memorandum, and
(b) the Historical Audited Financial Statements, in each case present or
will, when provided, present fairly in all material respects the consolidated
financial position of Holdings or the Predecessor Company, as the case may be,
at the respective dates of said information or statements and results of operations
of the applicable Person for the respective periods covered thereby. The
financial statements referred to in clause (b) of the preceding
sentence have been prepared in accordance with GAAP consistently applied except
to the extent provided in the notes to said financial statements. As of the
Closing Date, there has been no Closing Date Material Adverse Change since
December 31, 2004. After the Closing Date, there has been no Material
Adverse Change since December 31, 2004.


 


8.10.  Tax
Returns and Payments. Each of Holdings, the Borrowers and each of their
respective Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material Taxes payable by it that have become due, other than those
(a) not yet delinquent or (b) being contested in good faith as to
which adequate reserves have been provided in accordance with GAAP and which
could not reasonably be expected to result in a Material Adverse Effect.


 


8.11.  Compliance
with ERISA. (a)      Each Plan is in compliance with
ERISA, the Code and any applicable Requirement of Law; no Reportable Event has
occurred (or is reasonably likely to occur) with respect to any Plan; no Plan
is insolvent or in reorganization (or is reasonably likely to be insolvent or
in reorganization), and no written notice of any such insolvency or
reorganization has been given to Holdings, any Subsidiary or any ERISA
Affiliate; no Plan (other than a multiemployer plan) has an accumulated or
waived funding deficiency (or is reasonably likely to have such a deficiency);
none of Holdings, any Subsidiary or any ERISA Affiliate has incurred (or is
reasonably likely to incur) any liability to or on account of a Plan pursuant
to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA or Section 4971 or 4975 of the Code or has been notified in writing
that it will incur any liability under any of the foregoing Sections with
respect to any Plan; no proceedings have been instituted (or are reasonably
likely to be instituted) to terminate or to reorganize any Plan or to appoint a
trustee to administer any Plan, and no written notice of any such proceedings
has been given to Holdings, any Subsidiary or any ERISA Affiliate; and no lien
imposed under the Code or ERISA on the assets of Holdings or any Subsidiary or
any ERISA Affiliate exists (or is reasonably likely to exist) nor has Holdings,
any Subsidiary or any ERISA Affiliate been notified in writing that such a lien
will be imposed on the assets of Holdings, any Subsidiary or any ERISA
Affiliate on account of any Plan, except to the extent that a breach of any of
the 


 


65

















 


representations, warranties or agreements in this Section 8.11
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect or relates to
any matter disclosed in the financial statements of the Predecessor Company and
its Subsidiaries contained in the Confidential Information Memorandum. No Plan
(other than a multiemployer plan) has an Unfunded Current Liability that would,
individually or when taken together with any other liabilities referenced in
this Section 8.11, be reasonably likely to have a Material Adverse
Effect. With respect to Plans that are multiemployer plans (as defined in
Section 3(37) of ERISA), the representations and warranties in this Section 8.11(a),
other than any made with respect to (i) liability under Section 4201 or
4204 of ERISA or (ii) liability for termination or reorganization of such Plans
under ERISA, are made to the best knowledge of Holdings.


 


(b)  The
Canadian Pension Plans are duly registered under all applicable pension
benefits legislation; all material obligations of each Credit Party and its
Subsidiaries (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with the Canadian Pension
Plans, the Canadian Benefit Plans and the funding agreements therefor have been
performed in accordance with the terms of such plans, applicable laws and
regulations; there are no outstanding disputes concerning the assets held
pursuant to any such funding agreement; all contributions or premiums required
to be made by any Credit Party and any of its Subsidiaries to the Canadian
Pension Plans and the Canadian Benefit Plans have been made within the time
limits required by, and in accordance with, the terms of such plans and
applicable laws and regulations; all employee contributions to the Canadian
Pension Plans and the Canadian Benefit Plans required to be made by way of
authorized payroll deduction have been properly withheld and fully paid into
such plans within the time limits required by, and in accordance with, the
terms of such plans and applicable laws and regulations; all reports and
disclosures relating to the Canadian Pension Plans and Canadian Benefit Plans
required by any applicable laws or regulations have been filed or distributed
in accordance with applicable laws and regulations; no Credit Party has made
any improper withdrawals, applications or transfers of, the assets of any of
the Canadian Pension Plans or of the Canadian Benefit Plans, to the extent
applicable; other than as disclosed in Schedule 8.11(b), there have been
no partial terminations of any Canadian Pension Plan with a defined benefit
provision; other than as disclosed in Schedule 8.11(b), none of the
Canadian Pension Plans with a defined benefit provision is the result of, or
has been subject to, the merger or consolidation of two or more registered
pension plans or the funding media thereof; no amount is owing by any of the
Canadian Pension Plans under the Tax Act; no Credit Party has any knowledge,
nor any grounds for believing, that any of the Canadian Pension Plans or the
Canadian Benefit Plans is or could reasonably be expected to become the subject
of an investigation, any other proceeding, an action or a claim other than a
routine claim for benefits; except to the extent that a breach of any of the
foregoing representations, warranties or agreements in this Section 8.11(b)
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect, or relates
to any matter disclosed in the financial statements of the Borrowers contained
in the Confidential Information Memorandum. No Canadian Pension Plan has an
Unfunded Current Liability that would, individually or when taken together with
any other liabilities referenced in this Section 8.11(b), be
reasonably likely to have a Material Adverse Effect.


 


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8.12.  Subsidiaries.
Schedule 8.12 lists each Subsidiary of the US Borrower and the Canadian
Borrower (and the direct and indirect ownership interest of the US Borrower and
the Canadian Borrower, as applicable, therein), in each case existing on the
Closing Date. To the knowledge of each of the US Borrower and the Canadian
Borrower, after due inquiry, each Material Subsidiary as of Closing Date has
been so designated on Schedule 8.12.


 


8.13.  Patents,
etc. Holdings, the Borrowers and each of the Restricted Subsidiaries have
obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain
any such rights could not reasonably be expected to have a Material Adverse
Effect.


 


8.14.  Environmental
Laws. (a)     Except as could not reasonably be
expected to have a Material Adverse Effect: 
(i) Holdings, the Borrowers and each of their respective Subsidiaries
and all Real Estate are in compliance with all Environmental Laws;
(ii) none of Holdings, the Borrowers or any of their respective
Subsidiaries, is subject to any Environmental Claim or any other liability
under any Environmental Law; (iii) none of Holdings, the Borrowers or any
of their respective Subsidiaries are conducting any investigation, removal, remedial
or other corrective action pursuant to any Environmental Law at any location;
and (iv) no underground storage tank or related piping, or any impoundment
or other area containing Hazardous Materials is located at, on or under any
Real Estate currently owned or leased by Holdings, either Borrower or any of
their respective Subsidiaries.


 


(b)  None
of the Borrowers or any of the other Subsidiaries has treated, stored,
transported, released or disposed or arranged for disposal or transport for
disposal of Hazardous Materials in a manner that could reasonably be expected
to have a Material Adverse Effect.


 


8.15.  Properties.
The Borrowers and each of their respective Subsidiaries have good and marketable
title to or valid leasehold interests in all properties that are necessary for
the operation of their respective businesses as currently conducted and as
proposed to be conducted, free and clear of all Liens (other than any Liens
permitted by this Agreement) and except where the failure to have such good
title or interests could not reasonably be expected to have a Material Adverse
Effect.


 


8.16.  Solvency.
On the Closing Date (after giving effect to the Transactions), immediately following
the making of each Loan and after giving effect to the application of the
proceeds of such Loans, each of the US Borrower and the Canadian Borrower on a
consolidated basis with its Subsidiaries will be Solvent.


 


8.17.  Public
Utility Holding Company Act. None of Holdings, the US Borrower or the
Canadian Borrower 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”, within the meaning of the Public Utility Holding
Company Act of 1935, as amended.


 


SECTION 9. Affirmative
Covenants.


 


67

















 


Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on its own behalf and to the extent such covenants are applicable to it)
hereby covenant and agree that on the Closing Date and thereafter, until the
Commitments have terminated and the Loans, together with interest, Fees and all
other Obligations incurred hereunder (other than the Exchange Notes and the
Exchange Note Indenture and the obligations in respect thereof), are paid in
full:


 


9.1.  Information
Covenants. Each of the US Borrower and the Canadian Borrower will furnish
to each Lender and the US Administrative Agent:


 


(a)  Annual
Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the
SEC or the Ontario Securities Commission or delivered to the holders of the
Senior Credit Facilities (or, if such financial statements are not required to
be filed with the SEC or delivered to the holders of the Senior Credit
Facilities, on or before the date that is 120 days after the end of each
such fiscal year), the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statement of operations and cash flows for such fiscal year, setting forth
comparative consolidated figures for the preceding fiscal year, and containing
a footnote to such financial statements that includes consolidating balance
sheet, income statement and cash flow financial statement information for
Holdings and its Subsidiaries, and certified by independent chartered
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit or as to the status of Holdings or any of
its Material Subsidiaries (or group of Subsidiaries that together would constitute
a Material Subsidiary) as a going concern, together in any event with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of Holdings and its Material Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of Default
relating to Section 10.9 or 10.10 that has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof.


 


(b)  Quarterly
Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the
SEC or delivered to the holders of the Senior Credit Facilities with respect to
each of the first three quarterly accounting periods in each fiscal year of
Holdings and its Subsidiaries (or, if such financial statements are not
required to be filed with the SEC or delivered to the holders of the Senior
Credit Facilities, on or before the date that is 60 days after the end of
each such quarterly accounting period), the consolidated balance sheet of
(i) Holdings and its Subsidiaries, as at the end of such quarterly period
and the related consolidated statement of operations for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and the related consolidated statement of
cash flows for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and setting forth comparative consolidated figures
for the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year, and
containing a footnote to such financial statements that includes consolidating
balance sheet, income statement and cash flow financial statement information
for Holdings and its Subsidiaries, all of which shall be certified by an
Authorized Officer of Holdings as fairly presenting the financial 


 


68

















 


condition and results of operations of Holdings and
its Subsidiaries on a consolidated basis, subject to changes resulting from
audit and normal year-end audit adjustments.


 


(c)  Budgets.
Within 90 days after the commencement of each fiscal year of each
Borrower, budgets of each Borrower in reasonable detail for such fiscal year as
customarily prepared by management of such Borrower for their internal use
consistent in scope with the financial statements provided pursuant to Section 9.1(a),
setting forth the principal assumptions upon which such budgets are based.


 


(d)  Officer’s
Certificates. At the time of the delivery of the financial statements
provided for in Sections 9.1(a) and (b), a certificate of an
Authorized Officer of Holdings to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth (i) a
specification of any change in the identity of the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such fiscal
year or period, as the case may be, from the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries, respectively, provided to
the Lenders on the Closing Date or the most recent fiscal year or period, as
the case may be, and (ii) the amount of any Pro Forma Adjustment not previously
set forth in a Pro Forma Adjustment Certificate or any change in the amount of
a Pro Forma Adjustment set forth in any Pro Forma Adjustment Certificate
previously provided and, in either case, in reasonable detail, the calculations
and basis therefor.


 


(e)  Certain
Notices. Promptly after an authorized officer or any other senior officer
of Holdings, the US Borrower, the Canadian Borrower or any of the other
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
event that constitutes a Default or Event of Default, which notice shall
specify the nature thereof, the period of existence thereof and what action the
US Borrower or the Canadian Borrower proposes to take with respect thereto,
(ii) any litigation or governmental proceeding pending against the US Borrower,
the Canadian Borrower or any of the Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect or Material Adverse Change and
(iii) any other development that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect or Material Adverse Change.


 


(f)  Environmental
Matters. The Borrowers will promptly advise the US Administrative Agent in
writing after obtaining knowledge of any one or more of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such matters, be reasonably
expected to result in a Material Adverse Effect:


 


(i)  Any pending or threatened Environmental Claim
against the US Borrower, the Canadian Borrower or any of the other Subsidiaries
or any Real Estate;


 


(ii)  Any condition or occurrence that (x) could
reasonably be expected to result in noncompliance by the US Borrower, the
Canadian Borrower or any of the other Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis of
an Environmental Claim against the 


 


69

















 


US Borrower, the Canadian
Borrower or any of the other Subsidiaries or any Real Estate;


 


(iii)  Any condition or occurrence on any Real
Estate that could reasonably be anticipated to cause such Real Estate to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Estate under any Environmental Law; and


 


(iv)  The conduct of any investigation, or any
removal, remedial or other corrective action in response to the actual or
alleged presence, release or threatened release of any Hazardous Material on,
at, under or from any Real Estate.


 


All such notices
shall describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and the response thereto. The
term “Real Estate” shall mean land, buildings and improvements owned or
leased by the US Borrower, the Canadian Borrower or any of the other
Subsidiaries, but excluding all operating fixtures and equipment, whether or
not incorporated into improvements.


