Exhibit
10.1




 





 


CREDIT
AGREEMENT


 


Dated as of July 19,
2005


 


among


 


SAFETY
PRODUCTS HOLDINGS, INC.,

as a Guarantor,


 


SPH
ACQUISITION LLC

(The Rights and Obligations of which

Hereunder are to be Assumed by

NORCROSS SAFETY PRODUCTS L.L.C.,

NORTH SAFETY PRODUCTS INC.

and

MORNING PRIDE MANUFACTURING L.L.C.,

as U.S. Borrowers),


 


NORTH SAFETY
PRODUCTS LTD.,

which shall become a party hereto

as Canadian Borrower,


 


The Several
Lenders

from Time to Time Parties Hereto


 


CREDIT SUISSE,

as Administrative Agent,


 


BANK OF
AMERICA, N.A.,

as Syndication Agent,


 


GMAC
COMMERCIAL FINANCE LLC


 


LASALLE BANK
NATIONAL ASSOCIATION


 


and


 


US BANK NATIONAL
ASSOCIATION,

as Documentation Agents,


 


and


 


CREDIT SUISSE,
TORONTO BRANCH,

as Canadian Agent




 


 





 


CREDIT SUISSE,

as Sole Lead Arranger and Sole Bookrunner


 





















 


TABLE OF CONTENTS


 


	
  SECTION 1

  
	
   

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Defined
  Terms

  	
   

  
	
  1.2

  	
   

  	
  Other Definitional Provisions

  	
   

  
	
  1.3

  	
   

  	
  Related Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  
	
   

  	
   

  	
   

  	
   

  
	
  AMOUNT AND TERMS OF COMMITMENTS

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Term Commitments; Procedure for Term Loan Borrowing

  	
   

  
	
  2.2

  	
   

  	
  Repayment of Term Loans

  	
   

  
	
  2.3

  	
   

  	
  Revolving Commitments

  	
   

  
	
  2.4

  	
   

  	
  Procedure for Revolving Loan Borrowing

  	
   

  
	
  2.5

  	
   

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

  	
   

  
	
  2.6

  	
   

  	
  Commitment Fees, etc.

  	
   

  
	
  2.7

  	
   

  	
  Termination or Reduction of Revolving
  Commitments

  	
   

  
	
  2.8

  	
   

  	
  Optional Prepayments

  	
   

  
	
  2.9

  	
   

  	
  Mandatory Prepayments and Commitment
  Reductions

  	
   

  
	
  2.10

  	
   

  	
  Conversion and Continuation Options

  	
   

  
	
  2.11

  	
   

  	
  Limitations on Eurodollar Tranches

  	
   

  
	
  2.12

  	
   

  	
  Interest Rates and Payment Dates

  	
   

  
	
  2.13

  	
   

  	
  Computation of Interest and Fees

  	
   

  
	
  2.14

  	
   

  	
  Inability to Determine Interest Rate

  	
   

  
	
  2.15

  	
   

  	
  Pro Rata Treatment and Payments

  	
   

  
	
  2.16

  	
   

  	
  Requirements of Law

  	
   

  
	
  2.17

  	
   

  	
  Taxes

  	
   

  
	
  2.18

  	
   

  	
  Indemnity

  	
   

  
	
  2.19

  	
   

  	
  Change of Lending Office

  	
   

  
	
  2.20

  	
   

  	
  Replacement of Lenders under Certain
  Circumstances

  	
   

  
	
  2.21

  	
   

  	
  Bankers’ Acceptances Under the Canadian Subfacility

  	
   

  
	
  2.22

  	
   

  	
  Repayment, Rollover and Conversion of
  Bankers’ Acceptances and C$ Prime Loans

  	
   

  
	
  2.23

  	
   

  	
  Power of Attorney for the Execution of
  Bankers’ Acceptances

  	
   

  
	
  2.24

  	
   

  	
  Circumstances Making Bankers’ Acceptances
  Unavailable

  	
   

  
	
  2.25

  	
   

  	
  Increases of the Facilities

  	
   

  
	
  2.26

  	
   

  	
  B/A Equivalent Loans

  	
   

  
	
  2.27

  	
   

  	
  Collection Allocation Mechanism

  	
   

  
	
  2.28

  	
   

  	
  Special Provisions Relating to Currencies
  Other Than Dollars

  	
   

  
	
  2.29

  	
   

  	
  Dollar Equivalent Calculations

  	
   

  
	
  2.30

  	
   

  	
  Parent Borrower as Agent

  	
   

  



 





















 


	
  SECTION 3

  
	
   

  	
   

  	
   

  	
   

  
	
  LETTERS OF CREDIT

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  U.S. L/C Commitment

  	
   

  
	
  3.2

  	
   

  	
  Procedure for Issuance of U.S. Letter of
  Credit

  	
   

  
	
  3.3

  	
   

  	
  Fees and Other Charges

  	
   

  
	
  3.4

  	
   

  	
  U.S. L/C Participations

  	
   

  
	
  3.5

  	
   

  	
  Reimbursement Obligations of U.S. Borrowers

  	
   

  
	
  3.6

  	
   

  	
  Obligations Absolute

  	
   

  
	
  3.7

  	
   

  	
  U.S. Letter of Credit Payments

  	
   

  
	
  3.8

  	
   

  	
  Applications

  	
   

  
	
  3.9

  	
   

  	
  Canadian L/C Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  
	
   

  	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Financial Condition

  	
   

  
	
  4.2

  	
   

  	
  No Change

  	
   

  
	
  4.3

  	
   

  	
  Existence; Compliance with Law

  	
   

  
	
  4.4

  	
   

  	
  Power; Authorization; Enforceable
  Obligations

  	
   

  
	
  4.5

  	
   

  	
  No Legal Bar

  	
   

  
	
  4.6

  	
   

  	
  No Material Litigation

  	
   

  
	
  4.7

  	
   

  	
  No Default

  	
   

  
	
  4.8

  	
   

  	
  Ownership of Property; Liens

  	
   

  
	
  4.9

  	
   

  	
  Intellectual Property

  	
   

  
	
  4.10

  	
   

  	
  Taxes

  	
   

  
	
  4.11

  	
   

  	
  Federal Regulations

  	
   

  
	
  4.12

  	
   

  	
  Labor Matters

  	
   

  
	
  4.13

  	
   

  	
  ERISA, Canadian Pension and Benefit Plans and Foreign Plans

  	
   

  
	
  4.14

  	
   

  	
  Investment Company Act; Public Utility
  Holding Company Act; Other Regulations

  	
   

  
	
  4.15

  	
   

  	
  Subsidiaries

  	
   

  
	
  4.16

  	
   

  	
  Use of Proceeds

  	
   

  
	
  4.17

  	
   

  	
  Environmental Matters

  	
   

  
	
  4.18

  	
   

  	
  Accuracy of Information, etc.

  	
   

  
	
  4.19

  	
   

  	
  Security Documents

  	
   

  
	
  4.20

  	
   

  	
  Solvency

  	
   

  
	
  4.21

  	
   

  	
  Senior Indebtedness.

  	
   

  
	
  4.22

  	
   

  	
  Regulation H

  	
   

  
	
  4.23

  	
   

  	
  Certain Documents

  	
   

  
	
  4.24

  	
   

  	
  Capital Structure

  	
   

  
	
  4.25

  	
   

  	
  Mortgaged Properties

  	
   

  
	
  4.26

  	
   

  	
  Acquisition Documents; Representations and
  Warranties in Acquisition Agreement

  	
   

  
	
  4.27

  	
   

  	
  Anti-Terrorism Law

  	
   

  
	
  4.28

  	
   

  	
  Casualty Event

  	
   

  



 


ii





















 


	
  SECTION 5

  
	
   

  	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Conditions to Initial Extension of Credit

  	
   

  
	
  5.2

  	
   

  	
  Conditions to Each Extension of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  
	
   

  	
   

  	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Financial Statements

  	
   

  
	
  6.2

  	
   

  	
  Certificates; Other Information

  	
   

  
	
  6.3

  	
   

  	
  Payment of Obligations

  	
   

  
	
  6.4

  	
   

  	
  Maintenance of Existence; Compliance

  	
   

  
	
  6.5

  	
   

  	
  Maintenance of Property; Insurance

  	
   

  
	
  6.6

  	
   

  	
  Inspection of Property; Books and Records;
  Discussions

  	
   

  
	
  6.7

  	
   

  	
  Notices

  	
   

  
	
  6.8

  	
   

  	
  Environmental Laws

  	
   

  
	
  6.9

  	
   

  	
  Additional Collateral, etc.

  	
   

  
	
  6.10

  	
   

  	
  Real Estate Documentation

  	
   

  
	
  6.11

  	
   

  	
  Maintenance of Ratings

  	
   

  
	
  6.12

  	
   

  	
  Post-Closing Collateral Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  
	
   

  	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Financial Condition Covenants

  	
   

  
	
  7.2

  	
   

  	
  Indebtedness

  	
   

  
	
  7.3

  	
   

  	
  Liens

  	
   

  
	
  7.4

  	
   

  	
  Fundamental Changes

  	
   

  
	
  7.5

  	
   

  	
  Disposition of Property

  	
   

  
	
  7.6

  	
   

  	
  Restricted Payments

  	
   

  
	
  7.7

  	
   

  	
  Capital Expenditures

  	
   

  
	
  7.8

  	
   

  	
  Investments

  	
   

  
	
  7.9

  	
   

  	
  Optional Payments and Modifications of
  Certain Debt Instruments

  	
   

  
	
  7.10

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
  7.11

  	
   

  	
  Sales and Leasebacks

  	
   

  
	
  7.12

  	
   

  	
  Changes in Fiscal Periods

  	
   

  
	
  7.13

  	
   

  	
  Negative Pledge Clauses

  	
   

  
	
  7.14

  	
   

  	
  Clauses Restricting Subsidiary Distributions

  	
   

  
	
  7.15

  	
   

  	
  Lines of Business

  	
   

  
	
  7.16

  	
   

  	
  Limitation on Lease Expense

  	
   

  
	
  7.17

  	
   

  	
  Change of Name

  	
   

  
	
  7.18

  	
   

  	
  Anti-Terrorism Law; Anti-Money Laundering

  	
   

  
	
  7.19

  	
   

  	
  Embargoed Person

  	
   

  
	
  7.20

  	
   

  	
  Limitation on Capital and Holdco Capital

  	
   

  
	
  7.21

  	
   

  	
  Limitation on Holdco

  	
   

  



 


iii





















 


	
  SECTION 8

  
	
   

  	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  
	
   

  	
   

  	
   

  	
   

  
	
  THE AGENTS

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Appointment

  	
   

  
	
  9.2

  	
   

  	
  Delegation of Duties

  	
   

  
	
  9.3

  	
   

  	
  Exculpatory Provisions

  	
   

  
	
  9.4

  	
   

  	
  Reliance by Administrative Agent and the
  Canadian Agent

  	
   

  
	
  9.5

  	
   

  	
  Notice of Default

  	
   

  
	
  9.6

  	
   

  	
  Non-Reliance on Agents and Other U.S.
  Lenders

  	
   

  
	
  9.7

  	
   

  	
  Indemnification

  	
   

  
	
  9.8

  	
   

  	
  Agent in Its Individual Capacity

  	
   

  
	
  9.9

  	
   

  	
  Successor Administrative Agent

  	
   

  
	
  9.10

  	
   

  	
  Authorization to Release Guarantees and
  Liens

  	
   

  
	
  9.11

  	
   

  	
  Documentation Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10

  
	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Amendments and Waivers

  	
   

  
	
  10.2

  	
   

  	
  Notices

  	
   

  
	
  10.3

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  10.4

  	
   

  	
  Survival of Representations and Warranties

  	
   

  
	
  10.5

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  
	
  10.6

  	
   

  	
  Successors and Assigns; Participations and
  Assignments

  	
   

  
	
  10.7

  	
   

  	
  Adjustments; Set-off

  	
   

  
	
  10.8

  	
   

  	
  Counterparts

  	
   

  
	
  10.9

  	
   

  	
  Severability

  	
   

  
	
  10.10

  	
   

  	
  Integration

  	
   

  
	
  10.11

  	
   

  	
  GOVERNING LAW

  	
   

  
	
  10.12

  	
   

  	
  Submission to Jurisdiction; Waivers

  	
   

  
	
  10.13

  	
   

  	
  Acknowledgements

  	
   

  
	
  10.14

  	
   

  	
  Confidentiality

  	
   

  
	
  10.15

  	
   

  	
  Joint and Several Obligations

  	
   

  
	
  10.16

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  
	
  10.17

  	
   

  	
  Canadian Amendments and Waivers

  	
   

  
	
  10.18

  	
   

  	
  Judgment Currency

  	
   

  
	
  10.19

  	
   

  	
  USA PATRIOT Act Notice

  	
   

  



 


iv





















 


	
  ANNEX:
  A

  	
  Pricing
  Grid

  
	
   

  	
   

  
	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  1.1(A)

  	
  Commitments

  
	
  1.1(B)

  	
  Mortgaged
  Property

  
	
  1.1(C)

  	
  Individual
  Investors

  
	
  1.1(D)

  	
  Refinancings

  
	
  1.1(E)

  	
  Existing
  Letters of Credit

  
	
  1.1(F)

  	
  Excluded
  Foreign Subsidiaries

  
	
  4.4

  	
  Consents,
  Authorizations, Filings and Notices

  
	
  4.6

  	
  Material
  Litigation

  
	
  4.8

  	
  Real
  Property

  
	
  4.13

  	
  ERISA
  Matters

  
	
  4.15

  	
  Subsidiaries

  
	
  4.19(a)

  	
  UCC Filing
  Jurisdictions

  
	
  4.19(b)

  	
  Mortgage
  Filing Jurisdictions

  
	
  4.19(c)

  	
  Canadian
  Filing Jurisdictions

  
	
  4.24(b)

  	
  Capital
  Structure

  
	
  4.26

  	
  Acquisition
  Documents

  
	
  5.1(e)

  	
  Local
  Counsel

  
	
  5.1(h)

  	
  Fair Market
  Value

  
	
  5.1(h)(viii)

  	
  U.S.
  Mortgaged Property

  
	
  6.12(a)

  	
  Leasehold
  Properties

  
	
  6.12(b)

  	
  Owned
  Properties

  
	
  7.2(e)

  	
  Existing
  Indebtedness

  
	
  7.3(f)

  	
  Existing
  Liens

  
	
  7.8(o)

  	
  Permitted
  Investments

  
	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  A

  	
  Form of
  Guarantee and Collateral Agreement

  
	
  B

  	
  Form of
  Compliance Certificate

  
	
  C

  	
  Form of
  Closing Certificate

  
	
  D-1

  	
  Form of
  Fee Mortgage

  
	
  D-2

  	
  Form of
  Leasehold Mortgage

  
	
  E

  	
  Form of
  Assignment and Acceptance

  
	
  F-1

  	
  Form of
  Legal Opinion of Dechert LLP

  
	
  F-2

  	
  Form of
  Legal Opinion of Sternthal Katznelson Montigny, L.L.P.

  
	
  F-3

  	
  Form of
  Legal Opinion of Local Counsel

  
	
  G

  	
  Form of
  Prepayment Option Notice

  
	
  H

  	
  Form of
  Exemption Certificate

  
	
  I

  	
  Form of
  Notice of Canadian Loan Utilization by way of Bankers’ Acceptances or B/A Equivalent
  Loans

  
	
  J-1

  	
  Form of
  Quebec Security Documents

  
	
  J-2

  	
  Form of
  Ontario Leasehold Mortgage

  
	
  J-3

  	
  Form of
  General Security Agreement

  
	
  K

  	
  Form of
  Canadian L/C Agreement

  
	
  L

  	
  Form of
  Assumption Agreement

  
	
  M

  	
  Form of
  Joinder Agreement

  



 


v





















 


	
  N

  	
  Form of
  Borrowing Request

  
	
  O

  	
  Form of
  Notice of Conversion or Continuation

  



 


vi





















 


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


 


W I T N E S S E T H:


 


WHEREAS, Holdco
and Acquisition Corp., Holdco’s direct U.S. Wholly Owned Subsidiary, are each
newly formed companies organized by Odyssey Investment Partners, LLC and certain
other investors;


 


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


 


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


 


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


 


WHEREAS, the
Equity Financing (as defined below) shall be consummated simultaneously
herewith.


 


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


 





















 


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


 


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


 


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


 


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


 


SECTION 1


 


DEFINITIONS


 


1.1           Defined
Terms.  As used in this Agreement,
the terms listed in this Section 1.1 shall have the respective meanings
set forth in this Section 1.1.


 


“ABR”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) 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%. 
For purposes hereof:  Prime
Rate shall mean the rate of interest per annum announced from time to time
by the Administrative Agent as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Administrative Agent in connection with extensions of
credit to debtors); the effective date of any change in the Prime Rate shall be
the date of announcement of such change. 
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.


 


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


 


“Acceptance
Fee”:  the fee payable in C$ to the
Canadian Lenders in respect of Bankers’ Acceptances computed in accordance with
Section 2.21.


 


“Acquisition”:  as defined in the preamble hereto.


 


2





















 


“Acquisition
Agreement”:  as defined in the
preamble hereto.


 


“Acquisition
Corp.”:  as defined in the preamble
hereto.


 


“Acquisition
Documents”:  the collective reference
to the Acquisition Agreement and the other documents listed on Schedule 4.26.


 


“Additional
Holdco Notes”:  as defined in the
preamble hereto.


 


“Adjustment
Date”:  as defined in the Pricing
Grid.


 


“Administrative
Agent”:  as defined in the preamble
hereto.


 


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


 


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


 


“Agents”:  the collective reference to the Syndication
Agent, the Documentation Agent, the Canadian Agent and the Administrative
Agent.


 


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


 


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


 


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


 


“Alternate
Currency”:  Euros.


 


“Alternate
Currency Equivalent”:  as to any
amount denominated in Dollars as of any date of determination, the amount of
Alternate Currency that could be purchased with such amount of Dollars based
upon the Spot Selling Rate.


 


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


 


“Alternate
Currency Revolving Loan”:  each
Revolving Loan denominated in an Alternate Currency.


 


“Amended
Hypothec”: as defined in Section 6.12(c)


 


“Anti-Terrorism
Laws”:  as defined in Section 4.27.


 


3





















 


“Applicable
Margin”:  for each Type of Loan, the
rate per annum set forth under the relevant column heading below:


 




	
   

  	
   

  	
  ABR Loans and

  C$Prime Loans

  	
   

  	
  Eurodollar Loans

  and Bankers’

  Acceptances

  	
   

  
	
  U.S. Revolving Loans and Canadian Loans

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loans

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  






 


provided
that on and after each Adjustment Date to occur after the completion of one
full fiscal quarter of the Parent Borrower following the Closing Date, the
Applicable Margin with respect to U.S. Revolving Loans, U.S. Swingline Loans
and Canadian Loans will be determined pursuant to the Pricing Grid.


 


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


 


“Approved
Currency”:  each of Dollars and
Alternate Currency.


 


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


 


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


 


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


 


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


 


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


 


“Assumption”:  as defined in the preamble hereto.


 


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


 


“Available
Canadian Commitment”: as to any Canadian Lender at any time, an amount
equal to the excess, if any, of (a) such Lender’s Canadian Commitment then
in effect minus (b) such Lender’s Canadian Extensions of Credit
then outstanding.


 


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


 


4





















 


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


 


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


 


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


 


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


 


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


 


“Borrowers”:  as defined in the preamble hereto.


 


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


 


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


 


“Business
Day”:  a day other than a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
or required by law to close, provided that with respect to notices and
determinations in connection with, and payments of principal and interest on, (a) Eurodollar
Loans, such day is also a day for trading by and between banks in Dollar
deposits in the London interbank eurodollar market, and (b) an Alternate
Currency Revolving Loan denominated in Euros, the term “Business Day” shall
also exclude any day on which the Trans-European Real-time Gross Settlement
Operating System (or any successor operating system) is not operating (as
determined in good faith by the Administrative Agent), and provided, further,
that with respect to notices and determinations in connection with, and
payments of principal and interest on, a Canadian Loan, a day on which Canadian
chartered banks are open for business in Toronto, Canada, but excluding
Saturday, Sunday and any other day on which Canadian chartered banks are authorized
or required by law to close in Toronto, Canada.


 


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


 


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


 


5





















 


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


 


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


 


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


 


“Canadian
Agent”:  as defined in the preamble
hereto.


 


“Canadian
Borrower”:  as defined in the preamble
hereto.


 


“Canadian
Commitment”: as to any Canadian Lender, the obligation of such Lender, if
any, to make extensions of credit to the Canadian Borrower pursuant to Sections
2.3(c) and 3.9 hereof and the Canadian Loan Documents in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading “Canadian Commitment” opposite such Lender’s name on Schedule 1.1A
or in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the
terms hereof.  The amount of the Total
Canadian Commitments is an amount denominated in C$ having a Dollar Equivalent
of $25,000,000, or such lesser amount at any time equal to an amount
denominated in C$ having a Dollar Equivalent of $25,000,000 minus the
amount at such time outstanding under the U.S. Revolving Extensions of Credit
in excess of $25,000,000.  Upon such
adjustment of the Total Canadian Commitments, the Canadian Commitment as to any
Canadian Lender shall be adjusted pro rata in accordance with such Lender’s
Canadian Revolving Percentage.


 


“Canadian
Commitment Period”:  the period from but
excluding the Closing Date to the Revolving Termination Date.


 


“Canadian
Dollars” and “C$”:  dollars in
lawful currency of Canada.


 


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


 


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


 


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


 


6





















 


“Canadian
Extensions of Credit”:  as to any
Canadian Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Canadian Loans held by such Lender outstanding
and (b) such Lender’s Canadian Revolving Percentage of the Canadian L/C
Obligations then outstanding.


 


“Canadian
Issuing Lender”:  any Canadian Lender
designated as the Canadian Issuing Lender in a written notice from the Canadian
Agent and the Canadian Borrower to the Canadian Lenders.


 


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


 


“Canadian
L/C Commitment”:  an amount denominated
in C$ having a Dollar Equivalent of $1,000,000.


 


“Canadian
L/C Obligations”:  at any time, an
amount equal to the sum of (a) the aggregate then undrawn and unexpired
amount of the then outstanding Canadian Letters of Credit and (b) the
aggregate amount of drawings under Canadian Letters of Credit that have not
then been reimbursed pursuant to the Canadian L/C Agreements.


 


“Canadian
Lenders”:  as defined in the preamble
hereto.


 


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


 


“Canadian
Letters of Credit”:  letters of
credit issued by the Canadian Issuing Lender at the request of the Canadian
Borrower or any of them pursuant to the provisions hereof.


 


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


 


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


 


“Canadian
Reimbursement Obligation”:  the
obligation of the Canadian Borrower to reimburse the Canadian Issuing Lender
pursuant to the Canadian L/C Agreements for amounts drawn under Canadian
Letters of Credit.


 


7





















 


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


 


“Canadian
Required Prepayment Lenders”:  the
Requisite Lenders in respect of the Canadian Subfacility.


 


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


 


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


 


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


 


“Canadian
Security Documents”:  the Quebec
Security Documents, the Ontario Leasehold Mortgage and the General Security
Agreement to be granted by the Canadian Borrower in favor of the Canadian Agent
for the benefit of the Canadian Lenders in substantially the forms attached
hereto as Exhibits J-1, J-2, and J-3 respectively, as amended, supplemented or
otherwise modified from time to time, and the Mortgages and all other security
documents heretofore and hereafter delivered to the Canadian Agent granting a
Lien on any property of the Canadian Borrower or any Subsidiary thereof to
secure the obligations and liabilities of the Canadian Borrower or any
Subsidiary thereof to the Canadian Agent and the Canadian Lenders.


 


“Canadian
Subfacility”:  as defined in the definition
of “Facility”.


 


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


 


“Canadian
Subsidiary Guarantor”:  each Canadian
Subsidiary.


 


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


 


“Canadian
Wholly Owned Subsidiary Guarantor”: 
any Canadian Subsidiary Guarantor that is a Wholly Owned Subsidiary of
the Canadian Borrower.


 


“Capital”  Norcross Capital Corp., a Delaware
corporation.


 


“Capital
Expenditures”:  for any period, with
respect to any Person, the aggregate, without duplication, of all expenditures
by such Person and its Subsidiaries for the acquisition or leasing (pursuant to
a capital lease) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such
period) that should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries (excluding (i) any such asset acquired
in connection with normal replacement and maintenance programs properly charged
to current operations, (ii)


 


8





















 


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


 


“Capital
Lease Obligations”:  as to any
Person, the obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified
and accounted for as capital leases on a balance sheet of such Person under
GAAP and, for the purposes of this Agreement, the amount of such obligations at
any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.


 


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


 


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


 


“Casualty
Event”: any loss of title or any loss of or damage to or destruction of, or
any condemnation or other taking (including by any Governmental Authority) of,
any property of the Parent Borrower or any of its Subsidiaries.  “Casualty Event” shall include but not be
limited to any taking of all or any part of any Real Property of any person or
any part thereof, in or by condemnation or other eminent domain or
expropriation proceedings pursuant to any law, or by reason of the temporary
requisition of the use or occupancy of all or any part of any Real Property of
any person or any part thereof by any Governmental Authority, civil or
military.


 


“Closing
Date”:  the date on which the
conditions precedent set forth in Section 5.1 shall have been satisfied.


 


9





















 


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


 


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


 


“Collateral
Mortgage Bond”:  the Bond issued or
to be issued by the Canadian Borrower in favor of the Canadian Agent.


 


“Cominar
Hypothec”: as defined in Section 6.12(c)


 


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


 


“Commitment
Fee Rate”:  0.50%; provided
that on and after each Adjustment Date to occur after the completion of one
full fiscal quarter of the Parent Borrower following the Closing Date, the
Commitment Fee Rate will be determined pursuant to the Pricing Grid.


 


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


 


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


 


“Compliance
Certificate”:  a certificate duly
executed by a Responsible Officer substantially in the form of Exhibit B.


