exv10w31






Exhibit 10.31




      




LOAN, SECURITY AND GUARANTEE AGREEMENT




Dated as of June 14, 2011



among



MCJUNKIN RED MAN CORPORATION,

GREENBRIER PETROLEUM CORPORATION,

MCJUNKIN NIGERIA LIMITED,

MCJUNKIN — PUERTO RICO CORPORATION,

MCJUNKIN RED MAN DEVELOPMENT CORPORATION,

MCJUNKIN — WEST AFRICA CORPORATION,

MIDWAY — TRISTATE CORPORATION,

MILTON OIL & GAS COMPANY,

MRC MANAGEMENT COMPANY,

MRM OKLAHOMA MANAGEMENT LLC,

RUFFNER REALTY COMPANY

and

THE SOUTH TEXAS SUPPLY COMPANY, INC.,

as U.S. Borrowers and Canadian Facility Guarantors,



MIDFIELD SUPPLY ULC,

as a Canadian Borrower,



any other U.S. Borrowers and Canadian Borrowers party hereto from time to time



and



certain other U.S. Subsidiaries of U.S. Borrowers

party hereto from time to time as U.S. Facility Guarantors and Canadian Facility Guarantors,



CERTAIN FINANCIAL INSTITUTIONS,

as Lenders,



BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent,



BARCLAYS CAPITAL

and

WELLS FARGO CAPITAL FINANCE LLC,

as Co-Syndication Agents,



GOLDMAN SACHS LENDING PARTNERS LLC

and

U.S. BANK NATIONAL ASSOCIATION,

as Co-Documentation Agents and Managing Agents



and



SUNTRUST BANK

and

TD BANK, N.A.,

as Managing Agents



      




MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Lead Arranger and Book Manager



and



BARCLAYS CAPITAL

and

WELLS FARGO CAPITAL FINANCE, LLC,

as Joint Lead Arrangers and as Joint Book Managers













 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Accounting Terms
	 	 	62	 
	1.3 Uniform Commercial Code/PPSA
	 	 	63	 
	1.4 Certain Matters of Construction
	 	 	63	 
	1.5 Interpretation (Quebec)
	 	 	64	 
	SECTION 2. CREDIT FACILITIES
	 	 	64	 
	2.1 Commitment
	 	 	64	 
	2.2 Letter of Credit Facilities
	 	 	71	 
	2.3 Canadian Borrowers’ Sublimit
	 	 	77	 
	2.4 Obligations of the Canadian Domiciled Loan Party
	 	 	77	 
	SECTION 3. INTEREST, FEES AND CHARGES
	 	 	77	 
	3.1 Interest
	 	 	77	 
	3.2 Fees
	 	 	80	 
	3.3 Computation of Interest, Fees, Yield Protection
	 	 	81	 
	3.4 Reimbursement Obligations
	 	 	81	 
	3.5 Illegality
	 	 	82	 
	3.6 Inability to Determine Rates
	 	 	82	 
	3.7 Increased Costs; Capital Adequacy
	 	 	83	 
	3.8 Mitigation
	 	 	84	 
	3.9 Funding Losses
	 	 	84	 
	3.10 Maximum Interest
	 	 	85	 
	SECTION 4. LOAN ADMINISTRATION
	 	 	86	 
	4.1 Manner of Borrowing and Funding Loans
	 	 	86	 
	4.2 Defaulting Lender
	 	 	88	 
	4.3 Number and Amount of Interest Period Loans; Determination of Rate
	 	 	89	 
	4.4 Loan Party Agent
	 	 	89	 
	4.5 One Obligation
	 	 	90	 
	4.6 Effect of Termination
	 	 	90	 
	SECTION 5. PAYMENTS
	 	 	90	 
	5.1 General Payment Provisions
	 	 	90	 
	5.2 Repayment of Obligations
	 	 	90	 
	5.3 Payment of Other Obligations
	 	 	91	 
	5.4 Marshaling; Payments Set Aside
	 	 	91	 
	5.5 Post-Default Allocation of Payments
	 	 	91	 
	5.6 Application of Payments
	 	 	93	 
	5.7 Loan Account; Account Stated
	 	 	93	 
	5.8 Taxes
	 	 	94	 
	5.9 Lender Tax Information
	 	 	95	 
	5.10 Guarantee by U.S. Facility Loan Parties
	 	 	96	 
	5.11 Currency Matters
	 	 	99	 
	SECTION 6. CONDITIONS PRECEDENT
	 	 	100	 






i









 






	 	 	 	 	 
	 	 	Page	 
	6.1 Conditions Precedent to Initial Loans
	 	 	100	 
	6.2 Conditions Precedent to All Credit Extensions
	 	 	103	 
	SECTION 7. COLLATERAL
	 	 	104	 
	7.1 Grant of Security Interest
	 	 	104	 
	7.2 Lien on Deposit Accounts; Cash Collateral
	 	 	104	 
	7.3 Pledged Collateral
	 	 	105	 
	7.4 Other Collateral
	 	 	109	 
	7.5 Limitation on Permitted Discretion
	 	 	109	 
	7.6 No Assumption of Liability
	 	 	110	 
	7.7 Further Assurances
	 	 	110	 
	SECTION 8. COLLATERAL ADMINISTRATION
	 	 	111	 
	8.1 Administration of Accounts
	 	 	111	 
	8.2 Administration of Inventory
	 	 	112	 
	8.3 Administration of Deposit Accounts
	 	 	112	 
	8.4 General Provisions
	 	 	112	 
	8.5 Power of Attorney
	 	 	113	 
	SECTION 9. REPRESENTATIONS AND WARRANTIES
	 	 	114	 
	9.1 General Representations and Warranties
	 	 	114	 
	SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
	 	 	120	 
	10.1 Affirmative Covenants
	 	 	120	 
	10.2 Negative Covenants
	 	 	130	 
	10.3 Financial Covenants
	 	 	147	 
	SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
	 	 	147	 
	11.1 Events of Default
	 	 	147	 
	11.2 License
	 	 	151	 
	11.3 Setoff
	 	 	151	 
	11.4 Remedies Cumulative; No Waiver
	 	 	151	 
	11.5 Judgment Currency
	 	 	152	 
	SECTION 12. AGENT
	 	 	152	 
	12.1 Appointment, Authority and Duties of Agent
	 	 	152	 
	12.2 Agreements Regarding Collateral and Field Examination Reports
	 	 	154	 
	12.3 Reliance By Agent
	 	 	155	 
	12.4 Action Upon Default
	 	 	155	 
	12.5 Ratable Sharing
	 	 	156	 
	12.6 Indemnification of Agent Indemnitees
	 	 	156	 
	12.7 Limitation on Responsibilities of Agent
	 	 	156	 
	12.8 Successor Agent and Co-Agents
	 	 	157	 
	12.9 Due Diligence and Non-Reliance
	 	 	157	 
	12.10 Remittance of Payments and Collections
	 	 	158	 
	12.11 Agent in its Individual Capacity
	 	 	158	 
	12.12 Agent Titles
	 	 	159	 
	12.13 Bank Product Providers
	 	 	159	 
	12.14 No Third Party Beneficiaries
	 	 	159	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
	 	 	159	 
	13.1 Successors and Assigns
	 	 	159	 
	13.2 Participations
	 	 	160	 
	13.3 Assignments
	 	 	161	 
	SECTION 14. MISCELLANEOUS
	 	 	162	 
	14.1 Consents, Amendments and Waivers
	 	 	162	 
	14.2 Indemnity
	 	 	164	 
	14.3 Notices and Communications
	 	 	164	 
	14.4 Performance of Loan Parties’ Obligations
	 	 	165	 
	14.5 Credit Inquiries
	 	 	165	 
	14.6 Severability
	 	 	166	 
	14.7 Cumulative Effect; Conflict of Terms
	 	 	166	 
	14.8 Counterparts
	 	 	166	 
	14.9 Entire Agreement
	 	 	166	 
	14.10 Relationship with Lenders
	 	 	166	 
	14.11 No Advisory or Fiduciary Responsibility
	 	 	166	 
	14.12 Confidentiality
	 	 	167	 
	14.13 Certifications Regarding Indentures
	 	 	167	 
	14.14 GOVERNING LAW
	 	 	167	 
	14.15 Consent to Forum
	 	 	168	 
	14.16 Waivers by Loan Parties
	 	 	168	 
	14.17 Patriot Act Notice
	 	 	168	 
	14.18 Canadian Anti-Money Laundering Legislation
	 	 	169	 
	14.19 Reinstatement
	 	 	169	 
	14.20 Nonliability of Lenders
	 	 	169	 






iii









 








LIST OF EXHIBITS AND SCHEDULES




	 	 	 

	Exhibit A-1

	 	Form of Assignment and Acceptance
	Exhibit A-2

	 	Form of Assignment Notice
	Exhibit B-1

	 	Form of Canadian Borrowing Base Certificate
	Exhibit B-2

	 	Form of U.S. Borrowing Base Certificate
	Exhibit C-1

	 	Form of Canadian Revolver Note
	Exhibit C-2

	 	Form of U.S. Revolver Note
	Exhibit D

	 	Form of Compliance Certificate
	Exhibit E

	 	Form of Notice of Borrowing
	Exhibit F

	 	Form of Notice of Conversion/Continuation
	Exhibit G-1

	 	Form of Canadian Perfection Certificate
	Exhibit G-2

	 	Form of U.S. Perfection Certificate
	Exhibit H-1

	 	Form of Canadian Closing Certificate
	Exhibit H-2

	 	Form of U.S. Closing Certificate
	Exhibit I

	 	Form of Joinder Agreement
	Exhibit J-1

	 	Form of Non-Bank Certificate for Non-Partnership
	Exhibit J-2

	 	Form of Non-Bank Certificate for Partnership
	Schedule 1.1(a)

	 	Consolidated Interest Expense
	Schedule 1.1(b)

	 	Existing Letters of Credit
	Schedule 2.1.1(a)

	 	U.S. Revolver Commitment
	Schedule 2.1.1(b)

	 	Canadian Revolver Commitment
	Schedule 7.3

	 	Pledged Stock/Pledged Debt Securities
	Schedule 8.3

	 	Deposit Accounts
	Schedule 8.4.1

	 	Location of Collateral
	Schedule 9.1.12

	 	Subsidiaries/Excluded Subsidiaries
	Schedule 10.1.11

	 	Permitted Transactions with Affiliates
	Schedule 10.1.16(c)

	 	Post-Closing Actions
	Schedule 10.2.1

	 	Existing Indebtedness
	Schedule 10.2.2

	 	Existing Liens
	Schedule 10.2.4

	 	Non-Core Assets
	Schedule 10.2.5

	 	Permitted Investments
	Schedule 10.2.10

	 	Permitted Burdensome Agreements
	Schedule 13.3.3

	 	Permitted Assignees






iv









 





LOAN, SECURITY AND GUARANTEE AGREEMENT




     THIS LOAN, SECURITY AND GUARANTEE AGREEMENT is dated as of June 14, 2011, among MCJUNKIN
RED MAN CORPORATION, a Delaware corporation (“MRC”), GREENBRIER PETROLEUM CORPORATION,
a West Virginia corporation (“Greenbrier”), MCJUNKIN NIGERIA LIMITED, a Delaware
corporation (“McJunkin Nigeria”), MCJUNKIN — PUERTO RICO CORPORATION, a Delaware
corporation (“McJunkin Puerto Rico”), MCJUNKIN RED MAN DEVELOPMENT CORPORATION, a Delaware
corporation (“McJunkin Development”), MCJUNKIN — WEST AFRICA CORPORATION, a Delaware
corporation (“McJunkin West Africa”), MIDWAY — TRISTATE CORPORATION, a New York
corporation (“Midway”), MILTON OIL & GAS COMPANY, a West Virginia corporation
(“Milton”), MRC MANAGEMENT COMPANY, a Delaware corporation (“Management”), MRM
OKLAHOMA MANAGEMENT LLC, a Delaware limited liability company (“MRM Oklahoma”), RUFFNER
REALTY COMPANY, a West Virginia corporation (“Ruffner”), and THE SOUTH TEXAS SUPPLY
COMPANY, INC., a Texas corporation (“South Texas” and, together with MRC, Greenbrier,
McJunkin Nigeria, McJunkin Puerto Rico, McJunkin Development, McJunkin West Africa, Midway, Milton,
Management, MRM Oklahoma and Ruffner, the “Initial U.S. Borrowers”), and MIDFIELD SUPPLY
ULC, an Alberta unlimited liability company (the “Initial Canadian Borrower” and, together
with the other Canadian Borrowers (as defined herein) and the U.S. Borrowers (as defined herein),
the “Borrowers” and each, a “Borrower”), the other U.S. Subsidiaries (as defined
herein) of the U.S. Borrowers which may hereafter become party to this Agreement as U.S. Facility
Guarantors and Canadian Facility Guarantors (each as defined herein), the financial institutions
party to this Agreement from time to time as lenders (collectively, “Lenders”), BANK OF
AMERICA, N.A., a national banking association, in its capacity as collateral agent and
administrative agent for itself and the other Secured Parties (as defined herein) (together with
any successor agent appointed pursuant to Section 12.8, the “Agent”), Barclays Capital, the
investment banking division of Barclays Bank PLC, and Wells Fargo Capital Finance LLC, as
Co-Syndication Agents, Goldman Sachs Lending Partners LLC and U.S. Bank National Association, as
Co-Documentation Agents and Managing Agents, and SunTrust Bank and TD Bank, N.A., as Managing
Agents.



R E C I T A L S:




     The Borrowers have requested that Lenders provide a senior secured revolving credit facility
to the Borrowers to finance their mutual and collective business enterprise consisting of a
Canadian tranche in the initial maximum facility amount of Cdn$150,000,000 and a U.S. tranche in
the initial maximum facility amount of $900,000,000. Lenders are willing to provide the senior
secured revolving credit facility on the terms and conditions set forth in this Agreement.



     NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:



SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION




     1.1 Definitions. As used herein, the following terms have the meanings set forth
below:



1









 





     Account: as defined in the UCC or the PPSA, as applicable, including all rights to
payment for goods sold or leased, or for services rendered, whether or not they have been earned by
performance.



     Account Debtor: any Person who is obligated under an Account, Chattel Paper or
General Intangible.



     Accounting Change: as defined in Section 1.2.



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



     Acquired Entity or Business: as defined in the term “Consolidated EBITDA”.



     Additional Lender: as defined in Section 2.1.7(a).



     Affiliate: with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with
the Person specified. “Control” means the possession, directly or indirectly, of the power
(a) to vote 20% or more of the securities having ordinary voting power for the election of
directors, in the case of a corporation, or equivalent governing body, in the case of any other
type of legal entity, of a Person or (b) to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have correlative meanings.



     Agent: as defined in the preamble to this Agreement.



     Agent Indemnitees: the Agent and its officers, directors, employees, Affiliates and
agents.



     Agent Professionals: attorneys, accountants, appraisers, auditors, business valuation
experts, environmental engineers or consultants, turnaround consultants, and other professionals
and experts retained by Agent.



     Agreement: this Loan, Security and Guarantee Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.



     Allocable Amount: as defined in Section 5.10.3(b).



     AML Legislation: as defined in Section 14.17.



     Applicable Canadian Borrower: (a) the Initial Canadian Borrower or (b) any other
Canadian Borrower, as the context requires.



2









 





     Applicable Canadian Borrower Commitment: with respect to any Canadian Borrower, the
amount of Canadian Revolver Commitments up to which such Canadian Borrower may borrow Canadian
Revolver Loans or request the issuance of Canadian Letters of Credit, as designated by the Loan
Party Agent from time to time, and in an aggregate amount for all Canadian Borrowers not to exceed
the total Canadian Revolver Commitments.



     Applicable Canadian Borrower Secured Obligations: (a) if the Initial Canadian
Borrower is the only Canadian Borrower, the Canadian Facility Secured Obligations of the Initial
Canadian Borrower and (b) if there is more than one Canadian Borrower, the Secured Obligations of
the Applicable Canadian Borrower.



     Applicable Law: all laws, rules, regulations and legally binding governmental
guidelines applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law and common law, and all provisions of constitutions,
treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities (having the
force of law).



     Applicable Lenders: with respect to the U.S. Borrowers, the U.S. Lenders, and with
respect to the Canadian Borrowers, the Canadian Lenders.



     Applicable Margin: with respect to any Type of Loan and such other Obligations
specified below, the respective margin set forth below, as determined by reference to the
Consolidated Fixed Charge Coverage Ratio as calculated as of the last day of the fiscal quarter
then most recently ended:



	 	 	 	 	 	 	 
	 	 	 	 	 	 	U.S. Base
	 	 	 	 	LIBOR Loans,	 	Rate Loans,
	 	 	 	 	Canadian BA Rate	 	Canadian Base
	 	 	Consolidated	 	Loans, U.S. Letter of	 	Rate Loans and
	 	 	Fixed Charge	 	Credit Fees, Canadian	 	Canadian Prime
	Level	 	Coverage Ratio	 	Letter of Credit Fees	 	Rate Loans
	I
	 	£ 1.50: 1.00	 	2.25%	 	1.25%
	II
	 	> 1.50: 1.00	 	2.00%	 	1.00%
	 
	 	but	 	 	 	 
	 
	 	£ 2.25: 1.00	 	 	 	 
	III
	 	> 2.25: 1.00	 	1.75%	 	.75%





Until December 1, 2011, margins shall be determined as if Level II were applicable. Thereafter,
the margins shall be subject to increase or decrease upon receipt by the Agent pursuant to Sections
10.1.1(a) and (b) of the financial statements and corresponding Compliance Certificate, which
change shall be effective on the first day of the calendar month immediately following receipt.
If, by the first day of a month, any financial statement or Compliance Certificate due in the
preceding month has not been received, then, at the option of the Agent or Required Lenders, the
margins shall be determined as if Level I were applicable, from such day until the first day of the
calendar month immediately following actual receipt.







3









 








     Approved Fund: any Person (other than a natural person) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
its ordinary course of activities, has the capacity to fund Revolver Loans hereunder and is
administered or managed by a Lender, an entity that administers or manages a Lender, or an
Affiliate of either.



     Assignment and Acceptance: an assignment agreement between a Lender and Eligible
Assignee (and, to the extent required by the definition of “Eligible Assignee,” consented to by the
Loan Party Agent), in the form of Exhibit A-1.