 


(g)  Other
Information. Promptly upon filing thereof, copies of any filings (including
on Form 20-F or 6-K) or registration statements with, and reports to, the
SEC, the Ontario Securities Commission or any analogous Government Authority in
any relevant jurisdiction by Holdings, the US Borrower, the Canadian Borrower
or any of their respective Subsidiaries (other than amendments to any
registration statement (to the extent such registration statement, in the form
it becomes effective, is delivered to the Lenders), exhibits to any
registration statement and, if applicable, any registration statements on Form
S-8) and copies of all financial statements, proxy statements, notices and
reports that Holdings, the US Borrower, the Canadian Borrower or any of their
respective Subsidiaries shall send to the holders of any publicly issued debt
of Parent, Holdings, the US Borrower, the Canadian Borrower and/or any of their
respective Subsidiaries in their capacity as such holders (in each case to the
extent not theretofore delivered to the Lenders pursuant to this Agreement)
and, with reasonable promptness, such other information (financial or
otherwise) as the US Administrative Agent on its own behalf or on behalf of any
Lender may reasonably request in writing from time to time.


 


(h)  Pro
Forma Adjustment Certificate. Not later than any date on which financial statements
are delivered with respect to any four-quarter period in which a Pro Forma
Adjustment is made as a result of the consummation of the acquisition of any
Acquired Entity or Business by the US Borrower, the Canadian Borrower or any
Restricted Subsidiary for which there shall be a Pro Forma Adjustment, a
certificate of an Authorized Officer of each Borrower setting forth the amount
of such Pro Forma Adjustment and, in reasonable detail, the calculations and
basis therefor.


 


9.2.  Books,
Records and Inspections. Holdings and the Borrowers will, and will cause
each of their respective Subsidiaries to, permit officers and designated representatives
of the US Administrative Agent or the Required Lenders to visit and inspect any
of the properties or assets of the US Borrower, the Canadian Borrower and any
such Subsidiary in whomsoever’s possession to the extent that it is within such
party’s control to permit such inspection, and to 


 


70

















 


examine the books and records of the US Borrower, the
Canadian Borrower and any such Subsidiary and discuss the affairs, finances and
accounts the US Borrower, the Canadian Borrower and of any such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the US Administrative Agent or the Required Lenders may desire.


 


9.3.  Maintenance
of Insurance. Holdings and the Borrowers will, and will cause each of the
Material Subsidiaries to, at all times maintain in full force and effect, with
insurance companies that Holdings, the US Borrower and the Canadian Borrower,
as applicable, believe (in the good faith judgment of the management of
Holdings, the US Borrower and the Canadian Borrower, as applicable) are
financially sound and responsible at the time the relevant coverage is placed
or renewed, insurance (including flood insurance) in at least such amounts and
against at least such risks (and with such risk retentions) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and will furnish to the Lenders, upon written request from
the US Administrative Agent, information presented in reasonable detail as to the
insurance so carried.


 


9.4.  Payment
of Taxes. Holdings and the Borrowers will pay and discharge, and will cause
each of their respective Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon them or upon their
income or profits, or upon any properties belonging to them, prior to the date
on which material penalties attach thereto, and all lawful material claims
that, if unpaid, could reasonably be expected to become a material Lien upon
any properties of or the Capital Stock of the US Borrower, the Canadian
Borrower or any of the Restricted Subsidiaries; provided that none of
Holdings, the Borrowers or any of their respective Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves (in the good faith judgment of the management of Holdings, the US
Borrower and the Canadian Borrower, as applicable) with respect thereto in accordance
with GAAP and the failure to pay could not reasonably be expected to result in
a Material Adverse Effect.


 


9.5.  Consolidated
Corporate Franchises. Holdings and the Borrowers will do, and will cause
each Material Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its legal existence, corporate
rights and authority, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect; provided, however,
that the Borrowers and their respective Subsidiaries may consummate any
transaction permitted under Section 10.3, 10.4 or 10.5.


 


9.6.  Compliance
with Statutes, Regulations, etc. Holdings and the Borrowers will, and will
cause each of their Subsidiaries to, comply with all applicable laws, rules,
regulations and orders applicable to it or its property, and to maintain all
such governmental approvals or authorizations in full force and effect, in each
case except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.


 


9.7.  ERISA;
Canadian Benefit Matters. (a)      Promptly after
Holdings or any Subsidiary or any ERISA Affiliate knows or has reason to know
of the occurrence of any of the following events that, individually or in the
aggregate (including in the aggregate such events 


 


71

















 


previously disclosed or exempt from disclosure
hereunder, to the extent the liability therefor remains outstanding), would be
reasonably likely to have a Material Adverse Effect, Holdings will deliver to
the US Administrative Agent a certificate of an Authorized Officer or any other
senior officer of Holdings setting forth details as to such occurrence and the
action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices (required, proposed or
otherwise) given to or filed with or by Holdings, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an
individual participant’s benefits) or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding deficiency
has been incurred or an application is to be made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan;
that a Plan having an Unfunded Current Liability has been or is to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA (including the giving of written notice thereof); that a Plan has an
Unfunded Current Liability that has or will result in a lien under ERISA or the
Code; that proceedings will be or have been instituted to terminate a Plan
having an Unfunded Current Liability (including the giving of written notice
thereof); that a proceeding has been instituted against Holdings, a Subsidiary
or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the PBGC has notified Holdings, any
Subsidiary or any ERISA Affiliate of its intention to appoint a trustee to administer
any Plan; that Holdings, any Subsidiary or any ERISA Affiliate has failed to
make a required installment or other payment pursuant to Section 412 of
the Code with respect to a Plan; or that Holdings, any Subsidiary or any ERISA
Affiliate has incurred or will incur (or has been notified in writing that it
will incur) any liability (including any contingent or secondary liability) to
or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of
the Code.


 


(b)  Promptly
after Holdings or any Subsidiary thereof knows or has reason to know of the
occurrence of any of the following events that, individually or in the
aggregate (including in the aggregate such events previously disclosed or
exempt from disclosure hereunder, to the extent the liability therefor remains
outstanding) would be reasonably likely to have a Material Adverse Effect,
Holdings will deliver to the Canadian Administrative Agent a certificate of an
Authorized Officer or any other senior officer of Holdings setting forth
details as to such occurrence and the action, if any, that Holdings or such
Subsidiary is required or proposes to take, together with any notices
(required, proposed or otherwise) given to or filed with or by Holdings, such
Subsidiary, any Governmental Authority, a Canadian Pension Plan or Canadian
Benefit Plan participant (other than notices relating to an individual
participant’s benefits) or the Canadian Pension Plan or Canadian Benefit Plan
administrator with respect thereto: that an application is to be made to any
Governmental Authority for a waiver or modification of the minimum funding
requirements (including any required installment payments) or an extension of
any amortization period under applicable laws or regulations with respect to a
Canadian Pension Plan or Canadian Benefit Plan; that a Canadian Pension Plan
having an Unfunded Current Liability has been or is to be terminated or
wound-up in whole or in part under applicable laws or regulations (including
the giving of written 


 


72

















 


notice thereof); that a Canadian Pension Plan has an
Unfunded Current Liability that has or will result in a lien under applicable
laws or regulations; that proceedings will be or have been instituted to terminate
a Canadian Pension Plan having an Unfunded Current Liability (including the
giving of written notice thereof); that a proceeding has been instituted
against Holdings or a Subsidiary thereof pursuant to applicable laws or
regulations to collect a delinquent contribution to a Canadian Pension Plan or
a Canadian Benefit Plan; that any Governmental Authority has notified Holdings
or any Subsidiary thereof of its intention to appoint an administrator or other
trustee to administer any Canadian Pension Plan or Canadian Benefit Plan; that
Holdings or any Subsidiary thereof has failed to make a required contribution,
installment or other payment pursuant to applicable laws or regulations with
respect to a Canadian Pension Plan or Canadian Benefit Plan; that any event has
occurred in connection with a Canadian Pension Plan or Canadian Benefit Plan
giving rise to a lien (statutory or otherwise) against, or deemed trust in
respect of, any of the assets of Holdings or any Subsidiary thereof; or that
Holdings or any Subsidiary thereof has incurred or will incur (or has been
notified in writing that it will incur) any liability (including any contingent
or secondary liability) to or on account of a Canadian Pension Plan or Canadian
Benefit Plan arising due to breach by Holdings or any Subsidiary thereof of
their respective obligations pursuant to applicable laws or regulations.


 


9.8.  Good
Repair. Holdings and the Borrowers will, and will cause each of the
Restricted Subsidiaries to, ensure that its properties and equipment used or
useful in its business in whomsoever’s possession they may be to the extent
that it is within the control of such party to cause same, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses and consistent with third party leases, except
in each case to the extent the failure to do so could not be reasonably
expected to have a Material Adverse Effect.


 


9.9.  Refinancing
the Loans. Holdings and the Borrowers shall take all commercially
reasonable actions as previously agreed in writing to refinance, or cause the
refinancing of, the Loans as promptly as the Sponsor, Holdings, the Borrowers
and the US Administrative Agent reasonably agree is appropriate and practicable
after the Closing Date through a public offering or Rule 144A/Regulation S
placement of up to $770,000,000 aggregate principal amount (or such lesser
amount equal to the sum of the outstanding Initial Loans plus the
capitalization of amounts, if any, of any default interest on the Initial
Loans) of subordinated debt or preferred equity (the “Subordinated Notes”)
by each Borrower or such other corporation or entity agreed to by the US
Administrative Agent, the Borrowers, Holdings and the Sponsor. Without limiting
the foregoing Holdings and the Borrowers will cause their respective officers
to participate in due diligence and marketing efforts (including participation
in a roadshow and preparation of an offering memorandum) to effect such
refinancing.


 


9.10.  End
of Fiscal Years. Each of Holdings and the Borrowers will, for financial
reporting purposes, cause (a) each of its, and each of its Subsidiaries’,
fiscal years to end on the Saturday closest to December 31 of each year; provided,
however, that Holdings and the Borrowers may, upon written notice to the
US Administrative Agent, change the financial reporting convention specified
above to any other financial reporting convention reasonably acceptable to the
US Administrative Agent, in which case Holdings, the Borrowers and the US
Administrative Agent will, and are hereby authorized by the Lenders to, make
any adjustments to this Agreement that are necessary in order to reflect such
change in financial reporting.


 


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9.11.  [Intentionally
Omitted].


 


9.12.  Use
of Proceeds. The proceeds of the Loans will be used by the US Borrower and
the Canadian Borrower, together with (i) the net proceeds of the issuance
of the Senior Credit Facilities and (ii) the proceeds of the Equity
Contribution, on the Closing Date solely to effect the Acquisition and the
other Transactions and to pay Transaction Expenses.


 


9.13.  Changes
in Business. Holdings and its Subsidiaries, taken as a whole, will not
fundamentally and substantively alter the character of their business, taken as
a whole, from the business conducted by Holdings and its Subsidiaries, taken as
a whole, on the Closing Date and other business activities incidental or
related to any of the foregoing.


 


9.14.  Exchange
Notes. So long as the Borrowers have received requests to issue at least
$20,000,000 in the aggregate principal amount of Exchange Notes:


 


(a)  each
Borrower shall, as promptly as practicable after being requested to do so by
the US Administrative Agent at any time after the date that is 16 months after
the Closing Date and in any event prior to the Initial Loan Repayment Date, (i)
select a bank or trust company to act as Exchange Note Trustee, (ii) enter into
the Exchange Note Indenture and the Registration Rights Agreement and (iii)
cause counsel to such Borrower to deliver to the relevant Administrative Agent
an executed legal opinion in form and substance customary for a transaction of
that type to be mutually agreed upon by such Borrower and the relevant
Administrative Agent.


 


(b)  Each
Borrower will, on the fifth Business Day following the written request (the “Exchange
Request”) of the holder of any Loan (or beneficial owner of a portion
thereof) given at any time on or after the fifth Business Day prior to the
Initial Loan Repayment Date:


 


(i)  execute and deliver, and cause the Exchange
Note Trustee to execute and deliver, the Exchange Note Indenture if such
Exchange Note Indenture has not previously been executed and delivered; and


 


(ii)  execute and deliver to such holder or
beneficial owner in accordance with the Exchange Note Indenture one or more
Exchange Notes as evidence of all or a part of the principal amount of such
Term Loan bearing interest as set forth therein dated the date of the issuance
of such Exchange Note, payable to the order of such holder or owner, as the
case may be, in the same principal amount as such Loan being evidenced (for
certainty, including any capitalized interest).


 


The Exchange
Request shall specify the principal amount of the Loan to be evidenced by Exchange
Notes pursuant to this Section, which shall be at least $100,000 and integral
multiples of $50,000 in excess thereof or the entire remaining aggregate
principal amount of the Loan of such Lender (for certainty, including any
capitalized interest). Loans delivered to any Borrower under this Section to be
evidenced by Exchange Notes shall be governed by and construed in accordance
with the terms of the Exchange Note Indenture.