 


“Consolidated
Current Assets”:  at any date, all
amounts (other than cash and Cash Equivalents) that would, in conformity with
GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of Parent Borrower and its
Subsidiaries at such date.


 


“Consolidated
Current Liabilities”:  at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of Parent
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of Parent Borrower and its Subsidiaries, (b) without
duplication of clause (a) above, all Indebtedness consisting of U.S.
Revolving Loans, U.S. Swingline Loans or Canadian Loans to the extent otherwise
included therein and (c) tax reserves.


 


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


 


10





















 


course of business), provided that the
amounts referred to in this clause (f) shall not, in the aggregate, exceed
(A) $3,000,000 for any fiscal year of Parent Borrower in the case of
extraordinary, unusual or non-recurring cash expenses or losses (including cash
losses on sales of assets outside of the ordinary course of business but
excluding those described in clause (B) immediately following) or (B) $5,000,000
for any fiscal year of Parent Borrower in the case of extraordinary, unusual or
non-recurring restructuring charges arising out of Permitted Acquisitions
(including severance and other employee termination costs); provided,
that up to $5,000,000 of any amount referred to above in this clause B, if
not so charged in the initial fiscal year for which it is permitted, may be
carried over to the next immediately succeeding fiscal year, but not to any
subsequent fiscal years, (g) to the extent actually reimbursed, expenses
incurred to the extent covered by indemnification provisions in any agreement
in connection with any Permitted Acquisition, (h) extraordinary, unusual
or non-recurring costs or expenses in connection with the relocation and/or
consolidation of facilities, merger integration costs and costs associated with
the opening and permanent closing of facilities (including the closure of the
facility located in Addison, Illinois and the transfer of certain of the operations
conducted therein to the facility located in Charleston, South Carolina) in an
amount not to exceed $1,000,000 in the aggregate, (i) any other non-cash
charges or losses, (j) management, monitoring, consulting and advisory
fees and related expenses and any other fees and expenses (or any accruals
relating to such fees and related expenses) paid in accordance with Section 7.10(e),
(k) to the extent covered by insurance proceeds actually received, expenses
with respect to liability or Casualty Events or business interruption,
(l) extraordinary, unusual or non-recurring expenses incurred in
connection with the Transactions, not to exceed $27,000,000, including
management compensation, (m) any non-cash write-off of up to $10,000,000
of losses on the Disposition of North Safety Products (Africa)(Pty) Ltd., (n)
with respect to any Event of Default under any covenant set forth in Section 7.1,
the Net Cash Proceeds of any equity issuance to the Permitted Holders and the
Individual Investors, in each case solely to the extent that such Net Cash
Proceeds (A) are actually received by the Parent Borrower no later than
ten (10) days after the delivery of a Notice of Intent to Cure and (B) do
not exceed the aggregate amount necessary to cure such Event of Default under Section 7.1
for any applicable period (each, a “Permitted Cure Issuance”), it being
understood that this clause (n) may not be relied on for purposes of
calculating any financial ratios other than as applicable to Section 7.1;
provided that (A) no more than two Permitted Cure Issuances may be made in
any four fiscal quarter period and (B) in each eight fiscal quarter period
there shall be a period of at least four consecutive fiscal quarters during
which no Permitted Cure Issuance is made; provided, further that to the extent
the receipt of any Net Cash Proceeds of any Permitted Cure Issuance is an
effective addition to Consolidated EBITDA as contemplated by, and in accordance
with, the foregoing and, as a result thereof, any Event of Default of the
covenants set forth in Section 7.1 shall have been cured for any applicable
period, such cure shall be deemed to be effective as of the last day of such
applicable period and such addition to Consolidated EBITDA shall apply to any
period of four (4) consecutive fiscal quarters that includes the fiscal
quarter in respect of which such addition was made and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, gains on the sales of assets outside of the ordinary course of
business) and (c) any other non-cash income or gains, all as determined on
a consolidated basis.  For the purposes
of calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each a “Reference Period”) pursuant to any determination of
the Consolidated Total Leverage Ratio or the Consolidated Senior Leverage
Ratio, (i) if at any time during such Reference Period the Parent Borrower
or any Subsidiary shall have made any Material Disposition, the Consolidated
EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject of such
Material Disposition for such Reference Period or increased by an amount equal
to the Consolidated EBITDA (if negative) attributable thereto for such
Reference Period and (ii) if during such Reference Period the Parent
Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated
EBITDA for such Reference Period shall be calculated after giving pro  forma
effect thereto as if such Material Acquisition occurred on the first day of
such Reference Period.  As used in this
definition,


 


11





















 


“Material Acquisition” means any
acquisition of property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of business or
constitutes all or substantially all of the common equity of a Person and (b) involves
the payment of consideration by the Parent Borrower and its Subsidiaries in
excess of $1,500,000; and “Material Disposition” means any Disposition
of property or series of related Dispositions of property that yields gross
proceeds to the Parent Borrower or any of its Subsidiaries in excess of $1,500,000.


 


“Consolidated
Fixed Charge Coverage Ratio”:  for
any period, the ratio of (a) Consolidated EBITDA for such period less the
aggregate amount actually paid by the Parent Borrower and its Subsidiaries
during such period on account of Capital Expenditures to (b) Consolidated
Fixed Charges for such period.


 


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


 


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


 


“Consolidated
Interest Expense”:  for any period,
the excess, if any, of (a) total cash interest expense (including that
attributable to Capital Lease Obligations) of Parent Borrower and its
Subsidiaries for such period with respect to all outstanding Indebtedness of Parent
Borrower and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP)
over (b) total cash interest income of Parent Borrower and its
Subsidiaries for such period.


 


“Consolidated
Net Income”:  for any period, the
consolidated net income (or loss) of Parent Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded (a) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of the Parent Borrower or is
merged into or consolidated with the Parent Borrower or any of its
Subsidiaries, (b) the income (or loss) of any Person (other than a
Subsidiary of the Parent Borrower) in which the Parent Borrower or any of its
Subsidiaries has an ownership interest, except in respect of income to the
extent that any such income is actually received by the Parent Borrower or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Parent Borrower to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law
applicable to such Subsidiary.


 


“Consolidated
Senior Debt”:  all Consolidated Total
Debt other than the Senior Subordinated Notes and any other Indebtedness of the
U.S. Borrowers or the Canadian Borrower that, by its terms or the terms of any
applicable subordination agreement, is subordinated to the prior payment in
full of the Obligations.


 


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


 


12





















 


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


 


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


 


“Consolidated
Working Capital”:  at any date, the
excess of Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.


 


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


 


“Contractual
Obligation”:  as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.


 


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


 


“Delivery
Order”:  the Delivery Order relating
to the Collateral Mortgage Bond.


 


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


 


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


 


13





















 


arithmetic average (as determined by the
Canadian Agent) of the percentage discount rates (expressed as a decimal and rounded
upward, if necessary, to the nearest 1/100 of 1%) quoted to the Canadian Agent
by the Schedule II/III Reference Lenders as the percentage discount rate
at which each such Schedule II/III Reference Lender would, in accordance
with its normal practices, at approximately 10:00 a.m., Toronto time, on
such day, be prepared to purchase bankers’ acceptances accepted by such bank
having a face amount and term comparable to the face amount and Contract Period
of such Bankers’ Acceptance.


 


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


 


“Documentation
Agents”:  as defined in the preamble
hereto.


 


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


 


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


 


“Domestic
Subsidiary”:  any Subsidiary of the Parent
Borrower organized under the laws of any jurisdiction within the United States.


 


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


 


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


 


“Equity
Financing”:  the cash equity
investment in Holdco by the Equity Investors as the same is further invested in
cash equity in the Parent Borrower on or prior to the Closing Date, in an amount
not less than $109.0 million on terms and conditions reasonably satisfactory
to the Administrative Agent.


 


“Equity
Investors”:  Odyssey Investment
Partners Fund III, L.P., General Electric Pension Trust and the Individual
Investors.


 


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


 


14





















 


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


 


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


 


“Euro
Sublimit”:  the maximum principal
amount of Loans that the Borrowers may have outstanding at any one time
denominated in Euros, not to exceed the Dollar Equivalent of $25,000,000.


 


“Eurocurrency
Reserve Requirements”:  for any day
as applied to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as Eurocurrency
Liabilities in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.


 


“Eurodollar
Base Rate”:  with respect to any
Eurodollar Loan for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date
that is two Business Days prior to the beginning of the relevant Interest
Period by reference to the British Bankers’ Association Interest Settlement
Rates for deposits in the relevant Approved Currency (as set forth by the
Bloomberg Information Service or any successor thereto or any other service
selected by the Administrative Agent which 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; provided that,
to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the Eurodollar Base Rate shall be the
interest rate per annum determined by the Administrative Agent to be the
average of the rates per annum at which deposits in such Approved Currency are
offered for such relevant Interest Period to major banks in the London
interbank market in London, England by the 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.


 


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


 


“Eurodollar
Rate”:  with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):


 


	
   

  	
   

  	
  Eurodollar Base Rate

  	
   

  
	
   

  	
  1.00 – 

  	
  Eurocurrency Reserve Requirements

  



 


“Eurodollar
Tranche”:  the collective reference
to Eurodollar Loans the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).


 


“Event of
Default”:  any of the events
specified in Section 8, provided that any requirement for the
giving of notice, the lapse of time, or both, has been satisfied.


 


“Excess
Cash Flow”:  for any fiscal year of Parent
Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year, (ii) the provision for income tax expense
(including any franchise taxes imposed in lieu of income taxes and any income
taxes that would be payable if the entity were to become a taxable entity for
purposes of federal, state or local


 


15





















 


income taxes) deducted in arriving at such
Consolidated Net Income, (iii) the amount of all non-cash charges
(including depreciation and amortization) deducted in arriving at such Consolidated
Net Income, (iv) decreases in Consolidated Working Capital for such fiscal
year (excluding any changes in Consolidated Working Capital due to the effects
of purchase accounting adjustments) and (v) the aggregate net amount of
non-cash loss on the Disposition of property by the Parent Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income less (b) the sum, without duplication, of (i) the
amount of all non-cash items included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by the Parent Borrower and
its Subsidiaries in cash during such fiscal year on account of Capital
Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such Expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), including on account of Form Purchases,
(iii) the aggregate amount actually paid by the Parent Borrower and its
Subsidiaries during such fiscal year on account of Investments permitted by Section 7.8(h),
(i) or (n) (excluding the principal amount of Indebtedness incurred to
finance such Investments), (iv) the aggregate amount of all prepayments of
U.S. Revolving Loans, U.S. Swingline Loans and Canadian Loans during such
fiscal year to the extent accompanying permanent optional reductions of the
U.S. Revolving Commitments or Canadian Commitments, as the case may be, and all
optional prepayments of the Term Loans during such fiscal year, (v) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including the Term Loans) of the Parent Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit facility
to the extent there is not an equivalent permanent reduction in commitments
thereunder), (vi) increases in Consolidated Working Capital for such
fiscal year (excluding any changes in Consolidated Working Capital  due to the effects of purchase accounting
adjustments), (vii) the aggregate net amount of non-cash gain on the Disposition
of property by the Parent Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income, (viii) any
cash payments made during such fiscal year in respect of non-cash charges
described in clause (a)(iii) or (v) above that were deducted in
determining Consolidated Net Income for a prior fiscal year, (ix) the
aggregate amount of Restricted Payments made during such fiscal year as
permitted by Section 7.6(b) or (f), (x) amounts paid in cash during
such fiscal year by the Parent Borrower and its Subsidiaries in respect of
taxes based upon income (including any franchise taxes imposed in lieu of income
taxes), (xi) cash earnout and royalty payments made during such fiscal year to
former owners of acquired businesses that were not deducted as expenses in
determining such Consolidated Net Income, (xii) the aggregate amount of
cash payments related to pension, post-retirement and deferred compensation
obligations made during such fiscal year to the extent not expensed during such
fiscal year, (xiii) dividends paid by the Parent Borrower during such fiscal
year as permitted by Sections 7.6(d) and 7.6(e), (xiv) to the extent
not already deducted in determining Consolidated Net Income, (A) cash
expenses and fees incurred in connection with the Transactions, (B) fees
and expenses in connection with or refinancings permitted by Section 7.2
and  (C) cash expenses and fees
incurred in connection with any Investment permitted to be made pursuant to Section 7.8,
Indebtedness permitted to be incurred pursuant to Section 7.2 (whether or
not consummated) or early extinguishment of Indebtedness and with respect to
Permitted Acquisitions, not to exceed $4,000,000 in the aggregate during such
fiscal year, which amount, to the extent not expended during such fiscal year,
may be carried over to the next succeeding fiscal year but not to any
subsequent fiscal years and (xv) to the extent included in Consolidated
Net Income, cash indemnity payments received pursuant to indemnification
provisions in any agreement in connection with the Acquisition, any Permitted Acquisition
or any other Investment permitted hereunder (or in any similar agreement
related to any other acquisition consummated prior to the Closing Date).


 


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


 


16





















 


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


 


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


 


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


 


“Federal
Funds Effective Rate”:  for any day,
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published 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 Administrative Agent from three federal funds brokers of recognized
standing selected by it.


 


“Foreign
Plan”: any employee benefit plan, program, policy, arrangement or agreement
maintained or contributed to by, or entered into with, the Borrowers or any
Subsidiary with respect to employees employed outside the United States or
Canada.


 


“Foreign
Subsidiary”:  any Subsidiary of the Parent
Borrower that is not a Domestic Subsidiary.


 


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


 


“Funded
Debt”:  as to any Person, all
Indebtedness of such Person other than that described in clause (f) of the
definition of the term “Indebtedness” in respect of letters of credit.


 


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


 


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


 


17





















 


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


 


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


 


“Governmental
Authority”:  any nation or
government, any state, province, municipality or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government (including the
National Association of Insurance Commissioners).


 


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


 


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


 


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


 


“Guarantee
Obligation”:  as to any Person (the “guaranteeing
person”), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) 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 or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against
loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection or customary contractual indemnities entered into, in each case
in the ordinary course of business.  The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee Obligation
is made and (b) the maximum amount for which such guaranteeing person may
be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in which
case the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Parent Borrower in good faith.


 


18





















 


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


 


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


 


“Hedge
Counterparty”: as defined in the definition of “Obligations”.


 


“Holdco”:  as defined in the preamble hereto.


 


“Holdco
Capital”:  as defined in the preamble
thereto.


 


“Holdco
Merger”: as defined in the preamble thereto.


 


“Holdco
Notes”:  as defined in the preamble
hereto.


 


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


 


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


 


“Immaterial
Subsidiary”:  any Subsidiary of the
Parent Borrower, neither the net assets of which exceed $5,000,000 at any time
nor the net sales of which exceed $5,000,000 during the latest twelve-month
period (such net assets and net sales to be determined based on the most recent
financial statements of the Parent Borrower or any such Subsidiary, as applicable,
delivered to the Administrative Agent pursuant to this Agreement).


 


“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current accounts or trade payables and accrued expenses
incurred in the ordinary course of such Person’s business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such
Person, (f) the face amount of all obligations of such Person, contingent
or otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (f) above,
(h) all obligations of the kind referred to in clauses (a) through (g) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (i) all
obligations of such Person in respect of Hedge Agreements.  The amount of any Indebtedness at any date (A) 
under clause (h) shall be equal to the lesser of (A) the then stated
amount of the relevant obligations and (B) the then fair market value of
the property subject to the relevant Lien and (y) shall exclude any fair
value adjustments for purchase accounting. 
For the avoidance of doubt, Indebtedness shall exclude ordinary course
intercompany payables among Parent Borrower and its Subsidiaries.


 


19





















 


“Indebtedness
for Borrowed Money”:  of any Person
at any date, without duplication, all Indebtedness of such Person of a type
described in clauses (a) and (c) of the definition of the term “Indebtedness”.


 


“Individual
Investors”:  the individuals listed
on Schedule 1.1(C).


 


“Initial
Holdco Notes”:  as defined in the
preamble hereto.


 


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


 


“Insolvent”:  pertaining to a condition of Insolvency.


 


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


 


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


 


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


 


(i)                                     if any Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;


 


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


 


20





















 


(iii)                               any Interest Period that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month;
and


 


(iv)                              the Parent Borrower shall
select Interest Periods so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan in connection with any
scheduled payment of principal with respect thereto.


 


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


 


“Investments”:  as defined in Section 7.8.


 


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


 


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


 


“Judgment
Currency Conversion Date”:  as
defined in Section 10.18(a).


 


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


 


“Lease
Expense”:  for any period, the
aggregate amount of fixed and contingent rentals payable by the Parent Borrower
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period with respect to operating leases of real and personal
property.


 


“Lenders”:  as defined in the preamble hereto.


 


“Letters of
Credit”:  the collective reference to
Existing U.S. Letters of Credit, U.S. Letters of Credit and Canadian Letters of
Credit.


 


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


 


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


 


“Loan
Documents”:  this Agreement, the
Security Documents, the Assumption Agreement, the Joinder Agreement and any
Notes and the Canadian Loan Documents.


 


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


 


21





















 


“Material
Adverse Effect”:  a material adverse
effect on (a) the business, property, operations or condition (financial
or otherwise) of Parent Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies, taken as a whole, of the Administrative Agent, the
Canadian Agent, the Syndication Agent or the Lenders hereunder or thereunder.


 


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


 


“Maturing
Amount”:  as defined in Section 2.22.


 


“Merger”:  as defined in the preamble hereto.


 


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


 


“Morning
Pride”:  as defined in the preamble
hereto.


 


“Mortgaged
Properties”:  the real properties
listed on Schedule 1.1(B), (i) as to which the Administrative Agent
for the benefit of the U.S. Lenders has been granted a Lien pursuant to the Mortgages
and (ii) as to which the Canadian Agent for the benefit of the Canadian
Lenders has been granted a Lien pursuant to the Mortgages.


 


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


 


“Multiemployer
Plan”:  a plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA and with
respect to which Parent Borrower or a Commonly Controlled Entity is an employer
or has an obligation to make contributions.


 


“Net Cash
Proceeds”:  (a) in connection
with any Asset Sale or any Recovery Event, the proceeds thereof in the form of
cash and Cash Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys’ fees,
accountants’ fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset that is the subject of such Asset Sale or Recovery Event (other
than any Lien pursuant to a Security Document) and other customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and net of amounts deposited in escrow in connection therewith or
reasonably expected to be paid as a result of any purchase price adjustment,
indemnities or reserves related thereto (provided that such amounts shall be
Net Cash Proceeds to the extent and at the time released or not required to be
so used) and (b) in connection with any issuance or sale of equity
securities or


 


22





















 


debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys’ fees, investment
banking fees, accountants’ fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in connection therewith.


 


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


 


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


 


“North
Safety”:  as defined in the preamble
hereto.


 


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


 


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


 


“NSP”:  as defined in the preamble hereto.


 


“Obligations”:  the collective reference to the unpaid principal
of and interest on the Loans and Reimbursement Obligations and all other
obligations of any Borrower (including, without limitation, interest accruing
at the then applicable rate provided herein after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided herein after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) to any Agent or to any Lender (or, in the case
of Hedge Agreements, any Person that was a Lender or an Affiliate of a Lender at
the time it entered into such Hedge Agreement (a “Hedge Counterparty”)),
whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters of
Credit, any Hedge Agreement entered into by the Borrowers with any Lender (or
any Affiliate of any Lender) or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent, the Canadian Agent or to the Lenders that are
required to be paid by the Borrowers pursuant hereto or to any of the foregoing
agreements).


 


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


 


“Ontario
Leasehold Mortgage”:  the leasehold
mortgage dated as of July 19, 2005 made by the Canadian Borrower in favor
of the Canadian Agent with respect to 26 Dansk Court, Toronto, Ontario, as
amended, supplemented or otherwise modified from time to time.


 


“Other
Taxes”:  any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this Agreement
or any other Loan Document and any interest and penalties related thereto.


 


“Parent
Borrower”:  as defined in the
preamble hereto.


 


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


 


“Participating
Member States”:  the member states of
the European Communities that adopt or have adopted the Euro as their lawful
currency in accordance with the legislation of the European Union relating to
European Monetary Union.


 


23





















 


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


 


“Permitted
Acquisition”:  any acquisition made
by the Parent Borrower or any of its Subsidiaries of all or substantially all
of the assets of, or all the Capital Stock of, or a division or business
operated by, another Person engaged in a business meeting the requirements of Section 7.15,
provided that (a) at the time of such acquisition and after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing, (b) such acquisition shall be consummated in all material
respects in accordance with all applicable laws and regulations, (c) the
applicable Borrower, prior to any such acquisition, shall have delivered to the
Administrative Agent satisfactory evidence that the Person, business or division
to be acquired in such acquisition had positive EBITDA (calculated in a manner
consistent with the calculation of “Consolidated EBITDA”) for the period
consisting of four consecutive fiscal quarters most recently completed, (d) after
giving effect to such acquisition on a pro forma basis (determined giving effect
to any projected cost savings set forth on a schedule prepared in good
faith by the Chief Financial Officer of Parent Borrower provided to the
Administrative Agent and to which the Administrative Agent does not reasonably
object in a reasonable period of time (but in any event within five Business
Days)) the covenants contained in Section 7.1 shall not have been
violated, such covenants being recomputed as of the last day of the most
recently completed fiscal quarter of Parent Borrower for which financial statements
shall have been delivered to the Lenders pursuant to Section 4.1 or 6.1 as
if such acquisition (and any related assumption of Indebtedness) had occurred
on the first day of the period of four consecutive fiscal quarters then ended
and (e) the Parent Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer setting forth calculations
demonstrating compliance with the condition contained in clause (c) above
and attaching all relevant and available financial information regarding the
business or Person which is the subject of such acquisition.


 


“Permitted
Holders”:  collectively, (i) Odyssey
Investment Partners Fund III, L.P. and any of its Affiliates (other than any of
their portfolio companies) and (ii) General Electric Pension Trust and its
Affiliates.


 


“Permitted
Lien”:  as defined in Section 7.3.


 


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


 


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


 


“Pledge of
Bond Agreement”:  the pledge of bond
agreement made by the Canadian Borrower in favor of the Canadian Agent.


 


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


 


“Pricing
Grid”:  the pricing grid attached
hereto as Annex A.


 


24





















 


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


 


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


 


“Quebec
Collateral”: all property of the Canadian Borrower located in the Province
of Quebec.


 


“Quebec
Security Documents”: the Hypothec, the Collateral Mortgage Bond, the Delivery
Order and the Pledge of Bond Agreement.


 


“Rawdon
Property”: as defined in Section 6.12(c)


 


“Real
Property”:  collectively, all right,
title and interest (including any leasehold, mineral or other estate) in and to
any and all parcels of or interests in real property owned, leased or operated
by any person, whether by lease, license or other means, together with, in each
case, all easements,

hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and other real property and real property rights
incidental to the ownership, lease or operation thereof.


 


“Recovery
Event”:  any settlement of or payment
in respect of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of Holdco or any of its Subsidiaries with a
value in excess of $500,000.


 


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


 


“Refinancing
Indebtedness”:  with respect to any
Person, any refunding, refinancing, or extension of any Indebtedness of such
Person but only to the extent that (i) such Refinancing Indebtedness is
subordinated to the Obligations to at least the same extent as the Indebtedness
being refunded, refinanced or extended, if at all, (ii) such Refinancing
Indebtedness is scheduled to mature either (a) no earlier than the
Indebtedness being refunded, refinanced or extended, or (b) after the
maturity of the Term Loans, (iii) the portion, if any, of the Refinancing
Indebtedness that is scheduled to mature on or prior to the maturity date of
the Term Loans has a weighted average life to maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the weighted average
life to maturity of the portion of the Indebtedness being refunded, refinanced
or extended that is scheduled to mature on or prior to the maturity date of the
Term Loans, (iv) such Refinancing Indebtedness is in an aggregate
principal amount that is equal to or less than the sum of (a) the
aggregate principal amount then outstanding under the Indebtedness being
refunded, refinanced or extended, (b) the amount of accrued and unpaid
interest, if any, and premiums owed, if any, not in excess of preexisting
payment provisions on such Indebtedness being refunded, refinanced or extended
and (c) the amount of customary fees, expenses and costs related to the
incurrence of such Refinancing Indebtedness and (v) such Refinancing
Indebtedness is incurred by the same Person that initially incurred the
Indebtedness being refunded, refinanced or extended, except that the Parent
Borrower may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any wholly owned Subsidiary of the Parent Borrower.


 


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


 


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


 


“Regulation
U”:  Regulation U of the Board as in
effect from time to time.


 


25





















 


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


 


“Reinvestment
Deferred Amount”:  with respect to
any Reinvestment Event, the aggregate Net Cash Proceeds received by the Parent
Borrower or any of its Subsidiaries in connection therewith that are not
applied to prepay the Term Loans or reduce the Revolving Commitments pursuant
to Section 2.9(b) as a result of the delivery of a Reinvestment
Notice.


 


“Reinvestment
Event”:  any Asset Sale or Recovery
Event in respect of which the Parent Borrower has delivered a Reinvestment
Notice.


 


“Reinvestment
Notice”:  a written notice executed
by a Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Parent Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Recovery Event to acquire assets useful in the
Parent Borrower’s or any of its Subsidiaries’ business.


 


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


 


“Reinvestment
Prepayment Date”:  with respect to
any Reinvestment Event, the earlier of (a) the date occurring 270 days
after such Reinvestment Event and (b) the date on which the Parent Borrower
shall have determined not to, or shall have otherwise ceased to, acquire assets
useful in the Parent Borrower’s or any of its Subsidiaries’ business with all
or any portion of the relevant Reinvestment Deferred Amount.


 


“Related”:  as defined in Section 1.3.


 


“Relevant
Currency Equivalent”:  the Dollar Equivalent
or Alternate Currency Equivalent, as applicable.


 


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


 


“Reportable
Event”:  any of the events set forth
in Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under PBGC Reg. § 4043.