     ATB Financial Debt: a fixed asset revolving term loan facility made by Alberta
Treasury Branches in favor of the Initial Canadian Borrower and its Subsidiaries, in the aggregate
amount of $15,000,000 pursuant to the Amended and Restated Commitment Letter, dated as of November
13, 2009, as amended, modified, supplemented or restated to the Closing Date.



     Bank of America: Bank of America, N.A., a national banking association, and its
successors and assigns.



     Bank of America (Canada): Bank of America, N.A. (acting through its Canada branch).



     Bank of America Indemnitees: Bank of America, Bank of America (Canada) and their
respective officers, directors, employees, Affiliates and agents.



     Bank Product: any of the following products, services or facilities extended to any
Borrower or Subsidiary by a Lender or any of its Affiliates: (a) Cash Management Services; (b)
products under Hedge Agreements (other than Hedge Agreements that constitute Notes Priority Lien
Debt for purposes of the Intercreditor Agreement); (c) commercial credit card, purchase card and
merchant card services; and (d) other banking products or services as may be requested by any
Borrower or Subsidiary, other than loans and letters of credit.



     Bank Product Debt: Indebtedness and other obligations of a Loan Party relating to
Bank Products.



     Bank Product Document: any agreement, instrument or other document entered into in
connection with any Bank Product Debt.



     Board of Governors: the Board of Governors of the Federal Reserve System.



     Borrower and Borrowers: as defined in the preamble to this Agreement.



     Borrower Group: a group consisting of (i) the U.S. Borrowers or (ii) the Canadian
Borrowers, as the context requires.



     Borrower Group Commitment: with respect to the commitment of a U.S. Lender, its U.S.
Revolver Commitment and, with respect to the commitment of a Canadian Lender, its Canadian Revolver
Commitment; and the term “Borrower Group Commitments” means, collectively, the Borrower
Group Commitments of U.S. Lenders and the Borrower Group Commitments of Canadian Lenders. To the
extent any Lender has both a U.S. Revolver Commitment and a



4









 




Canadian Revolver Commitment, such Commitments shall be considered as separate Commitments for
purposes of this definition.




     Borrowing: a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.



     Borrowing Base: the Total Canadian Borrowing Base, the Canadian Borrowing Base and/or
the U.S. Borrowing Base, as the context requires.



     Borrowing Base Certificate: a certificate, executed by a Senior Officer of the Loan
Party Agent, in the form of Exhibit B-1 with respect to any Canadian Borrowing Base, and in the
form of Exhibit B-2 with respect to the U.S. Borrowing Base, in each case, with such changes as may
be agreed to by Loan Party Agent and Agent, setting forth the Borrowers’ calculation of the
Borrowing Base.



     Business Day: any day excluding Saturday, Sunday and any other day that is a legal
holiday under the laws of the State of North Carolina or the State of New York or is a day on which
banking institutions located in such state are closed; and when used with reference to (i) a LIBOR
Loan, the term shall also exclude any day on which banks are not open for the transaction of
banking business in London, United Kingdom and (ii) a Canadian Revolver Loan, shall also exclude a
day on which banks in Toronto, Ontario, Canada are not open for the transaction of banking
business.



     Canadian Availability: as of any date of determination, (a) the lesser of (i) the
Canadian Revolver Commitments minus all Canadian LC Obligations as of such date of determination
and (ii) the Total Canadian Borrowing Base as of such date of determination, minus (b) the
principal balance of all Canadian Revolver Loans.



     Canadian Availability Reserves: the sum (without duplication) of (a) the aggregate
amount of the Canadian Rent Reserve, if any, established pursuant to clause (h) of the definition
of Canadian Eligible Inventory; (b) the Canadian LC Reserve; (c) the Canadian Bank Product Reserve;
(d) the Canadian Priority Payables Reserve; and (e) such additional reserves, in such amounts and
with respect to such matters, as the Agent may establish in its Permitted Discretion.



     Canadian BA Rate: with respect to each Interest Period for a Canadian BA Rate Loan,
the rate of interest per annum equal to the average rate applicable to Canadian Dollar Bankers’
Acceptances having an identical or comparable term as the proposed Canadian BA Rate Loan displayed
and identified as such on the display referred to as the “CDOR Page” (or any display substituted
therefor) of Reuter Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on
such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately
preceding Business Day), plus five (5) basis points, provided that if such rate does not appear on
the CDOR Page at such time on such date, the rate for such date will be the annual discount rate
(rounded upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Eastern time on
such day at which a Canadian chartered bank listed on Schedule 1 of the Bank Act (Canada) as
selected by Agent is then offering to purchase Canadian Dollar Bankers’ Acceptances accepted by it
having such specified term (or a term as closely as possible comparable to such specified term),
plus five (5) basis points.



5









 





     Canadian BA Rate Loan: a Canadian Revolver Loan, or portion thereof, funded in
Canadian Dollars and bearing interest calculated by reference to the Canadian BA Rate.



     Canadian Bank Product Reserve: the aggregate amount of reserves, as established by
the Agent from time to time in its Permitted Discretion and in consultation with Loan Party Agent,
to reflect the reasonably anticipated liabilities in respect of the then outstanding Secured Bank
Product Obligations of the Canadian Domiciled Loan Parties and their Subsidiaries.



     Canadian Base Rate: on any date, the highest of (i) a fluctuating rate of interest
per annum equal to the rate of interest in effect for such day as publicly announced from time to
time by Bank of America (Canada) as its “Base Rate”, (ii) the sum of 0.50% plus the Federal Funds
Rate for such day, and (iii) the sum of 1.00% plus the LIBOR rate for a thirty (30) day Interest
Period as determined on such day. The “Base Rate” is a rate set by Bank of America (Canada) based
upon various factors including Bank of America (Canada)’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for pricing some loans made
in Dollars in Canada, which may be priced at, above, or below such announced rate. Any change in
such rate shall take effect at the opening of business on the day of such change. In the event
Bank of America (Canada) (including any successor or assignee) does not at any time announce a
“Base Rate”, clause (i) of Canadian Base Rate shall mean the “Base Rate” (being the rate for loans
made in Dollars in Canada) publicly announced by a Canadian Schedule 1 Chartered Bank selected by
Agent.



     Canadian Base Rate Loan: a Canadian Revolver Loan, or portion thereof, funded in
Dollars and bearing interest calculated by reference to the Canadian Base Rate.



     Canadian Borrowers: (a) the Initial Canadian Borrower and (b) each other Canadian
Subsidiary that, after the date hereof, has executed a supplement or joinder to this Agreement in
accordance with Section 10.1.13(a) or (b), as applicable, and has satisfied the other requirements
set forth in Section 10.1.13(a) or (b), as applicable, in order to become a Canadian Borrower.



     Canadian Borrowing Base: at any time, with respect to the Applicable Canadian
Borrower, an amount equal to the sum of, without duplication:




     (a) the book value of Canadian Eligible Accounts of the Applicable Canadian Borrower
multiplied by the advance rate of 85%, plus




     (b) the lesser of (i) 70% of the net book value of Canadian Eligible Inventory of the
Applicable Canadian Borrower (adding back the LIFO reserve calculated in accordance with
GAAP) and (ii) Net Orderly Liquidation Value of Canadian Eligible Inventory of the
Applicable Canadian Borrower (which shall be (A) net of the current monthly shrinkage
reserve calculated in accordance with GAAP and (B) valued at Cost) multiplied by the advance
rate of 85%, minus




     (c) subject to Section 7.5, effective (i) immediately upon or (ii) five (5) Business
Days after, in the case of Canadian Availability Reserves allocable to the Applicable
Canadian Borrower which would cause the aggregate amount of the Canadian Revolver Loans
allocable to the Applicable Canadian Borrower at such time to exceed the lesser of the
Applicable Canadian Borrower’s Applicable Canadian Borrower



6









 






Commitment and the Applicable Canadian Borrower’s Canadian Borrowing Base then in
effect, in each case, notification thereof to the Applicable Canadian Borrower by the Agent,
any and all such Canadian Availability Reserves.


The Canadian Borrowing Base at any time shall be determined by reference to the most recent
Borrowing Base Certificate theretofore delivered to the Agent with such adjustments as the Agent
deems appropriate in its Permitted Discretion to assure that the Canadian Borrowing Base is
calculated in accordance with the terms of this Agreement.




     Canadian Cash Collateral Account: a demand deposit, money market or other account
established by Agent at Bank of America (Canada) or such other financial institution as Agent may
select in its discretion with the consent of Loan Party Agent (not to be unreasonably withheld or
delayed), which account shall be for the benefit of the Canadian Facility Secured Parties and shall
be subject to Agent’s Liens securing the Canadian Facility Secured Obligations; provided that the
foregoing consent of Loan Party Agent to the selection by Agent in its discretion of a financial
institution other than Bank of America (Canada) shall not be required if an Event of Default has
occurred and is continuing.



     Canadian Dollars or Cdn$: the lawful currency of Canada.



     Canadian Domiciled Loan Party: any Canadian Borrower and each Canadian Subsidiary now
or hereafter party hereto as a Loan Party, and “Canadian Domiciled Loan Parties” means all
such Persons, collectively.



     Canadian Dominion Account: a special account established by the Canadian Domiciled
Loan Parties at Bank of America (Canada) or another bank acceptable to Agent, over which Agent has
exclusive control for withdrawal purposes.



     Canadian Eligible Accounts: at any time, the Accounts of the Applicable Canadian
Borrower at such date except any Account:




     (a) which is not subject to a duly perfected and opposable Lien in favor of the Agent;




     (b) which is subject to any Lien (including Liens permitted by Section 10.2.2) other
than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority
over the Lien in favor of the Agent; provided that, with respect to any tax Lien having such
priority, eligibility of Accounts shall be reduced by the amount of such tax Lien having
such priority;




     (c) owing by any Account Debtor with respect to which more than 120 days have elapsed
since the date of the original invoice therefor or which is more than 60 days past the due
date for payment;




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



7









 






     (e) which is owing (i) by Canadian Natural Resources Limited and its Affiliates to the
extent the aggregate amount of Accounts owing from Canadian Natural Resources Limited and
its Affiliates to Canadian Borrowers exceeds 30% of the aggregate Canadian Eligible Accounts
or (ii) by any other Account Debtor to the extent the aggregate amount of Accounts owing
from such Account Debtor and its Affiliates to Canadian Borrowers exceeds 20% of the
aggregate Canadian Eligible Accounts (or such higher percentage as the Agent may establish
for the Account Debtor from time to time), in each case, only to the extent of such excess;




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




     (g) which (i) does not arise from the sale of goods or performance of services in the
Ordinary Course of Business, (ii) is not evidenced by an invoice, or other documentation
satisfactory to the Agent, which has been sent to the Account Debtor, (iii) represents a
progress billing, (iv) is contingent upon the Applicable Canadian Borrower’s completion of
any further performance, or (v) represents a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment which is billed prior to actual sale to the
end user, cash-on-delivery or any other repurchase or return basis, except with respect to
up to $10,000,000 of such Accounts in the aggregate for the U.S. Borrowing Base and the
Total Canadian Borrowing Base on a combined basis as described in this clause (v) and
paragraph (g)(v) of the U.S. Eligible Accounts;




     (h) for which the goods giving rise to such Account (other than Accounts described in
the foregoing paragraph (g)(v)) have not been shipped to the Account Debtor or for which the
services giving rise to such Account have not been performed by the Applicable Canadian
Borrower;




     (i) with respect to which any check or other instrument of payment has been returned
uncollected for any reason;




     (j) which is owed by an Account Debtor in respect of which an Insolvency Proceeding has
been commenced or which is otherwise a debtor or a debtor in possession under any bankruptcy
law or any other federal, state or foreign (including any province or territory)
receivership, insolvency relief or other law or laws for the relief of debtors, including
the Bankruptcy and Insolvency Act (Canada) and the CCAA, unless the payment of Accounts from
such Account Debtor is secured by assets of, or guaranteed by, in either case, in a manner
reasonably satisfactory to the Agent, a Person that is reasonably acceptable to the Agent
or, if the Account from such Account Debtor arises subsequent to a decree or order for
relief with respect to such Account Debtor under the Bankruptcy and Insolvency Act (Canada)
or the CCAA, as now or hereafter in effect, the Agent shall have reasonably determined that
the timely payment and collection of such Account will not be impaired;




     (k) which is owed by an Account Debtor which has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs or is not solvent;



8









 






     (l) which is owed by an Account Debtor which is not organized under applicable law of
the U.S. or Canada, any state of the U.S. or any province or territory of Canada and does
not have its principal place of business in the U.S. or Canada unless such Account is backed
by a letter of credit or other credit support reasonably acceptable to the Agent and which
is in the possession of the Agent;




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




     (n) which is owed by any Governmental Authority, unless (i) the Account Debtor is the
United States or any department, agency or instrumentality thereof, and the Account has been
assigned to the Agent in compliance with the U.S. Assignment of Claims Act, and any other
steps necessary to perfect or render opposable the Lien of the Agent in such Account have
been complied with to the Agent’s reasonable satisfaction, (ii) the Account Debtor is the
government of Canada or a province or territory thereof, and the Account has been assigned
to the Agent in compliance with the Financial Administration Act (or similar Applicable Law
of such province or territory), and any other steps necessary to perfect or render opposable
the Lien of the Agent in such Account have been complied with to the Agent’s reasonable
satisfaction, or (iii) such Account is backed by a letter of credit reasonably acceptable to
the Agent and which is in the possession of the Agent;




     (o) which is owed by any Affiliate, employee, director, or officer of any Loan Party;
provided that portfolio companies of the Sponsor that do business with the Applicable
Canadian Borrower in the Ordinary Course of Business will not be treated as Affiliates for
purposes of this clause (o);




     (p) which is owed by an Account Debtor or any Affiliate of such Account Debtor which is
the holder of Indebtedness issued or incurred by any Loan Party; provided, that any such
Account shall only be ineligible as to that portion of such Account which is less than or
equal to the amount owed by the Loan Party to such Person;




     (q) which is subject to any counterclaim, deduction, defense, setoff, right of
compensation or dispute, but only to the extent of the amount of such counterclaim,
deduction, defense, setoff, right of compensation or dispute, unless (i) the Agent, in its
Permitted Discretion, has established Canadian Availability Reserves and determines to
include such Account as a Canadian Eligible Account or (ii) such Account Debtor has entered
into an agreement reasonably acceptable to the Agent to waive such rights;




     (r) which is evidenced by any promissory note, Chattel Paper or Instrument (in each
case, other than any such items that are delivered to the Agent);




     (s) which is owed by an Account Debtor located in any jurisdiction that requires, as a
condition to access to the courts of such jurisdiction, that a creditor qualify to transact
business, file a business activities report or other report or form, or take one or more
other actions, unless the Applicable Canadian Borrower has so qualified, filed such reports
or forms, or taken such actions (and, in each case, paid any required fees or other



9









 






charges), except to the extent the Applicable Canadian Borrower may qualify
subsequently as a foreign entity authorized to transact business in such jurisdiction and
gain access to such courts, without incurring any cost or penalty reasonably viewed by the
Agent to be material in amount, and such later qualification cures any access to such courts
to enforce payment of such Account;




     (t) with respect to which the Applicable Canadian Borrower has made any agreement with
the Account Debtor for any reduction thereof, but only to the extent of such reduction,
other than discounts and adjustments given in the Ordinary Course of Business; or




     (u) which the Agent determines is ineligible in its Permitted Discretion.


Subject to Sections 14.1 and 7.5 and the definition of Canadian Borrowing Base, the Agent may
modify the foregoing criteria in its Permitted Discretion.




     Canadian Eligible Inventory: at any date of determination thereof, the aggregate
amount of all Inventory owned by the Applicable Canadian Borrower at such date except any
Inventory:




     (a) which is not subject to a duly perfected and opposable Lien in favor of the Agent;




     (b) which is subject to any Lien (including Liens permitted by Section 10.2.2) other
than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority
over the Lien in favor of the Agent (other than any bailee, warehouseman, landlord or
similar non-consensual Liens having priority by operation of law to the extent either
subclause (i) or (ii) of clauses (h) or (i) below of Canadian Eligible Inventory is
satisfied with respect to the relevant Inventory); provided that, with respect to any tax
Lien having such priority, eligibility of Inventory shall be reduced by the amount of such
tax Lien having such priority;




     (c) which is, in the Agent’s Permitted Discretion, slow moving, obsolete,
unmerchantable, defective, unfit for sale, not salable at prices approximating at least the
cost of such Inventory in the Ordinary Course of Business or unacceptable due to age, type,
category and/or quantity;




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




     (e) which does not conform in all material respects to all standards imposed by any
applicable Governmental Authority (except that any standard that is qualified as to
“materiality” shall have been conformed to in all respects);




     (f) which constitutes packaging and shipping material, manufacturing supplies, display
items, bill-and-hold goods (other than bill-and-hold goods, the sale of which has been
excluded from Canadian Eligible Accounts pursuant to clause (g)(v) of the definition
thereof), returned or repossessed goods (other than goods that are undamaged and able to be
resold in the Ordinary Course of Business), defective goods,



10









 






goods held on consignment, goods to be returned to the Applicable Canadian Borrower’s
suppliers or goods which are not of a type held for sale in the Ordinary Course of Business;




     (g) which is not located in Canada or the United States or is not at a location listed
on Schedule 8.4.1 (as updated from time to time in accordance with the provisions hereof)
other than goods in transit between locations of the Loan Parties;




     (h) which is located, at any time after the Temporary Eligibility Period, in any
location leased by the Applicable Canadian Borrower unless (i) the lessor has delivered to
the Agent a Collateral Access Agreement or (ii) a Canadian Rent Reserve has been established
by the Agent;




     (i) which is located, at any time after the Temporary Eligibility Period, in any third
party warehouse or is in the possession of a bailee, processor or other Person and is not
evidenced by a Document, unless (i) such warehouseman, bailee, processor or other Person has
delivered to the Agent a Collateral Access Agreement and/or such other documentation as the
Agent may reasonably require or (ii) appropriate Canadian Availability Reserves have been
established by the Agent in its Permitted Discretion;




     (j) which is the subject of a consignment by the Applicable Canadian Borrower as
consignor unless (i) a protective PPSA financing statement has been properly filed against
the consignee (as assigned to the Agent), and (ii) there is a written agreement
acknowledging that such Inventory is held on consignment, that the Applicable Canadian
Borrower or retains title to such Inventory, that no Lien arising by, through or under such
consignment has attached or will attach to such Inventory (and proceeds thereof) and
requiring consignee to segregate the consigned Inventory from the consignee’s other personal
or movable property;




     (k) which is perishable as determined in accordance with GAAP; or




     (l) which contains or bears any intellectual property rights licensed to the Applicable
Canadian Borrower unless the Agent is satisfied that it may sell or otherwise dispose of
such Inventory without (i) infringing the rights of such licensor in any material respect or
(ii) incurring any material liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current licensing agreement.