 


(c)  The
Exchange Note Trustee shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good 


 


74

















 


standing and having its principal offices in the
Borough of Manhattan, in The City of New York, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has a combined capital and
surplus of not less than $500,000,000.


 


(d)  If
Exchange Notes are issued pursuant to the terms hereof, then the Exchange Note
Holders shall have the registration rights with respect to such Exchange Notes
as set forth in the Registration Rights Agreement.


 


(e)  The
Exchange Note Indenture shall provide that the unpaid principal amount of each
Exchange Note shall bear interest at a rate per annum equal to that of the Term
Loans on the date of issuance of the Exchange Note.


 


(f)  It
is understood and agreed that the Term Loans exchanged for Exchange Notes
constitute the same indebtedness as such Exchange Notes and that no novation
shall be effected by any such exchange.


 


9.15.  Change
of Control.


 


(a)  Upon
a Change of Control, each Borrower shall prepay each Lender’s Loans (including
any Initial Loans and Term Loans, without any premium, plus accrued and unpaid
interest, if any, to the date of prepayment (the “Change of Control Payment”),
in accordance with the terms contemplated in this Section 9.15.


 


(b)  Prior
to complying with the provisions of this Section 9.15, but in any event
within 30 days following a Change of Control, each Borrower shall either repay
all outstanding Indebtedness under the Senior Secured Facilities or obtain the
requisite consents, if any, under the Senior Secured Facilities necessary to
permit the prepayment of the Loans required by this Section 9.15, provided
that the failure to repay such Indebtedness or obtain such consent shall not
affect the obligation of any Borrower pursuant to clause (a) above.


 


(c)    Each
Borrower shall comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws or regulations are applicable in connection with the prepayment of the
Loans pursuant to a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
9.15, each Borrower shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Section 9.15 by virtue thereof.


 


SECTION 10. Negative
Covenants.


 


Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on its own behalf and to the extent such covenants are applicable to it)
hereby covenant and agree that on the Closing Date and thereafter, until the
Commitments have terminated and the Loans, together with interest, fees and all
other Obligations incurred hereunder (other than the Exchange Notes and the
Exchange Note Indenture and the obligations in respect thereof), are paid in
full:


 


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10.1.  Limitation
on Asset Sales. Holdings and the Borrowers will not, and will not permit
any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale,
unless (x) Holdings, such Borrower or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the fair market value (as determined in good faith by the board of directors of
Holdings) of the assets sold or otherwise disposed of and (y) except for any
Permitted Asset Swap, at least 75% of the consideration therefor received by
Holdings, such Borrower or such Restricted Subsidiary, as the case may be, is
in the form of cash or Cash Equivalents; provided that the amount of (a)
any liabilities (as shown on Holdings’, such Borrower’s, or such Restricted
Subsidiary’s most recent balance sheet or in the notes thereto) of Holdings,
such Borrower or such Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Loans), that are assumed by the transferee of
any such assets and for which Holdings, the Borrowers and all Restricted
Subsidiaries have been validly released by all creditors in writing, (b) any
securities received by Holdings, such Borrower or such Restricted Subsidiary
from such transferee that are converted by Holdings, by such Borrower or by
such Restricted Subsidiary into cash (to the extent of the cash received)
within 180 days following the closing of such Asset Sale and/or (c) any
Designated Non-Cash Consideration received by Holdings, such Borrower or any
Restricted Subsidiary in such Asset Sale having an aggregate fair market value,
taken together with all other Designated Non-Cash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to
exceed $75.0 million (with the fair market value of each item of Designated
Non-Cash Consideration being measured at the time received and without giving
effect to subsequent changes in value), shall be deemed to be cash for purposes
of this provision and for no other purpose.


 


10.2.  Limitation
on Restricted Payments.


 


(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
directly or indirectly:  (i) declare or
pay any dividend or make any distribution on account of Holdings’ or any
Borrower’s or any Restricted Subsidiary’s Equity Interests, including any
dividend or distribution payable in connection with any merger or consolidation
(other than (A) dividends or distributions by Holdings payable in Equity
Interests (other than Disqualified Stock) of Holdings or in options, warrants
or other rights to purchase such Equity Interests or (B) dividends or
distributions by a Restricted Subsidiary so long as, in the case of any
dividend or distribution payable on or in respect of any class or series of
securities issued by a Subsidiary other than a Wholly Owned Subsidiary,
Holdings, a Borrower or a Restricted Subsidiary receives at least its pro rata
share of such dividend or distribution in accordance with its Equity Interests
in such class or series of securities); (ii) purchase, redeem, defease or
otherwise acquire or retire for value any Equity Interests of Holdings or any
direct or indirect parent of Holdings, including in connection with any merger
or consolidation; (iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value in each case, prior to any
scheduled repayment, sinking fund payment or maturity, any Subordinated
Indebtedness (other than (x) Indebtedness permitted under clauses (b)(vii)
and (b)(viii) of Section 10.3 or (y) the purchase, repurchase or
other acquisition of Subordinated Indebtedness purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase or
acquisition); or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses  (i) through (iv) above
being collectively referred to as “Restricted Payments”).


 


76

















 


(b)  The
foregoing provisions will not prohibit:


 


(i)  the payment of any dividend within 60 days
after the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Agreement;


 


(ii)  (A) the redemption, repurchase, retirement or
other acquisition of any Equity Interests (“Retired Capital Stock”) or
Subordinated Indebtedness of Holdings or a Borrower, or any Equity Interests of
any direct or indirect parent company of Holdings, in exchange for, or out of
the proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary) of, Equity Interests of Holdings or a Borrower (in each case, other
than any Disqualified Stock) (“Refunding Capital Stock”) and (B) if
immediately prior to the retirement of Retired Capital Stock, the declaration
and payment of dividends thereon was permitted under clause (xi) of this
paragraph, the declaration and payment of dividends on the Refunding Capital
Stock (other than Refunding Capital Stock the proceeds of which were used to
redeem, repurchase, retire or otherwise acquire any Equity Interests of any
direct or indirect parent company of Holdings) in an aggregate amount per year
no greater than the aggregate amount of dividends per annum that was declarable
and payable on such Retired Capital Stock immediately prior to such retirement;


 


(iii)  the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of Holdings or a
Borrower made by exchange for, or out of the proceeds of the substantially
concurrent sale of, new Indebtedness of Holdings or a Borrower which is
incurred in compliance with Section 10.3 so long as


 


(A)  the principal amount of such new Indebtedness
does not exceed the principal amount of (or accreted value, if applicable),
plus any accrued and unpaid interest on the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value, plus the amount of any
reasonable premium required to be paid under the terms of the instrument
governing the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired and any reasonable fees and expenses incurred in connection
with the issuance of such new Indebtedness,


 


(B)  such Indebtedness is subordinated to Loans or
Holdings’ Guarantee at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or
retired for value,


 


(C)  such Indebtedness has a final scheduled
maturity date equal to or later than the final scheduled maturity date of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired
and


 


77

















 


(D)  such Indebtedness has a Weighted Average Life
to Maturity equal to or greater than the remaining Weighted Average Life to
Maturity of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired;


 


(iv)  a Restricted Payment to pay for the
repurchase, retirement or other acquisition or retirement for value of common
Equity Interests of Holdings, any of its direct or indirect parent corporations
held by any future, present or former employee, director or consultant of
Holdings, any of its Subsidiaries or any of its direct or indirect parent
corporations pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement; provided, however,
that the aggregate Restricted Payments made under this clause (i) (other
than proceeds from the issuance of Disqualified Capital Stock and Designated
Preferred Stock) do not exceed in any calendar year $20.0 million; and provided,
further, that such amount in any calendar year may be increased by an
amount not to exceed (A) the cash proceeds from the sale of (x) Equity
Interests of Holdings or any Borrower and (y) to the extent contributed to
Holdings, Equity Interests of any of Holdings direct or indirect parent
corporations, in each case to members of management, directors or consultants
of Holdings, any of its Subsidiaries or any of its direct or indirect parent
corporations that occurs after the Closing Date, plus (B) the cash proceeds of
key man life insurance policies received by a Borrower and the Restricted
Subsidiaries after the Closing Date less (C) the amount of any Restricted
Payments previously made pursuant to clauses (A) and (B) of this clause
(i);


 


and provided
further that cancellation of Indebtedness owing to Holdings or a Borrower from
members of management of Holdings or a Borrower, any of Holdings’ direct or indirect
parent companies or any Restricted Subsidiary in connection with a repurchase
of Equity Interests of Holdings or any of its direct or indirect parent
companies in an aggregate amount not to exceed $3.0 million will not be deemed
to constitute a Restricted Payment for purposes of this covenant or any other
provision of this Agreement;


 


(v)  Investments in Unrestricted Subsidiaries
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (ii) that are at the time outstanding,
without giving effect to the sale of an Unrestricted Subsidiary to the extent
the proceeds of such sale do not consist of cash and/or marketable securities,
not to exceed $60.0 million at the time of such Investment (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value);


 


(vi)  repurchases of Equity Interests deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;


 


(vii)  distributions or payments of Receivables
Fees;


 


78

















 


(viii)  the declaration and payment of dividends by
Holdings or any Borrower to, or the making of loans to, any direct or indirect
parent corporations to pay


 


(A)  franchise taxes and other fees, taxes and
expenses required to maintain their corporate existence,


 


(B)  federal, state, provincial and local income
taxes, to the extent such income taxes are attributable to the income of
Holdings, such Borrower or any Restricted Subsidiaries (and, to the extent of
the amounts actually received from the Unrestricted Subsidiaries, in amounts
required to pay such taxes to the extent attributable to the income of the
Unrestricted Subsidiaries),


 


(C)  customary salary, bonus and other benefits
payable to officers and employees of any direct or indirect parent corporation
of the Borrowers to the extent such salaries, bonuses and other benefits are
attributable to the ownership or operation of the Borrowers and the Restricted
Subsidiaries, and


 


(D)  general corporate overhead expenses
(including professional expenses) of any direct or indirect parent corporation
of the Borrowers to the extent such expenses are attributable to the ownership
or operation of the Borrowers and the Restricted Subsidiaries;


 


(ix)  any Restricted Payment used to fund the
payment of fees and expenses incurred in connection with the Transactions or
owed to Affiliates and permitted by Section 10.6;


 


(x)  the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of Holdings, any Borrower
or any Restricted Subsidiary issued in accordance with Section 10.3 to
the extent such dividends are included in the definition of “Fixed Charges”;


 


(xi)  the declaration and payment of dividends to a
direct or indirect parent corporation of Holdings, the proceeds of which will
be used to fund the payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of such parent
corporation issued after the Closing Date; provided that the amount of
dividends paid pursuant to this clause (viii) shall not exceed the
aggregate amount of cash actually contributed to Holdings from the sale of such
Designated Preferred Stock and provided, further, that for the
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of such declaration or
payment, after giving effect to such declaration or payment on a pro forma
basis, Holdings and the Restricted Subsidiaries on a consolidated basis would
have had a Fixed Charge Coverage Ratio of at least 2.0 to 1.0;


 


(xii)  Investments that are made with Excluded Contributions;
and


 


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(xiii)  other Restricted Payments in an aggregate
amount not to exceed $10.0 million;


 


provided
in the case of each of clauses (b)(i), (b)(iv),  (b)(v), (b)(x),
(b)(xi) and (b)(xiii), that no Default shall exist or result from
such payment.