 


“Required
Lenders”:  the holders of more than
50% of the sum of (i) the aggregate unpaid principal amount of the Term Loans,
(ii) the U.S. Revolving Commitments or, if the U.S. Revolving Commitments
have been terminated, the U.S. Revolving Extensions of Credit and (iii) the
Dollar Equivalent of the Canadian Commitments or, if the Canadian Commitments have
been terminated, the Dollar Equivalent of the Canadian Extensions of Credit.


 


“Requirement
of Law”:  as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, municipal by-law, building code,
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 to which such Person or any of its property is
subject.


 


26





















 


“Requisite
Lenders”:  with respect to any
Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans, the Total U.S. Revolving Extensions of Credit, or the Dollar
Equivalent of the Canadian Extensions of Credit as the case may be, outstanding
under such Facility (or, in the case of the U.S. Revolving Facility and the
Canadian Subfacility, prior to any termination of the U.S. Revolving
Commitments or the Canadian Commitments, the holders of more than 50% of the
Total U.S. Revolving Commitments or the Dollar Equivalent of the Canadian
Commitments, respectively).


 


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


 


“Responsible
Officer”:  the chief executive
officer, president or chief financial officer of the Parent Borrower, but in
any event, with respect to financial matters, the chief financial officer of the
Parent Borrower.


 


“Restricted
Payments”:  as defined in Section 7.6.


 


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


 


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


 


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


 


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


 


“Schedule I
Reference Lender”:  any Schedule I
Lender as may be agreed by the Canadian Borrower and the Canadian Agent from
time to time.


 


“Schedule II
Lender”:  any Lender named on Schedule II
to the Bank Act (Canada) or any Lender that is a Canadian financial institution
other than a Canadian chartered bank and is not a Schedule III Lender.


 


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


 


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


 


“Scheduled
Debt”:  all Indebtedness of Holdco and
its Subsidiaries listed on Schedule 7.2(e).


 


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


 


“Secured
Parties”:  the U.S. Secured Parties
and the Canadian Secured Parties.


 


27





















 


“Security
Documents”:  the collective reference
to the Guarantee and Collateral Agreement, the Mortgages, the Canadian Security
Documents and all other security documents hereafter delivered to and accepted
by the Administrative Agent or the Canadian Agent, as the case may be, granting
a Lien on any property of any Person to secure the obligations and liabilities
of any Loan Party under any Loan Document.


 


“Seller”:  as defined in the preamble hereto.


 


“Senior
Subordinated Notes”:  the 9 7/8%
Senior Subordinated Notes in the aggregate principal amount of $152,500,000 due
2011 of NSP.


 


“Senior Subordinated
Notes Indenture”:  the indenture
dated as of August 13, 2003, as amended on July 19, 2005, governing
the Senior Subordinated Notes, including any refinancing, refunding or
replacement thereof, as amended, supplemented or otherwise modified in accordance
with Section 7.9.


 


“Single
Employer Plan”:  any Plan that is
covered by Title IV of ERISA, but that is not a Multiemployer Plan.


 


“Solvent”:  when used with respect to any Person, means
that, as of any date of determination, (a) the amount of the present fair
saleable value of the assets of such Person will, as of such date, exceed the
amount of all liabilities of such Person, contingent or otherwise, as of such
date, as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value (as such quoted terms are determined in accordance
with applicable federal and state laws governing determinations of the
insolvency of debtors) of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to
pay its debts as they mature.  For
purposes of this definition, (i) debt means liability on a claim, (ii) claim
means any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured and (iii) the Parent Borrower may assume, so long as
no Default or Event of Default shall have occurred and be continuing at the
time such assumption is made, that all or a portion of the then outstanding
Term Loans or other Indebtedness of the Parent Borrower hereunder will be
refinanced at the maturity thereof.


 


“Specified
Change of Control”:  a Change of
Control as defined in the Holdco Notes Indenture or the Senior Subordinated
Notes Indenture.


 


“Spot
Selling Rate”:  the spot selling rate
at which the Administrative Agent offers to sell the Alternate Currency for Dollars
in the London foreign exchange market at approximately 11:00 a.m. London
time on such date for delivery two (2) Business Days later.


 


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


 


28





















 


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


 


“Syndication
Agent”:  as defined in the preamble
hereto.


 


“Survey”:
a survey of any Mortgaged Property (and all improvements thereon) which is (a) (i) prepared
by a surveyor or engineer licensed to perform surveys in the state or province
where such Mortgaged Property is located, (ii) dated (or redated) not
earlier than six months prior to the date of delivery thereof unless there
shall have occurred within six months prior to such date of delivery any
exterior construction on the site of such Mortgaged Property, in which event
such survey shall be dated (or redated) after the completion of such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent or Canadian Agent, as applicable) to the Administrative
Agent (or the Canadian Agent, as applicable), the Collateral Agent and the
Title Company, (iv) complying in all respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey and (v) sufficient for
the Title Company to remove all standard survey exceptions from the title
insurance policy (or commitment) relating to such Mortgaged Property and issue
the endorsements of the type required by Section 5.01(h)(iii) or (b) otherwise
acceptable to the Administrative Agent or the Canadian Agent, as applicable.


 


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


 


“Term
Lender”:  each Lender that is the
holder of a Term Loan.


 


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


 


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


 


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


 


“Title
Company”:  any title insurance
company as shall be retained by the Parent Borrower and reasonably acceptable to
the Administrative Agent or the Canadian Agent.


 


29





















 


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


 


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


 


“Total
Canadian Extensions of Credit”:  at
any time, the aggregate amount of the Canadian Extensions of Credit of the
Canadian Lenders outstanding at such time.


 


“Total
Commitments”:  $50,000,000.


 


“Total
Outstandings”:  the aggregate Dollar Equivalent
principal amount of all U.S. Revolving Extensions of Credit and Canadian Loans
plus (without duplication) the Canadian L/C Obligations and the U.S. L/C
Obligations.


 


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


 


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


 


“Transaction
Documents”:  the Acquisition
Documents and the Loan Documents.


 


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


 


“Transferee”:  any Assignee or Participant.


 


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


 


“U.S.
Borrowers”:  as defined in the
preamble hereto.


 


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


 


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


 


“U.S. L/C
Commitment”:  $5,000,000.


 


“U.S. L/C
Fee Payment Date”:  the last Business
Day of each March, June, September and December and the last day of
the U.S. Revolving Commitment Period.


 


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


 


30





















 


amount of
drawings under U.S. Letters of Credit that have not then been reimbursed
pursuant to Section 3.5.


 


“U.S. L/C
Participants”:  the collective
reference to all the U.S. Revolving Lenders other than the U.S. Issuing Lender.


 


“U.S.
Lenders”:  as defined in the preamble
hereto.


 


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


 


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


 


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


 


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


 


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


 


“U.S.
Revolving Commitment”:  as to any
U.S. Lender, the obligation of such Lender, if any, to make U.S. Revolving
Loans and participate in U.S. Swingline Loans and U.S. Letters of Credit in an
aggregate principal and/or face amount not to exceed the amount set forth under
the heading “U.S. Revolving Commitment” opposite such Lender’s name on Schedule 1.1(A) or
in the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof.  The amount of the Total U.S.
Revolving Commitments is $50,000,000 minus the amount at such time outstanding
under the Canadian Subfacility.  Upon
such adjustment of the Total U.S. Revolving Commitments, the U.S. Revolving Commitment
as to any U.S. Lender shall be reduced pro rata in accordance with such Lender’s
U.S. Revolving Percentage.


 


“U.S.
Revolving Commitment Period”:  the
period from but excluding the Closing Date to and excluding the Revolving
Termination Date; provided, that in regard to U.S. Swingline Loans not
to exceed $2,000,000, the “U.S. Revolving Commitment Period” shall include the
Closing Date.


 


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


 


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


 


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


 


31





















 


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


 


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


 


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


 


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


 


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


 


“U.S.
Swingline Commitment”:  the
obligation of the U.S. Swingline Lender to make U.S. Swingline Loans pursuant
to Section 2.5 in an aggregate principal amount at any one time outstanding
not to exceed $5,000,000.


 


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


 


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


 


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


 


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


 


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


 


“Uniform
Customs”:  the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to
time.


 


“United
States”:  the United States of
America.


 


1.2                                 Other
Definitional Provisions.


 


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


 


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


 


32





















 


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


 


(c)                                  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, Schedule and Exhibit references
are to this Agreement unless otherwise specified.


 


(d)                                 The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.


 


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


 


SECTION 2


 


AMOUNT AND TERMS OF COMMITMENTS


 


2.1                                 Term Commitments;
Procedure for Term Loan Borrowing.


 


(a)                                  Subject
to the terms and conditions hereof, each Term Lender severally agrees to make a
term loan (a “Term Loan”) to Acquisition Corp. on the Closing Date in an
amount not to exceed the amount of the Term Commitment of such Term
Lender.  The Term Loans may from time to
time be Eurodollar Loans or ABR Loans, as determined by the Parent Borrower and
notified to the Administrative Agent in accordance with Sections 2.1(b) and
2.10.


 


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


 


2.2                                 Repayment of Term
Loans.  The principal amount of the Term
Loan of each Term Lender shall mature in twenty-eight consecutive quarterly
installments, commencing on September 30, 2005, each of which shall be in
an amount equal to such Term Lender’s Term Percentage multiplied by the amount
set forth below opposite such installment:


 


33





















 




	
  Quarterly Installment

  	
   

  	
  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-24

  	
   

  	
  $

  	
  220,000

  	
   

  
	
  25-28

  	
   

  	
  $

  	
  20,680,000

  	
   

  






 


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


 


2.3                                 Revolving
Commitments.


 


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


 


(b)                                 The
U.S. Borrowers shall repay all outstanding U.S. Revolving Loans on the
Revolving Termination Date in the Approved Currency in which such Loan is
denominated.


 


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


 


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


 


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


 


(f)                                    The
Canadian Borrower shall repay all outstanding Canadian Loans on the Revolving
Termination Date.


 


2.4                                 Procedure
for Revolving Loan Borrowing.


 


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


 


34





















 


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


 


(b)                                 The
Canadian Borrower may obtain a Canadian Loan during the Canadian Commitment
Period on any Business Day, provided that
the Canadian Borrower shall give the Canadian Agent irrevocable telephonic
notice confirmed promptly in writing in form and substance as provided in Exhibit N
(which notice must be received by the Canadian Agent prior to (i) by 11:00 A.M.,
Toronto time, one Business Day prior to the requested Borrowing Date, in the
case of C$ Prime Loans, or (ii) in accordance with Section 2.21(e),
in the case of Canadian Loans comprised of Bankers’ Acceptances, specifying the
amount and Type of Canadian Loans to be borrowed; the initial Contract Period
for any Bankers’ Acceptances to be included in such borrowing; whether a
Canadian Lender is required to purchase the Bankers’ Acceptances accepted by
it; in the case of a rollover or conversion of any Bankers’ Acceptance as
contemplated by Section 2.22, the particulars of the maturing Bankers’
Acceptance; the date of such borrowing (which shall be a Business Day); and the
location and number of the Canadian Borrower’s account to which funds are to be
disbursed.  If no election as to the Type
of borrowing is specified, then the requested borrowing shall be a C$ Prime
Loan.  Each borrowing under the Canadian
Commitments shall be in an amount equal to C$1,000,000 or a whole multiple
thereof (or, if then aggregate Available Canadian Commitments are less than
C$1,000,000, such lesser amount).  If no
Contract Period is specified with respect to any requested Bankers’ Acceptance,
then the Canadian Borrower shall be deemed to have selected a Contract Period
of 30 days’ duration.  Upon receipt of
any such notice of borrowing from the Canadian Borrower, the Canadian Agent
shall promptly notify each Canadian Lender thereof and, in the case of a notice
requesting Bankers’ Acceptances, the Canadian Agent shall advise each Canadian
Lender of the face amount and term of each Draft to be accepted by it and
whether such Lender is required, pursuant to the notice by the Canadian
Borrower, to purchase the Bankers’ Acceptances


 


35





















 


accepted by it.  Each Canadian Lender will make the amount of
its pro rata share of each borrowing (except that, if the face amount of any
Draft to be accepted by a Canadian Lender, determined as provided for above,
would not be C$100,000 or a whole multiple of C$100,000, the Canadian Agent
shall either increase or decrease such face amount to the nearest whole
multiple of C$100,000) available to the Canadian Agent for the account of the
Canadian Borrower at the Funding Office prior to 12:00 Noon, Toronto time, on
the Borrowing Date requested by the Canadian Borrower in funds immediately
available to the Canadian Agent; provided, that the amount of Canadian
Loans at any time outstanding shall not exceed the Canadian Commitments; and provided,
further, that the Total Outstandings shall not at any time exceed the
Total Commitments.  Such borrowing will
then be made available to the Canadian Borrower by the Canadian Agent
transferring to the account of the Canadian Borrower specified by the Canadian
Borrower the aggregate of the amounts made available to the Canadian Agent by
the Canadian Lenders and in like funds as received by the Canadian Agent.


 


(c)                                  The
Canadian Agent shall open and maintain on its books at its Toronto main branch,
accounts and records evidencing the Canadian Loans made available to the
Canadian Borrower by the Canadian Lenders under this Agreement.  The Canadian Agent shall record therein the
amount of such Canadian Loans, each payment of principal and interest made
thereon, the Bankers’ Acceptances and B/A Equivalent Loans accepted, paid and
cancelled by the Canadian Borrower hereunder, the Canadian Letters of Credit
outstanding, paid or expired and all other amounts becoming due to the Canadian
Lenders under this Agreement, including Acceptance Fees, commitment fees,
administration fees and letters of credit fees, and all payments on account
thereof.  Such accounts and records
maintained by the Canadian Lenders will constitute, in the absence of manifest
error, prima facie evidence of the indebtedness
of the Canadian Borrower to the Canadian Lenders pursuant to this Agreement,
the date the Canadian Lenders made each Canadian Extension of Credit available
to the Canadian Borrower and the amounts the Canadian Borrower has paid from
time to time on account thereof.


 


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


 


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


 


(b)                                 The
Parent Borrower shall repay to the U.S. Swingline Lender the then unpaid
principal amount of each U.S. Swingline Loan on the Revolving Credit
Termination Date.


 


(c)                                  Whenever
the Parent Borrower desires that the U.S. Swingline Lender make a U.S.
Swingline Loan it shall give the U.S. Swingline Lender irrevocable telephonic
notice confirmed promptly in writing in form and substance as provided in Exhibit N
(which telephonic notice must be received by the U.S. Swingline Lender not
later than 1:00 P.M., New York City time, on the proposed Borrowing Date),
specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which


 


36





















 


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


 


(d)                                 The
U.S. Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Parent Borrower (which hereby
irrevocably directs the U.S. Swingline Lender to act on its behalf), on one
Business Day’s notice given by the U.S. Swingline Lender no later than 12:00
Noon, New York City time, request each U.S. Revolving Lender to make, and each
U.S. Revolving Lender hereby agrees to make, a U.S. Revolving Loan, in an
amount equal to such U.S. Revolving Lender’s U.S. Revolving Percentage of the
aggregate amount of the U.S. Swingline Loans (the “Refunded U.S. Swingline
Loans”) outstanding on the date of such notice, to repay the U.S. Swingline
Lender.  Each U.S. Revolving Lender shall
make the amount of such U.S. Revolving Loan available to the Administrative
Agent at the Funding Office in immediately available funds, not later than
11:00 A.M., New York City time, one Business Day after the date of such
notice.  The proceeds of such U.S. Revolving
Loans shall be immediately made available by the Administrative Agent to the
U.S. Swingline Lender for application by the U.S. Swingline Lender to the
repayment of the Refunded U.S. Swingline Loans. 
The Parent Borrower irrevocably authorizes the U.S. Swingline Lender to
charge the Parent Borrower’s accounts with the Administrative Agent (up to the
amount available in each such account) to pay immediately the amount of such
Refunded U.S. Swingline Loans to the extent amounts received from the U.S.
Revolving Lenders are not sufficient to repay in full such Refunded U.S.
Swingline Loans.


 


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


 


(f)                                    Whenever,
at any time after the U.S. Swingline Lender has received from any U.S.
Revolving Lender such Lender’s U.S. Swingline Participation Amount, the U.S.
Swingline Lender receives any payment on account of the U.S. Swingline Loans,
the U.S. Swingline Lender will distribute to such U.S. Revolving Lender its
U.S. Swingline Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such U.S.
Revolving Lender’s participating interest was outstanding and funded and, in
the case of principal and interest payments, to reflect such U.S. Revolving
Lender’s pro  rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all U.S. Swingline Loans
then due); provided, however, that in the event that such payment
received by the U.S. Swingline Lender is required to be returned, such U.S. Revolving
Lender will return to the U.S. Swingline Lender any portion thereof previously
distributed to it by the U.S. Swingline Lender.


 


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


 


37





















 


recoupment, defense or other
right that such U.S. Revolving Lender or the Parent Borrower may have against
the U.S. Swingline Lender, the Parent Borrower or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default or an
Event of Default or the failure to satisfy any of the other conditions
specified in Section 5, (iii) any adverse change in the condition
(financial or otherwise) of the Parent Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Parent Borrower, any other Loan
Party or any other U.S. Revolving Lender or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.


 


2.6                                 Commitment Fees,
etc.


 


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


 


(b)                                 The
U.S. Borrowers agree to pay to the Administrative Agent the fees in the amounts
and on the dates previously agreed to in writing by the Parent Borrower and the
Administrative Agent.


 


2.7                                 Termination
or Reduction of Revolving Commitments.


 


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


 


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


 


2.8                                 Optional
Prepayments.  (a)  Each
U.S. Borrower may at any time and from time to time prepay the U.S. Loans made
to it, in whole or in part, without premium or penalty, in the Approved
Currency in which such Loan is denominated, upon irrevocable telephonic notice
confirmed promptly in writing substantially in the form of Exhibit G,
which telephonic notice must be received by the Administrative Agent prior to
12:00 noon, New York City time, at least three Business Days prior thereto in
the case of Eurodollar Loans and at least one Business Day prior thereto
otherwise, which notice shall specify the date and amount of prepayment and the
Type of Loan to be prepaid, and, if a combination


 


38





















 


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


 


(b)                                 The
Canadian Borrower may at any time and from time to time prepay the C$ Prime
Loans made to it, in whole or in part, without premium or penalty, upon irrevocable
telephonic notice confirmed promptly in writing substantially in the form of Exhibit G
which telephonic notice must be received by the Canadian Agent prior to 12:00
noon, Toronto time, at least one Business Day prior thereto, which notice shall
specify the date and amount of prepayment, and, if a combination thereof, the
amount allocable to each.  Upon receipt
of any such notice, the Canadian Agent shall promptly notify each relevant
Canadian Lender thereof.  If any such
notice is given, the amount specified in such notice shall be due and payable
on the date specified therein.  Partial
prepayments of C$ Prime Loans shall be in an aggregate principal amount of
C$1,000,000 or a whole multiple thereof.


 


(c)                                  Notwithstanding
anything to the contrary contained in this Agreement, the applicable Borrower
may rescind any notice of prepayment under Section 2.8(a) or (b) if
such prepayment would have resulted from a refinancing of the Facilities, which
refinancing shall not be consummated or shall otherwise be delayed.


 


2.9                                 Mandatory
Prepayments and Commitment Reductions.


 


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


 


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


 


39





















 


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


 


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


 


(d)                                 Unless
otherwise agreed by the U.S. Required Prepayment Lenders or the Canadian Required
Prepayment Lenders, as the case may be, amounts to be applied in connection
with prepayments  made pursuant to Section 2.9(a),
2.9(b) or 2.9(c) shall be applied, first, to the prepayment of
the Term Loans (in each case pro rata to the remaining scheduled installments)
until the Term Loans have been paid in full and, second, to prepay, pro
rata, any outstanding U.S. Revolving Loans (in each case pro rata to each U.S. Lender
in accordance with such Lender’s U.S. Revolving Percentage) and any outstanding
Canadian Loans (in each case pro rata to each Canadian Lender in accordance
with such Lender’s Canadian Revolving Percentage) (without a corresponding
commitment reduction of the U.S. Revolving Commitments or the Canadian
Commitments) and, after all of the U.S. Revolving Loans and all of the Canadian
Loans have been repaid, and to the extent of the balance of any excess
remaining after the foregoing prepayments, the U.S. Borrowers shall cash
collateralize outstanding U.S. L/C Obligations by depositing a corresponding
amount in cash in a cash collateral account established with the Administrative
Agent for the benefit of the U.S. Lenders on terms and conditions satisfactory
to the Administrative Agent and, to the extent of any excess remaining the
Canadian Borrower shall cash collateralize outstanding Canadian L/C Obligations
by depositing a corresponding amount in cash in a cash collateral account
established with the Canadian Agent for the benefit of the Canadian Lenders on
terms and conditions satisfactory to the Canadian Agent.  To the extent there remains Net Cash Proceeds
after the Canadian Letters of Credit have been cash collateralized, Borrower
shall be entitled to retain such remaining Net Cash Proceeds.  The application of any prepayment pursuant to
Section 2.9 shall be made, first, to ABR Loans and, second,
to Eurodollar Loans in such manner as to minimize break funding costs set forth
in Section 2.18.  All prepayments
made pursuant to this Section 2.9 shall be made without premium or
penalty, provided that if a Eurodollar Loan is prepaid on any day other than
the last day of the Interest Period applicable thereto, Borrowers shall also
pay amounts owing pursuant to Section 2.18.  Each prepayment of the Loans under Section 2.9
(except in the case of U.S. Revolving Loans that are ABR Loans, U.S. Swingline
Loans or Canadian Loans that are C$ Prime Loans) shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.


 


40





















 


2.10                           Conversion
and Continuation Options.


 


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


 


(b)                                 Any
Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Parent Borrower giving
notice to the Administrative Agent, in accordance with the applicable
provisions of the term “Interest Period” set forth in Section 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Requisite Lenders in respect of such Facility have determined
in its or their sole discretion not to permit such continuations, and provided,
further, that if the Parent Borrower shall fail to give any required
notice as described above in this paragraph or if such continuation is not
permitted pursuant to the preceding proviso such Loans other than Alternate Currency
Loans shall be automatically converted to ABR Loans on the last day of such
then expiring Interest Period.  Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.  Eurodollar
Loans denominated in an Alternate Currency shall not be converted to an ABR
Loan, but shall continue as a Eurodollar Loan having an Interest Period of one
month in the circumstance described above.


 


2.11                           Limitations on Eurodollar
Tranches.  Notwithstanding anything
to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be
equal to or, in the case of Alternate Currency Revolving Loans, the Dollar
Equivalent of the principal amount equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches
shall be outstanding at any one time.


 


2.12                           Interest
Rates and Payment Dates.


 


(a)                                  Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.


 


41





















 


(b)                                 Each
ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.


 


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


 


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


 


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


 


2.13                           Computation
of Interest and Fees.


 


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


 


(b)                                 Each
determination of an interest rate by the Administrative Agent or the Canadian
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the relevant Borrowers and the relevant Lenders in the absence of
manifest error.  The Administrative Agent
shall, at


 


42





















 


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


 


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


 


(d)                                 For
the purposes of any Canadian Loan, the rates of interest under this Agreement
are nominal rates, and not effective rates or yields.  The principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement in
respect to any Canadian Loan.  If any
provision of this Agreement or any of the Canadian Loan Documents would oblige
the Canadian Borrower to make any payment of interest or other amount payable
to any Canadian Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by that Canadian Lender of “interest”
at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding 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 or so result in a receipt by that
Canadian Lender of “interest” at a “criminal rate,” such adjustment to be
effected, to the extent necessary (but only to the extent necessary), as
follows:


 


(i)                                     first, by reducing
the amount or rate of interest required to be paid to the affected Canadian
Lender; and


 


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


 


2.14                           Inability
to Determine Interest Rate.  If prior
to the first day of any Interest Period:


 


(a)                                  the Administrative
Agent shall have determined (which determination shall be conclusive and
binding upon the U.S. Borrowers in the absence of manifest error) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for the Approved
Currency in which any Eurodollar Loan is determined or the currency specified
in the notice requesting such borrowing pursuant to Section 2.4 in
accordance with the terms hereof for such Interest Period, or


 


(b)                                 the Administrative
Agent shall have received notice from the Requisite Lenders in respect of the
relevant Facility that the Eurodollar Rate for the Approved Currency in which
any Eurodollar Loan is denominated or the currency specified in the notice
requesting such borrowing pursuant to Section 2.4 determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such U.S. Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Loans during such Interest Period,


 


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


 


43










 













 


Agent shall be
obligated to do when the circumstances giving rise to such notice no longer
exist), no further Eurodollar Loans under the relevant Facility shall be made
or continued as such, nor shall the Parent Borrower have the right to convert
Loans under the relevant Facility to Eurodollar Loans.


 


2.15                           Pro
Rata Treatment and Payments.


 


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


 


(b)                                 Each
payment (including each prepayment) by the U.S. Borrowers on account of
principal of and interest on the Term Loans shall be made pro rata according to
the respective outstanding principal amounts of the Term Loans then held by the
Term Lenders).  The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Term Loans pro rata based upon the then remaining
principal amount thereof.  Amounts
prepaid on account of the Term Loans may not be reborrowed.


 


(c)                                  Each
payment (including each prepayment) by the U.S. Borrowers on account of
principal of and interest on the U.S. Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the U.S. Revolving
Loans then held by the U.S. Revolving Lenders.


 


(d)                                 All
payments (including prepayments) to be made by the Parent Borrower or the
Canadian Borrower, as the case may be, hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without setoff or counterclaim
and shall be made prior to 12:00 Noon, New York City time (in the case of U.S.
Loans or obligations) or, in the case of Loans denominated in Alternate
Currency, 12:00 Noon, local time or 12:00 Noon, Toronto time (in the case of
Canadian Loans or obligations), on the due date thereof to the Administrative
Agent, for the account of the U.S. Lenders, or, as the case may be, the
Canadian Agent, for the account of the Canadian Lenders at the applicable
Funding Office, in Dollars or Canadian Dollars, as the case may be, and in immediately
available funds.  The Administrative Agent
or the Canadian Agent, as the case may be, shall distribute such payments
received by it to the U.S. Lenders or the Canadian Lenders, as the case may be,
promptly upon receipt in like funds as received.  If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be moved to the preceding Business Day.  If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event
such payment shall be made on the immediately preceding Business Day.  In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.