     Subject to Sections 14.1 and 7.5 and the definition of Canadian Borrowing Base, the Agent may
modify the foregoing criteria in its Permitted Discretion.



     Canadian Employee Plan: any employee benefit plan, policy, program, agreement or
arrangement, including retirement, pension, profit sharing, employment, bonus or other incentive
compensation, retention, stock purchase, equity or equity-based compensation, deferred
compensation, change in control, severance, sick leave, vacation, loans, salary continuation,
hospitalization, health, life insurance, educational assistance or other fringe benefit or
perquisite plan, policy, agreement which is or was sponsored, maintained or contributed to by, or
required to be contributed to by, a Canadian Domiciled Loan Party, or with respect to which a
Canadian



11









 




Domiciled Loan Party has, or could reasonably be expected to have, any obligation or
liability, contingent or otherwise, but excluding the Canada Pension Plan, Quebec Pension Plan and
any provincial or federal program providing health benefits, employment insurance or workers’
compensation benefits.




     Canadian Facility Collateral: Collateral that now or hereafter secures (or is
intended to secure) any of the Canadian Facility Secured Obligations, including Property of the
U.S. Domiciled Loan Parties pledged to secure their Secured Obligations under their guarantee of
the Canadian Facility Secured Obligations.



     Canadian Facility Guarantee: each guarantee agreement (including this Agreement) at
any time executed by a Canadian Facility Guarantor in favor of the Agent guaranteeing all or any
portion of the Canadian Facility Secured Obligations.



     Canadian Facility Guarantor: each U.S. Borrower, each U.S. Facility Guarantor and
each other Person (if any) who guarantees payment and performance of any Canadian Facility Secured
Obligations.



     Canadian Facility Loan Party: a Canadian Borrower or a Canadian Facility Guarantor.



     Canadian Facility Obligations: all Obligations of the Canadian Facility Loan Parties
(excluding, for the avoidance of doubt, the Obligations of the U.S. Domiciled Loan Parties as
guarantors of any U.S. Facility Obligations).



     Canadian Facility Secured Obligations: all Secured Obligations of the Canadian
Facility Loan Parties.



     Canadian Facility Secured Parties: Agent, any Canadian Fronting Bank, Canadian
Lenders and Secured Bank Product Providers of Bank Products to Canadian Facility Loan Parties.



     Canadian Fronting Bank: Bank of America (Canada) or any Affiliate thereof that agrees
to issue Canadian Letters of Credit or, if reasonably acceptable to Loan Party Agent, any other
Canadian Lender or Affiliate thereof that agrees to issue Canadian Letters of Credit.



     Canadian Fronting Bank Indemnitees: any Canadian Fronting Bank and its officers,
directors, employees, Affiliates and agents.



     Canadian LC Application: an application by any Canadian Borrower on behalf of itself
or any other Canadian Borrower to a Canadian Fronting Bank for issuance of a Canadian Letter of
Credit, in form and substance reasonably satisfactory to such Canadian Fronting Bank.



     Canadian LC Conditions: the following conditions necessary for issuance of a Canadian
Letter of Credit: (a) each of the conditions set forth in Section 6 being satisfied or waived; (b)
after giving effect to such issuance, total Canadian LC Obligations do not exceed the Canadian
Letter of Credit Sublimit and no Canadian Overadvance exists or would result therefrom; (c) the
expiration date of such Canadian Letter of Credit is (i) no more than 365 days from issuance
(provided that each Canadian Letter of Credit may, upon the request of the Initial Canadian



12









 




Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for
additional consecutive periods of twelve (12) months or less (but no later than 20 Business Days
prior to the Facility Termination Date)), and (ii) unless the Canadian Fronting Bank and the Agent
otherwise consent (subject to the satisfaction of the Cash Collateral requirements set forth in
Section 2.2.6), at least 20 Business Days prior to the Facility Termination Date; (d) the Canadian
Letter of Credit and payments thereunder are denominated in Canadian Dollars or Dollars; (e) the
form of the proposed Canadian Letter of Credit is reasonably satisfactory to the Agent and the
applicable Canadian Fronting Bank; and (f) the proposed use of the Canadian Letter of Credit is for
a lawful purpose.




     Canadian LC Documents: all documents, instruments and agreements (including Canadian
LC Requests and Canadian LC Applications) delivered by any Canadian Borrower or by any other Person
to Canadian Fronting Bank or the Agent in connection with issuance, amendment or renewal of, or
payment under, any Canadian Letter of Credit.



     Canadian LC Obligations: with respect to the Applicable Canadian Borrower, the sum
(without duplication) of (a) all amounts owing by such Applicable Canadian Borrower for any
drawings under Canadian Letters of Credit; (b) the stated amount of all outstanding Canadian
Letters of Credit issued for the account of such Applicable Canadian Borrower; and (c) all fees and
other amounts owing with respect to such Canadian Letters of Credit.



     Canadian LC Request: a request for issuance of a Canadian Letter of Credit, to be
provided by a Canadian Borrower to Canadian Fronting Bank, in form reasonably satisfactory to Agent
and Canadian Fronting Bank.



     Canadian LC Reserve: with respect to the Applicable Canadian Borrower, the aggregate
of all Canadian LC Obligations of such Applicable Canadian Borrower, other than (a) those that have
been Cash Collateralized; and (b) if no Event of Default exists, those constituting charges owing
to the Canadian Fronting Bank.



     Canadian Lenders: Bank of America (Canada) and each other Lender that has issued a
Canadian Revolver Commitment (provided that such Person or an Affiliate of such Person also has a
U.S. Revolver Commitment).



     Canadian Letter of Credit: any standby or documentary letter of credit issued by
Canadian Fronting Bank for the account of a Canadian Borrower, or any indemnity, guarantee,
exposure transmittal memorandum or similar form of credit support issued by Agent or Canadian
Fronting Bank for the benefit of a Canadian Borrower.



     Canadian Letter of Credit Sublimit: Cdn$20,000,000.



     Canadian Multi-Employer Plan: each multi-employer plan, within the meaning of the
Regulations under the Income Tax Act (Canada).



     Canadian Overadvance: as defined in Section 2.1.5.



     Canadian Overadvance Loan: a Loan made to a Canadian Borrower when a Canadian
Overadvance exists or is caused by the funding thereof.



13









 





     Canadian Overadvance Loan Balance: on any date, the amount by which the aggregate
Canadian Revolver Loans of the Applicable Canadian Borrower or all Canadian Borrowers, as the case
may be, exceed the amount of the Canadian Borrowing Base of such Applicable Canadian Borrower or
the Total Canadian Borrowing Base on such date.



     Canadian Pension Plan: a “registered pension plan,” as defined in the Income Tax Act
(Canada) and any other pension plan maintained or contributed to by, or to which there is or may be
an obligation to contribute by, any Loan Party in respect of its Canadian employees or former
employees, excluding, for greater certainty, a Canadian Multi-Employer Plan.



     Canadian Prime Rate: on any date, the highest of (i) a fluctuating rate of interest
per annum equal to the rate of interest in effect for such day as publicly announced from time to
time by Bank of America (Canada) as its “Prime Rate”, (ii) the sum of 0.50% plus the Bank of Canada
overnight rate, which is the rate of interest charged by the Bank of Canada on one-day loans to
financial institutions, for such day, and (iii) the sum of 1.00% plus the Canadian BA Rate for a 30
day Interest Period as determined on such day. The “Prime Rate” is a rate set by Bank of America
(Canada) based upon various factors including the costs and desired return of Bank of America
(Canada), general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate shall take effect at the opening of business on the day specified in the public
announcement of such change. Each interest rate based on the Canadian Prime Rate hereunder shall
be adjusted simultaneously with any change in the Canadian Prime Rate. In the event Bank of
America (Canada) (including any successor or assignee) does not at any time announce a “Prime
Rate”, the clause (i) of Canadian Prime Rate shall mean the “Prime Rate” (being the rate for loans
made in Canadian Dollars in Canada) publicly announced by a Canadian Schedule 1 Chartered Bank
selected by Agent.



     Canadian Prime Rate Loan: a Canadian Revolver Loan, or portion thereof, funded in
Canadian Dollars and bearing interest calculated by reference to the Canadian Prime Rate.



     Canadian Priority Payables Reserve: on any date of determination, a reserve in such
amount as Agent may determine in its Permitted Discretion which reflects amounts secured by any
Liens, choate or inchoate, which rank or are capable of ranking in priority to the Agent’s and/or
the Secured Parties’ Liens and/or for amounts which may represent costs relating to the enforcement
of the Agent’s Liens including, without limitation, in the Permitted Discretion of the Agent, any
such amounts due and not paid for wages or vacation pay (including amounts protected by the Wage
Earner Protection Program Act (Canada)), amounts due and not paid under any legislation relating to
workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and
remitted when due under the Income Tax Act (Canada), amounts currently or past due and not paid for
realty, municipal or similar taxes (to the extent impacting any Collateral), all amounts currently
or past due and not contributed, remitted or paid to any Canadian Pension Plan or under the Canada
Pension Plan or the PBA, and any amounts representing any unfunded liability, solvency deficiency
or wind up deficiency with respect to any Canadian Employee Plan.



     Canadian Protective Advances: as defined in Section 2.1.6(a).



14









 





     Canadian Reimbursement Date: as defined in Section 2.2.5(a).



     Canadian Rent Reserve: the aggregate of (a) all past due rent and other past due
charges owing by any Canadian Borrower to any landlord or other Person who possesses any Canadian
Facility Collateral or could assert a Lien on such Canadian Facility Collateral; plus (b) a
reserve in an amount not to exceed rent and other charges that could be payable to any such Person
for the time period used to determine the Net Orderly Liquidation Value.



     Canadian Revolver Commitment: for any Canadian Lender, its obligation to make
Canadian Revolver Loans and to issue Canadian Letters of Credit, in the case of the Canadian
Fronting Bank, or participate in Canadian LC Obligations, in the case of the other Canadian
Lenders, to the Canadian Borrowers up to the maximum principal amount shown on Schedule 2.1.1(b),
or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party, as
such Canadian Revolver Commitment may be adjusted from time to time in accordance with the
provisions of Sections 2.1.4, 2.1.7 or 11.1. “Canadian Revolver Commitments” means the
aggregate amount of such commitments of all Canadian Lenders.



     Canadian Revolver Commitment Increase: as defined in Section 2.1.7(a).



     Canadian Revolver Commitment Termination Date: the earliest of (a) the U.S. Revolver
Commitment Termination Date (without regard to the reason therefor), (b) the date on which the Loan
Party Agent terminates or reduces to zero all of the Canadian Revolver Commitments pursuant to
Section 2.1.4, and (c) the date on which the Canadian Revolver Commitments are terminated pursuant
to Section 11.1. From and after the Canadian Revolver Commitment Termination Date, the Canadian
Borrowers shall no longer be entitled to request a Canadian Revolver Commitment Increase pursuant
to Section 2.1.7 hereof.



     Canadian Revolver Exposure: on any date, an amount equal to the sum of (a) the
Canadian Revolver Loans outstanding on such date and (b) the Canadian LC Obligations on such date.



     Canadian Revolver Loan: a Revolver Loan made by Canadian Lenders to a Canadian
Borrower pursuant to Section 2.1.1(b), which Revolver Loan shall, if denominated in Canadian
Dollars, be either a Canadian BA Rate Loan or a Canadian Prime Rate Loan and, if denominated in
Dollars, shall be either a Canadian Base Rate Loan or a LIBOR Loan, in each case as selected by the
Initial Canadian Borrower, and including any Canadian Swingline Loan, Canadian Overadvance Loan or
Canadian Protective Advance.



     Canadian Revolver Notes: the promissory notes, if any, executed by Canadian Borrowers
in favor of each Canadian Lender to evidence the Canadian Revolver Loans funded from time to time
by such Canadian Lender, which shall be in the form of Exhibit C-1 to this Agreement, together with
any replacement or successor notes therefor.



     Canadian Schedule 1 Chartered Bank: any of Royal Bank of Canada, Bank of Montreal,
The Toronto-Dominion Bank, The Bank of Nova Scotia or Canadian Imperial Bank of Commerce.



15









 





     Canadian Security Agreement: this Agreement, each general security agreement and each
Deed of Movable Hypothec among any Canadian Domiciled Loan Party and Agent.



     Canadian Subsidiary: Wholly-Owned Subsidiary of MRC incorporated or organized under
the laws of the Canada or any province or territory of Canada.



     Canadian Swingline Commitment: Cdn$25,000,000.



     Canadian Swingline Commitment Termination Date: with respect to any Canadian
Swingline Loan, the date that is five Business Days prior to the Canadian Revolver Commitment
Termination Date.



     Canadian Swingline Lender: Bank of America (Canada) or an Affiliate of Bank of
America (Canada).



     Canadian Swingline Loan: a Swingline Loan made by the Canadian Swingline Lender to a
Canadian Borrower pursuant to Section 2.1.8(b), which Swingline Loan shall, if denominated in
Canadian Dollars, be a Canadian Prime Rate Loan and, if denominated in Dollars, shall be a Canadian
Base Rate Loan, in each case as selected by the Initial Canadian Borrower.



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



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



     Cash Collateral: cash or Permitted Investments (other than the Permitted Investments
described in clauses (h) and (i) of the definition thereof), and any interest or other income
earned thereon, that is delivered to Agent to Cash Collateralize any Secured Obligations.



     Cash Collateral Account: the Canadian Cash Collateral Account and/or the U.S. Cash
Collateral Account, as the context may require.



     Cash Collateralize: the delivery of cash or Permitted Investments (other than the
Permitted Investments described in clauses (h) and (i) of the definition thereof) to Agent, as
security for the payment of Secured Obligations, in an amount equal to (a) with respect to LC
Obligations, 105% of the aggregate LC Obligations, and (b) with respect to any inchoate, contingent
or other Secured Obligations, Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Secured Obligations. “Cash
Collateralization” and “Cash Collateralized” have correlative meanings.



     Cash Dominion Event: the occurrence of any one of the following events: (i) Excess
Availability shall be less than the greater of (A) 10% of the Commitments or (B) $75,000,000 or
(ii) (A) an Event of Default pursuant to Sections 11.1.1 or 11.1.5 shall have occurred and be
continuing or (B) any other Event of Default pursuant to Section 11.1 shall have occurred and be
continuing and the Agent or the Required Lenders shall have reasonably determined (by written



16









 




notice to the Borrowers) to effect a Cash Dominion Event as a result of such breach; provided,
that, to the extent that the Cash Dominion Event has occurred due to clause (i) of this definition,
if Excess Availability shall have exceeded the greater of (x) 10% of the Commitments and (y)
$75,000,000 for at least thirty (30) consecutive days, the Cash Dominion Event shall be deemed to
be over. At any time that a Cash Dominion Event shall be deemed to be over or otherwise cease to
exist, Agent shall take such actions as may reasonably be required by Loan Party Agent to terminate
the cash sweeps and other transfers existing pursuant to Section 5.6 as a result of any notice or
direction given by Agent during the existence of a Cash Dominion Event.




     Cash Management Services: any services provided from time to time by any Lender or
any of its Affiliates to any Borrower or Subsidiary in connection with operating, collections,
payroll, trust, or other depository or disbursement accounts, including automated clearinghouse,
e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft,
depository, information reporting, lockbox and stop payment services.



     CCAA: Companies’ Creditors Arrangement Act (Canada), (or any successor statute), as
amended from time to time, and includes all regulations thereunder.



     Change in Law: the occurrence, after the date hereof, of (a) the adoption, taking
effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application thereof; or (c) the
making, issuance or application of any request, guideline, requirement or directive (whether or not
having the force of law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all
requests, rules, guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be
deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.



     Change in Tax Law: the enactment, promulgation, execution or ratification of, or any
change in or amendment to, any law (including the Code), treaty, regulation or rule (or in the
official application or interpretation of any law, treaty, regulation or rule, including a holding,
judgment or order by a court of competent jurisdiction) relating to taxation.



     Change of Control: shall mean and be deemed to have occurred if (a) prior to a
Qualified IPO, the Sponsor shall at any time not own, in the aggregate, directly or indirectly,
beneficially and of record, at least 35% of the voting power of the outstanding Voting Stock of
MRC; or (b) at any time on or after a Qualified IPO, any person, entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), other than
Sponsor, shall at any time have acquired direct or indirect beneficial ownership of both (x) 35% or
more of the voting power of the outstanding Voting Stock of MRC and (y) more than the percentage of
the voting power of such Voting Stock then beneficially owned, directly or indirectly, in the
aggregate, by the Sponsor, unless, in the case of either clause (a) or (b) above, the Sponsor has,
at such time, the right or the ability by voting power, contract or otherwise to elect or designate
for election at least a majority of the board of directors of MRC; or (c) Continuing Directors
shall not constitute at least a majority of the board of directors of MRC.



17









 





     Civil Code: the Civil Code of Québec, or any successor statute, as amended from time
to time, and includes all regulations thereunder.



     Claims: all claims, liabilities, obligations, losses, damages, penalties, judgments,
proceedings, interest and costs and expenses of any kind (including remedial response costs,
reasonable attorneys’ fees (which shall be limited to the fees, disbursements and other charges of
one primary counsel and one local counsel in each relevant jurisdiction for the Indemnitees (unless
there is an actual or perceived conflict of interest or the availability of different claims or
defenses in which case each such Indemnitee may retain its own counsel) and Extraordinary Expenses)
at any time (including after Full Payment of the Obligations, replacement of Agent or any Lender)
incurred by any Indemnitee or asserted against any Indemnitee by any Loan Party or other Person, in
any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or
transactions relating thereto, (b) any action taken or omitted in connection with any Loan
Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d)
exercise of any rights or remedies under any Loan Documents or Applicable Law or (e) failure by any
Loan Party to perform or observe any terms of any Loan Document, in each case, including all costs
and expenses relating to any investigation, litigation, arbitration or other proceeding (including
an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a
party thereto.



     Closing Date: as defined in Section 6.1.