 


10.3.  Limitations
on Incurrence of Indebtedness and Issuance of Disqualified Stock.


 


(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, “incur” and collectively, an “incurrence”) any
Indebtedness (including Acquired Indebtedness) and Holdings and the Borrowers
will not issue any shares of Disqualified Stock and will not permit any
Restricted Subsidiary to issue any shares of Preferred Stock or Disqualified
Stock;


 


(b)  The
foregoing limitations will not apply to:


 


(i)  the incurrence of Indebtedness under Senior
Credit Facilities up to an aggregate principal amount of $1,825.0 million
outstanding at any one time;


 


(ii)  the incurrence by Holdings, the Borrowers and
the Guarantors of Indebtedness represented by the Loans (including the
Guarantees thereof) and the Exchange Notes (and the Guarantees thereof);


 


(iii)  Indebtedness outstanding on the date hereof
as listed on Schedule 10.3(b)(iii);


 


(iv)  Indebtedness (including Capitalized Lease
Obligations), Disqualified Stock and Preferred Stock incurred by Holdings or
any Restricted Subsidiary to finance the purchase, lease or improvement of
property (real or personal) or equipment that is used or useful in a Similar
Business (whether through the direct purchase of assets or the Capital Stock of
any Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness, Disqualified
Stock and Preferred Stock then outstanding and incurred pursuant to this clause
(iv) and including all Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(iv), does not exceed (i) $75.0 million;


 


(v)  Indebtedness incurred by Holdings or any
Restricted Subsidiary constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including letters
of credit, in respect of workers’ compensation claims or other Indebtedness
with respect to reimbursement type obligations regarding workers’ compensation
claims; provided, however, that upon the drawing of such letters
of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;


 


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(vi)  Indebtedness arising from agreements of
Holdings or a Restricted Subsidiary providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business or assets permitted hereunder
(including any disposition of a Subsidiary), other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business or assets for the purpose of financing such acquisition; provided,
however, that (A) such Indebtedness is not reflected on the balance
sheet of Holdings or any Restricted Subsidiary (contingent obligations referred
to in a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (A)) and (B) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including non-cash proceeds (the fair market value of such non-cash proceeds
being measured at the time received and without giving effect to any subsequent
changes in value) actually received by Holdings and any Restricted Subsidiary
in connection with such disposition;


 


(vii)  Indebtedness of Holdings to a Restricted
Subsidiary; provided that any such Indebtedness is subordinated in right
of payment to the Loans to at least the same extent as the Loans are
subordinated to Senior Indebtedness; and provided, further, that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except to
another Restricted Subsidiary) shall be deemed, in each case, to be an
incurrence of such Indebtedness;


 


(viii)  Indebtedness of a Restricted Subsidiary to
Holdings, any Borrower or another Restricted Subsidiary; provided that
(A) any such Indebtedness is made pursuant to an intercompany note and (B) if a
Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a
Guarantor such Indebtedness is subordinated in right of payment to the
Guarantee of such Guarantor to at least the same extent as such Guarantor’s
Guarantee is subordinated to Senior Indebtedness; and provided, further,
that any subsequent transfer of any such Indebtedness (except to Holdings or
another Restricted Subsidiary) shall be deemed, in each case to be an
incurrence of such Indebtedness;


 


(ix)  shares of Preferred Stock of a Restricted
Subsidiary issued to Holdings, any Borrower or another Restricted Subsidiary; provided
that any subsequent issuance or transfer of any Capital Stock or any other
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such shares of
Preferred Stock (except to another Holdings or Restricted Subsidiary) shall be
deemed, in each case, to be an issuance of such shares of Preferred Stock;


 


(x)  Hedging Obligations of any Borrower or any
Restricted Subsidiary that are not entered into for speculative purposes and
that are entered into for the purpose of limiting (A) interest rate risk
with respect to any Indebtedness that is


 


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permitted by the terms of
this Agreement to be outstanding, (B) exchange rate risk with respect to any
Indebtedness to be incurred pursuant to this Section 10.3 or (C)
commodity pricing risk;


 


(xi)  obligations in respect of performance and
surety bonds and completion guarantees provided by any Borrower or any
Restricted Subsidiary in the ordinary course of business;


 


(xii)  Indebtedness of any Guarantor in respect of
such Guarantor’s Guarantee of the Obligations;


 


(xiii)  Indebtedness, Disqualified Stock and
Preferred Stock of Holdings, or any Restricted Subsidiary not otherwise
permitted hereunder in an aggregate principal amount or liquidation preference,
which when aggregated with the principal amount and liquidation preference of
all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding
and incurred pursuant to this clause (xiii), does not at any one time
outstanding exceed $150.0 million; provided, however, that the
aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock
incurred by the Restricted Subsidiaries (other than the Guarantors) pursuant to
this clause (xiii) may not exceed $75.0 million at any time outstanding;


 


(xiv)  any guarantee by Holdings, any Borrower or a
Guarantor of Indebtedness or other obligations of any Restricted Subsidiary so
long as the incurrence of such Indebtedness incurred by such Restricted
Subsidiary is permitted under the terms of this Agreement;


 


(xv)  the incurrence by Holdings, any Borrower or
any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred
Stock that serves to refund or refinance any Indebtedness incurred as permitted
under Sections 10.3(b)(ii), (b)(iii) and (b)(xvi) or any
Indebtedness issued to so refund or refinance such Indebtedness, Disqualified
Stock or Preferred Stock including additional Indebtedness incurred to pay
premiums and fees in connection therewith (the “Refinancing Indebtedness”)
prior to its respective maturity; provided, however, that such
Refinancing Indebtedness (other than Refinancing Indebtedness that serves to refund
or refinance any Indebtedness incurred as permitted under Section
10.3(b)(ii)) (I) has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred which is not less than the remaining
Weighted Average Life to Maturity of Indebtedness being refunded or refinanced,
(II) to the extent such Refinancing Indebtedness refinances Indebtedness
subordinated or pari passu to the Loans or any Guarantee of the Loans, such
Refinancing Indebtedness is subordinated or pari passu to the Loans or such
Guarantee at least to the same extent as the Indebtedness being refinanced or
refunded and (III) shall not include (A) Indebtedness, Disqualified Stock or
Preferred Stock of a Subsidiary that refinances


 


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Indebtedness,
Disqualified Stock or Preferred Stock of Holdings or (B) Indebtedness,
Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor
that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor
or (C) Indebtedness, Disqualified Stock or Preferred Stock of Holdings or a
Restricted Subsidiary that is not a Guarantor that refinances Indebtedness,
Disqualified Stock, or Preferred Stock of a Guarantor and (IV) shall not be in
a principal amount in excess of the principal amount of, premium, if any,
accrued interest on, and related fees and expenses of, the Indebtedness being
refunded or refinanced, and (V) shall not have a stated maturity date prior to
the stated maturity date of the Indebtedness being refunded or refinanced; provided,
further, that sub-clause (I) of this clause (xv) will not apply to any
refunding or refinancing of any Senior Indebtedness;


 


(xvi)  Indebtedness, Disqualified Stock or Preferred
Stock of Persons that are either acquired by Holdings or any Restricted
Subsidiary or merged into Holdings or a Restricted Subsidiary in accordance
with the terms of this Agreement; provided that such Indebtedness is not
incurred or Disqualified Stock or Preferred Stock is not issued in contemplation
of such acquisition or merger; and provided, further, that after
giving effect to such acquisition or merger, either (i) the Fixed Charge
Coverage Ratio on a consolidated basis for Holdings and the Restricted
Subsidiaries’ most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock
had been issued, as the case may be, and the application of proceeds therefrom
had occurred at the beginning of such four-quarter period, or (ii) the Fixed
Charge Coverage Ratio, determined as set forth in clause (i) above, would be
greater than immediately prior to such acquisition or merger;


 


(xvii)  Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business, provided
that such Indebtedness is extinguished within two Business Days of its
incurrence;


 


(xviii)  Indebtedness of Holdings or any Restricted
Subsidiary supported by a letter of credit issued pursuant to the Senior Credit
Facilities, in a principal amount not in excess of the stated amount of such
letter of credit; and


 


(xix) any guarantee by a
Restricted Subsidiary of Indebtedness of Holdings, provided that such
guarantee is incurred in accordance with the covenant described under Section
10.9.


 


(c)  For
purposes of determining compliance with this covenant, in the event that an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of more than one of the categories of permitted Indebtedness, Disqualified
Stock or Preferred Stock described in clause (b) above, Holdings shall,
in its sole discretion, classify such item of Indebtedness, Disqualified Stock
or Preferred Stock (or any position thereof) in any manner that complies with


 


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this covenant and such
item of Indebtedness will be treated as having been incurred pursuant to only
one of such categories. Accrual of interest, the accretion of accreted value
and the payment of interest in the form of additional Indebtedness,
Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of
Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section
10.3.


 


(d)  For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
incurred, in the case of term debt, or first committed, in the case of
revolving credit debt; provided that (x) the U.S. dollar-equivalent
principal amount of any such Indebtedness outstanding or committed on the
Closing Date shall be calculated based on the relevant currency exchange rate
in effect on the Closing Date, and (y) if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to
be exceeded if calculated at the relevant currency exchange rate in effect on
the date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. The principal amount of any Indebtedness
incurred to refinance other Indebtedness, if incurred in a different currency
from the Indebtedness being refinanced, shall be calculated based on the
currency exchange rate applicable to the currencies in which such respective
Indebtedness is denominated that is in effect on the date of such refinancing.


 


10.4.  Limitation
on Liens.


 


(a)           Holdings and the Borrowers will not,
and will not permit any Restricted Subsidiary to, directly or indirectly
create, incur, assume or suffer to exist any Lien that secures obligations
under any Pari Passu Indebtedness or Subordinated Indebtedness of Holdings or
such Restricted Subsidiary on any asset or property of Holdings or any Borrower
or any Restricted Subsidiary, or any income or profits therefrom, or assign or
convey any right to receive income therefrom, unless (i) in the case of Pari
Passu Indebtedness, the Obligations are equally and ratably secured with such
Pari Passu Indebtedness, and (ii) in case of Subordinated Indebtedness, the
obligations are secured by a Lien that is senior and first priority to such
Subordinated Indebtedness, in either case until such time as such Obligations
are no longer secured by a Lien and in a manner reasonably satisfactory to the
US Administrative Agent.


 


(b)           No Guarantor will directly or indirectly
create, incur, assume or suffer to exist any Lien that secures obligations
under any Pari Passu Indebtedness or Subordinated Indebtedness of such
Guarantor on any asset or property of such Guarantor or any income or profits
therefrom, or assign or convey any right to receive income therefrom, unless
(i) in the case of Pari Passu Indebtedness, the Guarantee of such Guarantor is
equally and ratably secured with such Pari Passu Indebtedness, and (ii) in case
of Subordinated Indebtedness, the Guarantee of such Guarantor is secured by a
Lien that is senior and first priority to such Subordinated Indebtedness, in
either case until such time as such obligations are no longer secured by a Lien
and in a manner reasonably satisfactory to the US Administrative Agent.


 


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10.5.  Merger,
Consolidation or Sale of All or Substantially All Assets. (a)  
Neither Holdings nor either Borrower may consolidate, merge or amalgamate with
or into or wind up into (whether or not Holdings or such Borrower is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more
related transactions, to any Person unless (i) Holdings or such Borrower is the
surviving corporation or the Person formed by or surviving any such
consolidation, merger or amalgamation (if other than Holdings or such Borrower)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made is a corporation organized or existing under
the laws of the jurisdiction of organization of Holdings or such Borrower or
the laws of the United States, any state thereof or the District of Columbia,
or the laws of Canada, any province thereof or any territory thereof (such
Person, as the case may be, being herein called the “Successor Company”);
(ii) the Successor Company, if other than the Holdings or such Borrower,
expressly assumes all the obligations of the Holdings or such Borrower under
the Loan Documents pursuant to an agreement or other documents or instruments
in form reasonably satisfactory to the Administrative Agent;  (iii) immediately after such transaction, no
Default or Event of Default exists; (iv) immediately after giving pro forma
effect to such transaction either (A) the Fixed Charge Coverage Ratio for the
Successor Company and the Restricted Subsidiaries’ most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such transaction would occur would have
been at least 2.00 to 1.00, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if such transaction had
occurred at the beginning of such four quarter period or (B) the Fixed Charge
Coverage Ratio for Holdings or the applicable Borrower, or the Successor
Company if Holdings or such Borrower is not the survivor of any such
consolidation, merger or transfer, would be greater than such Fixed Charge Coverage
Ratio for Holdings or such Borrower immediately prior to such transaction; (v)
each Borrower (as to its Guarantee of the other Borrower) and each Guarantor,
unless it is the other party to the transactions described above, in which case
clause (b) of the second succeeding paragraph shall apply, shall have
confirmed that its Guarantee shall apply to such Person’s obligations under the
this Agreement and Guarantee; and (vi) Holdings shall have delivered to the
Administrative Agent an Officers’ Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, amalgamation or transfer comply with
this Agreement. The Successor Company will succeed to, and be substituted for
either Borrower or Holdings, as the case may be, under the Loan Documents.
Notwithstanding the foregoing clauses (iii) and (iv), (a) any
Restricted Subsidiary (other than a Borrower) may consolidate or amalgamate
with, merge into or transfer all or part of its properties and assets to
Holdings and (b) Holdings or a Borrower may merge with an Affiliate of Holdings
or a Borrower, as the case may be, solely for the purpose of reincorporating
Holdings or such Borrower in a State of the United States so long as the amount
of Indebtedness of Holdings and the Restricted Subsidiaries is not increased
thereby.


 


(b)  Subject
to Section 10.9, no Guarantor shall, and Holdings and the Borrowers
shall not permit any Guarantor to, consolidate or merge with or into or wind up
into (whether or not such Guarantor is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions to, any
Person unless (i) (A) such Guarantor is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been


 


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made is a corporation
organized or existing under the laws of the jurisdiction of organization of
such Guarantor, as the case may be, or the laws of the United States, any state
thereof or the District of Columbia, or the laws of Canada, any province
thereof or any territory thereof (such Guarantor or such Person, as the case
may be, being herein called the “Successor Person”); (B) the Successor
Person, if other than such Guarantor, expressly assumes all the obligations of
such Guarantor under the Loan Documents and such Guarantor’s Guarantee pursuant
to the Loan Documents or Exchange Loan Documents or other documents or
instruments in form reasonably satisfactory to the Administrative Agent; (C)
immediately after such transaction, no Default or Event of Default exists; and
(D) Holdings shall have delivered to the Administrative Agent an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer comply with the Loan Documents; or (ii) the transaction
results in an Asset Sale Purchase Event and is made in compliance with Section
5.2. Subject to Section 10.9, the Successor Person shall succeed to,
and be substituted for, such Guarantor under this Agreement and such Guarantor’s
Guarantee. Notwithstanding the foregoing, any Guarantor may merge into or
transfer all or part of its properties and assets to another Guarantor, either
Borrower or Holdings.