 


(e)                                  Unless
the Administrative Agent or the Canadian Agent, as appropriate, shall have been
notified in writing by any Lender prior to the date of a borrowing that such
Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent or the Canadian Agent, as
appropriate, the Administrative Agent or the Canadian Agent, as appropriate, may
assume that such Lender is making such amount available to the Administrative
Agent or the Canadian Agent, as appropriate, and the Administrative Agent or
the Canadian Agent, as appropriate, may, in reliance upon such assumption, make
available to the Parent Borrower or the Canadian Borrower, as appropriate,


 


44





















 


a corresponding amount.  If such amount is not made available to the
Administrative Agent or the Canadian Agent, as appropriate, by the required
time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent or the Canadian Agent, as appropriate, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate, or in the case of Canadian Loans, the C$ Prime Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent or the Canadian Agent, as appropriate.  A certificate of the Administrative Agent or
the Canadian Agent, as appropriate, submitted to any Lender with respect to any
amounts owing under this paragraph shall be conclusive in the absence of
manifest error.  If and to the extent
that such Lender’s share of such borrowing is not made available to the
Administrative Agent or the Canadian Agent, as appropriate, by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent or
the Canadian Agent, as appropriate, shall also be entitled to recover such amount
with interest thereon (and no other interest) at the rate per annum applicable
to ABR Loans or the C$ Prime Loans under the relevant Facility, on demand, from
the Borrowers.


 


(f)                                    Unless
the Administrative Agent or the Canadian Agent, as appropriate, shall have been
notified in writing by the Parent Borrower or the Canadian Borrower, as
appropriate, prior to the date of any payment being made hereunder that the Borrowers
will not make such payment to the Administrative Agent or the Canadian Agent,
as appropriate, the Administrative Agent or the Canadian Agent, as appropriate,
may assume that the Borrowers are making such payment, and the Administrative
Agent or the Canadian Agent, as appropriate, may, but shall not be required to,
in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount.  If such payment is not made to the
Administrative Agent or the Canadian Agent, as appropriate, by the Borrowers
within three Business Days of such required date, the Administrative Agent or
the Canadian Agent, as appropriate, shall be entitled to recover, on demand,
from each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon (net of any interest or
other reimbursement received from such Lender) at the rate per annum equal to
the daily average Federal Funds Effective Rate or, in the case of the Canadian
Lenders, the C$ Prime Rate.  Nothing
herein shall be deemed to limit the rights of the Administrative Agent or the
Canadian Agent as appropriate, or any Lender against the Borrowers.


 


2.16                           Requirements of Law.


 


(a)                                  If
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof, in each case after the date hereof, or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:


 


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


 


(ii)                                  shall impose, modify
or hold applicable any reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not otherwise
included in the determination of the Eurodollar Rate hereunder or the Discount
Rate hereunder; or


 


(iii)                               shall impose on such
Lender any other condition;


 


45





















 


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


 


(b)                                 If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof, in each case after the date hereof, or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder or under or in respect of any
Letter of Credit or Bankers’ Acceptance or B/A Equivalent Loan to a level below
that which such Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Parent Borrower or the Canadian Borrower, as the case may
be (with a copy to the Administrative Agent) of a reasonably detailed written
request therefor, the relevant Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided that such Borrowers shall not be required to compensate a
Lender pursuant to this paragraph for any amounts incurred more than six months
prior to the date that such Lender notifies the Parent Borrower of such Lender’s
intention to claim compensation therefor and provided, further,
that if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such retroactive
effect.


 


(c)                                  A
certificate as to any additional amounts payable pursuant to this Section submitted
by any Lender to the Parent Borrower (with a copy to the Administrative Agent)
shall be presumptively correct.  The
obligations of any of the Borrowers pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.


 


2.17                           Taxes.


 


(a)                                  Except
as otherwise required by applicable law, all payments made by the Loan Parties under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present 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 net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent, the Canadian Agent
or any Lender as a result of a present or former connection between the
Administrative Agent, the Canadian 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 Administrative Agent, the Canadian


 


46





















 


Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, including any
interest and penalties related thereto (“Non-Excluded Taxes”) or Other
Taxes are required to be withheld from any amounts payable to the
Administrative Agent, the Canadian Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent, the Canadian Agent or such Lender shall
be increased to the extent necessary to yield to the Administrative Agent, the
Canadian Agent or such Lender (after payment of all Non-Excluded Taxes and
Other Taxes, including Non-Excluded Taxes or Other Taxes imposed on amounts
payable under this  Section 2.17(a))
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Loan
Parties shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (d) or (e) of
this Section, (ii) with respect to the U.S. Loans, that are United States
withholding taxes imposed on amounts payable to such Lender at the time the
Lender becomes a party to this Agreement, except to the extent that such Lender’s
assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the U.S. Borrowers with respect to such Non-Excluded
Taxes pursuant to this paragraph, or (iii) with respect to the Canadian
Loans, that are Canadian withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to the
extent that such Lender’s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Canadian Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph.


 


(b)                                 In
addition, the Parent Borrower and the Canadian Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.


 


(c)                                  Whenever
any Non-Excluded Taxes or Other Taxes are payable by the Borrowers, as promptly
as possible thereafter the Parent Borrower shall send to the Administrative
Agent or the Canadian Agent, as the case may be, for its own account or for the
account of the relevant Lender, as the case may be, a certified copy of an
original official receipt received by the Parent Borrower showing payment
thereof.  The Borrowers shall jointly and
severally indemnify the Administrative Agent, the Canadian Agent and each
Lender, within 30 days after demand therefor, for the full amount of any Non-Excluded
Taxes or Other Taxes (including Non-Excluded Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, the Canadian Agent or such Lender, as the case may be,
whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally
imposed or asserted.


 


(d)                                 Each
U.S. Lender (or Transferee) that is not a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States (or any jurisdiction thereof), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a “Non-U.S. Lender”) shall deliver to the Parent
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN (claiming
eligibility for benefits of an income tax treaty to which the United States is
a party) or Form W-8ECI, or, in the case of a Non-U.S. 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”, a
statement substantially in the form of Exhibit H and a Form W-8BEN,
or any subsequent versions thereof or successors thereto, properly completed
and duly executed by such Non-U.S. Lender claiming complete exemption from, or
a reduced rate of, U.S. federal withholding tax on all payments by the
Borrowers under this Agreement and the other Loan Documents.  Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation).  In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.  


 


47





















 


Each Non-U.S. Lender shall
promptly notify the Parent Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Parent Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). 
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender
shall not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.


 


(e)                                  A
Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrowers are
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Parent Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable law
and reasonably requested by the Parent Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided
that such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender or
otherwise be materially disadvantageous to such Lender.


 


(f)                                    If
the Administrative Agent or any Lender receives a refund or otherwise would
have received a refund but for the offset of the amount of such refund against
the Lender’s Non-Excluded Taxes (“Tax Refund”), which in the good faith
judgment of such Lender is allocable to Non-Excluded Taxes paid by the Parent
Borrower, it shall promptly pay the portion of such Tax Refund to the Parent
Borrower that will leave it in no better or worse after-tax position (taking
into account all out-of-pocket expenses of such Lender incurred in obtaining
such Tax Refund) then if the Non-Excluded Taxes giving rise to such refund had
never been imposed in the first instance, provided, however, that
the Parent Borrower agrees to promptly return such Tax Refund to the Administrative
Agent or the applicable Lender, as the case may be, if it receives notice from
the Administrative Agent or applicable Lender that such Administrative Agent or
Lender is required to repay such Tax Refund but only if such repayment is required
because the initial Tax Refund was permitted in error.


 


(g)                                 The
agreements in this Section shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.


 


2.18                           Indemnity.  The U.S. Borrowers agree to indemnify each
U.S. Lender and to hold each U.S. Lender harmless from any loss or expense
(other than any loss of Applicable Margin) that such Lender may sustain or
incur as a consequence of (a) the failure by the Borrowers in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Parent Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) the failure by the Borrowers in making
any prepayment of or conversion from Eurodollar Loans after the Parent Borrower
has given a notice thereof in accordance with the provisions of this Agreement
or (c) the making of a prepayment of Eurodollar Loans on a day that is not
the last day of an Interest Period with respect thereto.  Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have commenced
on the date of such failure) in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the London interbank eurodollar market.  A certificate as to any amounts payable
pursuant to this Section submitted to the Parent Borrower by any U.S.
Lender shall be conclusive in the absence of manifest error.  This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.


 


48





















 


2.19                           Change of Lending Office.  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.16 or 2.17(a) with
respect to such Lender, it will, if requested by the Parent Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided that such designation
is made on terms that, in the sole judgment of such Lender, cause such Lender
and its lending office(s) to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this Section shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.16 or 2.17(a).


 


2.20                           Replacement
of Lenders under Certain Circumstances. 
The Parent Borrower or the Canadian Borrower, as appropriate, shall be
permitted to (a) replace any Lender which (i) defaults in its
obligation to make Loans hereunder or (ii) in connection with any proposed
amendment, modification, supplement or waiver with respect to any of the
provisions of the Loan Documents as contemplated in Section 10.1 where
such amendment, modification, supplement or waiver has been approved by (x) the
U.S. Required Lenders (and, if applicable, the U.S. Required Prepayment Lenders
and/or the Requisite Lenders), or (y) the Canadian Required Lenders (and,
if applicable, the Canadian Required Prepayment Lenders and/or the Requisite
Lenders), if applicable, in accordance with such Section, fails to consent to
any such proposed amendment, modification, supplement or waiver and (b) replace
or remove any Lender which requests reimbursement for amounts owing pursuant to
Section 2.16 or 2.17 and, if the Parent Borrower or the Canadian Borrower,
if appropriate, elects to remove such Lender, terminate such Lender’s U.S.
Revolving Commitment or Canadian Commitment hereunder; provided that (A)(i) such
replacement or removal, as the case may be, does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement or removal, as the case may be, (iii) prior
to any such replacement or removal, as the case may be, pursuant to clause (b) above
such Lender shall have taken no action under Section 2.19 so as to
eliminate the continued need for payment of amounts owing pursuant to Section 2.16
or 2.17, (iv) the Parent Borrower shall be liable to such replaced or
removed U.S. Lender under Section 2.18 if any Eurodollar Loan owing to
such replaced or removed Lender shall be purchased other than on the last day
of the Interest Period relating thereto and (v) any such replacement or removal,
as the case may be, shall not be deemed a waiver of any rights which the Parent
Borrower or the Canadian Borrower, if appropriate, the Administrative Agent or
the Canadian Agent, as appropriate, or any other Lender shall have against the
replaced or removed Lender, (B) in the case of replacement of a Lender
under this Section 2.20, (i) the replacement financial institution
shall purchase, at par, all Loans including all accrued, but unpaid interest
and fees and other amounts owing to such replaced Lender on or prior to the
date of replacement, (ii) the replacement financial institution, if not already
a Lender, shall be reasonably satisfactory to the Administrative Agent or the
Canadian Agent, as appropriate, and the U.S. Issuing Lender and the Canadian
Issuing Lender, as appropriate, (iii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section 10.6
and (iv) until such time as such replacement shall be consummated, the
Parent Borrower or the Canadian Borrower, if appropriate, shall pay all
additional amounts (if any) required pursuant to Section 2.16 or 2.17, (C) if
the Parent Borrower or the Canadian Borrower, if appropriate, elects to remove
a Lender under clause (b) of this Section 2.20 and if such Lender has
any Loans outstanding at such time, the consent of the Administrative Agent or
the Canadian Agent, as appropriate, and the U.S. Required Lenders or the
Canadian Required Lenders, as appropriate, shall be required to terminate such
Lender’s U.S. Revolving Commitment or Canadian Commitment, as appropriate, and (D) in
the case of replacement of a non-consenting Lender under clause (a)(ii) of
this Section 2.20, the Parent Borrower or the Canadian Borrower, if
appropriate, shall replace such Lender within 60 days of such Lender’s failure
to consent to the proposed action.


 


2.21                           Bankers’ Acceptances
Under the Canadian Subfacility.  The
Canadian Borrower may issue Drafts denominated in C$ for acceptance by the
Canadian Lenders subject to the following provisions:


 


49





















 


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


 


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


 


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


 


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


 


(e)                                  the Canadian Agent
has been notified verbally by 11:00 A.M. (Toronto time) two (2) Business
Days prior to the date of issuance, of the Canadian Borrower’s intention to
issue Bankers’ Acceptances, such verbal notice to be followed by written
confirmation in the form and substance provided in Exhibit N not later
than 3:00 P.M. (Toronto time) on the same day;


 


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


 


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


 


(h)                                 Bankers’ Acceptances
issued by the Canadian Borrower hereunder and outstanding at any particular
time may not be repaid or prepaid prior to the respective scheduled maturity
thereof except with the prior consent of a Canadian Lender, which consent shall
only be granted upon such terms and conditions with respect to timing, breakage
costs or otherwise as such Canadian Lender shall alone determine in its
reasonable discretion; and


 


(i)                                     upon acceptance of
a Bankers’ Acceptance by a Canadian Lender, such Lender shall purchase, or
arrange for the purchase of, each Bankers’ Acceptance from the Borrower at the
Discount Rate for such Canadian Lender applicable to such Bankers’ Acceptance
accepted by it and provide to the Canadian Agent the Discount Proceeds for the
account of the Canadian Borrower.  The
Acceptance Fee payable by the Canadian Borrower to a Canadian Lender shall be
set off against the Discount Proceeds payable by such Canadian Lender under this
Section 2.21.


 


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


 


50





















 


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


 


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


 


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


 


(b)                                 With respect to each
Canadian Loan which is outstanding as a C$ Prime Loan, the Canadian Borrower
may elect from time to time to convert such C$ Prime Loan to Bankers’
Acceptances (or, if applicable, B/A Equivalent Loans) by giving the Canadian
Agent at least two Business Days prior verbal notice of such election.  Such notice shall be irrevocable and to be
followed by written confirmation in form and substance as provided in Exhibit O
not later than 3:00 P.M. (Toronto time) on the same day.  Provided that the Canadian Agent has received
a notice in accordance with this Section requesting the Canadian Lenders
to accept (and if required, purchase) Bankers’ Acceptances (or if applicable,
advance B/A Equivalent Loans) to replace all or a portion of an outstanding C$
Prime Loan, then upon receipt by each such Canadian Lender on the applicable
Borrowing Date of a payment equal to the principal amount of the outstanding C$
Prime Loan continued, each such Canadian Lender shall accept (and if required,
purchase) Bankers’ Acceptances (or if applicable, advance B/A Equivalent Loans)
in an aggregate face (and, if applicable, principal) amount equal to the
outstanding principal amount of the C$ Prime Loans to be continued.


 


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


 


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


 


51





















 


the proper signing officers of
the Canadian Borrower.  In this
connection, the parties also agree as follows:


 


(a)                                  each
Canadian Lender shall deal prudently in accordance with Canadian Banking
Standards with any Bankers’ Acceptance forms purported to have been pre-signed
and/or pre-endorsed by the Canadian Borrower and shall use them only in
accordance with the instructions of the Canadian Borrower given to such
Canadian Lender in conformity with this Agreement.  Each Canadian Lender shall be presumed to
have acted prudently when following such instructions in the absence of gross
negligence, bad faith or willful misconduct; alternatively, the Canadian
Borrower agrees that, at the request of the Canadian Agent, the Canadian
Borrower shall deliver to the Canadian Agent a “depository note” which complies
with the requirements of the Depository Bills and Notes Act (Canada), and
consents to the deposit of any such depository note in the book-based debt
clearance system maintained by the Canadian Depository for Securities;


 


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


 


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


 


(d)                                 the Canadian Borrower
waives presentment for payment and any other defense to payment of any amounts
due to a Canadian Lender in respect of a Bankers’ Acceptance and purchased by
it pursuant to this Agreement which might exist solely by reason of such
Bankers’ Acceptance being held, at the maturity thereof, by such Canadian
Lender in its own right, and the Canadian Borrower agrees not to claim any days
of grace if such Canadian Lender, as holder, sues the Canadian Borrower on the
Bankers’ Acceptance for payment of the amount payable by the Canadian Borrower
thereunder.  On the last day of the
Contract Period of a Bankers’ Acceptance, or such earlier date as may be
required or permitted pursuant to the provisions of this Agreement, the
Canadian Borrower shall pay the Canadian Lender that has accepted and purchased
such Bankers’ Acceptance the full face amount of such Bankers’ Acceptance and,
after such payment, the Canadian Borrower shall have no further liability in
respect of such Bankers’ Acceptance and such Canadian Lender shall be entitled
to all benefits of, and be responsible for all payments due to third parties
under, such Bankers’ Acceptance.


 


2.24                           Circumstances
Making Bankers’ Acceptances Unavailable.


 


(a)                                  If
the Canadian Agent determines in good faith, which determination shall be final,
conclusive and binding upon the Canadian Borrower, and notifies the Canadian
Borrower that, by reason of circumstances affecting the money market, there is
no market for Bankers’ Acceptances, then:


 


(i)                                     the right of the
Canadian Borrower to request a borrowing by way of Bankers’ Acceptance shall be
suspended until the Canadian Agent determines that the circumstances causing
such suspension no longer exist and the Canadian Agent so notifies the Canadian
Borrower; and


 


52





















 


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


 


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


 


2.25                           Increases
of the Facilities.


 


(a)                                  At
the discretion of the U.S. Borrowers, the U.S. Borrowers may request in writing
at any time after the Closing Date that the then effective aggregate principal
amount of any Type or Types of Term Loans be increased; provided that (1) the
aggregate principal amount of the increases in the Term Loans pursuant to this Section 2.25
shall not exceed $100,000,000 and each increase shall not be less than
$10,000,000, (2) no Event of Default shall have occurred and be continuing
or occur as a result of such increases in the Term Loans, (3) the proceeds
of such increases in the Term Loans shall be used solely for Permitted
Acquisitions and the costs and expenses related thereto, and (4) the
Borrowers shall, and shall cause their Subsidiaries to, execute and deliver evidence
that, on a pro forma basis, after giving effect to the increase and use of
proceeds, the Consolidated Senior Leverage Ratio shall not exceed 3.25 to 1.00
and evidence of compliance, on a pro forma basis (as set forth in the
definition of the term “Permitted Acquisition”), with Section 7.1
of this Agreement, and such other documents and instruments and take such other
actions as may be reasonably requested by Administrative Agent in connection
with such  increases.  Any request under this Section 2.25
shall be submitted by the Borrowers to the Administrative Agent (which shall
promptly forward copies to the Lenders), specify the proposed effective date
and amount of such increase and be accompanied by an officer’s certificate
stating on behalf of the Borrowers that no Event of Default exists or will
occur as a result of such increase.


 


(b)                                 No
Lender shall have any obligation, express or implied, to offer to increase the
aggregate principal amount of its applicable Term Loans.  Only the consent of each Lender (an “Increasing
Lender”) which agrees to increase the principal amount of its Term Loans
shall be required for an increase in the aggregate principal amount of the
applicable Term Loans pursuant to this Section 2.25.  Amendments to this Agreement that are
required to give effect to any such increases shall only require the consent of
the Parent Borrower and the Administrative Agent.  No Lender which elects not to increase the
principal amount of its Term Loans may be replaced in respect of its existing
applicable Term Loans as a result thereof without such Lender’s consent.  Each Increasing Lender shall as soon as
practicable specify the amount of the proposed increase which it is willing to
assume.  The U.S. Borrowers may accept
some or all of the offered amounts or designate new lenders which, if they
satisfy the requirements of Section 10.6(c) as if they were Assignees
seeking to become Lenders, shall qualify as additional Lenders hereunder in accordance
with this Section 2.25 (each such new lender being a “New Lender”),
which New Lenders may assume all or a portion of the increase in the aggregate
principal amount of the applicable Term Loans. 
The U.S. Borrowers and the Administrative Agent shall have discretion
jointly to adjust the allocation of the increased aggregate principal amount of
the applicable Term Loans among Increasing Lenders and New Lenders.


 


(c)                                  Each
New Lender designated by the U.S. Borrowers shall become an additional party
hereto as a Lender concurrently with the effectiveness of the proposed increase
in the aggregate principal amount of the applicable Term Loans, upon its
execution of an instrument of joinder, in each case in form and substance
satisfactory to the Administrative Agent. 
Subject to the foregoing, any increase requested by the U.S. Borrowers
shall be effective as of the date proposed by the U.S. Borrowers and shall be
in the principal amount equal to (i) the principal amount which Increasing
Lenders are willing to assume as increases to the principal amount of their
applicable Term Loans, plus (ii) the principal


 


53





















 


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


 


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


 


(e)                                  To
the extent that the Applicable Margins on any Term Loan made or committed to be
made pursuant to this Section are greater than those applicable to the
then existing Term Loans, the Applicable Margins on all the then existing Term
Loans shall be increased upon the effectiveness of the applicable increase
effected pursuant to this Section.  In
the event that the upfront fee payable on any Term Loan increased pursuant to
this Section exceeds the upfront fee payable on the original extension of
Term Loans (in the case of first increase under this Section), or the upfront
fee payable on the immediately preceding increase of Term Loans (in the case of
any subsequent increase under this Section), the Borrowers shall pay to each
Lender an amount, calculated on the Term Loan (including any prior increased
Term Loan) of such Lender, equal to the number of basis points by which the fee
payable on such Term Loan increased pursuant to this Section exceeded the
upfront fee payable on such original or immediately preceding, as the case may
be, increase of Term Loan.  If any Term
Loans made or committed to pursuant to this Section are issued at a
discount, such discount shall be treated as an upfront fee.


 


(f)                                    Without
the prior written consent of each holder of the then outstanding Term Loans, no
Term Loan shall be made pursuant to this Section 2.25 the proceeds to the
U.S. Borrowers of which (after deducting any fees payable in connection
therewith and taking into account any applicable original issue discount) are
less than the price the applicable Lender would have then been required to pay
in the market for a Term Loan in an amount equal to such Term Loan.


 


2.26                           B/A Equivalent Loans.  If a Canadian Lender is not a chartered bank
under the Bank Act (Canada) or if a Canadian Lender notifies the Canadian Agent
in writing that it is otherwise unable to accept Bankers’ Acceptances, such
Canadian Lender will, instead of accepting and purchasing Bankers’ Acceptances,
make a Loan (a “B/A Equivalent Loan”) from its Canadian Lending Office
to the Canadian Borrower in the amount and for the same term as the draft that
such Canadian Lender would otherwise have been required to accept and purchase
hereunder.  Each such Canadian Lender may
request that such B/A Equivalent Loan be evidenced by a non-interest bearing
promissory note, in a form approved by the Canadian Borrower and the Canadian Agent.  Each such Canadian Lender will provide to the
Canadian Agent the Discount Proceeds of such B/A Equivalent Loan for the
account of the Canadian Borrower in the same manner as such Canadian Lender
would have provided the Discount Proceeds in respect of the draft that such
Canadian Lender would otherwise have been required to accept and purchase
hereunder. Each such B/A Equivalent Loan will bear interest at the same rate
that would result if such Canadian Lender had accepted (and been paid an
acceptance fee) and purchased (on a discounted basis) a Bankers’ Acceptance for
the relevant Contract Period (it being the intention of the parties that each
such B/A Equivalent Loan shall have the same economic consequences for the
Lenders and the Canadian Borrower


 


54





















 


as the Bankers’ Acceptance that
such B/A Equivalent Loan replaces).  All
such interest shall be paid in advance on the date such B/A Equivalent Loan is
made, and will be deducted from the principal amount of such B/A Equivalent
Loan in the same manner in which the Discount Proceeds of a Bankers’ Acceptance
would be deducted from the face amount of the Bankers’ Acceptance.  Subject to the repayment requirements of this
Agreement, on the last day of the relevant Contract Period for such B/A
Equivalent Loan, the Canadian Borrower shall be entitled to convert each such
B/A Equivalent Loan into another type of Loan, or to roll over each such B/A
Equivalent Loan into another B/A Equivalent Loan, all in accordance with the
applicable provisions of this Agreement. 
For greater certainty, unless the context requires otherwise, all
provisions of this Agreement which are applicable to Bankers’ Acceptances are
also applicable, mutatis mutandis, to B/A Equivalent
Loans.


 


2.27                           Collection
Allocation Mechanism.


 


(a)                                  On
the CAM Exchange Date, (i) each U.S. Revolving Lender shall immediately be
deemed to have acquired (and shall promptly make payment therefor to the U.S.
Administrative Agent in accordance with Section 2.5(d)) participations in
the U.S. Swingline Loans in an amount equal to such U.S. Revolving Lender’s pro
rata share of each U.S. Swingline Loan outstanding on such date, (ii) simultaneously
with the automatic conversions pursuant to clause (iii) below, the
Lenders shall automatically and without further act (and without regard to the
provisions of Section 10.5) be deemed to have exchanged interests in the
Loans (other than the U.S. Swingline Loans) and Bankers’ Acceptances and B/A
Equivalent Loans and participations in the U.S. Swingline Loans and Letters of
Credit, such that in lieu of the interest of each Lender in each Loan, Bankers’
Acceptance, B/A Equivalent Loan and L/C Obligations in which it shall
participate as of such date (including such Lender’s interest in the
Obligations, Guaranty and Collateral of each Loan Party in respect of each such
Loan, Bankers’ Acceptance, and B/A Equivalent Loan and L/C Obligations), such
Lender shall hold an interest in every one of the Loans (other than the U.S.
Swingline Loans) and Bankers’ Acceptances and B/A Equivalent Loans and a
participation in every one of the U.S. Swingline Loans and all of the L/C
Obligations (including the Obligations, guaranty and Collateral of each Loan
Party in respect of each such Loan), whether or not such Lender shall
previously have participated therein, equal to such Lender’s CAM Percentage
thereof and (iii) simultaneously with the deemed exchange of interests pursuant
to clause (ii) above, the interest in the Loans and Bankers’
Acceptances and B/A Equivalent Loans denominated in Canadian Dollars to be
received in such deemed exchange shall be converted into Obligations denominated
in Dollars and on and after such date all amounts accruing and owed to Lenders
in respect of such Obligations shall accrue and be payable in Dollars at the
rates otherwise applicable hereunder.  It
is understood and agreed that Lenders holding interests in Bankers’ Acceptances
and B/A Equivalent Loans on the CAM Exchange Date shall discharge the
obligations to such Bankers’ Acceptances and B/A Equivalent Loans at maturity
in exchange for the interests acquired by such Lenders in the CAM
Exchange.  Each Lender and each Loan
Party hereby consents and agrees to the CAM Exchange, and each Lender agrees
that the CAM Exchange shall be binding upon its successors and assigns and any
person that acquires a participation in its interests in any Loan or Bankers’
Acceptance or B/A Equivalent Loan or any participation in any U.S. Swingline
Loan or Letter of Credit.  Each Loan
Party agrees from time to time to execute and deliver to the Administrative
Agent or the Canadian Agent, as appropriate, all such promissory notes and
other instruments and documents as the Administrative Agent or the Canadian
Agent, as appropriate, shall reasonably request to evidence and confirm the
respective interests of the Lenders after giving effect to the CAM Exchange,
and each Lender agrees to surrender any promissory notes originally received by
it in connection with its Loans hereunder to the Administrative Agent or the
Canadian Agent, as appropriate, against delivery of any promissory notes
evidencing its interests in the Loans and Bankers’ Acceptances and B/A
Equivalent Loans so executed and delivered; provided, however,
that the failure of any Loan Party to execute or deliver or of any Lender to
accept any such promissory note, instrument or document shall not affect the
validity or effectiveness of the CAM Exchange.