     Code: the Internal Revenue Code of 1986 and the regulations promulgated and rulings
issued thereunder.



     Collateral: all Property described in Section 7.1, all Property described in any
Security Document as security for any Secured Obligation, and all other Property that now or
hereafter secures (or is intended to secure) any Secured Obligations.



     Collateral Access Agreement: a landlord waiver, bailee letter, warehouse letter,
agreement regarding processing arrangements or other access agreement reasonably acceptable to the
Agent.



     Commitment: for any Lender, the aggregate amount of such Lender’s Borrower Group
Commitments. “Commitments” means the aggregate amount of all Borrower Group Commitments,
which amount shall on the Closing Date be equal to the sum of (a) Cdn$150,000,000 in respect of the
Canadian Revolver Commitments and (b) $900,000,000 in respect of the U.S. Revolver Commitments.



     Commodity Agreement: any commodity swap agreement, futures contract, option contract
or other similar agreement or arrangement, each of which is for the purpose of hedging the
commodity price exposure associated with any Borrower’s and its Subsidiaries’ operations and not
for speculative purposes.



     Compliance Certificate: a certificate, in the form of Exhibit D with such changes as
may be agreed to by Loan Party Agent and Agent, by which the Borrowers certify to the matters set
forth in Section 10.1.1(e).



18









 





     Confidential Information Memorandum: the Confidential Information Memorandum of the
Borrowers dated May 2011, delivered to the Lenders in connection with this Agreement, and the
financial statements and other attachments delivered to the Lenders in connection therewith.



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




     (a) without duplication and to the extent already deducted (and not added back) in
arriving at such Consolidated Net Income, the sum of the following amounts for such period:




     (i) total interest expense and to the extent not reflected in such total
interest expense, any losses on hedging obligations or other derivative instruments
entered into for the purpose of hedging interest rate risk, net of interest income
and gains on such hedging obligations, and costs of surety bonds in connection with
financing activities,




     (ii) provision for taxes based on income, profits or capital of the Borrowers
and the Restricted Subsidiaries, including state, franchise and similar taxes and
foreign withholding taxes paid or accrued during such period,




     (iii) depreciation and amortization,




     (iv) (a) losses on asset sales (other than asset sales in the Ordinary Course
of Business), disposals or abandonments, (b) any impairment charge or asset
write-off related to intangible assets (including good-will), long-lived assets, and
investments in debt and equity securities pursuant to GAAP, (c) all losses from
investments recorded using the equity method, (d) stock-based awards compensation
expense, and (e) other non-cash charges (provided that if any non-cash charges
referred to in this clause (e) represent an accrual or reserve for potential cash
items in any future period, the cash payment in respect thereof in such future
period shall be subtracted from Consolidated EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period),




     (v) extraordinary losses and unusual or non-recurring charges, severance,
relocation costs and curtailments or modifications to pension and post-retirement
employee benefit plans,




     (vi) restructuring charges or reserves (including restructuring costs related
to acquisitions after the date hereof and to closure and/or consolidation of
facilities),




     (vii) any deductions attributable to minority interests (including the minority
interest portion of the Initial Canadian Borrower’s employee profit sharing plans),




     (viii) the amount, if any, of management, monitoring, consulting and advisory
fees and related expenses paid to the Sponsor,



19









 






     (ix) LIFO expense, and




     (x) any costs or expenses incurred by any Borrower or a Restricted Subsidiary
pursuant to any management equity plan or stock option plan or any other management
or employee benefit plan or agreement or any stock subscription or shareholder
agreement, to the extent that such costs or expenses are funded with cash proceeds
contributed to the capital of any Borrower or net cash proceeds of an issuance of
Stock or Stock Equivalents of any Borrower, less




     (b) without duplication and to the extent included in arriving at such Consolidated Net
Income, the sum of the following amounts for such period:




     (i) extraordinary gains and unusual or non-recurring gains,




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




     (iii) gains on asset sales (other than asset sales in the Ordinary Course of
Business),




     (iv) any net after-tax income from the early extinguishment of Indebtedness or
hedging obligations or other derivative instruments,




     (v) LIFO income, and




     (vi) all gains from investments recorded using the equity method,


in each case, as determined on a consolidated basis for the Borrowers and the Restricted
Subsidiaries in accordance with GAAP; provided that, to the extent included in Consolidated Net
Income,





     (A) there shall be excluded in determining Consolidated EBITDA currency translation
gains and losses related to currency remeasurements of Indebtedness or intercompany balances
(including the net loss or gain resulting from Hedge Agreements for currency exchange risk),




     (B) there shall be excluded in determining Consolidated EBITDA for any period any
adjustments resulting from the application of Statement of Financial Accounting Standards
No. 133, and




     (C) there shall be included in determining Consolidated EBITDA for any period, without
duplication, (1) the Acquired EBITDA of any Person, property, business or asset acquired by
any Borrower or any Restricted Subsidiary during such period to the extent not subsequently
sold, transferred, abandoned or otherwise disposed by such Borrower or such Restricted
Subsidiary (each such Person, property, business or asset acquired and not subsequently so
disposed of, an “Acquired Entity or Business”) and the Acquired EBITDA of any
Unrestricted Subsidiary that is converted into a Restricted



20









 






Subsidiary during such period (each, a “Converted Restricted Subsidiary”),
based on the actual Acquired EBITDA of such Acquired Entity or Business or Converted
Restricted Subsidiary for such period (including the portion thereof occurring prior to such
acquisition or conversion), (2) an adjustment in respect of each Acquired Entity or Business
equal to the amount of the Pro Forma Adjustment with respect to such Acquired Entity or
Business for such period (including the portion thereof occurring prior to such acquisition)
as specified in a Pro Forma Adjustment Certificate and delivered to the Lenders and the
Agent, and (3) there shall be excluded in determining Consolidated EBITDA for any period the
Disposed EBITDA of any Person, property, business or asset (other than an Unrestricted
Subsidiary) sold, transferred, abandoned or otherwise disposed of, closed or classified as
discontinued operations by any Borrower or any Restricted Subsidiary during such period
(each such Person, property, business or asset so sold or disposed of, a “Sold Entity or
Business”), and the Acquired EBITDA of any Restricted Subsidiary that is converted into
an Unrestricted Subsidiary during such period (each, a “Converted Unrestricted
Subsidiary”) based on the actual Disposed EBITDA of such Sold Entity or Business or
Converted Unrestricted Subsidiary for such period (including the portion thereof occurring
prior to such sale, transfer or disposition or conversion).



     Consolidated Fixed Charge Coverage Ratio: for any Test Period, the ratio of (a)
Consolidated EBITDA for such Test Period to (b) Consolidated Fixed Charges for such Test Period.



     Consolidated Fixed Charges: for any period, the sum, without duplication, of (a)
Consolidated Interest Expense, (b) scheduled payments of principal on Consolidated Total Debt, (c)
the aggregate of all unfinanced capital expenditures of Borrowers and their respective Restricted
Subsidiaries during such period determined on a consolidated basis and (d) the portion of taxes
attributable to Borrowers and their respective Restricted Subsidiaries based on income actually
paid in cash and provisions for cash income taxes.



     Consolidated Interest Expense: for any period, the sum of (i) the cash interest
expense (including that attributable to Capital Leases in accordance with GAAP), net of cash
interest income, of the Borrowers and the Restricted Subsidiaries on a consolidated basis in
accordance with GAAP with respect to all outstanding Indebtedness of the Borrowers and the
Restricted 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
(other than currency swap agreements, currency future or option contracts and other similar
agreements) and (ii) any cash payments made during such period in respect of obligations referred
to in clause (b) below relating to Funded Debt that were amortized or accrued in a previous period
(other than any such obligations resulting from the discounting of Indebtedness in connection with
the application of purchase accounting in connection with any Permitted Acquisition), but
excluding, however, (a) amortization of deferred financing costs and any other amounts of non-cash
interest, (b) the accretion or accrual of discounted liabilities during such period, and (c) all
non-recurring cash interest expense consisting of liquidated damages for failure to timely comply
with registration rights obligations and financing fees, all as calculated on a consolidated basis
in accordance with GAAP and excluding, for the avoidance of doubt, any interest in respect of items
excluded from Indebtedness in the proviso to the definition thereof,



21









 




provided that (x) except as provided in clause (y) below, there shall be excluded from
Consolidated Interest Expense for any period the cash interest expense (or cash interest income) of
all Unrestricted Subsidiaries for such period to the extent otherwise included in Consolidated
Interest Expense, (y) there shall be included in determining Consolidated Interest Expense for any
period the cash interest expense (or income) of any Acquired Entity or Business acquired during
such period and of any Converted Restricted Subsidiary converted during such period, in each case
based on the cash interest expense (or income) of such Acquired Entity or Business or Converted
Restricted Subsidiary for such period (including the portion thereof occurring prior to such
acquisition or conversion) assuming any Indebtedness incurred or repaid in connection with any such
acquisition or conversion had been incurred or prepaid on the first day of such period, and (z)
there shall be excluded from determining Consolidated Interest Expense for any period the cash
interest expense (or income) of any Sold Entity or Business disposed of during such period, based
on the cash interest expense (or income) relating to any Indebtedness relieved, retired or repaid
in connection with any such disposition of such Sold Entity or Business for such period (including
the portion thereof occurring prior to such disposal) assuming such debt relieved, retired or
repaid in connection with such disposition had been relieved, retired or repaid on the first day of
such period. Notwithstanding the foregoing, for purposes of determining Consolidated Interest
Expense for any period prior to the first anniversary of the Closing Date, the monthly Consolidated
Interest Expense shall be as set forth on Schedule 1.1(a).




     Consolidated Net Income: for any period, the net income (loss) of the Borrowers and
the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with
GAAP, excluding, without duplication, (a) extraordinary items for such period, (b) the cumulative
effect of a change in accounting principles during such period to the extent included in
Consolidated Net Income, (c) any fees and expenses incurred during such period, or any amortization
thereof for such period, in connection with any acquisition, investment, recapitalization, asset
disposition, issuance or repayment of debt, issuance of equity securities, refinancing transaction
or amendment or other modification of any debt instrument (in each case, including any such
transaction consummated prior to the Closing Date and any such transaction undertaken but not
completed) and any charges or non-recurring merger costs incurred during such period as a result of
any such transaction and (d) any income (loss) for such period attributable to the early
extinguishment of Indebtedness. There shall be excluded from Consolidated Net Income for any
period the purchase accounting effects of adjustments to inventory, property and equipment,
software and other intangible assets and deferred revenue in component amounts required or
permitted by GAAP and related authoritative pronouncements (including the effects of such
adjustments pushed down to the Borrower and the Restricted Subsidiaries), as a result of any
acquisition whether consummated before or after the Closing Date, any Permitted Acquisition or
other Investment, or the amortization or write-off of any amounts hereof.



     Consolidated Secured Debt: as of any date of determination, (a) the aggregate
principal amount of Indebtedness of the Borrowers and the Restricted Subsidiaries outstanding on
such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of
any discounting of Indebtedness resulting from the application of purchase accounting in connection
with any Permitted Acquisition), consisting of Indebtedness for borrowed money, Capitalized Lease
Obligations and debt obligations evidenced by promissory notes or similar instruments, in each case
secured by Liens, minus (b) the aggregate amount of cash and



22









 




Permitted Investments held in accounts on the consolidated balance sheet of the Borrowers and
the Restricted Subsidiaries as at such date to the extent the use thereof for application to
payment of Indebtedness is not prohibited by law or any contract to which any Borrower or any of
the Restricted Subsidiaries is a party.




     Consolidated Total Assets: as of any date of determination, the amount that would, in
conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a
consolidated balance sheet of the Borrowers and the Restricted Subsidiaries at such date.



     Consolidated Total Debt: as of any date of determination, (a) the aggregate principal
amount of Indebtedness of the Borrowers and the Restricted Subsidiaries outstanding on such date,
determined on a consolidated basis in accordance with GAAP (but excluding the effects of any
discounting of Indebtedness resulting from the application of purchase accounting in connection
with any Permitted Acquisition), consisting of Indebtedness for borrowed money, Capitalized Lease
Obligations and debt obligations evidenced by promissory notes or similar instruments, minus (b)
the aggregate amount of cash and Permitted Investments held in accounts on the consolidated balance
sheet of the Borrowers and the Restricted Subsidiaries as at such date to the extent the use
thereof for application to payment of Indebtedness is not prohibited by law or any contract to
which any Borrower or any of the Restricted Subsidiaries is a party.



     Consolidated Total Debt to Consolidated EBITDA Ratio: as of any date of
determination, the ratio of (a) Consolidated Total Debt as of the last day of the most recent Test
Period for which financial statements have been delivered pursuant to Section 10.1.1 to (b)
Consolidated EBITDA for such Test Period.



     Continuing Director: at any date, an individual (a) who is a member of the board of
directors of MRC on the date hereof, (b) who, as at such date, has been a member of such board of
directors for at least the twelve preceding months, (c) who has been nominated to be a member of
such board of directors, directly or indirectly, by Sponsor or Persons nominated by Sponsor or (d)
who has been nominated to be a member of such board of directors by a majority of the other
Continuing Directors then in office.



     Converted Restricted Subsidiary: as defined in the term “Consolidated EBITDA”.



     Converted Unrestricted Subsidiary: as defined in the term “Consolidated EBITDA”.



     Cost: with respect to Inventory, the weighted average cost thereof, as determined in
the same manner and consistent with the most recent Inventory Appraisal which has been received and
approved by Agent in its reasonable discretion.



     Credit Documents: the Loan Documents and the Bank Product Documents.



     Credit Party: Agent, a Lender or any Fronting Bank; and “Credit Parties”
means Agent, Lenders and Fronting Banks.



     Creditor Representative: under any Applicable Law, a receiver, interim receiver,
receiver and manager, trustee (including any trustee in bankruptcy), custodian, conservator,
administrator,



23









 




examiner, sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator or
similar officer or fiduciary.




     Currency Agreement: any foreign exchange contract, currency swap agreement, futures
contract, option contract, synthetic cap or other similar agreement or arrangement, each of which
is for the purpose of hedging the foreign currency risk associated any Borrower’s and its
Subsidiaries’ operations and not for speculative purposes.



     Default: an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.



     Default Rate: for any Obligation (including, to the extent permitted by law, interest
not paid when due), 2.00% plus the interest rate otherwise applicable thereto, or if such
Obligation does not bear interest, a rate equal to the U.S. Base Rate plus 2.00%.



     Defaulting Lender: any Lender that, as reasonably determined by the Agent, (a) has
failed to perform any funding obligations hereunder, and such failure is not cured within three
Business Days, unless such Lender notifies the Agent and the Loan Party Agent in writing that such
failure is the result of such Lender’s determination that one or more conditions precedent to
funding (which conditions precedent, together with the applicable Default, if any, shall be
specifically identified in such writing) have not been satisfied; (b) has notified the Agent or any
Borrower that such Lender does not intend to comply with its funding obligations hereunder or has
made a public statement to the effect that it does not intend to comply with its funding
obligations hereunder or generally under other credit facilities (unless such notice or public
statement relates to such Lender’s obligation to fund a Loan hereunder and states that such
position is based on such Lender’s determination that a condition precedent to funding cannot be
satisfied); (c) has failed, within three Business Days following written request by the Agent, to
confirm in a manner reasonably satisfactory to the Agent that such Lender will comply with its
funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon receipt by the Agent of such confirmation); or (d) has, or has a
direct or indirect parent company that has, become the subject of an Insolvency Proceeding or taken
any action in furtherance thereof; provided, however, that a Lender shall not be a
Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in
such Lender or parent company.



     Deposit Account: (i) any “deposit account” as such term is defined in Article 9 of
the UCC and in any event shall include all accounts and sub-accounts relating to any of the
foregoing and (ii) with respect to any such Deposit Account located in Canada, any bank account
with a deposit function.



     Deposit Account Control Agreements: the deposit account control agreements, in form
and substance reasonably satisfactory to Agent and Loan Party Agent, executed by each lockbox
servicer and financial institution maintaining a lockbox and/or Deposit Account other than an
Excluded Deposit Account for a Loan Party, in favor of Agent, for the benefit of the Secured
Parties, as security for the Secured Obligations.



24









 





     Designated Non-Cash Consideration: the fair market value of non-cash consideration
received by any Borrower or a Restricted Subsidiary in connection with a Disposition pursuant to
Section 10.2.4(b) and Section 10.2.4(c) that is designated as Designated Non-Cash Consideration
pursuant to a certificate of a Senior Officer of the Loan Party Agent, setting forth the basis of
such valuation (which amount will be reduced by the fair market value of the portion of the
non-cash consideration converted to cash within 180 days following the consummation of the
applicable Disposition).



     Disposed EBITDA: with respect to any Sold Entity or Business or any Converted
Unrestricted Subsidiary for any period, the amount for such period of Consolidated EBITDA of such
Sold Entity or Business or Converted Unrestricted Subsidiary (determined as if references to the
Borrowers and the Restricted Subsidiaries in the definition of Consolidated EBITDA were references
to such Sold Entity or Business or Converted Unrestricted Subsidiary and its Subsidiaries), all as
determined on a consolidated basis for such Sold Entity or Business or Converted Unrestricted
Subsidiary.



     Disposition: as defined in Section 10.2.4(b).



     dividends: as defined in Section 10.2.6.



     Document: as defined in the UCC (and/or with respect to any Document of a Canadian
Domiciled Loan Party, a “document of title” as defined in the PPSA).



     Dollar Equivalent: on any date, with respect to any amount denominated in Dollars,
such amount in Dollars, and with respect to any stated amount in a currency other than Dollars, the
amount of Dollars that Agent determines (which determination shall be conclusive and binding absent
manifest error) would be necessary to be sold on such date at the applicable Exchange Rate to
obtain the stated amount of the other currency.



     Dollars or $: lawful money of the United States.



     Domestic Subsidiary: in the case of a Canadian Borrower, each Canadian Subsidiary,
and in the case of a U.S. Borrower, each U.S. Subsidiary.



     Dominion Account: with respect to the Canadian Domiciled Loan Parties, the Canadian
Dominion Account, and with respect to the U.S. Facility Loan Parties, the U.S. Dominion Account.



     Eligible Accounts: the Canadian Eligible Accounts and/or the U.S. Eligible Accounts,
as the context requires.