 


10.6.  Transactions
with Affiliates.


 


(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
their respective properties or assets to, or purchase any property or assets
from, or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of Holdings (each of the foregoing, an “Affiliate Transaction”)
involving aggregate payments or consideration in excess of $5.0 million, unless
(i) such Affiliate Transaction is on terms that are not materially less
favorable to Holdings, the relevant Borrower or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by Holdings, such Borrower or such Restricted Subsidiary with an unrelated
Person and (ii) Holdings delivers to the US Administrative Agent with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution
adopted by a majority of its Board of Directors approving such Affiliate
Transaction and setting forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clause (a)(i) above.


 


(b)  The
foregoing provisions will not apply to the following:  (i) transactions between or among Holdings,
the Borrowers and/or any Restricted Subsidiary which are Guarantors; (ii)
Restricted Payments permitted by the provisions of this Agreement described in Section
10.2; (iii) the payment of management, consulting, monitoring and advisory
fees and related expenses to the Sponsor; (iv) the payment of reasonable and
customary fees paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of Holdings, any of its direct or indirect
parent corporations or any Restricted Subsidiary; (v) payments of fees and
expenses to the Sponsor made for any financial advisory, financing,
underwriting or placement services or in respect of other investment banking
activities, including in connection with acquisitions or divestitures which payments
are approved by a majority of the Board of Directors of Holdings in good faith;
(vi) transactions otherwise prohibited by clause (a) above in which
Holdings or any Restricted Subsidiary, as the case may be, delivers to the US
Administrative Agent a letter from an Independent Financial Advisor stating
that such transaction is fair to


 


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Holdings or such
Restricted Subsidiary from a financial point of view or meets the requirements
of clause (a)(i) above; (vii) payments or loans (or cancellations of
loans) to employees or consultants of Holdings or any of its direct or indirect
parent corporations or any Restricted Subsidiary which are approved by a
majority of the Board of Directors of Holdings in good faith; (viii) any
agreement as in effect as of the Closing Date or any amendment thereto (so long
as any such amendment (and such amendment when aggregated with all other such
amendments) is not disadvantageous to the Lenders in any material respect as compared
to the applicable agreement as in effect on the Closing Date); (ix) the
existence of, or the performance by Holdings or any Restricted Subsidiary of
its obligations under the terms of, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party as of the Closing Date and any similar agreements which it may
enter into thereafter; provided, however, that the existence of,
or the performance by Holdings or any Restricted Subsidiary of obligations
under, any future amendment to any such existing agreement or under any similar
agreement entered into after the Closing Date shall only be permitted by this clause
(b)(ix) to the extent that the terms of any such amendment or new agreement
are not otherwise disadvantageous to the Lenders in any material respect; (x)
the Transactions and the payment of all fees and expenses related to the
Transactions; (xi) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary course
of business and otherwise in compliance with the terms of this Agreement which
are fair to Holdings or the Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of Holdings or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (xii) the issuance of Equity
Interests (other than Disqualified Stock) of Holdings or any of its parent
corporations to any Permitted Holder or to any director, officer, employee or
consultant; (xiii) sales of accounts receivable, or participations
therein, in connection with any Receivables Facility; and
(xiv) Investments by KKR Financial Corp. in securities of the Holdings or
any Restricted Subsidiary so long as (x) the Investment is being offered
generally to other investors on the same or more favorable terms and (y) the
Investment constitutes less than 5% of the proposed or outstanding issue amount
of such class of securities.


 


10.7.  Dividend
and Other Payment Restrictions Affecting Subsidiaries. Holdings and the
Borrowers will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to:


 


(a)  (i)
pay dividends or make any other distributions to Holdings or any Restricted
Subsidiary (A) on its Capital Stock or (B) with respect to any other interest
or participation in, or measured by, its profits, or (ii) pay any Indebtedness
owed to Holdings or any Restricted Subsidiary;


 


(b)  make
loans or advances to Holdings or any Restricted Subsidiary; or


 


(c)  sell,
lease or transfer any of its properties or assets to Holdings or any Restricted
Subsidiary, except (in each case) for such encumbrances or restrictions
existing under or by reason of:


 


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(A)  contractual encumbrances or restrictions in
effect on the Closing Date, including pursuant to the Senior Credit Facilities
and their related documentation;


 


(B)  this Agreement and the Loans;


 


(C)  purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in clause (c) above on the property so acquired;


 


(D)  applicable law or any applicable rule,
regulation or order;


 


(E)  any agreement or other instrument of a Person
acquired by Holdings or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired;


 


(F)  contracts for the sale of assets, including
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary;


 


(G)  secured Indebtedness otherwise permitted to
be incurred pursuant to Sections 10.3 and 10.4 that limits the
right of the debtor to dispose of the assets securing such Indebtedness;


 


(H)  restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business;


 


(I)  other Indebtedness or Disqualified Stock of
Restricted Subsidiaries permitted to be incurred subsequent to the Closing Date
pursuant to the provisions of the covenant described under Section 10.3;
provided that such dividend and other payment restrictions do not
materially adversely effect any Borrower’s ability to pay principal of, and
interest on, the Loans;


 


(J)  customary provisions in joint venture agreements
and other similar agreements entered into in the ordinary course of business;


 


(K)  customary provisions contained in leases and
other agreements entered into in the ordinary course of business;


 


(L)  any encumbrances or restrictions of the type
referred to in clauses (A), (B) and (C) above imposed by
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations


 


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referred to in clauses
(A) through (K) above, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of Holdings’ Board
of Directors, no more restrictive with respect to such encumbrance and other
restrictions than those prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing; or


 


(M)  restrictions created in connection with any
Receivables Facility that, in the good faith determination of the Board of
Directors of Holdings, are necessary or advisable to effect such Receivables
Facility.


 


10.8.  Limitation
on Other Pari Passu Indebtedness; etc. Holdings and the Borrowers will not,
and will not permit any Subsidiary Guarantor to, directly or indirectly, incur
any Indebtedness (including Acquired Indebtedness) that is subordinate in right
of payment to any other Indebtedness of Holdings, the Borrowers or such
Subsidiary Guarantor, as the case may be, unless such Indebtedness is either
(a) pari passu in right of payment with the Loans and Holdings’ or such other
Subsidiary Guarantor’s Guarantee, as the case may be, or (b) subordinate in
right of payment to the Loans, or Holdings’ or such Subsidiary Guarantor’s
Guarantee, as the case may be.


 


10.9.  Guarantees
of Indebtedness by Restricted Subsidiaries.


 


(a)  Holdings
shall not permit any Restricted Subsidiary, other than the Borrowers, a
Guarantor or a special-purpose Restricted Subsidiary formed in connection with
Receivables Facilities, to guarantee the payment of any Indebtedness of
Holdings, Borrowers or any other Guarantor unless (i)  such Restricted Subsidiary simultaneously
executes and delivers a supplement to the applicable Guarantee Agreement
providing for a Guarantee by such Restricted Subsidiary, except that with
respect to a guarantee of Indebtedness of the Borrowers or Holdings (A) if the
Loans or the Guarantee Agreement are subordinated in right of payment to such
Indebtedness, the Guarantee under the supplement shall be subordinated to such
Restricted Subsidiary’s guarantee with respect to such Indebtedness
substantially to the same extent as the Loans or the Guarantee are subordinated
to such Indebtedness under this Agreement and the Guarantee Agreement and (B)
if such Indebtedness is by its express terms subordinated in right of payment
to the Loans or the Guarantee, any such guarantee by such Restricted Subsidiary
with respect to such Indebtedness shall be subordinated in right of payment to
such Restricted Subsidiary’s Guarantee with respect to the Loans substantially
to the same extent as such Indebtedness is subordinated to the Loans or the
Guarantee; (ii) to the extent permitted by the law of the jurisdiction of
organization of such Restricted Subsidiary, such Restricted Subsidiary waives
and will not in any manner whatsoever claim or take the benefit or advantage
of, any rights of reimbursement, indemnity or subrogation or any other rights
against the Borrowers or Holdings or any Restricted Subsidiary as a result of
any payment by such Restricted Subsidiary under its Guarantee; (iii) such
Restricted Subsidiary shall deliver to the US Administrative Agent an opinion
of counsel to the effect that (A) such Guarantee supplement has been duly
executed and authorized, and (B) such Guarantee supplement constitutes a valid,
binding and enforceable obligation of such Restricted Subsidiary, except
insofar as enforcement thereof may be limited by bankruptcy, insolvency or
similar laws (including all laws relating to fraudulent transfers) and


 


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except insofar as
enforcement thereof is subject to general principles of equity; and (iv) the
Indebtedness so guaranteed is permitted under Section 10.3; provided
that this paragraph (a) shall not be applicable to any guarantee by any
Restricted Subsidiary (x) that (I) existed at the time such Person became a
Restricted Subsidiary, and (II) was not incurred in connection with, or in contemplation
of, such Person becoming a Restricted Subsidiary, or (y) that guarantees
Indebtedness that could have been incurred by such Restricted Subsidiary
directly under Section 10.3. In addition, any such Guarantee may be limited in
accordance with the laws of the jurisdiction of organization of the applicable
Restricted Subsidiary such that the Guarantee would be enforceable in
accordance with such law.


 


(b)  Notwithstanding
the other provisions of this Agreement, any Guarantee by a Restricted Subsidiary
shall provide by its terms that it shall be automatically and unconditionally
released and discharged upon (i) any sale, exchange or transfer, to any Person
not an Affiliate of Holdings, of all of Holdings’ or the Borrowers’ Capital
Stock in, or all or substantially all the assets of, such Restricted
Subsidiary, which sale, exchange or transfer is not prohibited by this
Agreement, or (ii) the release or discharge of the Guarantee by such Restricted
Subsidiary that is a Subsidiary of a Borrower which resulted in the creation of
such Guarantee, except a discharge or release by or as a result of payment
under such Guarantee.


 


10.10.  Amendments
or Waivers of Certain Loan Documents. Without the consent of the Required
Lenders, Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any amendment,
modification, supplement or waiver with respect to the Senior Credit Facility
as in effect on the Closing Date that would modify any of the provisions
thereof or any of the definitions relating to the provisions thereof in respect
of (i) the issuance of the Exchange Notes, (ii) the issuance or sale of any
equity or debt securities or the incurrence of any Indebtedness to repay or
refinance the Initial Loans or (iii) the application of Net Cash Proceeds from
a Prepayment Event (other than an Asset Sale Prepayment Event) to repay the
Initial Loans, in either case in a manner adverse to the Lenders.


 


10.11.  Payments
for Consent. Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, premium or otherwise, to any
Lender or Exchange Note Holder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Agreement, the
Guarantees or the Exchange Note Indenture or Exchange Notes unless such
consideration is offered to be paid or agreed to be paid to all Lenders and
Exchange Note Holders which so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.


 


10.12.  Restricted
Subsidiaries. As of the Closing Date, all of Holdings’ Subsidiaries will be
Restricted Subsidiaries. Holdings will not permit any Unrestricted Subsidiary
to become a Restricted Subsidiary except pursuant to the second to last
sentence of the definition of “Unrestricted Subsidiary”. For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by Holdings and the Restricted Subsidiaries (except to
the extent repaid) in the Subsidiary so designated will be deemed to be
Restricted Payments in an amount determined as set forth in the last sentence
of the definition of “Investment”. Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time under clause
(v) of Section 10.2(b)) and if such


 


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Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries
will not be subject to any of the restrictive covenants set forth in this
Agreement.


 


SECTION 11. Events
of Default.