 


55





















 


(b)                                 As
a result of the CAM Exchange, upon and after the CAM Exchange Date, each payment
received by the Administrative Agent or the Canadian Agent pursuant to any Loan
Document in respect of any of the Obligations, and each distribution made by
the Administrative Agent or the Canadian Agent in respect of the Obligations,
shall be distributed to the Lenders pro  rata in accordance with
their respective CAM Percentages.  Any
direct payment received by a Lender upon or after the CAM Exchange Date,
including by way of setoff, in respect of an Obligation shall be paid over to
the Administrative Agent for distribution to the Lenders in accordance herewith.


 


2.28                           Special
Provisions Relating to Currencies Other Than Dollars.


 


(a)                                  All
funds to be made available to Administrative Agent pursuant to this Agreement
in Euros shall be made available to Administrative Agent in immediately
available, freely transferable, cleared funds to such account with such bank in
such principal financial center in such Participating Member State (or in
London) as Administrative Agent shall from time to time nominate for this purpose.


 


(b)                                 In
relation to the payment of any amount denominated in Euros, Administrative
Agent shall not be liable to Borrower or any of the Lenders for any delay, or
the consequences of any delay, in the crediting to any account of any amount
required by this Agreement to be paid by Administrative Agent if Administrative
Agent shall have taken all relevant and necessary steps to achieve, on the date
required by this Agreement, the payment of such amount in immediately
available, freely transferable, cleared funds (in Euros) to the account with
the bank in the principal financial center in the Participating Member State
which Borrower or, as the case may be, any Lender shall have specified for such
purpose.  In this Section 2.28(b), “all
relevant steps” means all such steps as may be prescribed from time to time by
the regulations or operating procedures of such clearing or settlement system
as Administrative Agent may from time to time determine for the purpose of
clearing or settling payments of Euros. 
Furthermore, and without limiting the foregoing, Administrative Agent
shall not be liable to Borrower or any of the Lenders with respect to the
foregoing matters in the absence of its gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision or pursuant to a binding arbitration award or as
otherwise agreed in writing by the affected parties).


 


2.29                           Dollar
Equivalent Calculations.  For purposes
of this Agreement, the Dollar Equivalent of each Loan that is a Eurodollar Loan
or Letter of Credit denominated in Alternate Currency and the Dollar Equivalent
of the stated amount of each Canadian Extension of Credit shall be calculated
on the date when any such Loan is made, such Letter of Credit is issued, on the
first Business Day of each month and at such other times as designated by the
Administrative Agent or the Canadian Agent, as appropriate.  Such Dollar Equivalent shall remain in effect
until the same is recalculated by the Administrative Agent or the Canadian
Agent as provided above and notice of such recalculation is received by the
Borrowers, it being understood that until such notice of such recalculation is
received, the Dollar Equivalent shall be that Dollar Equivalent as last
reported to the Borrowers by the Administrative Agent or the Canadian Agent, as
appropriate.  The Administrative Agent
shall promptly notify the U.S. Borrowers and the U.S. Lenders of each such
determination of the Dollar Equivalent. 
The Canadian Agent shall promptly notify the Canadian Borrower and the
Canadian Lenders of each such determination of the Dollar Equivalent.


 


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


 


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SECTION 3


 


LETTERS OF CREDIT


 


3.1                                 U.S. L/C Commitment.


 


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


 


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


 


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


 


3.2                                 Procedure
for Issuance of U.S. Letter of Credit. 
The Parent Borrower may from time to time request that the U.S. Issuing
Lender issue a U.S. Letter of Credit by delivering to the U.S. Issuing Lender
an Application therefor, completed to the satisfaction of the U.S. Issuing
Lender at the address given to the Parent Borrower by the Administrative Agent
in the written notice designating the U.S. Issuing Lender as such, and such
other certificates, documents and other papers and information as the U.S.
Issuing Lender may request.  Upon receipt
of any Application, the U.S. Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the U.S. Letter of Credit requested thereby (but in no event
shall the U.S. Issuing Lender be required to issue any U.S. Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such U.S. Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the U.S. Issuing Lender
and the Parent Borrower.  The U.S.
Issuing Lender shall furnish a copy of such U.S. Letter of Credit to the Parent
Borrower promptly following the issuance thereof.  The U.S. Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to
the Lenders, notice of the issuance of each U.S. Letter of Credit (including
the amount thereof).


 


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3.3                                 Fees
and Other Charges.


 


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


 


(b)                                 In
addition to the foregoing fees, the U.S. Borrowers shall pay or reimburse the
U.S. Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by the U.S. Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any U.S. Letter of Credit
issued by it.


 


3.4                                 U.S.
L/C Participations.


 


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


 


(b)                                 If
any amount required to be paid by any U.S. L/C Participant to the U.S. Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the U.S. Issuing Lender under any U.S. Letter of Credit
is paid to the U.S. Issuing Lender within three Business Days after the date
such payment is due, such U.S. L/C Participant shall pay to the U.S. Issuing
Lender on demand an amount equal to the product of (i) the amount, times (ii) the
daily average Federal Funds Effective Rate during the period from and including
the date such payment is required to the date on which such payment is
immediately available to the U.S. Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360.  If any
such amount required to be paid by any U.S. L/C Participant pursuant to Section 3.4(a) is
not made available to the U.S. Issuing Lender by such U.S. L/C Participant
within three Business Days after the date such payment is due, the U.S. Issuing
Lender shall be entitled to recover from such U.S. L/C Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans under the Revolving Facility.  A certificate of the U.S. Issuing Lender
submitted to any U.S. L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.


 


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


 


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U.S. Letter of Credit (whether
directly from the Parent Borrower or otherwise, including proceeds of
collateral applied thereto by the U.S. Issuing Lender), or any payment of
interest on account thereof, the U.S. Issuing Lender will distribute to such
U.S. L/C Participant its pro rata share thereof; provided, however,
that in the event that any such payment received by the U.S. Issuing Lender
shall be required to be returned by the U.S. Issuing Lender, such U.S. L/C Participant
shall return to the U.S. Issuing Lender the portion thereof previously
distributed by the U.S. Issuing Lender to it.


 


3.5                                 Reimbursement
Obligations of U.S. Borrowers.  The
U.S. Borrowers, jointly and severally, agree in accordance with the terms and
provisions of this Section to reimburse the U.S. Issuing Lender on each
date on which the U.S. Issuing Lender notifies the Parent Borrower of the date
and amount of a draft presented under any U.S. Letter of Credit and paid by the
U.S. Issuing Lender for the amount of (a) such draft so paid and (b) any
taxes, fees, charges or other costs or expenses incurred by the U.S. Issuing
Lender in connection with such payment. 
Each such payment shall be made to the U.S. Issuing Lender at its
address for notices specified herein in the Approved Currency in which the
obligation giving rise to such payment is denominated and in immediately
available funds.  Interest shall be
payable on any and all amounts remaining unpaid by the Borrowers under this Section from
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate set forth in (i) until
the second Business Day following the date of the applicable drawing, Section 2.12(b) and
(ii) thereafter, Section 2.12(d).


 


3.6                                 Obligations
Absolute.  The U.S. Borrowers’
obligations under this Section 3 shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment that the Borrowers may have or have had against the U.S.
Issuing Lender, any beneficiary of a U.S. Letter of Credit or any other
Person.  The U.S. Borrowers also agree
with the U.S. Issuing Lender that the U.S. Issuing Lender shall not be
responsible for, and the U.S. Borrowers’ Reimbursement Obligations under Section 3.5
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
any U.S. Borrower and any beneficiary of any U.S. Letter of Credit or any other
party to which such U.S. Letter of Credit may be transferred or any claims whatsoever
of any U.S. Borrower against any beneficiary of such U.S. Letter of Credit or
any such transferee.  The U.S. Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any U.S. Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the U.S. Issuing Lender.  The U.S.
Borrowers agree that any action taken or omitted by the U.S. Issuing Lender
under or in connection with any U.S. Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the U.S. Borrowers and shall
not result in any liability of the U.S. Issuing Lender to the U.S. Borrowers.


 


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


 


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


 


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


 


SECTION 4


 


REPRESENTATIONS AND WARRANTIES


 


To induce the
Syndication Agent, the Administrative Agent, the Canadian Agent and the
relevant Lenders to enter into this Agreement and to make the Loans and issue
or participate in the Letters of Credit, Holdco and the Borrowers hereby
jointly and severally represent and warrant to the Syndication Agent, the
Administrative Agent, the Canadian Agent and each Lender that:


 


4.1                                 Financial Condition.


 


(a)                                  The
audited consolidated balance sheets of NSP Holdings L.L.C. and NSP as at December 31,
2002, December 31, 2003 and December 31, 2004 and the related
statements of operations, changes in members’ deficit and cash flows for the
fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Ernst & Young, LLP, present fairly in all
material respects the consolidated financial condition of NSP Holdings L.L.C.
and NSP as at such dates, and the consolidated results of its operations and
its consolidated cash flows for the respective fiscal years then ended.  The unaudited consolidated balance sheet of
NSP Holdings L.L.C. and NSP as at April 2, 2005, and the related unaudited
statements of operations and cash flows for the 3-month period ended on such
date, present fairly in all material respects the consolidated financial
condition of NSP Holdings L.L.C. and NSP as at such date, and the consolidated
results of its operations and its consolidated cash flows for the 3-month
period then ended (subject to normal year-end audit adjustments).  The (x) unaudited consolidated balance
sheets of NSP Holdings L.L.C. and NSP as at April 30, 2005 and May 28,
2005, and the related unaudited consolidated statements of operations and cash
flows for the fiscal months ended on such dates, and (y) the unaudited
balance sheets of NSP’s general industrial, fire service and utility/high voltage
business segments as at April 30, 2005 and May 28, 2005 and the
related statements of operations and cash flows for the fiscal months ended at
such dates, present fairly in all material respects the consolidated financial
condition of NSP Holdings L.L.C. and NSP, and the business segments as at such
dates, and the consolidated results of its operations and its consolidated cash
flows for the monthly periods then ended. 
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein and for the absence of certain notes
thereto).  NSP and its Subsidiaries do
not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph
but which would in accordance with GAAP be so reflected in a consolidated
balance sheet of the Parent Borrower


 


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


 


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


 


4.2                                 No Change.  Since December 31, 2004, there has been
no development or event that has had or could reasonably be expected to have a
Material Adverse Effect.


 


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


 


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


 


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may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).


 


4.5                                 No Legal Bar.  The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any Contractual Obligation of the Parent Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents).  No Requirement of Law or Contractual
Obligation applicable to the Parent Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.


 


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


 


4.7                                 No Default.  Neither the Parent Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect.  No Default or Event of
Default has occurred and is continuing.


 


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


 


4.9                                 Intellectual
Property.  The Parent Borrower and
each of its Subsidiaries owns, is licensed under, or otherwise has a right to
use, all Intellectual Property used in the conduct of its business as currently
conducted, except for any failure to so own or license Intellectual Property
which individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect.  No written
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property used in the conduct 
of the business of the Parent Borrower and its Subsidiaries, nor does
the Parent Borrower know of any valid basis for any such claim except for any
claims which individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect.  To
the knowledge of the Parent Borrower and its Subsidiaries, the use of Intellectual
Property by the Parent Borrower and its Subsidiaries does not infringe on the
rights of any Person in any respect, except for any infringement which
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.


 


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


 


4.11                           Federal Regulations.  No part of the proceeds of any Loans will be
used for “buying” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board.  If requested
by any Lender or the Administrative Agent, the Parent Borrower will furnish to
the Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.


 


4.12                           Labor Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against the Parent Borrower or any of its Subsidiaries pending or, to
the knowledge of the Parent Borrower, threatened; (b) hours worked by and
payment made to employees of the Parent Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters; and (c) all payments due
from the Parent Borrower or any of its Subsidiaries on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the Parent Borrower or the relevant Subsidiary.


 


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


 


(b)                                 Each
of the Canadian Borrower and its Subsidiaries has withheld from each payment to
each of their respective officers, directors and employees the amount of all
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
including income tax, pension plan, unemployment insurance and other payments
and deductions required to be withheld therefrom, and has paid the same to the
proper taxation or other receiving authority in accordance with all
Requirements of Law.  None of the
Canadian Borrower nor any of its Subsidiaries is subject to any claim by or
liability to any of their respective officers, directors or employees for
salary (including vacation pay) or benefits which


 


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would rank in whole or in part
pari passu with or prior to the Liens created by the Canadian Security
Documents.  No pension plan or fund
maintained by or on behalf of the Canadian Borrower or any of its Subsidiaries
for the benefit of any officer, director or employee of the Canadian Borrower
or any such Subsidiaries is a so-called defined benefit plan.  For any pension plan or fund, and for any
other employee benefit plan, which is a defined contribution plan requiring the
Canadian Borrower or any of its Subsidiaries to contribute thereto, or to
deduct from payments to any individual and pay such deductions into or to the
credit of such pension plan or fund, all required employer contributions have
been properly withheld by the Canadian Borrower or such Subsidiary and fully
paid into the funding arrangements for the applicable pension plan or
fund.  Any assessments owed to the
Pension Benefits Guarantee Fund established under the Pension Benefits Act
(Ontario), or other assessments or payments required under similar legislation
in any other jurisdiction, have been paid when due.  None of the Canadian Borrower, any of its
Subsidiaries or any of their respective Affiliates is subject to ERISA.


 


(c)                                  Except
where noncompliance would not reasonably be expected to result in a Material
Adverse Effect, each Foreign Plan has been maintained in substantial compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, and neither
the Borrowers nor any Subsidiary have incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Plan.  The present value of the accrued benefit
liabilities (whether or not vested) under each Foreign Plan which is funded,
determined as of the end of the most recently ended fiscal year of the
Borrowers or Subsidiary (based on the actuarial assumptions used for purposes
of the applicable jurisdiction’s financial reporting requirements), did not exceed
the current value of the assets of such Foreign Plan, and for each Foreign Plan
which is not funded, the obligations of such Foreign Plan are properly accrued.


 


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


 


4.15                           Subsidiaries.  Except as disclosed to the Administrative
Agent by the Parent Borrower in writing from time to time after the Closing
Date, (a) Schedule 4.15 sets forth the name and jurisdiction of
organization of each Subsidiary and, as to each such Subsidiary, the percentage
of each class of Capital Stock owned by any Loan Party and (b) there are
no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or directors
and directors’ qualifying shares) of any nature relating to any Capital Stock
of the Parent Borrower or any Subsidiary, except as created by the Loan
Documents or as listed on Schedule 4.15.


 


4.16                           Use of Proceeds.  The proceeds of the Term Loans made on the
Closing Date, the Equity Financing and the Additional Holdco Notes, together
with up to $2,000,000 proceeds of U.S. Swingline Loans, will be used to pay the
Acquisition consideration, refinance certain existing indebtedness and pay fees
and expenses in connection with the Transactions.  The proceeds of the U.S. Revolving Loans and
other U.S. Swingline Loans shall be used for general corporate purposes.  The proceeds of the U.S. Letters of Credit
shall be used to support payment obligations in the ordinary course of
business.  The proceeds of the Canadian
Loans shall be used to finance the working capital needs of the Canadian
Borrower.  The proceeds of any increase
in the Term Loans pursuant to Section 2.25 shall be used to fund Permitted
Acquisitions, pay the fees and expenses related thereto, and to refinance
Indebtedness of the Person or associated with the assets to be so acquired.


 


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


 


(a)                                  the facilities and
properties owned, leased or operated by the Parent Borrower or any of its
Subsidiaries (the “Group Properties”) do not contain, any Materials of
Environmental Concern in amounts or concentrations or under circumstances that
constitute or constituted a violation of, or could give rise to liability
under, any Environmental Law;


 


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


 


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


 


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


 


(e)                                  there has been no
release or threat of release of Materials of Environmental Concern at or from
the Group Properties, or arising from or related to the operations of the
Parent Borrower or any Subsidiary in connection with the Group Properties or
otherwise in connection with the Business, in violation of or in amounts or in
a manner that could reasonably be expected to give rise to liability under Environmental
Laws;


 


(f)                                    the Group
Properties and all operations at the Group Properties are in compliance, and have
in the last five years been in compliance, with all applicable Environmental
Laws, and there is no contamination at, under or about the Group Properties or
violation of any Environmental Law with respect to the Group Properties or the
Business; and


 


(g)                                 neither the Parent
Borrower nor any of its Subsidiaries has assumed any liability of any other
Person under Environmental Laws.


 


4.18                           Accuracy of Information,
etc.  Subject to the next succeeding
sentence and to the qualifications provided therein, no statement or
information contained in this Agreement, any other Loan Document, or to the
best of the Parent Borrower’s knowledge, any other document or written
certificate or written statement furnished by or on behalf of any Loan Party to
the Syndication Agent, the Administrative Agent, the Canadian Agent or the
Lenders, or any of them, pursuant to the Loan Documents or at the request of
Credit Suisse, as Sole Lead Arranger and Sole Bookrunner, for use in connection
with the transactions contemplated by this Agreement or the other Loan Documents,
taken as a whole, contained as of the date this Agreement or such other Loan
Document was delivered or such


 


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statement, document or
certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein, taken as a whole, not misleading in light of the
circumstances in which they were made in any material respect.  The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Parent Borrower to be reasonable
at the time made, it being recognized by the Lenders that such financial information
as it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information may
differ from the projected results set forth therein by a material amount.  There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Syndication Agent, the
Administrative Agent, the Canadian Agent and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents when
taken as a whole.


 


4.19                           Security Documents.


 


(a)                                  The
Guarantee and Collateral Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the U.S. Secured Parties and the
Canadian Secured Parties, a legal, valid and enforceable security interest in
the Collateral described therein (other than Collateral described as “all other
property not otherwise described above” and the proceeds thereof) and the
proceeds thereof which can be perfected by filings described in Schedule 4.19(a).  In the case of the Pledged Stock described in
the Guarantee and Collateral Agreement, stock certificates representing such
Pledged Stock having been delivered to the Administrative Agent and, in the
case of the other Collateral described in the Guarantee and Collateral
Agreement, financing statements and other filings specified on Schedule 4.19(a) in
appropriate form having been filed in the offices specified on Schedule 4.19(a),
the Guarantee and Collateral Agreement constitutes a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral (other than Collateral described as “all other property not
otherwise described above” and the proceeds thereof) and the proceeds thereof,
as security for the Borrower Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3 that have priority by operation of law).


 


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


 


(c)                                  The
Hypothec creates in favor of the Canadian Agent for the benefit of the Canadian
Lenders a legal, valid and enforceable Lien in the Quebec Collateral described
therein and proceeds thereof.  In the
case of certified Pledged Stock (as defined in the Canadian Security
Documents), certificates representing such Pledged Stock having been delivered
to the Canadian Agent, and in the case of the other Collateral described in the
Canadian Security Documents, financing statements in appropriate form having
been filed in the offices specified on Schedule 4.19(c), the Canadian
Security Documents constitute fully perfected Liens on, and security interests
in, all right, title and interest of the Loan Parties in such Collateral and
the proceeds thereof, as security for the obligations described therein as
being secured thereby, in each case prior and superior in right to any other
person except for Liens permitted under Section 7.3 to the extent such
Liens have priority under applicable law.


 


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(d)                                 To
evidence and secure the due payment and performance of the Canadian Extensions
of Credit and the other covenants and obligations of the Canadian Borrower
under this Credit Agreement, the Canadian Borrower shall execute and deliver or
cause to be executed and delivered the following documents to the Canadian
Agent for the benefit of the Canadian Lenders, all in the Canadian Agent’s
required form and otherwise satisfactory to the Canadian Agent in its sole
discretion: (i) the Hypothec, (ii) the Collateral Mortgage Bond, (iii) the
Delivery Order and (iv) the Pledge of Bond Agreement.


 


4.20                           Solvency.  Each Loan Party is, and after giving effect
to the Transactions, incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be Solvent.


 


4.21                           Senior Indebtedness.  The Obligations constitute “Senior
Indebtedness” of the U.S. Borrowers under and as defined in the Subordinated
Note Indenture.  The obligations of each
U.S. Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute “Guarantor Senior Indebtedness” of such U.S. Subsidiary Guarantor
under and as defined in the Subordinated Note Indenture.


 


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


 


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


 


4.24                           Capital Structure.


 


(a)                                  All
of the issued and outstanding shares of the Capital Stock of the Parent Borrower
are owned by Holdco.


 


(b)                                 Set
forth on Schedule 4.24(b) is a complete and correct list of all
Subsidiaries of the Parent Borrower on the date hereof, including, for each of
the Borrowers, the Subsidiary Guarantors and any Subsidiary the capital stock
of which is being pledged for the benefit of the Lenders pursuant to the terms
of the Loan, the number of issued and outstanding shares of the Capital Stock
thereof.  The Parent Borrower owns,
directly or indirectly, 100% of the Capital Stock of each of its
Subsidiaries.  The direct owner of the
Capital Stock of each such Subsidiary is set forth on Schedule 4.24(b).


 


4.25                           Mortgaged Properties.  Schedule 1.1(B) includes a complete
and correct list of all interests in real property owned on the date hereof by
the Parent Borrower and/or any of its Subsidiaries having a value (together
with improvements thereon) of at least $1,000,000, and in the case of leased
real property, has a remaining term of at least one year, and an annual base
rent in excess of $100,000, except for the leased Real Property at 6303 and
6311 Roper Road, Edmonton, Alberta.


 


4.26                           Acquisition
Documents; Representations and Warranties in Acquisition Agreement.  Schedule 4.26 lists (i) each
exhibit, schedule, annex or other attachment to the Acquisition Agreement and (ii) each
agreement, certificate, instrument, letter or other document contemplated by
the Acquisition Agreement or any item referred to in clause (i) to be
entered into, executed or delivered or to become effective in connection with
the Acquisition or otherwise entered into, executed or delivered in connection
with the Acquisition on or prior to the Closing Date or any material agreement,
certificate,


 


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instrument, letter or other
document contemplated by the Acquisition Agreement or any item referred to in
clause (i) to be entered into, executed or delivered or to become effective
in connection with the Acquisition or otherwise entered into, executed or
delivered in connection with the Acquisition after the Closing Date.  The Lenders have been furnished true and
complete copies of each Acquisition Document to the extent executed and
delivered on or prior to the Closing Date. 
All representations and warranties of each Seller and NSP set forth in
the Acquisition Agreement were true and correct in all material respects as of
the time such representations and warranties were made and shall be true and
correct in all material respects as of the Closing Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date.


 


4.27                           Anti-Terrorism Law.


 


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


 


(b)                                 No
Loan Party and to the knowledge of the Loan Parties, no Affiliate or broker or
other agent of any Loan Party acting or benefiting in any capacity in
connection with the Loans is any of the following:


 


(i)                                     a person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive
Order;


 


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


 


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


 


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


 


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


 


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


 


4.28                           Casualty Event.  The Parent Borrower and its Subsidiaries have
not received any notice of, nor has any knowledge of, the occurrence or pendency
or contemplation of any Casualty Event affecting all or any portion of its
property.


 


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SECTION 5


 


CONDITIONS PRECEDENT


 


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


 


(a)                                  Loan Documents.  The Administrative Agent and the Canadian
Agent shall have received (i) this Agreement, executed and delivered by
the Syndication Agent, the Administrative Agent, the Canadian Agent, the
Borrowers and the Lenders, (ii) the Guarantee and Collateral Agreement,
executed and delivered by Holdco, the U.S. Borrowers and each U.S. Subsidiary
Guarantor, (iii) an Acknowledgment and Consent in the form attached to the
Guarantee and Collateral Agreement, executed and delivered by each Issuer (as
defined therein) organized under the laws of any jurisdiction within the United
States, if any, that is not a Loan Party or a Grantor under the Guarantee and
Collateral Agreement and (iv) the Canadian Loan Documents, executed and
delivered by the Canadian Agent and the Canadian Borrower.


 


(b)                                 Financings
and Other Transactions, etc.


 


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


 


(ii)                                  Holdco shall have
received not less than $25.0 million in gross proceeds (prior to any applicable
original issue discount) from the issuance and sale of the Additional Holdco
Notes.


 


(iii)                               The Equity Financing
shall have been consummated.  The terms
of the Equity Financing shall not require any payments or other distributions
of cash or property in respect thereof other than payments in kind, or any
purchases, redemptions or other acquisitions thereof for cash or property other
than payments in kind, in each case prior to the payment in full of all
obligations under the Loan Documents, except as permitted by the Loan Documents.