     Eligible Assignee: subject to the requirements of Section 13.3.3, a Person that is
(a) a Lender or a U.S.-based Affiliate of a Lender, (b) if such Person is to hold U.S. Facility
Obligations, an Approved Fund; (c) if such Person is to hold Canadian Facility Obligations, a
Person who holds or is acquiring, or whose Affiliate holds or is acquiring, a U.S. Revolver
Commitment; (d) any other financial institution approved by Agent and Loan Party Agent (which
approval by Loan Party Agent shall not be unreasonably withheld or delayed, and shall be deemed
given if no objection is made within five Business Days after notice of the proposed



25









 




assignment), that is organized under the laws of the United States or Canada or any state or
district thereof, extends asset-based lending facilities in its Ordinary Course of Business and
whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the
Code or any other Applicable Law, or would, immediately following any such assignment, result in
increased costs or Taxes payable by the Loan Parties pursuant to Section 5.8; and (e) during any
Event of Default, any Person acceptable to Agent in its discretion, which acceptance shall not be
unreasonably withheld or delayed.




     Eligible Inventory: the Canadian Eligible Inventory and/or the U.S. Eligible
Inventory, as the context requires.



     Enforcement Action: any action to enforce any Obligations or Loan Documents or to
exercise any rights or remedies relating to any Collateral (whether by judicial action, self-help,
notification of Account Debtors, exercise of setoff or recoupment, exercise of any right or vote to
act in a Loan Party’s Insolvency Proceeding, or otherwise).



     Environment: shall mean ambient air, indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or subsurface strata,
natural resources or as otherwise defined in any Environmental Law.



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



     Environmental Law: any applicable Federal, state, foreign or local statute, law,
rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each
case as amended, and any binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment, relating to the protection of
environment, including, ambient air, surface water, groundwater, land surface and subsurface strata
and natural resources such as wetlands, or human health or safety (to the extent relating to human
exposure to Hazardous Materials), or Hazardous Materials.



     ERISA: the Employee Retirement Income Security Act of 1974.



26









 





     ERISA Affiliate: any trade or business (whether or not incorporated) under common
control with a Loan Party or treated as a single employer with a Loan Party, in each case within
the meaning of Section 414 of the Code.



     Event of Default: as defined in Section 11.1.



     Excess Availability: at any time, an amount equal to (a) the lesser of (i) the
Commitments minus all LC Obligations and (ii) the sum of the (1) U.S. Borrowing Base as of any date
of determination and (2) Total Canadian Borrowing Base as of any date of determination, minus (b)
the principal balance of all Revolver Loans.



     Exchange Rate: on any date, (a) with respect to Canadian Dollars in relation to
Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Dollars are
offered on such date for Canadian Dollars, and (b) with respect to Dollars in relation to Canadian
Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Canadian Dollars
are offered on such date for such Dollars



     Excluded Deposit Accounts: (a) Deposit Accounts that are zero balance disbursement
accounts, (b) Deposit Accounts used solely to fund payroll, payroll taxes and similar employment
taxes or employee benefits in the Ordinary Course of Business, (c) other Deposit Accounts with an
amount on deposit of less than $1,000,000 at any time in the aggregate for all such Deposit
Accounts and (d) the Net Available Cash Account.



     Excluded Loan Party: (a) each Loan Party that is a “controlled foreign corporation”
within the meaning of Section 957 of the Code; (b) any direct or indirect Subsidiary of a Person
described in clause (a) of this definition; and (c) any U.S. Subsidiary, substantially all of the
assets of which are Stock of one or more “controlled foreign corporations” within the meaning of
Section 957 of the Code.



     Excluded Subsidiary: (a) each U.S. Subsidiary listed on Schedule 9.1.12 hereto as an
Excluded Subsidiary, (b) any Subsidiary that is not a Wholly-Owned Subsidiary, (c) any Subsidiary
that is prohibited by any applicable Requirement of Law from guaranteeing the Secured Obligations,
(d) in respect of the U.S. Domiciled Loan Parties, (i) any Subsidiary of a non-U.S. Subsidiary
(that is a “controlled foreign corporation” within the meaning of Section 957 of the Code) and (ii)
any U.S. Subsidiary, substantially all of the assets of which are Stock of one or more “controlled
foreign corporations” within the meaning of Section 957 of the Code, (e) any Restricted Subsidiary
acquired pursuant to a Permitted Acquisition financed with secured Indebtedness incurred pursuant
to Section 10.2.1(b)(ix) or Section 10.2.1(b)(x) and each Restricted Subsidiary thereof that
guarantees such Indebtedness to the extent and so long as the financing documentation relating to
such Permitted Acquisition to which such Restricted Subsidiary is a party prohibits such Restricted
Subsidiary from guaranteeing, or granting a Lien on any of its assets to secure, the Secured
Obligations; provided that after such time that such prohibitions on guarantees or granting of
Liens lapses or terminates, such Restricted Subsidiary shall no longer be an Excluded Subsidiary,
(f) any other Subsidiary with respect to which, in the reasonable judgment of the Agent (confirmed
in writing by notice to the applicable Borrower), the cost or other consequences (including any
adverse tax consequences) of providing a Guarantee shall be excessive in view of the benefits to be
obtained by the Lenders therefrom, (g)



27









 




each Unrestricted Subsidiary and (h) any Restricted Subsidiary that the Loan Party Agent
elects by notice to the Agent to treat as an Excluded Subsidiary pursuant to this clause (h),
provided that (i) any such Restricted Subsidiary shall cease to be so treated as an Excluded
Subsidiary pursuant to this clause (h) upon written notice from the Loan Party Agent to the Agent,
and (ii) at any time, the total assets of all Restricted Subsidiaries that are Excluded
Subsidiaries solely as a result of this clause (h), as reflected on their most recent balance
sheets prepared in accordance with GAAP, do not in the aggregate at any time exceed $1,000,000, and
(iii) the total revenues of all Restricted Subsidiaries that are Excluded Subsidiaries solely as a
result of this clause (h) for the twelve-month period ending on the last day of the most recent
Test Period for which financial statements have been delivered pursuant to Section 10.1.1 do not in
the aggregate exceed $5,000,000.




     Excluded Tax: with respect to Agent, any Lender, any Fronting Bank or any other
recipient of a payment to be made by or on behalf of any Loan Party on account of any Obligation,
(a) taxes imposed on or measured by its net income (however denominated), and franchise taxes
imposed on it (i) by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located or, in the case of
any Lender, in which its applicable Lending Office is located or (ii) as the result of any other
present or former connection between such recipient and the jurisdiction imposing such tax (other
than connections arising from such recipient having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected a security interest
under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or
assigned an interest in any Loan, Letter of Credit or Loan Document); (b) any branch profits taxes
imposed by the United States or any similar tax imposed by any other jurisdiction in which such
recipient has a branch; (c) in the case of a Foreign Lender (within the meaning of clause (b) of
the definition thereof), any United States withholding tax that is imposed on amounts payable to
such Foreign Lender pursuant to laws in force at the time such Foreign Lender becomes a Lender (or
designates a new Lending Office) hereunder, or any additional United States withholding tax that is
imposed on amounts payable to a Foreign Lender after the time such Foreign Lender becomes a Lender
(or designates a new Lending Office) hereunder, except that taxes in this clause (c) shall
not include (i) additional United States withholding tax that may be imposed on amounts payable to
a Foreign Lender after the time such Foreign Lender becomes a party to the Agreement (or designates
a new Lending Office), as a result of a Change in Tax Law after such time and (ii) any amount with
respect to United States withholding tax that such Foreign Lender (or its assignor, if any) was
previously entitled to receive pursuant to Section 5.8 of this Agreement, if any, with respect to
such United States withholding tax at the time such Foreign Lender designates a new Lending Office
(or at the time of the assignment); (d) any United States withholding tax imposed under FATCA, or
(e) any withholding tax that is attributable to such recipient’s failure or inability (other than
as a result of a Change in Tax Law) to comply with Section 5.9.



     Existing Canadian Credit Agreement: that certain Amended and Restated Loan and
Security Agreement dated as of November 18, 2009, among the Initial Canadian Borrower, Mega
Production Testing Inc. and Hagan Oilfield Supply Ltd., as guarantors, the lenders party thereto
and Bank of America, N.A. (acting through its Canada branch), as agent for such lenders.



     Existing Letters of Credit: the letters of credit set forth on Schedule 1.1(b).



28









 





     Existing U.S. Credit Agreement: that certain Revolving Loan Credit Agreement dated as
of October 31, 2007, among MRC, as borrower, the lenders party thereto, The CIT Group/Business
Credit, Inc., as administrative agent and co-collateral agent for such lenders and the other agents
and parties referred to therein, as amended by that certain First Amendment to Revolving Loan
Credit Agreement dated as of December 21, 2009.



     Extraordinary Expenses: all costs, expenses or advances that Agent may incur during
an Event of Default, or during the pendency of any Insolvency Proceeding of any Borrower or any
Specified Subsidiary, including those relating to (a) any audit, inspection, repossession, storage,
repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection,
or other preservation of or realization upon any Collateral; (b) any action, arbitration or other
proceeding (whether instituted by or against Agent, any Lender, any Loan Party, any representative
of creditors of any Loan Party or any other Person) in any way relating to any Collateral
(including the validity, perfection, priority or avoidability of Agent’s Liens with respect to any
Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or
other Claims; (c) the exercise, protection or enforcement of any rights or remedies of Agent in, or
the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges
or Liens with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and
documentation of any modification, waiver, workout, restructuring or forbearance with respect to
any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances
include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation
and standby fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions,
accountants’ fees, environmental study fees, wages and salaries paid to employees of any Loan Party
or independent contractors in liquidating any Collateral, travel expenses and legal fees (which
shall be limited to the reasonable fees, disbursements and other charges of one primary counsel and
one local counsel in each relevant jurisdiction for the Agent and the Lenders (unless there is an
actual or perceived conflict of interest or the availability of different claims or defenses in
which case the Agent may retain its own counsel).



     Facility Termination Date: June 14, 2016.



     FATCA: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or
any amended version that is substantively comparable), and any current or future regulations or
official interpretations thereof.



     FCCR Test Event: the occurrence of any one of the following events: (i) Excess
Availability shall be less than the greater of (A) 10% of the Commitments or (B) $75,000,000 or
(ii) an Event of Default shall have occurred and be continuing; provided, that, to the extent that
the FCCR Test Event has occurred due to clause (i) of this definition, if Excess Availability shall
have exceeded the greater of (x) 10% of the Commitments and (y) $75,000,000 for at least thirty
(30) consecutive days, the FCCR Test Event shall be deemed to be over.



     Federal Funds Rate: (a) the weighted average of interest rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by federal funds brokers on
the applicable Business Day (or on the preceding Business Day, if the applicable day is not a
Business Day), as published by the Federal Reserve Bank of New York on the next Business



29









 




Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded
up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on
such transactions, as determined by Agent.




     Fee Letter: collectively, (a) the fee letter agreement among Agent, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, MRC and the Initial Canadian Borrower dated as of April 29,
2011, (b) the fee letter agreement among Barclays Capital, the investment banking division of
Barclays Bank PLC, MRC and the Initial Canadian Borrower dated as of April 29, 2011 and (c) the fee
letter agreement among Wells Fargo Capital Finance, LLC, MRC and the Initial Canadian Borrower
dated as of April 29, 2011.



     Financial Administration Act: Financial Administration Act (Canada) and all
regulations and schedules thereunder.



     Floating Rate Loan: a U.S. Base Rate Loan, a Canadian Prime Rate Loan or a Canadian
Base Rate Loan.



     FLSA: the Fair Labor Standards Act of 1938.



     Foreign Lender: a Lender that is (a) in the case of the Canadian Borrowers, resident
in a jurisdiction other than Canada or a province or territory thereof, and (b) in the case of the
U.S. Borrowers, not a “United States person” within the meaning of section 7701(a)(30) of the Code.



     Foreign Plan: any employee benefit plan, program, policy, arrangement or agreement
maintained or contributed to by a Borrower or any of its Subsidiaries with respect to employees
employed outside the United States or Canada.



     Foreign Subsidiary: a Subsidiary of a Borrower that is not a Domestic Subsidiary.



     Fronting Bank: a U.S. Fronting Bank and/or the Canadian Fronting Bank, as the context
requires.



     Fronting Bank Indemnitees: U.S. Fronting Bank Indemnitees and/or Canadian Fronting
Bank Indemnitees, as the context requires.



     FSCO: The Financial Services Commission of Ontario or like body in Canada or in any
other province or territory or jurisdiction of Canada with whom a Canadian Pension Plan is required
to be registered in accordance with Requirements of Law and any other Governmental Authority
succeeding to the functions thereof.



     Full Payment: with respect to any Obligations (other than unasserted contingent
indemnity claims), (a) the full cash payment thereof in the applicable currency required hereunder,
including any interest and documented fees and other charges accruing during an Insolvency
Proceeding (whether or not allowed in the proceeding); (b) if such Obligations are LC Obligations,
Bank Product Debt or inchoate or contingent in nature, Cash Collateralization thereof (or delivery
of a standby letter of credit acceptable to Agent in its discretion, in the amount of required Cash
Collateral); and (c) a release of any Claims of Loan Parties against Agent, Lenders and any
Fronting Bank arising on or before the payment date. No Loans shall be



30









 




deemed to have been paid in full until all Commitments related to such Loans have expired or
been terminated.




     Funded Debt: all consolidated indebtedness of the Borrowers and the Restricted
Subsidiaries for borrowed money that matures more than one year from the date of its creation or
matures within one year from such date that is renewable or extendable, at the option of any
Borrower or any Restricted Subsidiary, to a date more than one year from such date or arises under
a revolving credit or similar agreement that obligates the lender or lenders to extend credit
during a period of more than one year from such date, including all amounts of Funded Debt required
to be paid or prepaid within one year from the date of its creation and, in the case of the
Borrowers, Indebtedness in respect of the Loans.



     GAAP: generally accepted accounting principles in effect in the United States, from
time to time, applied consistently, subject to Section 1.2 hereof; provided that capital leases and
operating leases shall be subject to generally accepted accounting principles in effect in the
United States on the date hereof.



     General Intangibles: as defined in the UCC (and/or with respect to any General
Intangible of a Canadian Facility Loan Party, an “intangible” as defined in the PPSA).



     Governmental Approval: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all Governmental
Authorities.



     Governmental Authority: any federal, state, provincial, municipal, foreign or other
governmental department, agency, commission, board, bureau, court, tribunal, instrumentality,
political subdivision, or other entity or officer exercising executive, legislative, judicial,
regulatory or administrative functions for or pertaining to any government or court, in each case
whether it is or is not associated with the United States, a state, district or territory thereof,
Canada, a province or territory thereof or any other foreign entity or government.



     Guarantee: each guarantee agreement (including this Agreement) executed by a
Guarantor in favor of Agent guaranteeing all or any portion of the Canadian Facility Secured
Obligations or the U.S. Facility Secured Obligations.



     Guarantee Obligations: as to any Person, any obligation of such Person guaranteeing
or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of such Person, whether or not
contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such
Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any such Indebtedness of
the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure
or hold harmless the owner of such Indebtedness against loss in respect thereof; provided, however,
that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or
collection in the Ordinary Course of Business or customary and reasonable indemnity obligations in
effect on the Closing Date or entered into in connection with any



31









 




acquisition or disposition of assets permitted under this Agreement (other than such
obligations with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which
such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder)
as determined by such Person in good faith.




     Guarantor Payment: as defined in Section 5.10.3(b).



     Guarantors: Canadian Facility Guarantors, U.S. Facility Guarantors, and each other
Person who guarantees payment or performance of any Secured Obligations.



     Hazardous Materials: (a) any petroleum or petroleum products, radioactive materials,
friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of “hazardous
substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted
hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words
of similar import, under any applicable Environmental Law; and (c) any other chemical, material or
substance, which is prohibited, limited or regulated by any Environmental Law.



     Hedge Agreement: an Interest Rate Agreement, Currency Agreement or Commodity
Agreement entered into in the ordinary course of any Borrower’s or any of its Subsidiaries’
businesses.



     Historical Financial Statements: as of the Closing Date, (a) the audited consolidated
financial statements of the Parent and its Subsidiaries for the fiscal year ended December 31,
2010, (b) the unaudited financial statements of the Parent and its Subsidiaries for the fiscal
quarter ended March 31, 2011 and (c) the unaudited financial statements of the Parent and its
Subsidiaries for the fiscal month ended April 30, 2011.



     Increase Date: as defined in Section 2.1.7(a).



     Indebtedness: with respect to any Person shall mean (a) all indebtedness of such
Person for borrowed money, (b) the deferred purchase price of assets or services that in accordance
with GAAP would be included as liabilities in the balance sheet of such Person, (c) the face amount
of all letters of credit issued for the account of such Person and, without duplication, all drafts
drawn thereunder, (d) all Indebtedness of a second Person secured by any Lien on any property owned
by such first Person, whether or not such Indebtedness has been assumed, (e) all Capitalized Lease
Obligations of such Person, (f) all obligations of such Person under interest rate swap, cap or
collar agreements, interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity price protection agreements or other commodity price hedging
agreements and other similar agreements and (g) without duplication, all Guarantee Obligations of
such Person, provided that Indebtedness shall not include (i) trade payables and accrued expenses,
in each case payable directly or through a bank clearing arrangement and arising in the Ordinary
Course of Business, (ii) deferred or prepaid revenue, (iii) purchase price holdbacks in respect of
a portion of the purchase price of an asset to satisfy



32









 




warranty or other unperformed obligations of the respective seller and (iv) all intercompany
Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of
terms) and made in the Ordinary Course of Business.




     Indemnified Taxes: Taxes other than Excluded Taxes and Other Taxes.



     Indemnitees: Agent Indemnitees, Lender Indemnitees, Fronting Bank Indemnitees and
Bank of America Indemnitees.



     Information: as defined on Section 14.12.



     Initial Canadian Borrower: as defined in the preamble to this Agreement.



     Initial U.S. Borrowers: as defined in the preamble to this Agreement.



     Insolvency Proceeding: any case or proceeding or proposal commenced by or against a
Person under any state, provincial, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the U.S. Bankruptcy Code, or any other insolvency,
debtor relief, bankruptcy, receivership, debt adjustment law or other similar law (whether state,
provincial, federal or foreign), including the Bankruptcy and Insolvency Act (Canada) and the CCAA;
(b) the appointment of a Creditor Representative or other custodian for such Person or any part of
its Property; or (c) an assignment or trust mortgage for the benefit of creditors.