 


Upon the
occurrence of any of the following specified events (each an “Event of
Default”):


 


11.1.  Payments.
Either Borrower shall (a) default in the payment when due of any principal of
the Loans (whether or not such payment is prohibited by Section 3) or
(b) default, and such default shall continue (whether or not such payment is
prohibited by Section 3) for (i) 10 or more days, in the payment when
due of any interest or stamping fees on the Loans or any Fees or (ii) 30 or
more days, for any other amounts payable of any other payment Obligations; or


 


11.2.  Representations,
etc. Any representation, warranty or statement made or deemed made by any
Credit Party herein or in any Guarantee Agreement or any certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to be untrue
in any material respect on the date as of which made or deemed made; or


 


11.3.  Covenants.
Any Credit Party shall (a) default in the due performance or observance by it
of any term, covenant or agreement contained in Section 9.1(e) or Section 10
or (b) default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in Section 11.1 or 11.2
or clause (a) of this Section 11.3) contained in this
Agreement or any other Loan Document and such default shall continue unremedied
for a period of at least 30 days after receipt of written notice by either
Borrower from the US Administrative Agent or the Directing Lenders; or


 


11.4.  Defaults
Under Other Agreement. Holdings, either Borrower or any Restricted
Subsidiary defaults under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any Indebtedness for
money borrowed by Holdings, either Borrower or any Restricted Subsidiary or the
payment of which is guaranteed by Holdings, either Borrower or any Restricted
Subsidiary (other than Indebtedness owed to Holdings, either Borrower or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Closing Date, if both (i) such default either (A) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (B) relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and has resulted in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity and (ii) the principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness in default for failure to
pay principal at its stated final maturity (after giving effect to any
applicable grace periods), or the maturity of which has been so accelerated,
equals $50.0 million or more at any one time outstanding;


 


11.5.  Bankruptcy,
etc. Holdings, either Borrower or any Specified Subsidiary shall commence a
voluntary case, proceeding or action concerning itself under (a) Title 11
of the United States Code entitled “Bankruptcy”, (b) any of the Bankruptcy and
Insolvency Act


 


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(Canada), the Companies’
Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act
(Canada) (collectively, the “Canadian Insolvency Laws”) or (c) in
the case of the Canadian Borrower and any Foreign Subsidiary that is a Specified
Subsidiary, any domestic or foreign law relating to bankruptcy, insolvency,
reorganization or relief of debtors legislation of its jurisdiction of
incorporation, in each case as now or hereafter in effect, or any successor
thereto (collectively, the “Bankruptcy Code”); or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not controverted within 10 days after
commencement of the case, proceeding or action; or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not dismissed within 60 days after
commencement of the case, proceeding or action; or a custodian (as defined in
the Bankruptcy Code), receiver, interim receiver, receiver manager, examiner,
trustee, liquidator, assignee, sequestrator or similar person is appointed for,
or takes charge of, all or any substantial part of the property of Holdings,
either Borrower or any Specified Subsidiary and such appointment continues
undischarged or unstayed for a period of 60 days; or Holdings, either Borrower
or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, winding up, relief of debtors,
dissolution, receivership, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings, either
Borrower or any Specified Subsidiary; or there is commenced against Holdings,
either Borrower or any Specified Subsidiary any such proceeding or action that
remains undismissed for a period of 60 days; or Holdings, either Borrower or
any Specified Subsidiary is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding or action is
entered; or Holdings, either Borrower or any Specified Subsidiary makes a
general assignment for the benefit of creditors; or any corporate action is
taken by Holdings, either Borrower or any Specified Subsidiary for the purpose
of effecting any of the foregoing; or


 


11.6.  ERISA.
(a)  (i)  Any Plan shall fail
to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA
(including the giving of written notice thereof); an event shall have occurred
or a condition shall exist in either case entitling the PBGC to terminate any
Plan or to appoint a trustee to administer any Plan (including the giving of
written notice thereof); any Plan shall have an accumulated funding deficiency
(whether or not waived); Holdings or any Subsidiary thereof or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving
of written notice thereof); (ii) there could result from any event or events
set forth in clause (i) of this Section 11.6(a) the
imposition of a lien, the granting of a security interest, or a liability, or
the reasonable likelihood of incurring a lien, security interest or liability;
and (iii) such lien, security interest or liability will or would be
reasonably likely to have a Material Adverse Effect, or
(b)  (i) Holdings or any Subsidiary thereof shall have failed to
make any required contribution, installment or other payment pursuant to
applicable laws or regulations with respect to a Canadian Pension Plan or
Canadian Benefit Plan, or any other event shall have occurred, giving rise to a
lien (statutory or otherwise) against, or deemed trust in respect of, any of
the assets of Holdings or any Subsidiary thereof, or a waiver of the minimum
funding requirements or an extension of any amortization period under
applicable laws or regulations with respect to a Canadian Pension Plan or Canadian
Benefit Plan is sought or


 


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granted; any Canadian
Pension Plan is or shall have been terminated or wound up in whole or in part
or is the subject of termination proceedings under applicable laws or regulations
(including the giving of written notice thereof); an event shall have occurred
or a condition shall exist in either case entitling any Governmental Authority
to terminate or wind up in whole or in part any Canadian Pension Plan or
Canadian Benefit Plan (including the giving of written notice thereof);
Holdings or any Subsidiary thereof has incurred or is likely to incur a
liability to or on account of a Canadian Pension Plan or Canadian Benefit Plan
arising due to breach by Holdings or any Subsidiary thereof of their respective
obligations pursuant to applicable laws or regulations (including the giving of
written notice thereof); (ii) there could result from any event or events
set forth in clause (i) of this Section 11.6(b) the
imposition of a lien, the granting of a security interest, or a liability, or
the reasonable likelihood of incurring a lien, security interest or liability;
and (iii) such lien, security interest or liability will or would be
reasonably likely to have a Material Adverse Effect; or


 


11.7.  Guarantee.
The Guarantee Agreements or any material provision thereof shall cease to be in
full force or effect or any Guarantor thereunder or any Credit Party shall deny
or disaffirm in writing any Guarantor’s obligations under any Guarantee
Agreement; or


 


11.8.  Judgments.
One or more judgments or decrees shall be entered against Holdings, either
Borrower or any of the Restricted Subsidiaries involving a liability of $50.0
million or more in the aggregate for all such judgments and decrees for
Holdings, the Borrowers and the Restricted Subsidiaries (to the extent not paid
or fully covered by insurance provided by a carrier not disputing coverage
after having been notified thereof) and any such judgments or decrees shall not
have been satisfied, vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof;


 


then, and in
any such event, and at any time thereafter, if any Event of Default shall then
be continuing, the US Administrative Agent, upon the request of the Directing
Lenders, shall, by written notice to either Borrower, take any or all of the
following actions, without prejudice to the rights of the US Administrative
Agent, the Canadian Administrative Agent or any Lender to enforce its claims
against any Credit Party, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 11.5
shall occur with respect to Holdings, the US Borrower, the Canadian Borrower or
any Specified Subsidiary, the result that would occur upon the giving of
written notice by the US Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such
notice):  (i) declare the Commitment
terminated, whereupon the Commitments of each Lender shall forthwith terminate
immediately and any Fees theretofore accrued shall forthwith become due and
payable without any other notice of any kind; and/or (ii) declare the
principal of and any accrued interest and fees in respect of all Loans 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 the US Borrower and the
Canadian Borrower.


 


SECTION 12. The
Administrative Agents.


 


12.1.  Appointment.
Each Lender hereby irrevocably designates and appoints the US Administrative
Agent as the agent of such Lender under this Agreement and the other Loan


 


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Documents, and each such
Lender irrevocably authorizes the US Administrative Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the US Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the US Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the US
Administrative Agent.


 


12.2.  Delegation
of Duties. The US Administrative Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to seek advice of counsel concerning
all matters pertaining to such duties. The US Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.


 


12.3.  Exculpatory
Provisions. Neither the US Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person’s own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the US Borrower, the Canadian
Borrower, any Guarantor, any other Credit Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the US Administrative Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the US Borrower, the Canadian Borrower, any Guarantor or any
other Credit Party to perform its obligations hereunder or thereunder. The US
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the US Borrower or
the Canadian Borrower.


 


12.4.  Reliance
by US Administrative Agent. The US Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the US Borrower and/or the Canadian Borrower), independent
accountants and other experts selected by the US Administrative Agent. The US
Administrative Agent may deem and treat the Lender specified in the Register
with respect to any amount owing hereunder as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the US Administrative Agent. The US Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders


 


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against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action or both. The US Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.


 


12.5.  Notice
of Default. The US Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the US Administrative Agent has received notice from a Lender
or either Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”. In the
event that the US Administrative Agent receives such a notice, the US
Administrative Agent shall give notice thereof to the Lenders. The US
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders; provided
that unless and until the US Administrative Agent shall have received such directions,
the US Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders (except to the extent that this Agreement requires that such action be
taken only with the approval of the Required Lenders or each of the Lenders, as
applicable).


 


12.6.  Non-Reliance
on US Administrative Agent and Other Lenders. Each Lender expressly acknowledges
that neither the US Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the US Administrative Agent hereinafter
taken, including any review of the affairs of the US Borrower, the Canadian
Borrower, any Guarantor or any other Credit Party, shall be deemed to
constitute any representation or warranty by the US Administrative Agent to any
Lender. Each Lender represents to the US Administrative Agent that it has,
independently and without reliance upon the US Administrative Agent or any
other Lender, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the US Borrower,
the Canadian Borrower, any Guarantor and any other Credit Party and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon
the US 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
US Borrower, the Canadian Borrower, any Guarantor and any other Credit Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the US Administrative Agent hereunder, the US Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, assets, operations,
properties, financial condition, prospects or creditworthiness of the US
Borrower, the Canadian Borrower, any Guarantor or any other Credit Party that
may come into the possession of the US Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.


 


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12.7.  Indemnification.
The Lenders agree to indemnify the US Administrative Agent in its capacity as
such (to the extent not reimbursed by the US Borrower or the Canadian Borrower
and without limiting the obligation of the US Borrower and the Canadian
Borrower to do so), ratably according to their respective portions of the Total
Credit Exposure in effect on the date on which indemnification is sought (or,
if indemnification is sought after the date upon which the Commitments shall
have terminated and the Loans shall have been paid in full, ratably in accordance
with their respective portions of the Total Credit Exposure in effect immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the US Administrative Agent in any way relating to or arising out of,
the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the US
Administrative Agent under or in connection with any of the foregoing, provided
that no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the US Administrative Agent’s gross
negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.


 


12.8.  US
Administrative Agent in its Individual Capacity. The US Administrative
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the US Borrower, the Canadian Borrower, any
Guarantor and any other Credit Party as though the US Administrative Agent were
not the US Administrative Agent hereunder and under the other Loan Documents. With
respect to the Loans made by it, the US Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the US Administrative
Agent, and the terms “Lender” and “Lenders” shall include the US
Administrative Agent in its individual capacity.


 


12.9.  Successor
Agent. The US Administrative Agent may resign as US Administrative Agent
upon 20 days’ prior written notice to the Lenders and the Borrowers. If the US
Administrative Agent shall resign as US Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrowers (which approval shall not be unreasonably
withheld) so long as no Default or Event of Default is continuing, whereupon
such successor agent shall succeed to the rights, powers and duties of the US
Administrative Agent, and the term “US Administrative Agent” shall mean
such successor agent effective upon such appointment and approval, and the
former US Administrative Agent’s rights, powers and duties as US Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former US Administrative Agent or any of the parties to this Agreement
or any holders of the Loans. After any retiring US Administrative Agent’s
resignation as US Administrative Agent, the provisions of this Section 12
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was US Administrative Agent under this Agreement and the other Loan
Documents.


 


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12.10.  Withholding
Tax. To the extent required by any applicable law, the US Administrative
Agent may withhold from any interest payment to any Lender an amount equivalent
to any applicable withholding tax. If the Internal Revenue Service, Canada
Revenue Agency or any authority of the United States, Canada or other jurisdiction
asserts a claim that the US Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender
failed to notify the US Administrative Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason), such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as
tax or otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs and any out of pocket
expenses.


 


12.11.  Canadian
Administrative Agent. Each of the Lenders hereby agrees and confirms that
the provisions of this Section 12 shall apply mutatis mutandis
to the Canadian Administrative Agent as if each reference to the US
Administrative Agent were a reference to the Canadian Administrative Agent
unless the context clearly indicates otherwise upon the same terms and subject
to the same conditions as provided in this Section 12; provided
that any successor Canadian Administrative Agent shall be a Canadian Resident
with an office in Toronto, Canada or Montreal, Canada having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank which is
also a bank and a Canadian Resident.


 


12.12.  Other
Agents; Arrangers and Bookrunners. Each Loan Party hereby irrevocably
designates and appoints each Guarantee Agent as agent for the benefit of such
Loan Party under each Guarantee Agreement. None of the Lenders or other Persons
identified on the cover page of this Agreement as a “joint lead arranger,” “joint
bookrunner,” “co-syndication agent” or “co-documentation agent” shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement in their respective capacities as such, but shall be entitled to all
the benefits of this Section 12 applicable to the US Administrative
Agent. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.


 


SECTION 13. Miscellaneous.