 


(iv)                              The Refinancing shall
have been consummated in full to the satisfaction of the Lenders with all Liens
in favor of the existing lenders being unconditionally released; the Administrative
Agent shall have received a “pay-off” letter in form and substance reasonably
satisfactory to the Administrative Agent with respect to all debt being
refinanced in the Refinancing; and the Administrative Agent shall have received
from any person holding any Lien securing any such debt, such UCC termination
statements, PPSA financing charge statements, mortgage releases, releases of
assignments of leases and rents, releases of Liens in Intellectual Property and
other instruments, in each case in proper form for recording, as the
Administrative Agent shall have reasonably requested to release and terminate
of record the Liens securing such debt.


 


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


 


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


 


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


 


(e)                                  Legal Opinions.  The Administrative Agent and the Canadian
Agent, as appropriate, shall have received the executed legal opinions of (i) Dechert
LLP, counsel to the Parent Borrower and its Subsidiaries, substantially in the
form of Exhibit F-1, (ii) Sternthal Katznelson Montigny, L.L.P.,
counsel to the Canadian Borrower and its Subsidiaries, substantially in the
form of Exhibit F-2, and (iii) each
local counsel listed on Schedule 5.1(e), substantially to the effect set
forth in Exhibit F-3.  Such
legal opinions shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent, the Canadian Agent
and Syndication Agent may reasonably require.


 


(f)                                    Pledged Stock;
Stock Powers; Pledged Notes.  The
Administrative Agent shall have received (i) the certificates representing
the shares of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement that are represented by certificates, together with an undated stock
power for each such certificate executed in blank by a duly authorized officer
of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Administrative Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed transfer
form in blank) by the pledgor thereof. 
The Canadian Agent shall have received each promissory note, if any,
pledged to the Canadian Agent pursuant to the Canadian Security Documents
endorsed (without recourse) in blank (or accompanied by an executed transfer
form in blank satisfactory to the Canadian Agent) by the pledgor thereof.  The Administrative Agent or the Canadian
Agent, as appropriate, shall have received certified copies of UCC, PPSA,
United States Patent and Trademark Office and United States Copyright Office,
tax and judgment lien searches, bankruptcy and pending lawsuit searches or
equivalent reports or searches, each of a recent date listing all effective
financing statements, lien notices or comparable documents that name any Loan
Party as debtor and that are filed in those state or provincial and county
jurisdictions in which any property of any Loan Party is located and the state
or provincial and county jurisdictions in which any Loan Party is organized or
maintains its principal place of business and such other searches that the
Collateral Agent deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the U.S. Security Documents or
the Canadian Security Documents (other than Permitted Liens or any other Liens
acceptable to the Administrative Agent or the Canadian Agent, as applicable);


 


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


 


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(h)                                 Real
Property Requirements.  (A) Except
as provided in Section 5.1(h)(B) in respect of Mortgaged Property of
the Canadian Borrower and its Subsidiaries, the Administrative Agent shall have
received:


 


(i)                                     a Mortgage
encumbering each Mortgaged Property in favor of the Administrative Agent, for
the benefit of the Lenders, duly executed and acknowledged by each Loan Party
that is the owner of or holder of any interest in such Mortgaged Property,
together with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof to create a lien
under applicable Requirements of Law, and such financing statements and any
other instruments necessary to grant a mortgage lien under the laws of any
applicable jurisdiction, all of which shall be in form and substance reasonably
satisfactory to the Administrative Agent;


 


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


 


(iii)                               with respect to each
Mortgage, a policy of title insurance (or marked up title insurance commitment
having the effect of a policy of title insurance) insuring the Lien of such
Mortgage as a valid first mortgage Lien on the Mortgaged Property and fixtures
described therein in the amount equal to not less than 115% of the fair market
value of such Mortgaged Property and fixtures, which fair market value is set
forth on Schedule 5.1(h), which policy (or such marked-up commitment)
(each, a “Title Policy”) shall (A) be issued by the Title Company, (B) to
the extent necessary, include such reinsurance arrangements (with provisions
for direct access, if necessary) as shall be reasonably acceptable to the
Collateral Agent, (C) contain a “tie-in” or “cluster” endorsement, if
available under applicable law (i.e., policies which insure against
losses regardless of location or allocated value of the insured property up to
a stated maximum coverage amount), (D) have been supplemented by such
endorsements (or where such endorsements are not available, opinions of special
counsel, architects or other professionals reasonably acceptable to the
Collateral Agent) as shall be reasonably requested by the Collateral Agent
(including endorsements on matters relating to usury, first loss, last dollar,
zoning, contiguity, revolving credit, doing business, non-imputation, public
road access, survey, variable rate, environmental lien, subdivision, mortgage
recording tax, separate tax lot  and so-called
comprehensive coverage over covenants and restrictions), and (E) contain
no exceptions to title other than exceptions acceptable to the Administrative
Agent;


 


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


 


(v)                                 evidence reasonably
acceptable to the Administrative Agent of payment by Borrower of all Title
Policy premiums, search and examination charges, escrow charges and related
charges, mortgage recording taxes, fees, charges, costs and expenses required
for the recording of the Mortgages and issuance of the Title Policies referred
to above;


 


(vi)                              with respect to each Real
Property or Mortgaged Property, copies of all leases in which Borrower or any
Subsidiary holds the lessor’s interest or other agreements relating to
possessory


 


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


 


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


 


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


 


(ix)                                a completed Federal
Emergency Management Agency Standard Flood Hazard Determination with respect to
each Mortgaged Property.


 


(B)  The Canadian Agent shall have
received:


 


(i)                                     a
Mortgage encumbering each Mortgaged Property of the Canadian Borrower and any
of its Subsidiaries in favor of the Canadian Agent, for the benefit of the
Canadian Lenders, duly executed and acknowledged by each Loan Party that is the
owner of or holder of any interest in such Mortgaged Property, together with
such certificates, affidavits, questionnaires or returns as shall be required
in connection with the recording or filing thereof to create a lien under
applicable Requirements of Law, and such financing statements and any other
instruments necessary to grant a mortgage lien under the laws of any applicable
jurisdiction, all of which shall be in form and substance reasonably
satisfactory to the Canadian Agent;


 


(ii)                                  with
respect to each Mortgaged Property of the Canadian Borrower and any of its
Subsidiaries, such consents, approvals, amendments, supplements, estoppels,
tenant subordination agreements or other instruments as necessary to consummate
the Transactions or as shall reasonably be deemed necessary by the Canadian
Agent in order for the owner or holder of the fee or leasehold interest constituting
such Mortgaged Property to grant the Lien contemplated by the Mortgage with
respect to such Mortgaged Property;


 


(iii)                                  with
respect to each Mortgage relating to owned Real Property made by the Canadian
Borrower and any of the its Subsidiaries, a Title Policy, which shall (A) be
issued by the Title Company, (B) to the extent necessary, include such
reinsurance arrangements (with provisions for direct access, if necessary) as
shall be reasonably acceptable to the Canadian Agent, (C) contain a “tie-in”
or “cluster” endorsement, if available under applicable law (i.e., policies
which insure against losses regardless of location or allocated value of the
insured property up to a stated maximum coverage amount), (D) have been
supplemented by such endorsements (or where such endorsements are not
available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Canadian Agent) as shall be reasonably requested
by the Canadian (including endorsements on matters relating to usury, first
loss, last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien,
subdivision, mortgage recording tax, separate tax lot, and so-called
comprehensive coverage over covenants and restrictions), and (E) contain
no exceptions to title other than exceptions acceptable to the Canadian Agent;


 


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


 


72





















 


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


 


(v)                                 evidence
reasonably acceptable to the Canadian Agent of payment by the Canadian Borrower
of all Title Policy premiums, search and examination charges, escrow charges
and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages and issuance of the Title
Policies referred to above;


 


(vi)                              with
respect to each Real Property or Mortgaged Property of the Canadian Borrower
and any of its Subsidiaries, copies of all leases in which the Canadian
Borrower or any of its Subsidiaries holds the lessor’s interest or other
agreements relating to possessory interests, if any.  To the extent any of the foregoing affect any
Mortgaged Property, such agreement shall be subordinate to the Lien of the
Mortgage to be recorded against such Mortgaged Property, either expressly by
its terms or pursuant to a subordination, non-disturbance and attornment
agreement, and shall otherwise be acceptable to the Canadian Agent;


 


(vii)                           with
respect to each Mortgaged Property of the Canadian Borrower and any of its
Subsidiaries, each Loan Party shall have made all notifications, registrations
and filings, to the extent required by, and in accordance with, all
Requirements of Law applicable to such Mortgaged Property; and


 


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


 


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


 


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


 


(l)                                     Patriot Act.  The Administrative Agent shall have received,
at least five Business Days prior to the Closing Date, all documentation and
other information required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including
without limitation the PATRIOT Act.


 


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


 


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(n)                                 Litigation.  There shall be no litigation, public or
private, or administrative proceedings, governmental investigation or other
legal or regulatory developments, actual or threatened, that, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or could materially and adversely affect the ability of Holdco, the Parent
Borrower or their Subsidiaries to fully and timely perform their respective
obligations under the Transaction Documents, or the ability of the parties to
consummate the financings contemplated hereby or the other Transactions.


 


(o)                                 Indebtedness and
Minority Interests.  After giving
effect to the Transactions and the other transactions contemplated hereby, no
Loan Party shall have outstanding any Indebtedness or preferred stock other
than (i) Indebtedness outstanding hereunder, (ii) the Senior
Subordinated Notes, (iii) the Holdco Notes, (iv) the Indebtedness
listed on Schedule 7.2(e) and (v) Indebtedness owed to the
Borrowers or any Guarantor.


 


5.2                                 Conditions to Each
Extension of Credit.  The agreement
of each Lender to make any extension of credit requested to be made by it on
any date (including its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:


 


(a)                                  Requests for Loans.


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)                                 Representations and
Warranties.  Each of the
representations and warranties made by any Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date except for such representations and
warranties expressly stated to be made as of a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date.


 


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(c)                                  No Default.  No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.


 


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


 


SECTION 6


 


AFFIRMATIVE COVENANTS


 


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


 


6.1                                 Financial
Statements.


 


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


 


(i)                                     as soon as
available, but in any event within 90 days after the end of each fiscal
year of Holdco, a copy of the audited consolidated balance sheets of Holdco and
its consolidated Subsidiaries and Parent Borrower and its consolidated
subsidiaries as at the end of such year and the related audited consolidated
statements of operations for such year, setting forth in each case in comparative
form (to the extent practicable taking into account predecessors) the figures
for the previous year of such entities and any predecessors, reported on
without a “going concern” or like qualification or exception, or qualification
arising out of the scope of the audit, by Ernst & Young LLP or other
independent certified public accountants of nationally recognized standing;


 


(ii)                                  as soon as available,
but in any event not later than 45 days after the end of each of the first
three quarterly periods of each fiscal year of Holdco, the unaudited
consolidated balance sheets of Holdco and its consolidated Subsidiaries and
Parent Borrower and its consolidated subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of operations for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form (to the extent practicable
taking into account predecessors) the figures for the previous year of such
entities and any predecessors, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit adjustments
and the absence of certain footnotes);


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(a)                                  concurrently with the
delivery of the financial statements referred to in Section 6.1(a)(i), (i) a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate and (ii) all “management letters”, if any,
delivered by such accountants in connection therewith;


 


(b)                                 concurrently with the
delivery of any financial statements pursuant to Section 6.1(a), (i) a
certificate of a Responsible Officer stating that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information and
calculations necessary for determining compliance by the Parent Borrower and
its Subsidiaries with the provisions of this Agreement referred to therein as
of the last day of the fiscal quarter or fiscal year of Parent Borrower, and,
if such Compliance Certificate demonstrates an Event of Default of any covenant
under Section 7.1, the Permitted Holders and the Individual Investors may
deliver, together with such Compliance Certificate, notice of their intent to
cure (a “Notice of Intent to Cure”) such Event of Default through
capital contributions or the purchase of Equity interests as contemplated
pursuant to clause (n) of the definition of “Consolidated EBITDA”; provided
that the delivery of a Notice of Intent to Cure shall in no way affect or alter
the occurrence, existence or continuation of any such Event of Default or the
rights, benefits, powers and remedies of the Administrative Agent and the Lenders
under any Loan Document;


 


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


 


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


 


(e)                                  no later than five
Business Days prior to the effectiveness thereof, copies of substantially final
drafts of any proposed amendment, supplement, waiver or other modification with
respect to any Scheduled Debt;


 


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


 


(g)                                 promptly, such
additional financial and other information as any Lender may from time to time
reasonably request.


 


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


 


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


 


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6.5                                 Maintenance
of Property; Insurance.  (a)  Keep
all material tangible property useful and necessary in its business in as good
working order and condition as currently maintained, ordinary wear and tear and
damage occurring as a result of a Casualty Event excepted and (b) maintain
with financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business.


 


6.6                                 Inspection
of Property; Books and Records; Discussions.  (a)  Keep books of records and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of any
Lender, at its own expense, to visit and inspect (but not collect soil,
groundwater, sediment, surface water or air samples) any of its properties and
examine and make abstracts from any of its books and records, at such
reasonable times during normal business hours upon reasonable advance written
notice to the Parent Borrower and, subject to the proviso below, as often as
may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of the Parent Borrower and its Subsidiaries
with officers and employees of the Parent Borrower and its Subsidiaries and
with its independent certified public accountants (subject to such independent
certified public accountants’ customary procedures) (such visits and
inspections shall be coordinated by the Lenders to the extent reasonably practicable);
provided that such visits shall occur no more than two times per year if
no Event of Default has occurred and is continuing.  In the absence of an Event of Default, the
Administrative Agent and the Lenders shall give Parent Borrower the opportunity
to participate in any discussions with Parent Borrower’s independent certified
public accountants.


 


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


 


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


 


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


 


(c)                                  any litigation or
proceeding affecting Parent Borrower or any of its Subsidiaries in which the
amount involved is $1,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought and, with respect to any litigation or
proceeding relating to respiratory claims, Parent Borrower shall provide to the
Administrative Agent notice of such litigations and proceedings as disclosed in
the periodic reports and public filings of Parent Borrower, provided that after
such notice is provided to the Administrative Agent, and to the extent
reasonably requested by the Administrative Agent, the Parent Borrower shall
provide to the Administrative Agent any supporting documentation with respect
to such litigations and proceedings;


 


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


 


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


 


(e)                                  any development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.


 


Each notice
pursuant to this Section 6.7 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdco or the Parent Borrower or the relevant Subsidiary
proposes to take with respect thereto.


 


6.8                                 Environmental Laws.


 


(a)                                  Comply
in all material respects with, and ensure compliance in all material respects
by all tenants and subtenants, if any, with, all applicable Environmental Laws,
and obtain and comply in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.  For the purposes of this Section 6.8(a) noncompliance
by the Parent Borrower shall be deemed not to constitute a breach of this
covenant; provided that, upon learning of any actual or suspected
noncompliance, the Parent Borrower shall in a timely fashion undertake
reasonable efforts to achieve compliance; and provided, further,
that, in any case, such noncompliance, and any other noncompliance with any
Environmental Law, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.


 


(b)                                 Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.  For the purposes of this Section 6.8(b) noncompliance
by the Parent Borrower shall be deemed not to constitute a breach of this
covenant; provided that, upon learning of any actual or suspected
noncompliance, the Parent Borrower shall in a timely fashion undertake
reasonable efforts to achieve compliance; and provided, further,
that, in any case, such noncompliance, and any other noncompliance with any
Environmental Law, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.


 


(c)                                  At
all times have appointed one or more employees of the Parent Borrower or its
Subsidiaries who together have responsibility for the management of all
environmental matters and issues applicable to the Parent Borrower and its
Subsidiaries and for implementing programs and procedures to assure compliance
with all Environmental Laws.


 


6.9                                 Additional
Collateral, etc.


 


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


 


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the Canadian Agent deems
necessary or advisable to grant to the Canadian Agent, for the benefit of the
Canadian Lenders, a security interest in such property and (iii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the U.S. Secured Parties and the Canadian Secured Parties, or to the
Canadian Agent, for the benefit of the Canadian Lenders, as the case may be, a
perfected first priority security interest in such property, including the
filing of Uniform Commercial Code or other financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement, the
Canadian Security Documents or by law or as may be reasonably requested by the
Administrative Agent or the Canadian Agent, as the case may be.


 


(b)                                 With
respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $1,000,000 acquired after the Closing Date by
the Parent Borrower or any of its Subsidiaries (other than (x) any such real
property subject to a Lien expressly permitted by Section 7.3(g) and
(y) real property acquired by any Excluded Foreign Subsidiary) or in the case
of leases with a remaining term of more than one year and an annual base rent
in excess of $100,000, promptly (i) execute and deliver a first priority
Mortgage, in favor of the Administrative Agent, for the benefit of the U.S.
Lenders or the Canadian Agent, for the benefit of the Canadian Lenders, as the
case may be, covering such real property, (ii) if requested by the
Administrative Agent or the Canadian Agent, as the case may be, provide the
U.S. Lenders or the Canadian Lenders, as the case may be, with (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as
shall be reasonably specified by the Administrative Agent or the Canadian
Agent, as the case may be) as well as a current ALTA survey thereof, together
with a surveyor’s certificate or an existing Survey (together with an affidavit
of no change) sufficient for the Title Company to remove all standard survey
exceptions from the title insurance policy or commitment and (y) to the extent
obtainable by Parent Borrower or any Subsidiary, as applicable, within a
commercially reasonable period of time using commercially reasonable efforts,
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent or the Canadian Agent, as the case may be, in connection
with such mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent or the Canadian Agent, as
the case may be, and (iii) if requested by the Administrative Agent or the
Canadian Agent, as the case may be, deliver to the Administrative Agent or the
Canadian Agent, as the case may be, legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent or the Canadian
Agent, as the case may be.


 


(c)                                  With
respect to any new Subsidiary (other than an Excluded Foreign Subsidiary)
created or acquired after the Closing Date by the Parent Borrower or any of its
Subsidiaries (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), and,
with respect to any Subsidiary in existence on the date hereof which is not a
party to the Guarantee and Collateral Agreement on the Closing Date as to which
the Administrative Agent reasonably requests, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new or
existing Subsidiary, as the case may be, that is owned by the Parent Borrower
or any of its Subsidiaries, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Parent Borrower or such Subsidiary, as the case may be, (iii) cause such
new or existing Subsidiary, as the case may be, (A) to become a party to
the Guarantee and Collateral Agreement, (B) to take such actions necessary
or advisable to grant to the Administrative Agent for the benefit of the
Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new or
existing Subsidiary, as the case may be, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent


 


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and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the
form of Exhibit C, with appropriate insertions and attachments, and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.


 


(d)                                 With
respect to any new Excluded Foreign Subsidiary created or acquired after the
Closing Date by the Parent Borrower or any of its Subsidiaries (other than the
Canadian Borrower or any Subsidiaries thereof), promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the U.S. Secured
Parties and the Canadian Secured Parties, a perfected first priority security
interest in the Capital Stock entitled to vote of such new Subsidiary, as the
case may be, that is owned by the Parent Borrower or any of its Subsidiaries
(provided that in no event shall more than 65% of the total outstanding Capital
Stock of any such new Subsidiary, as the case may be, be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Parent Borrower or
such Subsidiary, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent’s security interest therein, and (iii) legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Administrative
Agent.


 


(e)                                  With
respect to any new Canadian Wholly Owned Subsidiary created or acquired after
the Closing Date by the Canadian Borrower or any of its Subsidiaries, promptly (i) execute
and deliver to the Canadian Agent such amendments to the Canadian Security
Documents as the Canadian Agent deems necessary or advisable to grant to the
Canadian Agent, for the benefit of the Canadian Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary, that is
owned by the Canadian Borrower or any of its Subsidiaries, (ii) deliver to
the Canadian Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Canadian Borrower or such Subsidiary, as the case may
be, and take such other action as may be necessary or, in the opinion of the
Canadian Agent, desirable to perfect the Canadian Lenders’ security interest
therein, (iii) cause such new Subsidiary (A) to become a party to the
applicable Canadian Security Documents and (B) to take such actions
necessary or advisable to grant to the Canadian Agent, for the benefit of the
Canadian Lenders, a perfected first priority security interest or first-ranking
hypothec, as the case may be, in the Collateral or in Collateral similar to the
one described in the Canadian Security Documents with respect to such new
Subsidiary (except to the extent of Liens on such Collateral permitted by Section 7.3
which have priority in accordance with applicable law), including, without
limitation, the filing of appropriate financing statements in such
jurisdictions as may be required by the applicable Canadian law or as may be
requested by the Canadian Agent, and (iv) if requested by the Canadian
Agent, deliver to the Canadian Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Canadian Agent.


 


6.10                           Real Estate Documentation.  Furnish to the Canadian Agent all real estate
documentation reasonably required by the Canadian Agent with respect to the
Mortgaged Property of the Canadian Borrower and each of its Subsidiaries to
perfect such first priority Lien.


 


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


 


6.12                           Post-Closing
Collateral Matters.  The applicable
Loan Parties shall use their commercially reasonable efforts to obtain and
deliver to Administrative Agent, within the time periods set


 


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


 


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


 


(1)                                  duly
executed and acknowledged Mortgages, financing statements and other instruments
meeting the requirements of Section 5.1(h)(i);


 


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


 


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


 


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


 


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


 


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


 


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


 


(8)                                  Surveys
as required by Section 5.1(h)(viii);


 


(9)                                  a
completed Federal Emergency Management Agency Standard Flood Hazard
Determination as required by Section 5.1(h)(ix); and


 


(10)                            written
opinions of local counsel in the states in which each such Real Property is
located, as required by Section 5.1(e).


 


(b)                                 with
respect to each of the owned Real Properties set forth on Schedule 6.12(b),
within thirty (30) days after the Closing Date, the applicable Loan Party will
use commercially reasonable efforts to deliver to Administrative Agent the
following:


 


(1)                                  duly
executed and acknowledged Mortgages, financing statements and other instruments
meeting the requirements of Section 5.1(h)(i);


 


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


 


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


 


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


 


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


 


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


 


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


 


(8)                                  Surveys
as required by Section 5.1(h)(viii);


 


(9)                                  a
completed Federal Emergency Management Agency Standard Flood Hazard Determination
as required by Section 5.1(h)(ix); and


 


(10)                            written
opinions of local counsel in the states in which each such Real Property is
located, as required by Section 5.1(e).


 


(c)                                  The
Canadian Borrower shall use its commercially reasonable efforts to obtain and
deliver to the Canadian Agent, within the time periods set forth below (unless
waived or extended by the Canadian Agent in its discretion), to the extent such
items have not been delivered as of the Closing Date, or delivery has not been
waived by the Canadian Agent in its discretion, the following:


 


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


 


(2)                                  confirmation
of registration of the Cominar Priority Agreement with the Quebec Register of
Personal and Moveable Real Rights within thirty (30) days after the Closing
Date;


 


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


 


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


 


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


 


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


 


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(7)                                  a
duly executed bailee letter from 1197727 Ontario Inc. (carrying on business
under the trade name of Quality Manufacturing), in form and substance
satisfactory to the Canadian Agent, with respect to the third party warehouse
located at 10 Allison Avenue, Morrisburg, Ontario within (30) days after the
Closing Date.


 


SECTION 7


 


NEGATIVE COVENANTS


 


Holdco (solely
in respect of Section 7.21) and Parent Borrower hereby agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender, the Canadian Agent or the
Administrative Agent hereunder (other than contingent or indemnification
obligations), Parent Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, and Holdco, in respect of Section 7.21,
shall not:


 


7.1                                 Financial
Condition Covenants.


 


(a)                                  Consolidated
Total Leverage Ratio.  Permit the
Consolidated Total Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of Parent Borrower ending with any fiscal quarter
ending during any period set forth below to exceed the ratio set forth below
opposite such period:


 




	
  Period

  	
   

  	
  Consolidated Total

  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9/30/05
  through 3/31/06

  	
   

  	
  4.60x

  	
   

  
	
  6/30/06
  through 12/31/06

  	
   

  	
  4.50x

  	
   

  
	
  3/31/07
  through 12/31/07

  	
   

  	
  4.25x

  	
   

  
	
  3/31/08
  through 12/31/08

  	
   

  	
  4.00x

  	
   

  
	
  3/31/09
  through 12/31/09

  	
   

  	
  3.75x

  	
   

  
	
  3/31/10
  through 6/30/12

  	
   

  	
  3.50x

  	
   

  






 


(b)                                 Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of Parent Borrower ending with any fiscal quarter ending during any
period set forth below to be less than the ratio set forth below opposite such
period:


 




	
  Period

  	
   

  	
  Consolidated Interest

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9/30/05 through 12/31/07

  	
   

  	
  2.25x

  	
   

  
	
  3/31/08 through 6/30/12

  	
   

  	
  2.50x

  	
   

  






 


(c)                                  Consolidated
Fixed Charge Coverage Ratio.  Permit
the Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of Parent Borrower ending with any fiscal quarter ending during
any period set forth below to be less than the ratio set forth below opposite
such period:


 


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  Period

  	
   

  	
  Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9/30/05 through 12/31/06

  	
   

  	
  1.25x

  	
   

  
	
  3/31/07 through 12/31/08

  	
   

  	
  1.30x

  	
   

  
	
  3/31/09 through 6/30/12

  	
   

  	
  1.40x

  	
   

  






 


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


 


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


 


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


 


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


 


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


 


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


 


(f)                                    additional
Indebtedness of the Parent Borrower or any of its Subsidiaries in an aggregate
principal amount at any time outstanding not to exceed $11,500,000 (calculated
based upon the exchange rate in effect on the date such Indebtedness is
incurred);


 


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


 


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


 


(i)                                     Indebtedness of
Foreign Subsidiaries to the Parent Borrower, any U.S. Subsidiary Guarantor, the
Canadian Borrower or any Canadian Subsidiary Guarantor including, without
limitation, Indebtedness arising from push down accounting, allocations of
transfer pricing and allocations of the purchase price paid in acquisitions,
provided, however, that none of such Indebtedness shall have been incurred in
connection with the transfer of cash or Cash Equivalents to the Foreign Subsidiary.