     Insurance Assignment: each collateral assignment of insurance pursuant to which a
Loan Party assigns to the Agent, for the benefit of the Secured Parties, such Loan Party’s rights
under business interruption policies, as security for the Secured Obligations.



     Intercreditor Agreement: that certain Second Amended and Restated Intercreditor
Agreement dated as of December 21, 2009, among MRC, certain of its subsidiaries, The CIT
Group/Business Credit, Inc., as co-collateral agent for the Revolving Credit Lenders (as defined
therein), Bank of America, N.A., as co-collateral agent for the Revolving Credit Lenders, and U.S.
Bank National Association, as collateral trustee for itself and the Senior Secured Notes Secured
Parties (as defined therein), the Additional Senior Secured Notes Secured Parties (as defined
therein) and the Subordinated Lien Secured Parties (as defined therein), as the same may be
amended, supplemented or otherwise modified from time to time.



     Interest Period: as defined in Section 3.1.4.



     Interest Period Loan: a LIBOR Loan or a Canadian BA Rate Loan.



     Interest Rate Agreement: any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedging agreement or other similar
agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure
associated with any Borrower’s and its Subsidiaries’ operations and not for speculative purposes.



     Inventory: as defined in the UCC or the PPSA, as applicable, including all goods
intended for sale, lease, display or demonstration; all work in process; and all raw materials, and
other materials and supplies of any kind that are or could be used in connection with the



33









 




manufacture, transformation, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding
Equipment).




     Inventory Appraisal: (a) on the Closing Date, the appraisals prepared by HILCO
Appraisal Services, LLC dated February 25, 2011 for the U.S. Borrowers and dated May 6, 2011 for
the Initial Canadian Borrower and (b) thereafter, the most recent inventory appraisal conducted by
an independent appraisal firm and delivered pursuant to Section 10.1.15 hereof.



     Investment: for any Person: (a) the acquisition (whether for cash, property, services
or securities or otherwise) of Stock, Stock Equivalents, bonds, notes, debentures, partnership or
other ownership interests or other securities of any other Person (including any “short sale” or
any sale of any securities at a time when such securities are not owned by the Person entering into
such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not exceeding 364 days
arising in the Ordinary Course of Business; or (c) the entering into of any guarantee of, or other
contingent obligation with respect to, Indebtedness.



     IRS: the United States Internal Revenue Service.



     Joint Lead Arrangers: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays
Capital, the investment banking division of Barclays Bank PLC, and Wells Fargo Capital Finance,
LLC.



     LC Document: any of the Canadian LC Documents or the U.S. LC Documents.



     LC Obligations: U.S. LC Obligations and/or Canadian LC Obligations, as the context
requires.



     Lender Indemnitees: Lenders, Affiliates of Lenders and their respective officers,
directors, members, partners, employees and agents.



     Lenders: as defined in the preamble to this Agreement, including the Agent in its
capacity as U.S. Swingline Lender, the Canadian Swingline Lender, the U.S. Lenders and the Canadian
Lenders and their respective permitted successors and assigns and, where applicable, any Fronting
Bank, and any other Person who hereafter becomes a “Lender” pursuant to an Assignment and
Acceptance.



     Lending Office: the office designated as such by the Applicable Lender at the time it
becomes party to this Agreement or thereafter by notice to Agent and Loan Party Agent.



     Letter-of-Credit Right: as defined in the UCC, and in any event shall mean a right to
payment or performance under a letter of credit, whether or not the beneficiary has demanded or is
at the time entitled to demand payment of performance.



     Letters of Credit: the U.S. Letters of Credit and/or the Canadian Letters of Credit,
as the context requires.



34









 





     LIBOR: for any Interest Period with respect to a LIBOR Loan, the per annum rate of
interest (rounded up, if necessary, to the nearest 1/8th of 1%), determined by Agent at
approximately 11:00 a.m. (London time) two Business Days prior to commencement of such Interest
Period, for a term comparable to such Interest Period, equal to (a) the British Bankers Association
LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source
designated by Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate at
which Dollar deposits in the approximate amount of the LIBOR Loan would be offered by Bank of
America’s London branch to major banks in the London interbank Eurodollar market. If the Board of
Governors imposes a Reserve Percentage with respect to LIBOR deposits, then LIBOR shall be the
foregoing rate, divided by 1 minus the Reserve Percentage.



     LIBOR Loan: each set of LIBOR Revolver Loans having a common length and commencement
of Interest Period.



     LIBOR Revolver Loan: a Revolver Loan that bears interest based on LIBOR; provided,
however, that a Canadian Base Rate Loan bearing interest as set forth in clause (c) of the
definition of Canadian Base Rate, or a U.S. Base Rate Loan bearing interest as set forth in clause
(c) of the definition of U.S. Base Rate, shall not constitute a LIBOR Revolver Loan.



     Lien: any mortgage, pledge, security interest, hypothecation, assignment, statutory
trust, deemed trust, privilege, lien or similar encumbrance, whether statutory, based on common
law, contract or otherwise, and including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any reservation of ownership or any lease in
the nature thereof.



     Loan: a Revolver Loan.



     Loan Account: as defined in Section 5.7.1.



     Loan Documents: this Agreement, the Other Agreements and the Security Documents.



     Loan Parties: the Canadian Facility Loan Parties and the U.S. Facility Loan Parties,
collectively, and “Loan Party” means any of the Loan Parties, individually.



     Loan Party Agent: as defined in Section 4.4.



     Loan Party Group: a group consisting of (a) Canadian Facility Loan Parties or (b)
U.S. Facility Loan Parties.



     Loan Party Group Obligations: with respect to the Canadian Borrower Group and the
other Canadian Facility Loan Parties, the Canadian Facility Obligations, and with respect to the
U.S. Borrower Group and the other U.S. Facility Loan Parties, U.S. Facility Obligations.



     Material Adverse Change: any event or circumstance which has resulted or is
reasonably likely to result in a material adverse change in the business, assets, operations,
properties or financial condition of MRC and its Subsidiaries, taken as a whole or that would
materially adversely affect the ability of the Loan Parties, taken as a whole, to perform their
respective payment obligations under this Agreement or any of the other Loan Documents.



35









 





     Material Adverse Effect: a circumstance or condition affecting the business, assets,
operations, properties or financial condition of MRC and its Subsidiaries, taken as a whole, that
would materially adversely affect (a) the business, assets, operations, properties, or financial
condition of the Borrowers and their Subsidiaries, taken as a whole, (b) the ability of the Loan
Parties, taken as a whole, to perform their respective payment obligations under this Agreement or
any of the other Loan Documents or (c) the rights and remedies of the Agent and the Lenders under
this Agreement or any of the other Loan Documents.



     Material Subsidiary: at any date of determination, each Restricted Subsidiary of MRC
(a) whose total assets at the last day of the Test Period ending on the last day of the most recent
fiscal period for which financial statements have been delivered pursuant to Section 10.1.1 were
equal to or greater than 5% of the Consolidated Total Assets of MRC and its Restricted Subsidiaries
at such date or (b) whose gross revenues for such Test Period were equal to or greater than 5% of
the consolidated gross revenues of MRC and its Restricted Subsidiaries for such period, in each
case determined in accordance with GAAP.



     Maximum Canadian Facility Amount: on any date of determination, the lesser of (a) the
Canadian Revolver Commitments on such date and (b) Cdn$150,000,000 (or such greater or lesser
amount after giving effect to any reductions in the Commitments pursuant to Section 2.1.4 and/or to
any Canadian Revolver Commitment Increase made pursuant to and in accordance with Section 2.1.7);
it being acknowledged and agreed that at no time can the sum of the Dollar Equivalent of the
Maximum Canadian Facility Amount plus the Maximum U.S. Facility Amount exceed the Maximum Facility
Amount in effect at such time.



     Maximum Facility Amount: the sum of the (a) Dollar Equivalent of the Maximum Canadian
Facility Amount and (b) Maximum U.S. Facility Amount but, in any event, not to exceed
$1,300,000,000.



     Maximum U.S. Facility Amount: on any date of determination, the lesser of (a) the
U.S. Revolver Commitments on such date and (b) $900,000,000 (or such greater or lesser amount after
giving effect to any reductions in the Commitments pursuant to Section 2.1.4 and/or to any U.S.
Revolver Commitment Increase made pursuant to and in accordance with Section 2.1.7); it being
acknowledged and agreed that at no time can the sum of the Maximum U.S. Facility Amount plus the
Dollar Equivalent of the Maximum Canadian Facility Amount exceed the Maximum Facility Amount in
effect at such time.



     Moody’s: Moody’s Investors Service, Inc., and its successors.



     MRC: as defined in the preamble to this Agreement.



     Multiemployer Plan: any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which any Loan Party or ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions, but excluding, for greater certainty, any Canadian Multi-Employer Plan.



     Net Available Cash Account: as defined in Section 8.3.



36









 





     Net Orderly Liquidation Value: the orderly liquidation value (net of costs and
expenses estimated to be incurred in connection with such liquidation) of the Eligible Inventory
that is estimated to be recoverable in an orderly liquidation of such Eligible Inventory, as
determined from time to time by reference to the most recent Inventory Appraisal.



     Non-Bank Certificate: as defined in Section 5.9.2.



     Non-Core Assets: the assets described on Schedule 10.2.4.



     Notes: each Revolver Note or other promissory note executed by a Borrower to evidence
any Obligations.



     Notes Priority Lien Collateral: as defined in the Intercreditor Agreement.



     Notes Priority Lien Debt: as defined in the Intercreditor Agreement.



     Notes Priority Liens: as defined in the Intercreditor Agreement.



     Notice of Borrowing: a Notice of Borrowing to be provided by Loan Party Agent to
request a Borrowing of Loans, in the form attached hereto as Exhibit E or otherwise in form
reasonably satisfactory to Agent and Loan Party Agent.



     Notice of Conversion/Continuation: a Notice of Conversion/Continuation to be provided
by Loan Party Agent to request a conversion or continuation of any Loans as LIBOR Loans or Canadian
BA Rate Loans, in the form attached hereto as Exhibit F or otherwise in form reasonably
satisfactory to Agent and Loan Party Agent.



     Obligations: all (a) principal of and premium, if any, on the Loans, (b) LC
Obligations and other obligations of the Loan Parties with respect to Letters of Credit, (c)
interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts
payable by the Loan Parties under the Loan Documents and (d) other Indebtedness, obligations and
liabilities of any kind owing by the Loan Parties pursuant to the Loan Documents, whether now
existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any
Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit,
acceptance, loan, guarantee, indemnification or otherwise, and whether direct or indirect, absolute
or contingent, due or to become due, primary or secondary, or joint or several.



     Ordinary Course of Business: with respect to any Person, the ordinary course of
business of such Person, consistent with past practices or, with respect to actions taken by such
Person for which no past practice exists, consistent with past practices of similarly situated
companies, and, in each case, undertaken in good faith.



     Organic Documents: with respect to any Person, its charter, certificate or articles
of incorporation, continuation or amalgamation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement, partnership agreement,
certificate of partnership, certificate of formation, memorandum of association, voting trust
agreement, or similar agreement or instrument governing the formation or operation of such Person.



37









 





     Other Agreement: each: Note; LC Document; Fee Letter; Intercreditor Agreement;
Borrowing Base Certificate; Compliance Certificate; Subordination Agreement; or other document,
instrument, certificate, notice, report or agreement (other than this Agreement or a Security
Document) now or hereafter delivered by or on behalf of a Loan Party to Agent or a Lender in
connection with any transactions relating hereto.



     Other Taxes: all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made under any Loan Document or
from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.



     Overadvance: a Canadian Overadvance or U.S. Overadvance, as the context requires.



     Overadvance Loan: a Canadian Overadvance Loan and/or a U.S. Overadvance Loan, as the
context requires.



     Parent: McJunkin Red Man Holding Corporation, a Delaware corporation.



     Participant: as defined in Section 13.2.1.



     Participant Register: as defined in Section 13.2.1.



     Passive Entity: a Person that conducts no business activity other than the ownership
of Stock and has no Indebtedness other than Guarantee Obligations relating to its Subsidiaries.



     Patriot Act: the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).



     Payment Item: each check, draft or other item of payment payable to a Loan Party,
including those constituting proceeds of any Collateral.



     PBA: the Pensions Benefits Act (Ontario) or any other Canadian federal or provincial
or territorial pension benefit standards legislation pursuant to which any Canadian Pension Plan is
required to be registered.



     PBGC: the Pension Benefit Guaranty Corporation.



     Perfection Certificate: shall mean a certificate disclosing information regarding the
Loan Parties in the form of Exhibit G-1 with respect to the Canadian Facility Loan Parties, and in
the form of Exhibit G-2 with respect to the U.S. Facility Loan Parties or any other form approved
by the Agent and Loan Party Agent.



     Permitted Acquisition: the acquisition, by merger or otherwise, by any Borrower or
any of the Restricted Subsidiaries of assets or Stock or Stock Equivalents, so long as (a) such
acquisition and all transactions related thereto shall be consummated in accordance with Applicable
Law; (b) such acquisition shall result in the issuer of such Stock or Stock Equivalents becoming a
Restricted Subsidiary and a Guarantor, to the extent required by Section 10.1.13; (c)



38









 




such acquisition shall result in the Agent, for the benefit of the Secured Parties, being
granted a Lien in any Stock, Stock Equivalent or any assets so acquired, to the extent required by
Sections 10.1.13 and/or 10.1.16; (d) after giving effect to such acquisition, no Default or Event
of Default shall have occurred and be continuing; (e) after giving effect to such acquisition,
either (1) both (A) Excess Availability shall be greater than the higher of (x) 10% of the
Commitments and (y) $75,000,000 and (B) the Consolidated Fixed Charge Coverage Ratio determined as
of the most recent Test Period for which financial statements have been delivered pursuant to
Section 10.1.1 shall be greater than 1.0 to 1.0 or (2) Excess Availability shall be greater than
the higher of (x) 15% of the Commitments and (y) $125,000,000 and (f) any Indebtedness incurred to
finance the acquisition is permitted to be incurred by the Senior Secured Notes Indenture;
provided, that if (x) such acquisition satisfies all of the conditions set forth above except for
the conditions set forth in clause (e) above and (y) after giving effect to such acquisition,
either (1) Excess Availability is greater than the higher of (A) 10% of the Commitments and (B)
$75,000,000 or (2) the Consolidated Fixed Charge Coverage Ratio shall be greater than 1.0 to 1.0,
such acquisition shall be permitted provided that it, together with all other acquisitions
permitted under this proviso, do not exceed $50,000,000 in the aggregate.




     Notwithstanding the definition of U.S. Borrowing Base and Canadian Borrowing Base, in
connection with and subsequent to any Permitted Acquisition, the Accounts and Inventory acquired by
the Borrowers, or, subject to compliance with Section 10.1.13 of this Agreement, of the Person so
acquired, may be included in the calculation of the Borrowing Base and thereafter if all criteria
set forth in the definitions of Eligible Accounts and Eligible Inventory have been satisfied and,
if the aggregate value (or Cost in the case of Inventory) of such Accounts and Inventory is in
excess of $40,000,000 and only to the extent reasonably requested by the Agent, the Agent shall
have received a collateral audit and appraisal of such Accounts and Inventory acquired by the
applicable Borrower or Borrowers or owned by such Person acquired by the applicable Borrower or
Borrowers which shall be reasonably satisfactory in scope, form and substance to the Agent;
provided, that if no collateral audit and appraisal is delivered to and approved by the Agent with
respect to such Accounts and Inventory, then the lowest recovery rates from the current Inventory
Appraisal shall apply to such Accounts and Inventory.



     Permitted Additional Debt: senior unsecured or subordinated Indebtedness issued by a
Borrower or a Guarantor and, to the extent permitted by Section 10.2.1(b)(x), any Indebtedness
incurred by any other Restricted Subsidiary of MRC, (a) the terms of which (i) do not provide for
any scheduled repayment, mandatory redemption or sinking fund obligation prior to the date that is
180 days following the U.S. Revolver Commitment Termination Date (other than customary offers to
purchase upon a change of control, asset sale or event of loss and customary acceleration rights
after an event of default) and (ii) to the extent subordinated provide for customary subordination
to the Obligations under the Loan Documents, (b) the covenants, events of default, guarantees and
other terms of which (other than interest rate and redemption premiums), taken as a whole, are not
more restrictive to such Borrower and the Subsidiaries than those in this Agreement or the Senior
Secured Notes Indenture; provided that a certificate of a Senior Officer of such Borrower is
delivered to the Agent at least five Business Days (or such shorter period as the Agent may
reasonably agree) prior to the incurrence of such Indebtedness, together with a reasonably detailed
description of the material terms and conditions of such Indebtedness or drafts of the
documentation relating thereto, stating that such Borrower has determined in good faith that such
terms and conditions satisfy the foregoing requirement shall



39









 




be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless
the Agent notifies such Borrower within such period that it disagrees with such determination
(including a reasonable description of the basis upon which it disagrees), and (c) of which, except
to the extent permitted by Section 10.2.1(b)(x), no Subsidiary of MRC (other than a Loan Party) is
an obligor.




     Permitted Discretion: a determination made by Agent, in the exercise of its
reasonable credit judgment (from the perspective of a secured asset-based lender), exercised in
good faith and subject to Section 7.5.