 


13.1.  Amendments
and Waivers. Neither this Agreement nor any other Loan Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section 13.1. Without notice
to or the consent of any Lenders and without any further action necessary by
the parties hereto, effective as of the Initial Loan Repayment Date, (A) the
provisions of Sections 2.10, 2.12 and 2.13 shall not apply to the Term Loans
(B) the provisions of Section 3 shall be replaced with the provisions of
Article 14 of the Exchange Note Indenture (as applicable and with such
modifications as the circumstances require), (C) the provisions of Sections
5.1, 5.2 and 5.4 shall be replaced by Sections 1101 and 1102
and the first paragraph of Section 1105 and Section 1021 of the
Exchange Note Indenture (as applicable and with such modifications as the
circumstances require), (D) the provisions of Section 9 and Section 10 shall be
replaced with the provisions of Articles 8 and 10 of the


 


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Exchange Note Indenture
(as applicable and with such modifications as the circumstances require), (E)
the provisions of Section 11 shall be replaced with the provisions of Sections
501 and 502 of the Exchange Note Indenture and (F) the provisions of Article 11
and 13 of the Exchange Note Indenture (as applicable and with such
modifications as the circumstances require) shall apply to the Term Loans,
which replacement provisions, along with the relevant defined terms used
therein for the purposes thereof, will thereupon be deemed incorporated by
reference herein, with references therein to the “US Issuer”, “Canadian Issuer”,
the “US Trustee”, “Canadian Trustee” and both “Notes” being deemed to be
references to the “US Borrower”, “Canadian Borrower”, the “US Administrative
Agent”, “Canadian Administrative Agent” and “Loans”, respectively, and with
such other modifications to this Agreement necessary to give effect to the
foregoing; in furtherance of the foregoing, the US Administrative Agent will
(and the Lenders hereby authorize and direct the US Administrative Agent to),
at the request of the Borrowers, enter into such technical amendments to this
Agreement as are reasonably necessary to effect the foregoing. The Required
Lenders may, or, with the written consent of the Required Lenders, the US
Administrative Agent may, from time to time, (a) enter into with the
relevant Credit Party or Credit Parties written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Credit Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the US Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall directly (i) forgive any portion of any Loan or extend the Maturity Date
of any Loan or reduce the stated rate, or forgive any portion, or extend the
date for the payment, of any interest or fee payable hereunder (other than as a
result of waiving the applicability of any post-default increase in interest
rates), or extend the final expiration date of any Lender’s Commitment, or
increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 13.8(a), in each case without the
written consent of each Lender directly and adversely affected thereby, or
(ii) amend, modify or waive any provision of this Section 13.1
or reduce the percentages specified in the definitions of the terms “Required
Lenders” or consent to the assignment or transfer by the US Borrower or the
Canadian Borrower of its rights and obligations under any Loan Document to
which it is a party (except as permitted pursuant to Section 10.3),
in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12
without the written consent of the then-current US Administrative Agent, or
(iv) release all or substantially all of the Guarantors under the Guarantee
Agreements (except as expressly permitted by the applicable Guarantee
Agreement), without the prior written consent of each Lender, or (v) amend Section 2.9
so as to permit Interest Period intervals greater than six months without
regard to availability to Lenders, without the written consent of each Lender
directly and adversely affected thereby, or (vi) amend, modify or waive any
provision in the Exchange Note Indenture) that requires (or would, if any
Exchange Notes were outstanding, require) the approval of all holders of
Exchange Notes, in each case without the


 


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consent of all Lenders,
or (vii) restrict the right of any Lender to exchange Loans for Exchange
Notes or amend the rate of such exchange or amend the terms of the Exchange
Notes in any manner that requires (or would, if the Exchange Notes were
outstanding, require) the approval of all holders of Exchange Notes, in each
case without the consent of each Lender directly affected thereby. Any such
waiver and any such amendment, supplement or modification shall apply equally
to each of the affected Lenders and shall be binding upon Holdings, the US
Borrower, the Canadian Borrower, such Lenders, the US Administrative Agent and
all future holders of the affected Loans. In the case of any waiver, the
Borrowers, the Lenders and the US Administrative Agent shall be restored to
their former positions and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing, it being understood that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon. For the purposes of this Section 13.1, where a particular provision
of the Exchange Note Indenture is deemed hereby to be incorporated by reference
herein, and (A) either (i) such provision is identified in the form of Exchange
Note Indenture attached hereto as Exhibit F (the “Form of Indenture”) as
applying to the “Canadian form”, or other words or symbols of similar import
are used, or (ii) if the Canadian Borrower has entered into a Canadian Exchange
Note Indenture as issuer of Exchange Notes, 
such provision is contained only in such Canadian Exchange Note Indenture,
such provision shall be understood to apply to the Canadian Term Loans and the
Canadian Borrower and not to the US Term Loans or the US Borrower; or (B) such
provision is identified in the Form of Indenture as applying to the “US form”,
or other words or symbols of similar import are used, or, if the US Borrower
has entered into a US Exchange Note Indenture as issuer of Exchange Notes,  such provision is contained only in such US
Exchange Note Indenture, such provision shall be understood to apply to the US
Term Loans and the US Borrower and not to the Canadian Term Loans or the
Canadian Borrower; and any provision not so identified or appearing in both the
Canadian Exchange Note Indenture and the US Exchange Note Indenture shall be
understood to apply equally to all the Term Loans and both Borrowers.


 


13.2.  Notices.
All notices, requests and demands to or upon the respective parties hereto to
be effective shall be in writing (including by facsimile transmission), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
as follows in the case of Holdings, the US Borrower, the Canadian Borrower, the
US Administrative Agent and the Canadian Administrative Agent, and as set forth
on Schedule 1.1(a) in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:


 


	
  The US Borrower:

  	
  Suite 950

  1 North Dale Mabry

  Tampa, Florida 33609

  USA

  
	
   

  	
  Attn:

  	
  Legal Department

  
	
   

  	
  Fax:

  	
  (813) 739-0112

  



 


99

















 


	
  Holdings or the Canadian Borrower:

  	
  1600 Britannia Rd East

  Mississauga, Ontario

  L4W 1J2

  Canada

  
	
   

  	
  Attn:  General Counsel

  
	
   

  	
  Fax:   (905) 670-6520

  
	
   

  	
   

  
	
  The US Administrative Agent:

  	
  The Bank of Nova Scotia

  One Liberty Plaza, 25th Floor

  New York, New York 10006

  
	
   

  	
  Attn:  John Hall
          Senior
  Manager

  
	
   

  	
  Fax:   (212) 225-5090 

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
  Attn:  Mark S. Wojciechowski,
  Esq.

  
	
   

  	
  Fax:    (212) 262-1910

  
	
   

  	
   

  
	
  The Canadian Administrative Agent:

  	
  The Bank of Nova Scotia 

  Wholesale Banking Operations 

  720 King Street West, 3rd Floor 

  Toronto, Ontario 

  M5V 2T3 

  
	
   

  	
  Attention:  John Hall

                    Senior
  Manager 

  
	
   

  	
  Facsimile:   (416) 866-5991 

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
  Attn:  Mark S. Wojciechowski,
  Esq.

  
	
   

  	
  Fax:    (212)
  262-1910

  



 


provided
that any notice, request or demand to or upon the US Administrative Agent, the
Canadian Administrative Agent or the Lenders pursuant to Sections 2.3,
2.6, 2.9 and 5.1 shall not be effective until received.


 


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13.3.  No
Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the US Administrative Agent, the Canadian
Administrative Agent or any Lender, any right, remedy, power or privilege hereunder
or under the other Loan Documents shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.


 


13.4.  Survival
of Representations and Warranties. All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loans hereunder until one
year after repayment of all the outstanding Loans including, for greater
certainty Exchange Notes.


 


13.5.  Payment
of Expenses. The Borrowers agree (a) to pay or reimburse the Agents for all
their reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby, including
the reasonable fees, disbursements and other charges of counsel to the Agents,
(b) to pay or reimburse each Lender and Agent for all its reasonable and
documented costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the reasonable fees, disbursements and
other charges of counsel to each Lender and of counsel to the Agents, (c) to
pay, indemnify, and hold harmless each Lender and Agent from any and all recording
and filing fees and (d) to pay, indemnify, and hold harmless each Lender and
Agent and their respective directors, officers, employees, trustees and agents
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable and documented fees,
disbursements and other charges of counsel, with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents, the Exchange Note Indenture, the Exchange Notes, the
Guarantees of the Exchange Notes and any such other documents, including any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law or to any actual or alleged presence, release or
threatened release of Hazardous Materials involving or attributable to the operations
of either Borrower, any of its Subsidiaries or any of the Real Estate (all the
foregoing in this clause (d), collectively, the “indemnified
liabilities”), provided that the US Borrower and the Canadian
Borrower shall have no obligation hereunder to the US Administrative Agent or
any Lender nor any of their respective directors, officers, employees and
agents with respect to indemnified liabilities to the extent attributable to
(i) the gross negligence or willful misconduct of the party to be indemnified
to the extent so determined in the final, non-appealable judgment of a court of
competent jurisdiction or (ii) disputes among the US Administrative Agent,
the Lenders and/or their transferees. The agreements in this Section 13.5
shall survive repayment of the Loans and all other amounts payable hereunder.


 


101

















 


13.6.  Successors
and Assigns; Participations and Assignments. (a)   The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that (i) Holdings, the US Borrower and the Canadian Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by
Holdings, the US Borrower or the Canadian Borrower without such consent shall
be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c)
of this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the US Administrative Agent, the Canadian Administrative
Agent and the Lenders or holders of Senior Indebtedness, to the extent set forth
in Section 3) any legal or equitable right, remedy or claim under or by
reason of this Agreement.


 


(b)  (i)
Subject to the conditions set forth in clause (b)(ii) below, any Lender
may assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it) with the prior written consent of:


 


(A)  at any time prior to the Designated 1 Date,
but then only if any such assignment would result in the Agents holding less
than 50.1% in the aggregate of the aggregate outstanding amount of all Loans,
the applicable Borrower (which consent shall not be unreasonably withheld or
delayed; it being understood that either Borrower shall have the right to withhold
consent to any assignment if, in order for such assignment to comply with
applicable law, such Borrower would be required to obtain the consent of, or
make any filing or registration with, any Governmental Authority); provided
that no Borrower consent shall be required for an assignment to a Lender, an
Affiliate of a Lender (unless increased costs or additional amounts under Section
5.4(a) (other than with respect to Canadian Withholding taxes) would result
therefrom except if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing), an Approved Fund, or if an Event of Default
under Section 11.1 or Section 11.5 has occurred and is
continuing, any other assignee; and


 


(B)  the US Administrative Agent (which consent
shall not be unreasonably withheld or delayed).


 


(ii)  Assignments shall be subject to the following
additional conditions:


 


(A)  except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the US


 


102

















 


Administrative Agent)
shall not be less than $1,000,000, and increments of $1,000,000 in excess
thereof, unless each of the US Borrower and the US Administrative Agent
otherwise consents; provided that no such consent of the US Borrower
shall be required if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing; provided, further, that
contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;


 


(B)  each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement; provided that this clause shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender’s rights and obligations in respect of one Class of
Commitments or Loans;


 


(C)  the parties to each assignment shall execute
and deliver to the US Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500; provided that
only one such fee shall be payable in the event of simultaneous assignments to
or from two or more Approved Funds; and


 


(D)  the assignee, if it shall not be a Lender,
shall deliver to the US Administrative Agent an administrative questionnaire in
a form approved by the US Administrative Agent (the “Administrative
Questionnaire).”


 


For the purpose of this Section 13.6(b), the term “Approved
Fund” shall mean any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course and that is administered, advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers, advises or manages a Lender.


 


(iii)  Subject to acceptance and recording thereof
pursuant to clause (b)(v) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.10, 2.11, 3.5,
5.4 and 13.5). Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this Section
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with clause (c)
of this Section.


 


103

















 


(iv)  The US Administrative Agent, acting for this
purpose as an agent of the US Borrower and the Canadian Borrower, shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). Further, the Register shall contain the name and address of
the US Administrative Agent and the Canadian Administrative Agent and the
lending office through which each such Person acts under this Agreement. The
entries in the Register shall be conclusive, and the US Borrower, the Canadian
Borrower, the US Administrative Agent, the Canadian Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the US Borrower, the Canadian Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.


 


(v)  Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in clause (b) of this Section and any written consent to such
assignment required by clause (b) of this Section, the US Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.


 


(c)  (i)
    Any Lender may, without the
consent of the US Borrower, the Canadian Borrower, the US Administrative Agent
or the Canadian Administrative Agent, sell participations to one or more banks
or other entities (each, a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitments and/or the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the US Borrower, the Canadian Borrower,
the US Administrative Agent, the Canadian Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 13.1 that affects such Participant. Subject
to clause (c)(ii) of this Section, the US Borrower and the Canadian
Borrower agree that each Participant shall be entitled to the benefits of Sections
2.10, 2.11 and 5.4 to the same extent as if it were a Lender
(subject to the requirements of those Sections) and had acquired its interest
by assignment pursuant to clause (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 13.8(b)
as


 


104

















 


though it were a Lender, provided
such Participant agrees to be subject to Section 13.8(a) as though
it were a Lender. Each Lender that sells a participation hereunder shall record
in book entries maintained by such Lender the name and the amount of the
participating interest of each Participant entitled to receive payments in
respect of such participating interest.


 


(ii)  A Participant shall not be entitled to
receive any greater payment under Section 2.10 or 5.4 (other
than with respect to Canadian withholding taxes) than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the US Borrower’s and the Canadian Borrower’s prior written consent
(which consent shall not be unreasonably withheld).