 


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(j)                                     Indebtedness of
any Foreign Subsidiary to any other Foreign Subsidiary (other than the Canadian
Borrower or any Subsidiary thereof which is a Guarantor);


 


(k)                                  purchase money
Indebtedness hereafter incurred by the Parent Borrower or any of its
Subsidiaries to finance the purchase, repair or improvement of fixed or capital
assets in an amount not to exceed $5,000,000 at any one time outstanding
(calculated based upon the exchange rate in effect on each date such
Indebtedness is incurred);


 


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


 


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


 


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


 


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


 


(p)                                 obligations
(contingent or otherwise) of the Parent Borrower existing or arising under any
Hedge Agreement entered into in the ordinary course of business and not for
speculative purposes; provided, that if such obligations relate to
interest rates, (i) such obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and (ii) the
notional principal amount of such obligations at the time incurred does not
exceed the principal amount of the Indebtedness to which such obligations
related;


 


(q)                                 Indebtedness assumed in connection with a
Permitted Acquisition after the date hereof (and not created in contemplation
thereof);


 


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


 


(s)                                  Refinancing
Indebtedness in respect of clauses (e) and (q).


 


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


 


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


 


(b)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or other
like Liens arising in the ordinary course of business imposed by law that do
not secure amounts in each case overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;


 


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(c)                                  pledges or deposits
in connection with workers’ compensation, unemployment insurance and other
social security legislation;


 


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


 


(e)                                  easements,
rights-of-way, restrictions, minor defects or irregularities of title and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Parent Borrower or any of its
Subsidiaries;


 


(f)                                    Liens in existence
on the date hereof listed on Schedule 7.3(f), including Liens securing
Indebtedness permitted by Sections 7.2(e) for which collateral is
described on Schedule 7.2(e) and Refinancing Indebtedness related
thereto, provided that no such Lien is spread to cover any additional
property after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;


 


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


 


(h)                                 Liens created pursuant
to this Agreement and the Security Documents, or which are specifically
permitted by the terms of any Security Document;


 


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


 


(j)                                     all building codes
and zoning ordinances and other laws, ordinances, regulations, rules, orders or
determinations of any federal, state, county, municipal and other governmental
authority now or hereafter enacted;


 


(k)                                  Liens securing
reimbursement of obligations in respect of (i) documentary letters of
credit, provided that such Liens cover only the documents, the goods
covered thereby and the proceeds thereof and (ii) bankers’ acceptances
created in respect of drawings under such letters of credit, provided
that such Liens cover only the specific goods covered by such letter of credit
and the proceeds thereof;


 


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


 


87





















 


(m)                               Liens encumbering
customary initial deposits in respect of commodity trading accounts or other
brokerage accounts incurred in the ordinary course of business;


 


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


 


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


 


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


 


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


 


(r)                                    Liens arising from
the filing, for notice purposes only, of financing statements in respect of
operating leases;


 


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


 


(t)                                    Liens (i) on
cash advances in favor of the seller of any property to be acquired in an
Investment permitted pursuant to Sections 7.8 (i) or (n) to be applied
against the purchase price for such Investment, and (ii) on any assets
that are the subject of an agreement for a Disposition thereof permitted
hereunder that arise pursuant to such agreement, so long as such assets are
disposed within six (6) months of the date such agreement shall have been
entered into;


 


(u)                                 Liens consisting of
restrictions on the transfer of securities pursuant to applicable federal and
state securities laws;


 


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


 


(w)                               Liens not otherwise
permitted by this Section 7.3 on assets not constituting Collateral
securing Indebtedness and other obligations and liabilities in an aggregate
amount not to exceed $1,500,000 at any one time outstanding.


 


7.4                                 Fundamental Changes.  Except for the Merger to be effected in
connection with the Acquisition, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:


 


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


 


88





















 


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


 


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


 


(c)                                  Dispositions
permitted under Section 7.5;


 


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


 


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


 


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


 


(g)                                 any Subsidiary of
Parent Borrower may merge with any other Person in connection with a Permitted
Acquisition; provided however, that if such Subsidiary is a U.S. Borrower or a
U.S. Subsidiary Guarantor, such Person, upon consummation of the merger, shall
become a U.S. Borrower or a U.S. Subsidiary Guarantor, respectively; and


 


(h)                                 any Immaterial
Subsidiary may dissolve, liquidate or wind up its affairs at any time provided
that such dissolution, liquidation or winding up, as applicable could not
reasonably be expected to have a Material Adverse Effect.


 


7.5                                 Disposition of
Property.  Dispose of any of its
property, whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any
Person, except:


 


(a)                                  the Disposition of
obsolete, worn out, salvage or surplus property in the ordinary course of
business; provided that the aggregate consideration received for all
such property is at least equal to the aggregate fair market value thereof;


 


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


 


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


 


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


 


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


 


(f)                                    Restricted Payments
permitted under Section 7.6;


 


89





















 


(g)                                 Dispositions of Cash
Equivalents; provided that the aggregate consideration received for all
such Cash Equivalents is at least equal to the aggregate fair market value
thereof; and


 


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


 


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


 


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


 


(b)                                 payments made to
Holdco for corporate overhead expenses reasonably incurred by Holdco, including
without limitation, the (i) insurance premiums, (ii) legal,
administration, accounting, audit and tax fees and expenses (including
franchise fees or similar taxes and fees required to maintain its corporate
existence), (iii) reimbursement payments to investors for their ordinary
course out-of-pocket expenses and (iv) fees and expenses of board
meetings; provided that the payments permitted under this clause (b) shall
not exceed $1,250,000 in the aggregate for any fiscal year of the Parent
Borrower;


 


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


 


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


 


90





















 


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


 


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


 


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


 


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


 


7.7                                 Capital
Expenditures.  Make or commit to make
any Capital Expenditure, except:


 


(a)                                  Capital Expenditures
of the Parent Borrower and its Subsidiaries in the ordinary course of business
not exceeding $15,000,000 during any fiscal year of the Parent Borrower; provided
that (A) up to $7,500,000 of any amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year but not in any subsequent fiscal
years and (B) Capital Expenditures made pursuant to this paragraph (a) during
any fiscal year shall be deemed made, first, in respect of amounts permitted
for such fiscal year as provided above and, second, in respect of amounts
carried over from the prior fiscal year pursuant to subclause (A) above;
provided that, in connection with any Permitted Acquisition, the amount of
Capital Expenditures that would otherwise be permitted in any such fiscal year
pursuant to this clause (a) (including as a result of the application of
subclause (B) of this clause (a)) may be increased in an amount equal to
the greater of 2% of revenues of the Permitted Acquisition for the latest
twelve months for which financial statements are available and 125% of the
average historical capital expenditures for the previous three fiscal years of
the acquired business (excluding for purposes hereof, any capital expenditures
constituting a portion of the purchase price of, or in contemplation of,
acquisitions made by or for the acquired business within the previous three
fiscal years) (“Incremental Capital Expenditures”); provided further that up to
50% of such Incremental Capital Expenditure amount, if not so expended in the
initial fiscal year for which it is permitted, may be carried over for
expenditure in the next fiscal year but not in any subsequent fiscal years in
addition to any amounts carried over pursuant to this Section 7.7(a)(A) above;
however, that in no event shall Incremental Capital Expenditures exceed
$10,000,000 in the aggregate in any fiscal year; and


 


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


 


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7.8                                 Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, “Investments”), except (without
duplication):


 


(a)                                  extensions of trade
credit in the ordinary course of business;


 


(b)                                 investments in cash
and Cash Equivalents;


 


(c)                                  Guarantee Obligations
permitted by Section 7.2;


 


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


 


(e)                                  Investments in assets
useful in the business of the Parent Borrower and its Subsidiaries made by the
Parent Borrower or any of its Subsidiaries with the proceeds of any Reinvestment
Deferred Amount;


 


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


 


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


 


(h)                                 Investments in joint
ventures and unconsolidated subsidiaries useful in the business of the Parent
Borrower and its Subsidiaries and in Foreign Subsidiaries in amounts not to
exceed $3,000,000 individually and $6,000,000 in the aggregate at any one time
outstanding (calculated based on the date such Investment was made);


 


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


 


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


 


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


 


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


 


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


 


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


 


(o)                                 Investments set forth
on Schedule 7.8(o);


 


(p)                                 the Acquisition; and


 


(q)                                 Investments in joint
ventures and unconsolidated subsidiaries in South Africa in amounts not to
exceed $1,500,000 in the aggregate.


 


7.9                                 Optional
Payments and Modifications of Certain Debt Instruments.  (a) Make or offer to make any optional
or voluntary payment, prepayment, repurchase or redemption of, or otherwise
optionally or voluntarily defease or segregate funds with respect to Holdco to
defease or segregate funds with respect to, any Indebtedness (other than any
Scheduled Debt that is not subordinated in right of payment to the
Obligations), other than with the proceeds of Refinancing Indebtedness or (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any subordinated
Indebtedness included in the Scheduled Debt (including the Senior Subordinated
Notes and the Holdco Notes), other than any such amendment, modification,
waiver or other change that (i) (A) would extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon or (B) is not adverse in
any respect to the interests of the Borrowers or Lenders in the reasonable
opinion of the U.S. Required Lenders and (ii) does not involve the payment
of a consent fee or (c) designate any Indebtedness (other than obligations
of the Loan Parties pursuant to the Loan Documents) as “Designated Senior
Indebtedness” for the purposes of the Senior Subordinated Notes and the Senior
Subordinated Notes Indenture or the Holdco Notes and Holdco Notes Indenture.


 


7.10                           Transactions
with Affiliates.  Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than between or among (x) the Parent
Borrower or any U.S. Wholly Owned Subsidiary Guarantor, (y) the Canadian
Borrower and/or any Canadian Subsidiary Guarantor(s) and (z) any Foreign
Subsidiary (other than the Canadian Borrower or any Canadian Subsidiary
Guarantor) and any other such Foreign Subsidiary) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of
the Parent Borrower or such Subsidiary, as the case may be, (c) upon fair
and reasonable terms (i) no less favorable to the Parent Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate or (ii) in the
case of a transaction between the Parent Borrower and such Subsidiary, more
favorable to the Parent Borrower than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate, (d) any of the
Transactions, (e)  the payment of management, monitoring, consulting and
advisory fees and related expenses and any other fees and expenses (or any
accruals relating to such fees and related expenses) paid to Equity Investors
in an amount


 


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not to exceed $1,000,000 in any
fiscal year and (f) the payment of transaction fees and expenses to Equity
Investors in connection with Permitted Acquisitions or other Investments
permitted under Section 7.8 made on usual and customary terms and, in
respect of any such fees and expenses in connection with each Permitted
Acquisition or other permitted Investment that exceed $1,000,000 in the
aggregate, which fees and expenses are approved by a majority of the
disinterested members of the board of directors of the Parent Borrower.


 


7.11                           Sales and Leasebacks.  Enter into any arrangement with any Person
providing for the leasing by the Parent Borrower or any Subsidiary of real or
personal property that has been or is to be sold or transferred by the Parent
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Parent Borrower or such Subsidiary unless such
arrangement is entered into in connection with the financing of the acquisition
of such property through the proceeds of a Capital Lease Obligation permitted
by Section 7.3(g) and the sale or transfer of such property occurs
within ninety days following the acquisition thereof by the Parent Borrower or
any of its Subsidiaries except for Sale and Leasebacks by Parent Borrower or
any of its Subsidiaries not exceeding $5,000,000 during any fiscal year of the
Parent Borrower; provided that up to $5,000,000 of any amount
referred to above, if not so expended in the fiscal year for which it is
permitted, may be carried over for expenditure in the next succeeding fiscal
year but not in any subsequent fiscal years.


 


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


 


7.13                           Negative Pledge Clauses.  Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Parent
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party, other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).


 


7.14                           Clauses Restricting
Subsidiary Distributions.  Enter into
or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Parent Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Parent Borrower or any other Subsidiary of
the Parent Borrower, (b) make loans or advances to, or other Investments
in, the Parent Borrower or any other Subsidiary of the Parent Borrower or (c) transfer
any of its assets to the Parent Borrower or any other Subsidiary of the Parent
Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents, (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement that
has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary, and (iii) any
restrictions on the ability of any Subsidiary to transfer any such asset
imposed by the provisions of the documentation pursuant to which there shall
have been created a Lien permitted by Section 7.3.


 


7.15                           Lines of Business.  Enter into any business, either directly or
through any Subsidiary, except for the manufacture, distribution and sale of personal
protection and safety equipment and related products.


 


7.16                           Limitation on Lease
Expense.  Permit Lease Expense to
exceed $12,500,000 for any fiscal year of the Parent Borrower; provided
that, the amount of Lease Expense that would otherwise be permitted in any such
fiscal year pursuant to this Section 7.16 may be increased in an amount
proportionate


 


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to the increase in Consolidated
EBITDA resulting from Permitted Acquisitions, and any such increase shall be
calculated based upon the Consolidated EBITDA of Parent Borrower for the twelve
months immediately preceding the consummation of the Permitted Acquisition and
on a pro forma basis for the Permitted Acquisition as if such Permitted
Acquisition was completed on the first day of such period.


 


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


 


7.18                           Anti-Terrorism
Law; Anti-Money Laundering.


 


(a)                                  Directly
or indirectly, (i) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in Section 4.27, (ii) knowingly deal in, or
otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order or any other Anti-Terrorism
Law, or (iii) knowingly engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts
to violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
the Loan Parties shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable
discretion, confirming the Loan Parties’ compliance with this Section 7.18).


 


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


 


7.19                           Embargoed Person.  Cause or permit (a) any of the funds or
properties of the Loan Parties that are used to repay the Loans to constitute
property of, or be beneficially owned directly or indirectly by, any person
subject to sanctions or trade restrictions under United States law (“Embargoed
Person” or “Embargoed Persons”) that is identified on (1) the “List
of Specially Designated Nationals and Blocked Persons” maintained by OFAC
and/or on any other similar list maintained by OFAC pursuant to any authorizing
statute including, but not limited to, the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701 et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Order or Requirement of Law promulgated thereunder,
with the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by a Requirement of Law, or the Loans made by the
Lenders would be in violation of a Requirement of Law, or (2) the
Executive Order, any related enabling legislation or any other similar
Executive Orders or (b) any Embargoed Person to have any direct or
indirect interest, of any nature whatsoever in the Loan Parties, with the
result that the investment in the Loan Parties (whether directly or indirectly)
is prohibited by a Requirement of Law or the Loans are in violation of a
Requirement of Law.


 


7.20                           Limitation
on Capital and Holdco Capital. 
Capital may not hold any material properties, become liable for any
material obligations, engage in any trade or business, or conduct any business
activity, other than (a) the issuance of its equity interests to the
Parent Borrower or any wholly owned subsidiary of the Parent Borrower and the
activities incidental or related thereto and (b) the incurrence of
Indebtedness as a co-obligor or guarantor, as the case may be, of the Senior
Subordinated Notes, the Loan Documents and any other Indebtedness that is
permitted to be incurred by Borrower under the Loan Documents and the
activities incidental or related thereto; provided that the net proceeds
of such Indebtedness are retained by the Parent Borrower or loaned to or
contributed as capital to one or more Subsidiaries other than Capital.  Neither the Parent Borrower nor any of its
Subsidiaries shall engage in any transactions with Capital in violation of the
immediately preceding sentence.  Holdco
Capital may not


 


95





















 


hold any properties, become
liable for any obligations, engage in any trade or business or conduct any
activity, other than consummation of the Holdco Merger.


 


7.21                           Limitation on Holdco.  Holdco may not hold any material properties,
become liable for any material obligations, engage in any trade or business, or
conduct any business activity, other than (a) the ownership of equity
interests of the Parent Borrower and the activities incidental or related
thereto, (b) liabilities under the Holdco Notes and activities incidental
thereto and any refinancing thereof contemplated by the definitions of “Term
Loan Termination Date” or “Revolving Termination Date”, (c) liabilities
under the Loan Documents, (d) cash and Cash Equivalents and (e) corporate,
administrative and operating expenses in the ordinary course of business.  Neither the Parent Borrower nor any of its
Subsidiaries shall engage in any transactions with Holdco in violation of the
immediately preceding sentence.


 


SECTION 8


 


EVENTS OF DEFAULT


 


8.1                                 Events of Default.  If any of the following events shall occur
and be continuing:


 


(a)                                  the Borrowers shall
fail to pay any principal of any Loan or Reimbursement Obligation when due in
accordance with the terms hereof; or the Borrowers shall fail to pay any
interest on any Loan or Reimbursement Obligation, or any other amount payable
hereunder or under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms hereof; or


 


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


 


(c)                                  (i)  any Loan
Party shall default in the observance or performance of any agreement contained
in clause (i) or (ii) of Section 6.4(a) (with respect to
the Parent Borrower only), Section 6.7(a) or Section 7 of this
Agreement or (ii) an “Event of Default” under and as defined in any
Mortgage or in any of the Canadian Loan Documents shall have occurred and be
continuing; or


 


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


 


(e)                                  the Parent Borrower
or any of its Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating to
any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other


 


96





















 


event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become payable; provided
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate the Dollar Equivalent of
$5,000,000; or


 


(f)                                    (i) Holdco,
the Parent Borrower or any of their Subsidiaries (other than an Immaterial
Subsidiary) shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Holdco, the Parent Borrower or any of their
Subsidiaries (other than an Immaterial Subsidiary) shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against Holdco, the Parent Borrower or any of their Subsidiaries
(other than an Immaterial Subsidiary) any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against Holdco, the Parent Borrower or any of its
Subsidiaries (other than an Immaterial Subsidiary) any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdco, the Parent Borrower or any of its Subsidiaries
(other than an Immaterial Subsidiary) shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) Holdco, the
Parent Borrower or any of its Subsidiaries (other than an Immaterial
Subsidiary) shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or


 


(g)                                 (i) any Person
shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or Multiemployer Plan or any Lien
in favor of the PBGC, a Plan or a Multiemployer Plan shall arise on the assets
of the Parent Borrower or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
U.S. Required Lenders, likely to result in the termination of such Plan under
Title IV of ERISA, (iv) any Single Employer Plan shall terminate under
Title IV of ERISA, (v) the Parent Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the U.S. Required Lenders becomes
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan or Multiemployer
Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events


 


97





















 


or conditions, if any, could, in the opinion
of the U.S. Required Lenders, reasonably be expected to have a Material Adverse
Effect; or


 


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


 


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


 


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


 


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


 


(l)                                     the Senior Subordinated
Notes or the guarantees of the Senior Subordinated Notes shall cease, for any
reason, to be validly subordinated to the Obligations or the obligations of the
U.S. Subsidiary Guarantors under the Guarantee and Collateral Agreement, as the
case may be, as provided in the Note Agreement, or any Loan Party, any
Affiliate of any Loan Party, or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert;


 


then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect to any
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (including the face amount of all Bankers’ Acceptances and B/A
Equivalent Loans accepted by the Canadian Lenders), with accrued interest
thereon and all other amounts owing under this Agreement and the other Loan
Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) shall immediately become due and payable,
and (B) if such event is any other Event of Default, any or all of the
following actions may be taken:  (i) with
the consent of the Requisite U.S. Revolving Facility Lenders, the
Administrative Agent may, or upon the request of the Requisite U.S. Revolving
Facility Lenders, the Administrative Agent shall, by notice to the Parent
Borrower declare the U.S. Revolving Commitments to be terminated forthwith,
whereupon the U.S. Revolving Commitments shall


 


98





















 


immediately
terminate; (ii) the Canadian Agent may, by notice to the Canadian
Borrower, declare the Canadian Commitments to be terminated forthwith,
whereupon the Canadian Commitments shall immediately terminate; (iii) with
the consent of the U.S. Required Lenders, the Administrative Agent may, or upon
the request of the U.S. Required Lenders, the Administrative Agent shall, by
notice to the Parent Borrower, declare the U.S. Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the
other Loan Documents (including all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder to the U.S. Borrowers) to be due and payable
forthwith, whereupon the same shall immediately become due and payable; and (iv) with
the consent of the Canadian Required Lender, the Canadian Agent may, or upon
request of the Canadian Required Lenders, the Canadian Agent shall, by notice
to the Canadian Borrower, declare the Canadian Loans hereunder (including the
face amount of all Bankers’ Acceptances accepted by the Canadian Lenders), with
accrued interest thereon, and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable.


 


With respect
to all U.S. Letters of Credit and Canadian Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the U.S. Borrowers and the Canadian
Borrower, as the case may be, shall at such time deposit in a cash collateral
account opened by the Administrative Agent or the Canadian Agent, as the case
may be, an amount equal to the aggregate then undrawn and unexpired amount of
such U.S. Letters of Credit or Canadian Letters of Credit, as the case may
be.  Amounts held in such cash collateral
account shall be applied by the Administrative Agent or the Canadian Agent, as
the case may be, to the payment of drafts drawn under such U.S. Letters of
Credit or Canadian Letters of Credit, as the case may be, and the unused
portion thereof after all such U.S. Letters of Credit or Canadian Letters of
Credit, as the case may be, shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the U.S. Borrowers and the
Canadian Borrower, as the case may be, hereunder and under the other Loan Documents.  After all such U.S. Letters of Credit or
Canadian Letters of Credit, as the case may be, shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Parent Borrower and the Canadian Borrower, as the
case may be, hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the relevant Borrowers (or such other Person as may be lawfully entitled
thereto).  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Parent Borrower and the Canadian
Borrower.


 


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


 


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SECTION 9


 


THE AGENTS


 


9.1                                 Appointment.


 


(a)                                  Each
U.S. Lender hereby irrevocably designates and appoints the Administrative Agent
as the agent of such Lender under this Agreement and the other Loan Documents,
and each such Lender irrevocably authorizes the 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 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 Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any U.S. 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
Administrative Agent.


 


(b)                                 Each
Canadian Lender hereby irrevocably designates and appoints the Administrative
Agent and the Canadian Agent as the agents of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent and the Canadian Agent, in such capacities, 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 Administrative Agent and the Canadian Agent, as the case may
be, 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, neither the Administrative Agent nor the Canadian
Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Canadian 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 Administrative Agent or the Canadian Agent.


 


(c)                                  For
greater certainty, and without limiting the powers of the Canadian Agent, or
any other Person acting as an agent or mandatory for the Canadian Agent
hereunder or under any of the other Loan Documents, the Canadian Borrower
hereby acknowledges that, for purposes of holding any security granted by the
Canadian Borrower on property pursuant to the laws of the Province of Quebec to
secure obligations of the Canadian Borrower under any bond, debenture or other
title of indebtedness issued by the Canadian Borrower, the Canadian Agent shall
be the holder of an irrevocable power of attorney (fondé de
pouvoir) (within the meaning of the Civil Code
of Quebec) for all present and future Canadian Lenders and in
particular for all present and future holders of any bond, debenture or other
title of indebtedness issued by the Canadian Borrower.  Each Canadian Lender hereby irrevocably
constitutes, to the extent necessary, the Canadian Agent as the holder of an
irrevocable power of attorney (fondé de pouvoir)
(within the meaning of Article 2692 of the Civil Code
of Quebec) in order to hold security granted by the Canadian
Borrower in the Province of Quebec to secure the obligations of the Canadian
Borrower under bond, debenture or other title of indebtedness issued by the
Canadian Borrower, and hereby agrees that the Canadian Agent may act as the
bondholder and mandatary (i.e. agent) with respect to any bond, debenture or
similar title of indebtedness that may be issued by the Canadian Borrower and
pledged in favor of the Canadian Agent for the benefit of the Canadian Agent
and the Canadian Lenders.  Each assignee
of a Canadian Lender shall be deemed to have confirmed and ratified the
constitution of the Canadian Agent as the holder of such irrevocable power of
attorney (fondé de pouvoir) by execution of an
Assignment and Acceptance. 
Notwithstanding the provisions of Section 32 of the An Act  respecting the


 


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special
powers of legal persons (Quebec), the Canadian Agent
may acquire and be the holder of any hypothec or debenture.  The Canadian Borrower hereby acknowledges
that each such hypothec or debenture constitutes a title of indebtedness, as
such term is used in Article 2692 of the Civil Code
of Quebec.


 


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


 


The Lenders shall have the right to appoint a
successor agent (and fondé de pouvoir),
Credit Suisse Toronto Branch from time to time without notice to or the consent
of the Canadian Borrower.  Upon such
appointment, the successor agent shall succeed to and become the agent (and fondé de pouvoir) with all the rights, powers and privileges
of the retiring agent (and fondé de pouvoir)
and the retiring agent (and fondé de pouvoir)
shall thereupon be immediately discharged from all further duties and
obligations under this Agreement.


 


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


 


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


 


9.3                                 Exculpatory
Provisions.  Neither any Agent nor
any of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) 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 to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the U.S.
Lenders for any recitals, statements, representations or warranties made by any
Loan 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 Agents 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 any Loan Party a party thereto to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any U.S. 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 any Loan Party.


 


9.4                                 Reliance
by Administrative Agent and the Canadian Agent.  The Administrative Agent and Canadian Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, 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 Parent Borrower),
independent accountants and other experts selected by the Administrative Agent
or Canadian Agent, as the case may be.  The
Administrative Agent or Canadian Agent, as the case may be, may deem and treat
the payee of any Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed


 


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with the Administrative Agent
or Canadian Agent, as the case may be.  The
Administrative Agent or Canadian Agent shall each 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 (or, if so specified by this Agreement, all Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.  The Administrative Agent or Canadian Agent
shall each 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 (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.