     Permitted Investments: shall mean:



     (a) securities issued or unconditionally guaranteed by the United States of America or the
Canadian government or any agency or instrumentality thereof, in each case having maturities of not
more than 12 months from the date of acquisition thereof;



     (b) securities issued by any state of the United States of America or any province or
territory of Canada, or any political subdivision of any such state, province or territory, or any
public instrumentality thereof or any political subdivision of any such state, province or
territory, or any public instrumentality thereof having maturities of not more than 12 months from
the date of acquisition thereof and, at the time of acquisition, having an investment grade rating
generally obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall
be rating such obligations, then from another nationally recognized rating service);



     (c) commercial paper issued by any Lender or any bank holding company owning any Lender;



     (d) commercial paper maturing no more than 12 months after the date of creation thereof and,
at the time of acquisition, having a rating of at least A-1 or P-1 from either S&P or Moody’s (or,
if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from
another nationally recognized rating service);



     (e) domestic and LIBOR certificates of deposit or bankers’ acceptances maturing no more than
two years after the date of acquisition thereof issued by any Lender or any other bank having
combined capital and surplus of not less than $250,000,000 in the case of domestic banks;



     (f) repurchase agreements with a term of not more than 30 days for underlying securities of
the type described in clauses (a), (b) and (e) above entered into with any bank meeting the
qualifications specified in clause (e) above or securities dealers of recognized national standing;



     (g) marketable short-term money market and similar funds (x) either having assets in excess of
$250,000,000 or (y) having a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if at
any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from
another nationally recognized rating service);



40









 





     (h) shares of investment companies that are registered under the Investment Company Act of
1940 and substantially all the investments of which are one or more of the types of securities
described in clauses (a) through (g) above; and



     (i) in the case of Investments by any Restricted Foreign Subsidiary or Investments made in a
country outside the United States of America or Canada, Permitted Investments shall also include
(i) direct obligations of the sovereign nation (or any agency thereof) in which such Restricted
Foreign Subsidiary is organized and is conducting business or where such Investment is made, or in
obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof),
in each case maturing within a two years after such date and having, at the time of the acquisition
thereof, a rating equivalent to at least A-1 from S&P and at least P-1 from Moody’s, (ii)
investments of the type and maturity described in clauses (a) through (h) above of foreign
obligors, which Investments or obligors (or the parents of such obligors) have ratings described in
such clauses or equivalent ratings from comparable foreign rating agencies, (iii) shares of money
market mutual or similar funds which invest exclusively in assets otherwise satisfying the
requirements of this definition (including this proviso) and (iv) other short-term investments
utilized by Foreign Restricted Subsidiaries in accordance with normal investment practices for cash
management in investments analogous to the foregoing investments in clauses (a) through (i).



     Permitted Liens: shall mean:



     (a) Liens for taxes, assessments or governmental charges or claims not yet due or which are
being contested in good faith and by appropriate proceedings for which appropriate reserves have
been established in accordance with GAAP;



     (b) Liens in respect of property or assets of any Borrower or any of the Subsidiaries imposed
by law, such as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens arising in
the Ordinary Course of Business, in each case so long as such Liens arise in the Ordinary Course of
Business and do not individually or in the aggregate have a Material Adverse Effect;



     (c) Liens arising from judgments or decrees in circumstances not constituting an Event of
Default under Section 11.1;



     (d) Liens incurred or deposits made in connection with workers’ compensation, unemployment
insurance and other types of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the Ordinary Course of Business or
otherwise constituting Investments permitted by Section 10.2.5;



     (e) ground leases in respect of real property on which facilities owned or leased by a
Borrower or any of its Subsidiaries are located;



     (f) easements, rights-of-way, servitudes, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering in any material respect with the
business of any Borrower and its Subsidiaries, taken as a whole;



41









 





     (g) any interest or title of a lessor or secured by a lessor’s interest under any lease
permitted by this Agreement;



     (h) Liens in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods;



     (i) Liens on goods the purchase price of which is financed by a documentary letter of credit
issued for the account of a Borrower or any of its Subsidiaries, provided that such Lien secures
only the obligations of such Borrower or such Subsidiaries in respect of such letter of credit to
the extent permitted under Section 10.2.1(b);



     (j) leases or subleases granted to others not interfering in any material respect with the
business of any Borrower and its Subsidiaries, taken as a whole;



     (k) Liens arising from precautionary Uniform Commercial Code financing statements, PPSA
financing statements or similar filings made in respect of operating leases entered into by any
Borrower or any of its Subsidiaries; and



     (l) Liens created in the Ordinary Course of Business in favor of banks and other financial
institutions over credit balances of any bank accounts of any Borrower and the Restricted
Subsidiaries held at such banks or financial institutions, as the case may be, to facilitate the
operation of cash pooling and/or interest set-off arrangements in respect of such bank accounts in
the Ordinary Course of Business.



     Permitted Sale Leaseback: any Sale Leaseback consummated by any Borrower or any of
the Restricted Subsidiaries after the Closing Date, provided that any such Sale Leaseback not
between a Borrower and any Guarantor or any Guarantor and another Guarantor is consummated for fair
value as determined at the time of consummation in good faith by such Borrower or such Restricted
Subsidiary and, in the case of any Sale Leaseback (or series of related Sales Leasebacks) the
aggregate proceeds of which exceed $25,000,000, the board of directors of such Borrower or such
Restricted Subsidiary (which such determination may take into account any retained interest or
other Investment of such Borrower or such Restricted Subsidiary in connection with, and any other
material economic terms of, such Sale Leaseback).



     Person: any individual, corporation, limited liability company, unlimited liability
company, partnership, joint venture, joint stock company, land trust, business trust,
unincorporated organization, Governmental Authority or other entity.



     Plan: any “employee benefit plan” (as defined in Section 3(3) of ERISA), and any
payroll practice and other employee benefit plan, policy, program, agreement or arrangement,
including retirement, pension, profit sharing, employment, individual consulting or other
compensation agreement, collective bargaining agreement, bonus or other incentive compensation,
retention, stock purchase, equity or equity-based compensation, deferred compensation, change in
control, severance, sick leave, vacation, loans, salary continuation, hospitalization, health, life
insurance, educational assistance, or other fringe benefit or perquisite plan, policy, agreement
which is or was sponsored, maintained or contributed to by, or required to be contributed to by,
any Loan Party or Affiliate thereof or with respect to which a Loan Party



42









 




or ERISA Affiliate has or could have any obligation or liability, contingent or otherwise, but
excluding, for greater certainty, a Canadian Employee Plan.




     Pledged Collateral: as defined in Section 7.3.1.



     Pledged Debt Securities: as defined in Section 7.3.1.



     Pledged Stock: as defined in Section 7.3.1.



     Post-Acquisition Period: with respect to any Permitted Acquisition, the period
beginning on the date such Permitted Acquisition is consummated and ending on the last day of the
fourth full consecutive fiscal quarter immediately following the date on which such Permitted
Acquisition is consummated.



     PPSA: the Personal Property Security Act (Alberta), (or any successor statute) and
the regulations thereunder; provided, however, if validity, perfection and effect of perfection and
non-perfection and opposability of the Agent’s security interest in and Lien on any Collateral of
any Loan Party are governed by the personal property security laws of any jurisdiction other than
Alberta, PPSA shall mean those personal property security laws (including the Civil Code) in such
other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection,
and effect of perfection and non-perfection and for the definitions related to such provisions, as
from time to time in effect.



     Proceeds of Crime Act: the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) (or any successor statute), as amended from time to time, and includes all
regulations thereunder.



     Pro Forma Adjustment: for any Test Period that includes all or any part of a fiscal
quarter included in any Post-Acquisition Period, with respect to the Acquired EBITDA of the
applicable Acquired Entity or Business or the Consolidated EBITDA of the Borrowers, the pro forma
increase or decrease in such Acquired EBITDA or such Consolidated EBITDA, as the case may be,
projected by the Borrowers in good faith as a result of (a) actions taken or expected to be taken
during such Post-Acquisition Period for the purposes of realizing reasonably identifiable and
factually supportable cost savings or (b) any additional costs incurred during such
Post-Acquisition Period, in each case in connection with the combination of the operations of such
Acquired Entity or Business with the operations of the Borrowers and the Restricted Subsidiaries;
provided that, so long as such actions are taken or expected to be taken during such
Post-Acquisition Period or such costs are incurred during such Post-Acquisition Period, as
applicable, it may be assumed, for purposes of projecting such pro forma increase or decrease to
such Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such cost savings will
be realizable during the entirety of such Test Period, or such additional costs, as applicable,
will be incurred during the entirety of such Test Period; provided further that any such pro forma
increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall
be without duplication for cost savings or additional costs already included in such Acquired
EBITDA or such Consolidated EBITDA, as the case may be, for such Test Period.



43









 





     Pro Forma Adjustment Certificate: any certificate of a Senior Officer of the Loan
Party Agent delivered pursuant to Section 10.1.1(e).



     Pro Forma Basis and Pro Forma Compliance: with respect to compliance with any
test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustment shall have
been made and (B) all Specified Transactions and the following transactions in connection therewith
shall be deemed to have occurred as of the first day of the applicable period of measurement in
such test or covenant: (a) income statement items (whether positive or negative) attributable to
the property or Person subject to such Specified Transaction, (i) in the case of a sale, transfer
or other disposition of all or substantially all Stock in any Subsidiary of any Loan Party or any
division, product line, or facility used for operations of any Loan Party or any of its
Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition or Investment
described in the definition of “Specified Transaction”, shall be included, (b) any retirement of
Indebtedness, and (c) any Indebtedness incurred or assumed by any Loan Party or any of the
Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula
rate, shall have an implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination; provided that, without limiting the
application of the Pro Forma Adjustment pursuant to (A) above, the foregoing pro forma adjustments
may be applied to any such test or covenant solely to the extent that such adjustments are
consistent with the definition of Consolidated EBITDA and give effect to events (including
operating expense reductions) that are (i) (x) directly attributable to such transaction, (y)
expected to have a continuing impact on the Loan Parties and the Restricted Subsidiaries and (z)
factually supportable or (ii) otherwise consistent with the definition of Pro Forma Adjustment.



     Pro Forma Consolidated Fixed Charge Coverage Ratio: with respect to compliance with
any covenant or test hereunder, the Consolidated Fixed Coverage Ratio as calculated on the assumed
basis that the applicable dividend or payment in respect of Subordinated Indebtedness was included
as one of the Consolidated Fixed Charges.



     Pro Forma Entity: as defined in “Acquired EBITDA”.



     Property: any interest in any kind of property or asset, whether real (immovable),
personal (movable) or mixed, or tangible (corporeal) or intangible (incorporeal).



     Pro Rata: (a) when used with reference to a Lender’s (i) share on any date of the
total Borrower Group Commitments to a Borrower Group, (ii) participating interest in LC Obligations
(if applicable) to the members of such Borrower Group, (iii) share of payments made by the members
of such Borrower Group with respect to such Borrower Group’s Obligations, (iv) increases or
reductions to the Canadian Revolver Commitments or the U.S. Revolver Commitments pursuant to
Section 2.1.4 or 2.1.7, and (v) obligation to pay or reimburse Agent for Extraordinary Expenses
owed by or in respect of such Borrower Group or to indemnify any Indemnitees for Claims relating to
such Borrower Group, a percentage (expressed as a decimal, rounded to the ninth decimal place)
derived by dividing the amount of the Borrower Group Commitment of such Lender to such Borrower
Group on such date by the aggregate amount of the Borrower Group Commitments of all Lenders to such
Borrower Group on such date (or if such Borrower Group Commitments have been terminated, by
reference to the respective




44











 




Borrower Group Commitments as in effect immediately prior to the termination thereof) or (b)
when used for any other reason, a percentage (expressed as a decimal, rounded to the ninth decimal
place) derived by dividing the aggregate amount of the Lender’s Commitments on such date by the
aggregate amount of the Commitments of all Lenders on such date (or if any such Commitments have
been terminated, such Commitments as in effect immediately prior to the termination thereof).




     Protective Advances: Canadian Protective Advances and/or U.S. Protective Advances, as
the context requires.



     Qualified IPO: any underwritten sale to the public of MRC’s, Parent’s or any direct
or indirect parent of Parent’s (or its successor’s) Stock pursuant to an effective registration
statement filed with the SEC on Form S-1 or Form S-3 (or any successor forms adopted by the SEC)
after which MRC’s, Parent’s or any direct or indirect parent of Parent’s (or its successor’s) Stock
is listed on a United States national securities exchange or the NASDAQ stock market; provided that
a Qualified IPO shall not include any issuance of Stock in any merger or other business
combination, and shall not include any registration of the issuance of Stock to existing
securityholders or employees of MRC, Parent or any direct or indirect parent of Parent and their
respective Subsidiaries on Form S-4 or Form S-8 (or any successor form adopted by the SEC).



     Real Estate: as defined in Section 10.1.1(i).



     Records: as defined in the UCC, and in any event means information that is inscribed
on a tangible medium or which is stored in an electronic or other medium and is retrievable in
perceivable form, including, all books and records, customer lists, files, correspondence, tapes,
computer programs, print outs and computer records.



     Register: as defined in Section 13.1.



     Report: as defined in Section 12.2.3.



     Reportable Event: the occurrence of any of the events set forth in Section 4043(b) or
(c) of ERISA and regulations thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived).



     Required Borrower Group Lenders: at any date of determination thereof, Lenders having
Borrower Group Commitments to a Borrower Group representing more than 50% of the aggregate Borrower
Group Commitments to such Borrower Group at such time; provided, however, that if and for so long
as any such Lender shall be a Defaulting Lender, the term “Required Borrower Group Lenders” shall
mean Lenders (excluding such Defaulting Lender) having Borrower Group Commitments to such Borrower
Group representing more than 50% of the aggregate Borrower Group Commitments to such Borrower Group
(excluding the Borrower Group Commitments of each Defaulting Lender) at such time; provided
further, however, that if all of the Borrower Group Commitments to such Borrower Group have been
terminated, the term “Required Borrower Group Lenders” shall mean Lenders to such Borrower Group
holding Revolver Loans to, and (if applicable) participating interest in LC Obligations owing by,
such Borrower Group representing more than 50% of the aggregate outstanding principal amount of
Revolver Loans and (if applicable) LC Obligations owing by such Borrower Group at such time.



45









 





     Required Lenders: at any date of determination thereof, Lenders having Borrower Group
Commitments representing more than 50% of the aggregate Borrower Group Commitments at such time;
provided, however, that for so long as any Lender shall be a Defaulting Lender, the term “Required
Lenders” shall mean Lenders (excluding such Defaulting Lender) having Commitments representing more
than 50% of the aggregate Commitments (excluding the Commitments of each Defaulting Lender) at such
time; provided further, however, that if any of the Borrower Group Commitments have been
terminated, the term “Required Lenders” shall be calculated using (a) in lieu of such Lender’s
terminated Borrower Group Commitment, the outstanding principal amount of the Revolver Loans by
such Lender to, and (if applicable) participation interests in LC Obligations owing by, such
Borrower Group and (b) in lieu of the aggregate Commitments under such terminated Borrower Group
Commitment, the aggregate outstanding Revolver Loans to, and (if applicable) LC Obligations owing
by such Borrower Group.



     Requirement of Law: as to any Person, the Organic Documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.



     Reserves: U.S. Availability Reserves and/or Canadian Availability Reserves, as the
context requires.



     Restricted Foreign Subsidiary: a Foreign Subsidiary that is a Restricted Subsidiary.



     Restricted Subsidiary: any Subsidiary of any Borrower other than an Unrestricted
Subsidiary.



     Reserve Percentage: the reserve percentage (expressed as a decimal, rounded up to the
nearest 1/8th of 1%) applicable to member banks under regulations issued by the Board of Governors
for determining the maximum reserve requirement for Eurocurrency liabilities.



     Revolver Commitment Increase and Revolver Commitment Increases: as defined in
Section 2.1.7(a).



     Revolver Loan: a loan made pursuant to Section 2.1.1, and any Overadvance Loan,
Swingline Loan or Protective Advance.



     Revolver Notes: collectively, the U.S. Revolver Notes and the Canadian Revolver
Notes.



     S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., and its successors.



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



46









 





     SEC: means the Securities and Exchange Commission or any successor thereto and, as
the context may require, any analogous Governmental Authority in any other relevant jurisdiction of
the Parent or any Subsidiary.



     Secured Bank Product Obligations: Bank Product Debt owing to a Secured Bank Product
Provider and evidenced by one or more Bank Product Documents that the Loan Party Agent, in a
written notice to Agent, has expressly requested be treated as Secured Bank Product Obligations for
purposes hereof, up to the maximum amount (in the case of any Secured Bank Product Provider other
than Bank of America and its Affiliates) specified by such provider in writing to Agent, which
amount may be established and increased or decreased by further written notice to Agent from time
to time.



     Secured Bank Product Provider: (a) Bank of America or any of its Affiliates; and (b)
any other Lender or Affiliate of a Lender that is providing a Bank Product; provided that such
provider shall deliver a written notice to Agent, in form and substance reasonably satisfactory to
Agent and Loan Party Agent, by the later of the Closing Date or 10 Business Days (or such later
time as Agent and Loan Party Agent may agree in their reasonable discretion) following creation of
the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be
secured by the Collateral and the methodology to be used in calculating such amount, and (ii) if
such provider is not a Lender, agreeing to be bound by Section 12.13.



     Secured Leverage Ratio: as of any date of determination, the ratio of (a)
Consolidated Secured Debt as of the most recent Test Period for which financial statements have
been delivered pursuant to Section 10.1.1 to (b) Consolidated EBITDA for such Test Period.



     Secured Obligations: Obligations and Secured Bank Product Obligations, including in
each case those under all Credit Documents.



     Secured Parties: Canadian Facility Secured Parties, U.S. Facility Secured Parties and
Secured Bank Product Providers.



     Securities Account Control Agreement: the securities account control agreements, in
form and substance reasonably satisfactory to Agent and Loan Party Agent, executed by each
financial institution maintaining a Securities Account for a Loan Party, in favor of Agent.



     Securities Accounts: all present and future “securities accounts” (as defined in
Article 8 of the UCC or the PPSA, as applicable), including all monies, “uncertificated
securities,” “securities entitlements” and other “financial assets” (as defined in Article 8 of the
UCC or the PPSA, as applicable) contained therein.



     Security Documents: this Agreement, the Guarantees, Insurance Assignments, Canadian
Security Agreements, the Deposit Account Control Agreements, the Securities Account Control
Agreements and all other documents, instruments and agreements now or hereafter securing (or given
with the intent to secure) any Secured Obligations.



     Senior Officer: the President, the Chief Financial Officer, the Principal Accounting
Officer, the Treasurer, the Controller or any other senior officer of a Person designated as such
in writing to the Agent by such Person.



47









 





     Senior Secured Notes: the senior secured notes of MRC issued from time to time
pursuant to the Senior Secured Notes Indenture and any registered notes issued by MRC in exchange
for, and as contemplated by, such notes with substantially identical terms as such notes, as any
such notes may be amended, restated, supplemented, replaced, increased, refinanced or otherwise
modified from time to time in accordance with the terms of the Intercreditor Agreement.



     Senior Secured Notes Indenture: that certain Indenture, dated as of December 21,
2009, by and among MRC, Parent, the Credit Support Parties (as defined therein) party thereto, and
U.S. Bank National Association, as trustee, as the same may be amended, restated, supplemented,
replaced, increased, refinanced or otherwise modified from time to time in accordance with the
terms of the Intercreditor Agreement.