 


(d)  Any
Lender may, without the consent of or notice to the US Borrower, the Canadian
Borrower or the US Administrative Agent or any other Person, at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. In
order to facilitate such pledge or assignment, the US Borrower and the Canadian
Borrower hereby agree that, upon request of any Lender at any time and from
time to time after each of the US Borrower and the Canadian Borrower has made
its initial borrowing hereunder, the US Borrower or the Canadian Borrower, as
the case may be, shall provide to such Lender, at the US Borrower’s or the
Canadian Borrower’s own expense, a promissory note, substantially in the form
of Exhibit D, as the case may be, evidencing the Loans, owing to such
Lender.


 


(e)  Subject
to Section 13.16, the US Borrower and the Canadian Borrower
authorize each Lender to disclose to any Participant, secured creditor of such
Lender or assignee (each, a “Transferee”) and any prospective Transferee
any and all financial information in such Lender’s possession concerning each
Borrower and its Affiliates that has been delivered to such Lender by or on
behalf of each Borrower and its Affiliates pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of each Borrower and its Affiliates
in connection with such Lender’s credit evaluation of each Borrower and its
Affiliates prior to becoming a party to this Agreement.


 


13.7.  Replacements
of Lenders under Certain Circumstances. (a)      The US
Borrower (on its own behalf and on behalf of the Canadian Borrower) shall be
permitted to replace any Lender that (i) requests reimbursement for amounts
owing pursuant to Section 2.10, 2.12, 3.5 or 5.4,
(ii) is affected in the manner described in Section 2.10(a)(iii)
and as a result thereof any of the actions described in such Section is
required to be taken, or (iii) becomes a Defaulting Lender, with a replacement
bank or other financial institution; provided that (1) such replacement
does not conflict with any Requirement of Law, (2) the US Borrower and/or the
Canadian Borrower, as applicable, shall repay (or the replacement bank or institution
shall purchase, at par) all Loans and other amounts (other than any disputed
amounts), pursuant to Section 2.10, 2.11, 2.12, 3.5
or 5.4, as the case may be) owing to such replaced Lender prior to the
date of replacement, (3) the replacement bank or institution, if not already a
Lender, and the


 


105

















 


terms and conditions of
such replacement, shall be reasonably satisfactory to the US Administrative
Agent, (4) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 13.6 (provided
that the US Borrower and the Canadian Borrower shall be obligated to pay the registration
and processing fee referred to therein) and (5) any such replacement shall
not be deemed to be a waiver of any rights that the US Borrower, the Canadian
Borrower, the US Administrative Agent or any other Lender shall have against
the replaced Lender.


 


(b)  If
any Lender (such Lender, a “Non-Consenting Lender”) has failed to
consent to a proposed amendment, waiver, discharge or termination which
pursuant to the terms of Section 13.1 requires the consent of such
Lender affected and with respect to which the Required Lenders shall have
granted their consent, the Borrowers shall have the right (unless such
Non-Consenting Lender grants such consent) to replace such Non-Consenting
Lender by requiring such Non-Consenting Lender to assign its Loans and/or its
Commitments hereunder to one or more assignees reasonably acceptable to the
Administrative Agent; provided that: (i) all Obligations with respect to
such assigned Loans or Commitments owing to such Non-Consenting Lender being
replaced shall be paid in full to such Non-Consenting Lender concurrently with
such assignment, and (ii) the replacement Lender shall purchase the foregoing
by paying to such Non-Consenting Lender a price equal to the principal amount
thereof plus accrued and unpaid interest thereon. In connection with any such
assignment, the Borrowers, US Administrative Agent, such Non-Consenting Lender
and the replacement Lender shall otherwise comply with Section 13.1.


 


13.8.  Adjustments;
Set-off. (a)      Subject to Section 3, If any
Lender (a “benefited Lender”) shall at any time receive any payment of
all or part of its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 11.5, or
otherwise), in a greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of such other Lender’s Loans, or
interest thereon, such benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender’s
Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such benefited
Lender to share the excess payment or benefits of such collateral or proceeds
ratably with each of the Lenders; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.


 


(b)  After
the occurrence and during the continuance of an Event of Default, in addition
to any rights and remedies of the Lenders provided by law, subject to Section
3, each Lender shall have the right, without prior notice to the US
Borrower or the Canadian Borrower, any such notice being expressly waived by
the US Borrower and the Canadian Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the US Borrower or the
Canadian Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or


 


106

















 


agency thereof to or for
the credit or the account of the US Borrower or the Canadian Borrower, as the
case may be. Each Lender agrees promptly to notify the US Borrower or the
Canadian Borrower, as the case may be, and the US Administrative Agent after
any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.


 


13.9.  Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by facsimile or other
electronic transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the US Borrower and
the US Administrative Agent.


 


13.10.  Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating 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.


 


13.11.  [Intentionally
Omitted].


 


13.12.  GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.


 


13.13.  Submission
to Jurisdiction; Waivers. Each of Holdings, the US Borrower and the
Canadian Borrower each hereby irrevocably and unconditionally:


 


(a)  submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York and appellate courts from any thereof;


 


(b)  consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;


 


(c)  agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each Borrower at its address set
forth in Section 13.2 or at such other address of which the US
Administrative Agent shall have been notified pursuant thereto;


 


(d)  agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and


 


107

















 


(e)  waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section 13.13
any special, exemplary, punitive or consequential damages.


 


13.14.  Acknowledgments.
Each of Holdings, the US Borrower and the Canadian Borrower hereby acknowledges
that:


 


(a)  it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;


 


(b)  none
of the US Administrative Agent, the Canadian Administrative Agent or any Lender
has any fiduciary relationship with or duty to Holdings, the US Borrower or the
Canadian Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the US Administrative
Agent, the Canadian Administrative Agent and Lenders, on one hand, and
Holdings, the US Borrower or the Canadian Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and


 


(c)  no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among Holdings, the US Borrower, the Canadian Borrower and the Lenders.


 


13.15.  WAIVERS
OF JURY TRIAL. HOLDINGS, THE US BORROWER, THE
CANADIAN BORROWER, THE US ADMINISTRATIVE AGENT, THE CANADIAN ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


13.16.  Confidentiality.
The US Administrative Agent, the Canadian Administrative Agent and each Lender
shall hold all non-public information furnished by or on behalf of the US
Borrower or the Canadian Borrower in connection with such Lender’s evaluation
of whether to become a Lender hereunder or obtained by such Lender or the US
Administrative Agent or the Canadian Administrative Agent pursuant to the
requirements of this Agreement (“Confidential Information”),
confidential in accordance with its customary procedure for handling
confidential information of this nature and (in the case of a Lender that is a
bank) in accordance with safe and sound banking practices and in any event may
make disclosure as required or requested by any regulatory or governmental
agency or representative thereof or pursuant to legal process or to such Lender’s
or the US Administrative Agent’s or the Canadian Administrative Agent’s
attorneys, professional advisors or independent auditors or Affiliates, provided
that unless specifically prohibited by applicable law or court order, each
Lender and the US Administrative Agent and the Canadian Administrative Agent
shall notify each Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Person or Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided, further, that in no event shall any Lender,
the US Administrative Agent or the Canadian Administrative Agent be obligated
or required to return


 


108

















 


any materials furnished
by such Borrower or any Subsidiary of such Borrower. Each Lender, the US
Administrative Agent and the Canadian Administrative Agent agrees that it will
not provide to prospective Transferees or to prospective direct or indirect
contractual counterparties in swap agreements to be entered into in connection
with Loans made hereunder any of the Confidential Information unless such
Person is advised of and agrees to be bound by the provisions of this Section 13.16.


 


13.17.  Language. The parties hereto confirm
that it is their wish that this Agreement, as well as any other documents
relating to this Agreement, including notices, schedules and authorizations,
have been and shall be drawn up in the English language only. Les signataires confirment leur volonté que la présente convention, de
même que tous les documents s’y rattachant, y compris tout avis, annexe et
autorisation, soient rédigés en anglais seulement.


 


13.18.  Judgment
Currency. (a)   The obligations of the US Borrower and the
Canadian Borrower hereunder and under the other Loan Documents to make payments
in Dollars (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 US
Administrative Agent, the Canadian Administrative Agent or a Lender of the full
amount of the Obligation Currency expressed to be payable to the US
Administrative Agent, the Canadian Administrative Agent or Lender under this
Agreement or the other Loan Documents. If, for the purpose of obtaining or
enforcing judgment against Holdings, the US Borrower, the Canadian Borrower or
any other Credit 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 prevailing, in each case, as of the date
immediately preceding the day on which the judgment is given (such Business 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,
Holdings, the US Borrower and the Canadian Borrower each covenant and agree 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
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 of exchange prevailing on the Judgment
Currency Conversion Date.


 


(c)  For
purposes of determining the prevailing rate of exchange, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.


 


13.19.  National
Security Laws. Each Lender hereby notifies the US Borrower and the Canadian
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), the Criminal Code, the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the United
Nations Suppression of Terrorism Regulations, the Anti-Terrorism Act and any equivalent
Law applicable under any relevant


 


109

















 


foreign jurisdiction
(collectively, the “National Security Laws”), it is required to obtain,
verify and record information that identifies the US Borrower and the Canadian
Borrower, which information includes the name and address of the US Borrower
and the Canadian Borrower and other information that will allow such Lender to
identify the US Borrower and the Canadian Borrower in accordance with
applicable National Security Laws.


 


110

















 


IN WITNESS
WHEREOF, each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.


 


	
   

  	
  STILE U.S.
  ACQUISITION CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STILE
  ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STILE
  CONSOLIDATED CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA, as US

  Administrative Agent, as Canadian Administrative

  Agent and as Joint Lead Arranger and Joint

  Bookrunner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  
					



 


S-1

















 


	
   

  	
  DEUTSCHE
  BANK SECURITIES INC., as Joint

  Lead Arranger, Joint Bookrunner and as

  Co-Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Eydenberg

  	
   

  
	
   

  	
   

  	
  Name:  John Eydenberg

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie L. Perry

  	
   

  
	
   

  	
   

  	
  Name: Stephanie
  Perry

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS SECURITIES
  LLC, as Joint Bookrunner and

  as Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A.
  Juge

  	
   

  
	
   

  	
   

  	
  Name:  David A. Juge

  
	
   

  	
   

  	
  Title:    Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren
  Jervey

  	
   

  
	
   

  	
   

  	
  Name: Warren
  Jervey

  
	
   

  	
   

  	
  Title:   Director and Counsel Region Americas
            Legal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  MONTREAL, as Co-Documentation

  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shahrokh
  Z. Shah

  	
   

  
	
   

  	
   

  	
  Name:  Shahrokh Z. Shah

  
	
   

  	
   

  	
  Title:    Managing Director

  
					



 


S-2

















 


	
   

  	
  SUNTRUST
  BANK, as Co-Documentation Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M.
  Burt

  	
   

  
	
   

  	
   

  	
  Name:  Ian M. Burt

  
	
   

  	
   

  	
  Title:   Managing Director

  
					



 


S-3

















 


	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG CAYMAN ISLANDS

  BRANCH, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  O’Leary

  	
   

  
	
   

  	
   

  	
  Name:  Paul O’Leary

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory
  Shefrin

  	
   

  
	
   

  	
   

  	
  Name: Gregory
  Shefrin

  
	
   

  	
   

  	
  Title:   Director

  



 


S-4

















 


	
   

  	
  DEUTSCHE
  BANK AG, CANADA BRANCH, as

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Maynard

  	
   

  
	
   

  	
   

  	
  Name:  John Maynard

  
	
   

  	
   

  	
  Title:   Managing Director& COO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Gynn

  	
   

  
	
   

  	
   

  	
  Name:  David Gynn

  
	
   

  	
   

  	
  Title:    Vice President

  
					



 


S-5

















 


	
   

  	
  UBS LOAN
  FINANCE LLC, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wilfred
  V. Salm

  
	
   

  	
   

  	
  Name: Wilfred
  V. Salm

  
	
   

  	
   

  	
  Title:   Director Banking Products Services,
           US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard
  Tavrow

  
	
   

  	
   

  	
  Name: Richard
  L. Tavrow

  
	
   

  	
   

  	
  Title:   Director Banking Products Services,
           US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS AG
  CANADA BRANCH, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amy Fung

  
	
   

  	
   

  	
  Name:  Amy Fung

  
	
   

  	
   

  	
  Title:    Director Banking Products Services

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  Gerry

  
	
   

  	
   

  	
  Name: Stephen
  Gerry

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST
  BANK, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M.
  Burt

  
	
   

  	
   

  	
  Name:  Ian M. Burt

  
	
   

  	
   

  	
  Title:   Managing Director

  



 


S-6

















 


	
   

  	
  BANK OF
  MONTREAL, as Lender 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shahrokh
  Z. Shah

  
	
   

  	
   

  	
  Name:  Shahrokh Z. Shah

  
	
   

  	
   

  	
  Title:    Managing Director

  



 


S-7