 


9.5                                 Notice of Default.  Neither the Administrative Agent nor the
Canadian Agent shall be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Administrative Agent or
the Canadian Agent, as the case may be, has received notice from a Lender or
the Parent 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 Administrative Agent or
the Canadian Agent receives such a notice, the Administrative Agent or the
Canadian Agent shall give notice thereof to the Lenders.  The Administrative Agent or the Canadian
Agent shall take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all  Lenders); provided
that unless and until the Administrative Agent or the Canadian Agent shall have
received such directions, the Administrative Agent or the Canadian 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; provided, further,
that with respect to the termination of the U.S. Revolving Commitments and
Canadian Commitments and/or the acceleration of the U.S. Loans, the
Administrative Agent or the Canadian Agent shall take such action with respect
to such termination and/or acceleration as shall be reasonably directed by the
U.S. Revolving Facility Lenders and/or the U.S. Required Lenders and Canadian
Required Lenders, respectively.


 


9.6                                 Non-Reliance
on Agents and Other U.S. Lenders. 
Each Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereinafter taken, including any review of the affairs of a Loan
Party or any affiliate of a Loan Party, shall be deemed to constitute any representation
or warranty by any Agent to any 
Lender.  Each  Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other  Lender, and based on such documents 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 Loan Parties and their affiliates 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 any 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 Loan Parties and
their affiliates.  Except for notices,
reports and other documents expressly required to be furnished to the  Lenders by the Administrative Agent or the
Canadian Agent, as applicable, hereunder, the Administrative Agent nor the
Canadian Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of any Loan
Party or any affiliate of a Loan Party that may come into the possession of the
Administrative Agent or the Canadian Agent, as applicable, or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.


 


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9.7                                 Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (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 such Aggregate
Exposure Percentages 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 (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against such 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 such 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 that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent’s gross
negligence or willful misconduct.  The
agreements in this Section shall survive the payment of the Loans and all
other amounts payable hereunder.


 


9.8                                 Agent
in Its Individual Capacity.  Each
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though such Agent was not
an Agent.  With respect to its Loans made
or renewed by it and with respect to any Letter of Credit issued or participated
in by it, (i) each Agent (other than the Canadian Agent) shall have the
same rights and powers under this Agreement and the other Loan Documents as any
U.S. Lender and may exercise the same as though it were not an Agent, and the
terms “U.S. Lender” and “U.S. Lenders” shall include each Agent in its
individual capacity, and (ii) the Canadian Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Canadian Lender and may exercise the same as though it were not the Canadian
Agent, and the terms “Canadian Lender” and “Canadian Lenders” shall include the
Canadian Agent in its individual capacity.


 


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


 


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


 


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under this Agreement and the
other Loan Documents, then the Canadian Required Lenders shall appoint from
among the Canadian Lenders a successor agent for the Canadian Lenders, which
successor agent shall (unless an Event of Default under Section 8.1(a) or
Section 8.1(f) with respect to any Borrower shall have occurred and
be continuing) be subject to approval by the Canadian Borrower (which approval
shall not be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the Canadian Agent, and the
term “Canadian Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Canadian Agent’s rights, powers and
duties as Canadian Agent shall be terminated, without any other or further act
or deed on the part of such former Canadian Agent or any of the parties to this
Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Canadian Agent by the
date that is 30 days following a retiring Canadian Agent’s notice of
resignation, the retiring Canadian Agent’s resignation shall nevertheless
thereupon become effective and the Canadian Lenders shall assume and perform
all of the duties of the Canadian Agent hereunder until such time, if any, as
the Canadian Required Lenders appoint a successor agent as provided for
above.  After any retiring Canadian Agent’s
resignation as Canadian Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Canadian Agent under this Agreement and the other Loan Documents.


 


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


 


(b)                                 Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Canadian Agent is hereby irrevocably authorized by each of the Canadian Lenders
(without requirement of notice to or consent of any Canadian Lender except as
expressly required by Section 10.1) to take any action requested by the
Canadian Borrower having the effect of releasing any Collateral or guarantee
obligations to the extent necessary to permit consummation of any transaction
not prohibited by any Loan Document or that has been consented to in accordance
with Section 10.1.


 


9.11                           Documentation Agents.  Neither the Documentation Agents nor the
Syndication Agent shall have any duties or responsibilities hereunder in their capacity
as such.


 


SECTION 10


 


MISCELLANEOUS


 


10.1                           Amendments and Waivers.  Except as provided in Section 2.25,
neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. 
The Required Lenders and each Loan Party party to the relevant Loan
Document may, or, with the written consent of the Required Lenders, the
Administrative Agent (or the Canadian Agent, as applicable) and each Loan Party
party to the relevant Loan Document may, from time to time, (a) enter into
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 Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent (or the Canadian Agent, as
applicable), as the case may be, may specify in


 


104





















 


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 (i) forgive
or reduce the principal amount or extend the final scheduled date of maturity
of any Loan, extend the scheduled date of any amortization payment in respect
of any Term Loan, reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender’s Revolving Commitment, in
each case without the consent of each Lender directly affected thereby; (ii) 
reduce any percentage specified in the definition of Required Lenders or U.S.
Required Prepayment Lenders, consent to the assignment or transfer by the
Parent of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
any material Guarantor from its obligations under the Guarantee and Collateral
Agreement (other than in connection with permitted asset sales), in each case
without the written consent of all U.S. Lenders; (iii) eliminate or reduce
the voting rights of any Lender under this Section 10.1 without the
written consent of such Lender; (iv) amend, modify or waive any condition
precedent to any extension of credit under the U.S. Revolving Facility set
forth in Section 5.2 (including in connection with any waiver of an
existing Default or Event of Default) without the written consent of the
Requisite U.S. Revolving Facility Lenders; (v) amend, modify or waive any
provision of Section 2.17 without the consent of the Requisite Lenders in
respect of each Facility adversely affected thereby; (vi) reduce the
percentage specified in the definition of Requisite Lenders with respect to any
Facility without the written consent of all Lenders under such Facility; (vii) amend,
modify or waive any provision of Section 9 without the written consent of
the Administrative Agent (or the Canadian Agent, as applicable); (viii) amend,
modify or waive any provision of Section 2.5 without the written consent
of the Swingline Lender; or (ix) amend, modify or waive any provision of Section 3
without the written consent of the U.S. Issuing Lender.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent (or the
Canadian Agent, as applicable) and all future holders of the Loans.  In the case of any waiver, the Loan Parties,
the Lenders and the Administrative Agent (or the Canadian Agent, as applicable)
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.


 


10.2                           Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business 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 the Parent Borrower, the
Administrative Agent and the Canadian Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the case
of the U.S. Lenders, or to such other address as may be hereafter notified by
the respective parties hereto:


 


Holdco:                                                                                                                                              c/o
Odyssey Investment Partners, LLC

280 Park Avenue

West Tower, 38th Floor

New York, New York  10017

Attention:  Brian Kwait

Telecopy:  (212) 351-7925


 


The Parent
Borrower:                                                                       2211
York Road, Suite 215

Oak Brook, Illinois  60523

Attention:  David Myers

Telecopy:  (630) 572-8518

Telephone:  (630) 572-8234


 


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The Canadian
Borrower                                                          10,550
Parkway Boul.


Ville d’Anjou, Quebec HlJ 2K4


Attention : 
VP Finance


Telecopy : 
(514) 351-3361


Telephone: (514) 351-7233


 


With a copy
to:                                                                                                     Dechert
LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, Pennsylvania  19103-2793

Attention:  Geraldine A. Sinatra, Esq.

Telecopy:  (215) 994-2222

Telephone:  (215) 994-2824


 


and


 


Sternthal Katznelson Montigny, L.L.P.

Place du Canada, Suite 1020

Montreal, Canada

H3B 2N2

Attention:  David Sternthal

Telecopy:  (514) 878-9195

Telephone:  (514) 878-1011


 


The
Administrative Agent:                                         11
Madison Avenue

New York, New York  10010

Attention:  Thomas Lynch

                  Agency
Group Manager

Telecopy:  (212) 325-8304

Telephone:  (212) 325-9205


 


and


 


The Canadian
Agent:                                                                      Credit
Suisse, Toronto Branch

1 First Canadian Place

Suite 3000, PO Box 301

Toronto, Ontario 

Canada  M5X 1C9

Attention:  Agency Operations

Fax:  416-352-4574


 


provided
that any notice, request or demand to or upon the Administrative Agent, the
Canadian Agent, the U.S. Lenders or the Canadian Lenders shall not be effective
until received.


 


10.3                           No Waiver; Cumulative
Remedies.  No failure to exercise and
no delay in exercising, on the part of the Administrative Agent, the Canadian
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.


 


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10.4                           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 and other
extensions of credit hereunder.


 


10.5                           Payment of Expenses and
Taxes.  The Borrowers agree (a) to
pay or reimburse the Administrative Agent, the Syndication Agent and the
Canadian Agent 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 and disbursements of counsel to the
Administrative Agent, the Syndication Agent and the Canadian Agent and filing
and recording fees and expenses, with statements with respect to the foregoing
to be submitted to the Parent Borrower prior to the Closing Date (in the case
of amounts to be paid on the Closing Date) and from time to time thereafter on
a quarterly basis or such other periodic basis as the Administrative Agent
shall deem appropriate, (b) to pay or reimburse each Lender, the Canadian
Agent and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under or workout or
restructuring of this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel (including the allocated
fees and expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent and the Canadian Agent, (c) to pay, indemnify, and
hold each Lender, the Arranger, the Canadian Agent and the Administrative Agent
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender, the Arranger, the Administrative Agent,
the Canadian Agent, the Documentation Agents, the Syndication Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an “Indemnitee”) harmless 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 fees, disbursements and other charges of counsel) arising
out of or relating to any claim or any litigation or other proceeding (regardless
of whether such Indemnitee is a party thereto and regardless of whether such
matter is initiated by a third party or by any Borrower or any of its
affiliates) that relates to the Transactions, including the financing
contemplated hereby, the Acquisition or any transactions connected therewith or
with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including any of the foregoing relating to the use of proceeds of
the Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Borrower, any of their
Subsidiaries or any of the Group Properties (all the foregoing in this clause
(d), collectively, the “Indemnified Liabilities”), provided that
the Borrowers shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted primarily from the gross negligence or willful misconduct of such
Indemnitee.  All amounts due under this Section 10.5
shall be payable promptly after receipt of a reasonably detailed invoice
therefor.  Statements payable by the
Borrowers pursuant to this Section 10.5 shall be submitted to David Myers
(Telephone No. (630) 572-8234) (Telecopy No. (639) 572-8518), at the
address of the Parent Borrower set forth in Section 10.2, or to such other
Person or address as may be hereafter designated by the Parent Borrower in a
written notice to the Administrative Agent. 
The agreements in this Section 10.5 shall survive repayment of the
Loans and all other amounts payable hereunder.


 


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10.6                           Successors
and Assigns; Participations and Assignments.


 


(a)                                  This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Administrative Agent, the Canadian Agent, all future holders of
the Loans and their respective successors and assigns, except that no Borrower
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.


 


(b)                                 Any
Lender may, without the consent of any Borrower, in accordance with applicable
law, at any time sell to one or more banks, financial institutions or other
entities (each, a “Participant”) participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents.  In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Parent Borrower and the Administrative
Agent (or the Canadian Agent, as applicable) shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents.  In no event shall any Participant under any
such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would increase commitments, reduce the principal of, or interest on, the Loans
or any fees payable hereunder, postpone the date of the final maturity or
scheduled amortization of the Loans or release any Guarantor (other than in
connection with permitted Asset Sales) or all or substantially all of the
Collateral, in each case to the extent subject to such participation.  The Borrowers agree that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. 
The Borrowers also agree that each Participant shall be entitled to the
benefits of Sections 2.16, 2.17 and 2.18 with respect to its participation in
the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.17, such
Participant shall have complied with the requirements of said Section and provided,
further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.


 


(c)                                  Any
Lender (an “Assignor”) may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any affiliate thereof or,
with the consent of the Parent Borrower (except in the case of the assignment
of a Term Loan, in which case only notice is required) and the Administrative
Agent or the Canadian Agent, as well as the U.S. Issuing Lender or the Canadian
Issuing Lender, in the case of the assignment of the Canadian Commitments
(which, in each case, shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or other entity (an “Assignee”)
all or any part of its rights and obligations under this Agreement pursuant to
an Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and
delivered to the Administrative Agent or the Canadian Agent, as appropriate,
for its acceptance and recording in its Register; provided that no such
assignment to an Assignee (other than any Lender or any affiliate thereof)
shall, unless otherwise agreed by the Parent Borrower and the Administrative
Agent or the Canadian Agent, as appropriate, be in an aggregate principal
amount (treating multiple, simultaneous assignments to two or more Approved
Funds managed by the same investment


 


108





















 


advisor as a single assignment)
of less than (i) $1,000,000, in the case of the Term Loans or (ii) $2,500,000,
in the case of the U.S. Revolving Loans, unless the entire Commitments and Loans
and other interests of the assigning Lender (and of all Lenders which are
Approved Funds managed by the same investment advisor as the assigning Lender)
are so assigned; provided, further, that, unless otherwise agreed
to by the Parent Borrower and the Administrative Agent, no Canadian Lender and
no U.S. Lender having a Related Canadian Lender may assign its Commitment in
whole or in part unless the Assignee has a Related bank, financial institution
or other entity which simultaneously assumes any obligations of the Related
Lender of the transferor Lender with respect to the assigned Commitment; and provided,
further, that no such assignment of all or any part of the Canadian
Commitments or the Canadian Extensions of Credit shall be made in favor of any Person
which is a non-resident of Canada for the purpose of Section 212 of the
Income Tax Act (Canada).  Any such
assignment need not be ratable as among the Facilities other than, unless
otherwise agreed to by the Parent Borrower and the Administrative Agent, the
Canadian Subfacility.  Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor’s rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto).  The parties to each such
assignment shall execute and deliver to the Administrative Agent or the
Canadian Agent, as appropriate, an Assignment and Acceptance (such Assignment
and Acceptance to be (A) electronically executed and delivered to the
Administrative Agent or the Canadian Agent, as appropriate, via an electronic
settlement system then acceptable to the Administrative Agent or the Canadian
Agent, as appropriate, which shall initially be the settlement system of
ClearPar, LLC, or (B) manually executed and delivered together with a
processing and recordation fee of $3,500) and the assignee, if it shall not be
a Lender immediately prior to the assignment, shall deliver to the
Administrative Agent or the Canadian Agent, as appropriate, an Administrative
Questionnaire and applicable tax form(s).  Notwithstanding any provision of this Section 10.6,
the consent of the Parent Borrower shall not be required for any assignment
that occurs when an Event of Default shall have occurred and be
continuing.  The Canadian Agent shall, on
behalf of the Canadian Borrower, maintain at its address referred to in Section 10.2
a copy of each Assignment and Acceptance delivered to it and a Register for the
recordation of the names and addresses of the Canadian Lenders and the
Commitment of, and the principal amount of the Loans owing to, each Canadian
Lender from time to time.


 


(d)                                 The
Administrative Agent shall, on behalf of the Parent Borrower, maintain at its
address referred to in Section 10.2 a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitment of,
and the principal amount of the Loans owing to, each Lender from time to
time.  The entries in the Register shall
be conclusive, in the absence of manifest error, and the Parent Borrower, each
other Loan Party, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing the Loans recorded therein for all purposes of this
Agreement.  Any assignment of any Loan,
whether or not evidenced by a Note, shall be effective only upon appropriate
entries with respect thereto being made in the Register (and each Note shall
expressly so provide).


 


(e)                                  Upon
its receipt of an Assignment and Acceptance executed by an Assignor, an
Assignee and any other Person whose consent is required by Section 10.6(c),
together with payment to the Administrative Agent or the Canadian Agent, in the
case of the assignment of the Canadian Commitments, of a registration and
processing fee of $3,500, the Administrative Agent or the Canadian Agent, as
appropriate, shall (i) promptly accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register on the effective date determined
pursuant thereto.


 


109





















 


(f)                                    For
avoidance of doubt, the parties to this Agreement acknowledge that the provisions
of this Section 10.6 concerning assignments of Loans and Notes relate only
to absolute assignments and that such provisions do not prohibit assignments
creating security interests, including any pledge or assignment by a Lender of
any Loan or Note to any Federal Reserve Bank in accordance with applicable law.


 


(g)                                 The
Parent Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (f) above.


 


10.7                           Adjustments; Set-off.


 


(a)                                  Except
to the extent that this Agreement expressly provides for payments to be
allocated to a particular Lender (other than any Canadian Lender) or to the
Lenders under a particular Facility (other than the Canadian Subfacility), if
any Lender (a “Benefited Lender”) shall, at any time after the Loans and
other amounts payable hereunder shall immediately become due and payable
pursuant to Section 8, receive any payment of all or part of the
Obligations owing to it, 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 8.1(f), or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of the Obligations owing to such other Lender, such
Benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as shall
be necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral 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)                                 In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to any Borrower, any such notice
being expressly waived by the Borrowers to the extent permitted by applicable
law, upon any amount becoming due and payable after all applicable grace
periods by the Borrowers 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
agency thereof to or for the credit or the account of any Borrower, as the case
may be.  Each Lender agrees promptly to
notify the Parent Borrower and the Administrative Agent after any such setoff
and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.


 


10.8                           Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an executed
signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Parent Borrower, the Administrative
Agent and the Canadian Agent.


 


10.9                           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


 


110





















 


in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.


 


10.10                     Integration.  This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by any Loan Party, the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.


 


10.11                     GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  NOTWITHSTANDING THE FOREGOING, HOWEVER, ALL
CLAIMS AND RIGHTS OF ACTION OF THE CANADIAN LENDERS AGAINST THE CANADIAN
BORROWER OR ANY OF THEM HEREUNDER OR UNDER THE CANADIAN LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
PROVINCE OF ONTARIO (EXCLUDING ANY PROVISION THEREOF WHICH MAY MAKE THE
LAWS OF ANOTHER JURISDICTION APPLICABLE) AND THE LAWS OF CANADA APPLICABLE
THEREIN.


 


10.12                     Submission
to Jurisdiction; Waivers.  Each
Borrower hereby irrevocably and unconditionally:


 


(a)                                  if it is a U.S.
Borrower or the Canadian Borrower, 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 for the
Southern District of New York, and appellate courts from any thereof; and,
if it is the Canadian Borrower, submits for itself and its property in any
legal or proceeding relating to this Agreement and the Canadian 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
Province of Ontario;


 


(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 the Parent Borrower, as the case may be at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent (and in the case of the Canadian Borrower, the Canadian
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


 


(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 any special,
exemplary, punitive or consequential damages.


 


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10.13                     Acknowledgements.  Each 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)                                 neither the
Administrative Agent, the Canadian Agent nor any Lender has any fiduciary
relationship with or duty to any Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Administrative Agent, the Canadian Agent and Lenders, on one hand, and the
Borrowers, 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 the Parent
Borrower and the Lenders.


 


10.14                     Confidentiality.  Each of the Administrative Agent, the
Canadian Agent and each Lender agrees to keep confidential all non-public
information provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing
herein shall prevent the Administrative Agent, the Canadian Agent or any Lender
from disclosing any such information (a) to the Administrative Agent, the
Canadian Agent, any other Lender or any affiliate of any Lender, (b) to
any Transferee or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates, (d) upon the request or demand of any Governmental Authority, (e) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender, (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document or (j) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty’s advisor (so long as such
contractual counterparty agrees to be bound by the provisions of this Section 10.14).


 


10.15                     Joint
and Several Obligations.  All of the
obligations of the U.S. Borrowers hereunder shall be joint and several; provided,
however, that in no event shall the maximum liability of any U.S.
Borrower in respect of Obligations arising out of Loans and other extensions of
credit made to the other U.S. Borrowers exceed the greater of (a) the
actual loan to such U.S. Borrower and (b) the maximum amount which can be
guaranteed by such U.S. Borrower under applicable Federal and state laws
relating to the insolvency of debtors.


 


10.16                     WAIVERS OF JURY TRIAL.  THE BORROWERS, THE 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 LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


10.17                     Canadian
Amendments and Waivers.  Neither the
Canadian Loan Documents nor any terms in respect of the Canadian Commitments
hereof or thereof may be amended, supplemented or modified without the prior
written consent of the Canadian Agent and the Canadian Lenders.


 


112





















 


10.18                     Judgment Currency.


 


(a)                                  Borrower’s
obligation hereunder and under the other Loan Documents to make payments in the
applicable Approved Currency (pursuant to such obligation, the “Obligation
Currency”) shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent or the respective
Lender of the full amount of the Obligation Currency expressed to be payable to
the Administrative Agent or such Lender under this Agreement or the other Loan
Documents.  If, for the purpose of
obtaining or enforcing judgment against Borrower 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 Relevant Currency Equivalent, and in the case
of other currencies, the rate of exchange (as quoted by the Administrative
Agent or if the Administrative Agent does not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the Administrative
Agent) determined, in each case, as of the Business Day 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,
Borrower covenants and agrees to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the 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 Relevant Currency Equivalent or any other rate of
exchange for this Section 10.18, such amounts shall include any premium
and costs payable in connection with the purchase of the Obligation Currency.


 


10.19                     USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name,
address and tax identification number of the Borrowers and other information
regarding the Borrowers that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrowers in accordance with the Act.  This notice is given in accordance with the
requirements of the Act and is effective as to the Lenders and the Administrative
Agent.


 


113





















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.


 


	
   

  	
  SAFETY
  PRODUCTS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Benjamin Hochberg

  	
   

  
	
   

  	
   

  	
  Name: Benjamin Hochberg

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPH
  ACQUISITION LLC

  
	
   

  	
  (the rights
  and obligations of which hereunder

  
	
   

  	
  are to be
  assumed by

  
	
   

  	
  NORCROSS
  SAFETY PRODUCTS, L.L.C.

  
	
   

  	
  NORTH SAFETY
  PRODUCTS INC.

  
	
   

  	
                           and

  
	
   

  	
  MORNING
  PRIDE MANUFACTURING L.L.C.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Benjamin Hochberg

  	
   

  
	
   

  	
   

  	
  Name: Benjamin Hochberg

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE, acting through its Cayman Islands

  Branch, as Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill O’ Daly

  	
   

  
	
   

  	
   

  	
  Name: Bill O’ Daly

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cassandra Droogan

  	
   

  
	
   

  	
   

  	
  Name: Cassandra Droogan

  
	
   

  	
   

  	
  Title: Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE, TORONTO BRANCH, as Canadian

  Agent and as a Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce F. Wetherby

  	
   

  
	
   

  	
   

  	
  Name: Bruce F. Wetherby

  
	
   

  	
   

  	
  Title: Director and Principal Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Duncan Webb

  	
   

  
	
   

  	
   

  	
  Name: Duncan Webb

  
	
   

  	
   

  	
  Title:

  



 





















 


	
   

  	
  BANK OF
  AMERICA, N.A., as Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Vander Horst

  	
   

  
	
   

  	
   

  	
  Name: Peter Vander Horst

  
	
   

  	
   

  	
  Title: Principal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMAC
  COMMERCIAL FINANCE LLC, as Documentation

  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Wakefield Smith

  	
   

  
	
   

  	
   

  	
  Name: W. Wakefield Smith

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION, as

  
	
   

  	
                Documentation
  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oscar D. Johnson Jr

  	
   

  
	
   

  	
   

  	
  Name: Oscar D. Johnson Jr

  
	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US BANK NATIONAL ASSOCIATION, as

  
	
   

  	
                Documentation
  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew J. Schulz

  	
   

  
	
   

  	
   

  	
  Name: Matthew J. Schulz

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julia R. Meade

  	
   

  
	
   

  	
   

  	
  Name: Julia R. Meade

  
	
   

  	
   

  	
  Title: Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMAC COMMERCIAL FINANCE CORPORATION –

  
	
   

  	
  CANADA, as Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Wakefield Smith

  	
   

  
	
   

  	
   

  	
  Name: W. Wakefield Smith

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE CANADA ASSET FINANCING, INC., as Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ABN AMRO N.V., Canada Branch, as Canadian Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darcy Mack

  	
   

  
	
   

  	
   

  	
  Name: Darcy Mack

  
	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry Walsh

  	
   

  
	
   

  	
   

  	
  Name: Barry Walsh

  
	
   

  	
   

  	
  Title: Vice President

  



 





















 


[OTHER LENDERS]


 


[OTHER CANADIAN LENDERS]


 





















 


Annex A


 


PRICING GRID
FOR U.S. REVOLVING LOANS, U.S. SWINGLINE LOANS

AND CANADIAN LOANS 


 


	
  Consolidated Total

  Leverage Ratio of the

  Parent Borrower

  	
   

  	
  Applicable Margin

  for Eurodollar Loans

  and Bankers’

  Acceptances or B/A

  Equivalent Loans

  	
   

  	
  Applicable Margin

  for ABR Loans and

  C$Prime Loans

  	
   

  	
  Commitment Fee

  Rate

  	
   

  
	
  X >4.25x

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  
	
  4.25x> X >3.25x

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  0.50

  	
  %

  
	
  X< 3.25x

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.375

  	
  %

  



 


Changes in the Applicable Margin resulting from changes in the
Consolidated Total Leverage Ratio of the Parent Borrower shall become effective
on the date (the “Adjustment Date”) on which financial statements are
delivered to the Lenders pursuant to Section 6.1(a) (but in any event
not later than the 45th day after the end of each of the first three quarterly
periods of each fiscal year or the 90th day after the end of each fiscal year,
as the case may be) and shall remain in effect until the next change to be
effected pursuant to this paragraph; provided that the foregoing changes
in the Applicable Margin shall not be effective until at least one full fiscal
quarter of the Parent Borrower after the Closing Date has been completed.  If any financial statements referred to above
are not delivered within the time periods specified above, then, until such
financial statements are delivered the Consolidated Total Leverage Ratio of the
Parent Borrower as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be greater than
4.0 to 1.0.  In addition, at all times
while an Event of Default shall have occurred and be continuing, the Consolidated
Total Leverage Ratio of the Parent Borrower shall for the purposes of this
definition be deemed to be greater than 4.0 to 1.0.  Each determination of the Consolidated Total
Leverage Ratio of the Parent Borrower pursuant to this pricing grid shall be
made with respect to (or, in the case of Consolidated Total Debt, as at the end
of) the period of four consecutive fiscal quarters of the Parent Borrower
ending at the end of the period covered by the relevant financial statements.