     Settlement Report: a report delivered by the Agent to the Applicable Lenders
summarizing the Revolver Loans and, if applicable, participations in LC Obligations of the
applicable Borrower Group outstanding as of a given settlement date, allocated to the Applicable
Lenders on a Pro Rata basis in accordance with their Revolver Commitments.



     Sold Entity or Business: as defined in the definition of the term “Consolidated
EBITDA”.



     Solidary Claim: as defined in Section 12.1.1(b).



     Solvent: as it relates to (a) the Loan Parties, taken as a whole, (w) are adequately
capitalized, (x) own assets, the value of which, on a going concern basis, exceed their
liabilities, (y) will have sufficient working capital to pay their debts as they become due and (z)
have not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or
otherwise), or made any conveyance in connection therewith, in each case, with actual intent to
hinder, delay or defraud either present or future creditors of such Persons or any of their
Affiliates; and (b) (i) as to any other Person (other than a Person incorporated or organized under
the laws of the Canada or any province or territory of Canada), such Person (u) owns Property whose
fair salable value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (v) owns Property whose present
fair salable value (as defined below) is greater than the probable total liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become
absolute and matured; (w) is able to pay all of its debts as they mature; (x) has capital that is
not unreasonably small for its business and is sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage; (y) is not “insolvent” within the
meaning of Section 101(32) of the U.S. Bankruptcy Code; and (z) has not incurred (by way of
assumption or otherwise) any obligations or liabilities (contingent or otherwise) or made any
conveyance in connection therewith, with actual intent to hinder, delay or defraud either present
or future creditors of such Person or any of its Affiliates and (ii) as to any other Person
incorporated or organized under the laws of the Canada or any province or territory of Canada, is
not an “insolvent person” as defined in the Bankruptcy and Insolvency Act (Canada). “Fair salable
value” means the amount that could be obtained for assets within a reasonable time, either through
collection or through sale under ordinary selling conditions by a



48









 




capable and diligent seller to an interested buyer who is willing (but under no compulsion) to
purchase.




     Specified Revolving Credit Collateral: all Letter-of-Credit Rights, Chattel Paper,
Instruments, Investment Property and General Intangibles pertaining to the property described in
clauses (i) and (ii) of Section 7.1 of this Agreement.



     Specified Subsidiary: at any date of determination (a) any Material Subsidiary or (b)
any Unrestricted Subsidiary (i) whose total assets at the last day of the Test Period ending on the
last day of the most recent fiscal period for which financial statements pursuant to Section 10.1.1
have been delivered were equal to or greater than 15% of the Consolidated Total Assets of the
Parent and the Subsidiaries at such date or (ii) whose gross revenues for such Test Period were
equal to or greater than 15% of the consolidated gross revenues of the Parent and the Subsidiaries
for such period, in each case determined in accordance with GAAP and (c) each other Subsidiary
that, when such Subsidiary’s total assets or gross revenues are aggregated with the total assets or
gross revenues, as applicable, of each other Subsidiary that is the subject of an Event of Default
described in Section 11.1.5 would constitute a Specified Subsidiary under clause (a) or (b) above.



     Specified Transaction: with respect to any period, any Investment, sale, transfer or
other disposition of assets, incurrence or repayment of Indebtedness, Dividend, Subsidiary
designation, Revolver Commitment Increase or other event that by the terms of this Agreement
requires “Pro Forma Compliance” with a test or covenant hereunder or requires such test or
covenant to be calculated on a “Pro Forma Basis.”



     Sponsor: GS Capital Partners V Fund, L.P. and its respective Affiliates.



     Stock: shares of capital stock or shares in the capital, as the case may be (whether
denominated as common stock or preferred stock or ordinary shares or preferred shares, as the case
may be), beneficial, partnership or membership interests, participations or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited liability company or
equivalent entity, whether voting or non-voting.



     Stock Equivalents: all securities convertible into or exchangeable for Stock and all
warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently
convertible, exchangeable or exercisable.



     Subordinated Indebtedness: Indebtedness of any Loan Party that is expressly
subordinate and junior in right of payment to the Obligations of such Loan Party under this
Agreement and is on subordination terms no less favorable to the Lenders than as is customary for
senior subordinated notes issued in a public or Rule 144A high yield debt offering, it being
understood that delivery to the Agent at least ten Business Days prior to the incurrence of such
Indebtedness of a certificate of a Senior Officer of a Borrower (together with a reasonably
detailed description of the subordination terms and conditions of such Indebtedness or drafts of
the documentation relating thereto) certifying that such Borrower has determined in good faith that
such subordination terms and conditions satisfy the foregoing requirements shall be conclusive
evidence that such terms and conditions satisfy such requirement unless the Agent notifies such



49









 




Borrower within such ten Business Day period that it disagrees with such determination
(including a reasonable description of the basis upon which it disagrees)




     Subordination Agreement: that certain Postponement and Subordination Agreement dated
as of June 14, 2011, among McJunkin Red Man Canada Ltd., an Alberta corporation, Midfield Holdings
(Alberta) Ltd., an Alberta corporation, the Initial Canadian Borrower and Bank of America, as Agent
and Lender.



     Subsidiary: with respect to any Person shall mean and include (a) any corporation
more than 50% of whose Stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of whether or not at
the time Stock of any class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (b) any partnership, association, joint venture or other entity
in which such Person directly or indirectly through Subsidiaries has more than a 50% equity
interest at the time. Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of any Borrower.



     Successor Borrower: as defined in Section 10.2.3(a).



     Super-Majority Borrower Group Lenders: at any date of determination thereof, Lenders
having Borrower Group Commitments to a Borrower Group representing more than 75% of the aggregate
Borrower Group Commitments to such Borrower Group at such time; provided, however, that if and for
so long as any such Lender shall be a Defaulting Lender, the term “Super-Majority Borrower Group
Lenders” shall mean Lenders (excluding such Defaulting Lender) having Borrower Group Commitments to
such Borrower Group representing more than 75% of the aggregate Borrower Group Commitments to such
Borrower Group (excluding the Borrower Group Commitments of each Defaulting Lender) at such time;
provided further, however, that if all of the Borrower Group Commitments to such Borrower Group
have been terminated, the term “Super-Majority Borrower Group Lenders” shall mean Lenders to such
Borrower Group holding Revolver Loans to, and (if applicable) participating interest in LC
Obligations owing by, such Borrower Group representing more than 75% of the aggregate outstanding
principal amount of Revolver Loans and (if applicable) LC Obligations owing by such Borrower Group
at such time.



     Super-Majority Lenders: at any date of determination thereof, Lenders having Borrower
Group Commitments representing more than 75% of the aggregate Borrower Group Commitments at such
time; provided, however, that for so long as any Lender shall be a Defaulting Lender, the term
“Super-Majority Lenders” shall mean Lenders (excluding such Defaulting Lender) having Commitments
representing more than 75% of the aggregate Commitments (excluding the Commitments of each
Defaulting Lender) at such time; provided further, however, that if any of the Borrower Group
Commitments have been terminated, the term “Super-Majority Lenders” shall be calculated using (a)
in lieu of such Lender’s terminated Borrower Group Commitment, the outstanding principal amount of
the Revolver Loans by such Lender to, and (if applicable) participation interests in LC Obligations
owing by, such Borrower Group and (b) in lieu of the aggregate Commitments under such terminated
Borrower Group



50









 




Commitment, the aggregate outstanding Revolver Loans to, and (if applicable) LC Obligations
owing by such Borrower Group.




     Supporting Obligations: as defined in the UCC, and in any event means a
Letter-of-Credit Right or secondary obligation that supports the payment or performance of an
Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property,
including, but not limited to, securities, Investment Property, bills, notes, lien notes,
judgments, chattel mortgages, mortgages, security interests, hypothecs, assignments, guarantees,
suretyships, accessories, bills of exchange, negotiable instruments, invoices and all other rights,
benefits and documents now or hereafter taken, vested in or held by a Person in respect of or as
security for the same and the full benefit and advantage thereof, and all rights of action or
claims which a Person now has or may at any time hereafter have against any other Person in respect
thereof, including rights in its capacity as seller of any property or assets returned, repossessed
or recovered, under an installment or conditional sale or otherwise.



     Swingline Commitment: U.S. Swingline Commitment and/or Canadian Swingline Commitment,
as the context requires.



     Swingline Commitment Termination Date: U.S. Swingline Commitment Termination Date
and/or Canadian Swingline Commitment Termination Date, as the context requires.



     Swingline Lender: U.S. Swingline Lender and/or Canadian Swingline Lender, as the
context requires.



     Swingline Loan: a loan made pursuant to Section 2.1.8.



     Taxes: all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other similar charges imposed in the nature of taxation by any
Governmental Authority, including any interest, additions to tax or penalties applicable thereto.



     Temporary Eligibility Period: the period of sixty (60) days after the Closing Date,
or such longer period as the Agent shall approve; provided, such period shall not exceed one
hundred twenty (120) days after the Closing Date without the approval of the Required Lenders.



     Termination Event: (a) the voluntary full or partial wind up of a Canadian Pension
Plan that is a registered pension plan by a Canadian Facility Loan Party; (b) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or have a trustee
appointed to administer such a plan; or (c) any other event or condition which might constitute
grounds for the termination of, winding up or partial termination of winding up or the appointment
of trustee to administer, any such plan.



     Test Period: for any determination under this Agreement, the four consecutive fiscal
quarters of MRC then last ended.



     Total Canadian Borrowing Base: at any time, an amount equal to the sum of, without
duplication:



51









 






     (a) the book value of Canadian Eligible Accounts of all Canadian Borrowers multiplied
by the advance rate of 85%, plus




     (b) the lesser of (i) 70% of the net book value of Canadian Eligible Inventory of all
Canadian Borrowers (adding back the LIFO reserve calculated in accordance with GAAP) and
(ii) Net Orderly Liquidation Value of Canadian Eligible Inventory of all Canadian Borrowers
(which shall be (A) net of the current monthly shrinkage reserve calculated in accordance
with GAAP and (B) valued at Cost) multiplied by the advance rate of 85%, minus




     (c) subject to Section 7.5, effective (i) immediately upon or (ii) five (5) Business
Days after, in the case of Canadian Availability Reserves which would cause the aggregate
amount of the Canadian Revolver Loans of all Canadian Borrowers at such time to exceed the
lesser of the Canadian Revolver Commitments and the Total Canadian Borrowing Base then in
effect, in each case, notification thereof to the Canadian Borrowers by the Agent, any and
all Canadian Availability Reserves.


The Total Canadian Borrowing Base at any time shall be determined by reference to the most recent
Borrowing Base Certificate theretofore delivered to the Agent with such adjustments as the Agent
deems appropriate in its Permitted Discretion to assure that the Total Canadian Borrowing Base is
calculated in accordance with the terms of this Agreement.




     Total Revolver Exposure: as of any date of determination the sum of the Dollar
Equivalent of the Canadian Revolver Exposure and the U.S. Revolver Exposure on such date of
determination.



     Transaction Expenses: any fees or expenses incurred or paid by any Borrower or any of
its Subsidiaries in connection with this Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby.



     Transfer: as defined in Section 2.1.6(b).



     Transfer Date: as defined in Section 2.1.6(b).



     Transferee: any actual or potential Eligible Assignee, Participant or other Person
acquiring an interest in any Obligations.



     Type: any type of a Loan (i.e., U.S. Base Rate Loan, LIBOR Loan, Canadian BA Rate
Loan, Canadian Base Rate Loan, or Canadian Prime Rate Loan) and which shall be either an Interest
Period Loan or a Floating Rate Loan.



     UCC: the Uniform Commercial Code as in effect in the State of New York or, when the
laws of any other jurisdiction govern the creation, perfection, priority or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction.



     Unfunded Current Liability: of any (i) Plan shall mean the amount, if any, by which
the present value of the accrued benefits under the Plan as of the close of its most recent plan
year, determined in accordance with Statement of Financial Accounting Standards No. 87 as in effect



52









 




on the date hereof, based upon the actuarial assumptions that would be used by the Plan’s
actuary in a termination of the Plan, exceeds the fair market value of the assets allocable
thereto, and (ii) Canadian Pension Plan shall mean the excess of the present value of the benefit
liabilities determined on a plan termination basis in accordance with actuarial assumptions over
the current value of the assets, and in any event includes any unfunded liability, solvency
liability or wind up deficiency in respect of any Canadian Pension Plan.




     Unrestricted Subsidiary: (a) any Subsidiary of any Borrower that is formed or
acquired after the Closing Date, provided that at such time (or promptly thereafter) such Borrower
designates such Subsidiary an Unrestricted Subsidiary in a written notice to the Agent, (b) any
Restricted Subsidiary subsequently re-designated as an Unrestricted Subsidiary by the applicable
Borrower in a written notice to the Agent, provided that in the case of (a) and (b), (x) such
designation or re-designation shall be deemed to be an Investment on the date of such designation
or re-designation in an Unrestricted Subsidiary in an amount equal to the sum of (i) such
Borrower’s direct or indirect equity ownership percentage of the net worth of such designation or
re-designated Restricted Subsidiary immediately prior to such designation or re-designation (such
net worth to be calculated without regard to any guarantee provided by such designated or
re-designated Restricted Subsidiary) and (ii) the aggregate principal amount of any Indebtedness
owed by such designated or re-designated Restricted Subsidiary to such Borrower or any other
Restricted Subsidiary immediately prior to such designated or re-designation, all calculated,
except as set forth in the parenthetical to clause (i), on a consolidated basis in accordance with
GAAP and (y) no Default or Event of Default would result from such designation or re-designation
and (c) each Subsidiary of an Unrestricted Subsidiary; provided, however, that at the time of any
written designation or re-designation by the applicable Borrower to the Agent that any Unrestricted
Subsidiary shall no longer constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary
shall cease to be an Unrestricted Subsidiary to the extent no Default or Event of Default would
result from such designation or re-designation. On or promptly after the date of its formation,
acquisition, designation or re-designation, as applicable, each Unrestricted Subsidiary (other than
an Unrestricted Subsidiary that is (x) a Foreign Subsidiary, (y) any Domestic Subsidiary of a
non-U.S. Subsidiary (that is a “controlled foreign corporation” within the meaning of Section 957
of the Code) or (z) any U.S. Subsidiary, substantially all of the assets of which are Stock of one
or more “controlled foreign corporations” within the meaning of Section 957 of the Code) shall have
entered into a tax sharing agreement containing terms that, in the reasonable judgment of the
Agent, provide for an appropriate allocation of tax liabilities and benefits. An Unrestricted
Subsidiary which has been re-designated as a Restricted Subsidiary may not be subsequently
re-designated as an Unrestricted Subsidiary.



     U.S. Assignment of Claims Act: Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41
U.S.C. § 15, as amended.



     U.S. Availability: as of any date of determination, (a) the lesser of (i) the U.S.
Revolver Commitments minus all U.S. LC Obligations as of such date of determination and (ii) the
U.S. Borrowing Base as of such date of determination, minus (b) the principal balance of all U.S.
Revolver Loans.



53









 





     U.S. Availability Reserves: the sum (without duplication) of (a) the aggregate amount
of the U.S. Rent Reserve, if any, established pursuant to clause (h) of the definition of U.S.
Eligible Inventory; (b) the U.S. LC Reserve, (c) the U.S. Bank Product Reserve; (d) the Canadian
Overadvance Loan Balance, if any, outstanding on such date; and (e) such additional reserves, in
such amounts and with respect to such matters, as Agent may establish in its Permitted Discretion.



     U.S. Bank Product Reserve: the aggregate amount of reserves, as established by the
Agent from time to time in its Permitted Discretion and in consultation with Loan Party Agent, to
reflect the reasonably anticipated liabilities in respect of the then outstanding Secured Bank
Product Obligations of the U.S. Facility Loan Parties and their Subsidiaries.



     U.S. Bankruptcy Code: Title 11 of the United States Code.



     U.S. Base Rate: for any day, a per annum rate equal to the greater of (a) the U.S.
Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a 30
day interest period as determined on such day, plus 1.0%.



     U.S. Base Rate Loan: any Loan that bears interest based on the U.S. Base Rate.



     U.S. Borrowers: (a) the Initial U.S. Borrowers and (b) each other U.S. Subsidiary
that, after the date hereof, has executed a supplement or joinder to this Agreement in accordance
with Section 10.1.13(c) specifying that it wishes to be a U.S. Borrower.



     U.S. Borrowing Base: at any time, an amount equal to the sum of, without duplication:




     (a) the book value of U.S. Eligible Accounts multiplied by the advance rate of 85%,
plus




     (b) the lesser of (i) 70% of the net book value of U.S. Eligible Inventory (adding back
the LIFO reserve calculated in accordance with GAAP) and (ii) Net Orderly Liquidation Value
of U.S. Eligible Inventory (which shall be (A) net of the current monthly shrinkage reserve
calculated in accordance with GAAP and (B) valued at Cost) multiplied by the advance rate of
85%, minus




     (c) subject to Section 7.5, effective (i) immediately upon or (ii) five (5) Business
Days after, in the case of U.S. Availability Reserves which would cause the aggregate amount
of the U.S. Revolver Loans at such time to exceed the lesser of the U.S. Revolver
Commitments and the U.S. Borrowing Base then in effect, in each case, notification thereof
to the U.S. Borrowers by the Agent, any and all U.S. Availability Reserves.


The U.S. Borrowing Base at any time shall be determined by reference to the most recent Borrowing
Base Certificate theretofore delivered to the Agent with such adjustments as the Agent deems
appropriate in its Permitted Discretion to assure that the U.S. Borrowing Base is calculated in
accordance with the terms of this Agreement.







54









 








     U.S. Cash Collateral Account: a demand deposit, money market or other account
established by Agent at Bank of America or such other financial institution as Agent may select in
its discretion with the consent of Loan Party Agent (not to be unreasonably withheld or delayed),
which account shall be for the benefit of the U.S. Facility Secured Parties and shall be subject to
Agent’s Liens securing the Secured Obligations; provided that the foregoing consent of Loan Party
Agent to the selection by Agent in its discretion of a financial institution other than Bank of
America shall not be required if an Event of Default has occurred and is continuing.



     U.S. Domiciled Loan Party: any U.S. Borrower and each U.S. Facility Guarantor, and
“U.S. Domiciled Loan Parties” means all such Persons, collectively.



     U.S. Dominion Account: a special account established by the U.S. Facility Loan
Parties at Bank of America or another bank acceptable to Agent, over which Agent has exclusive
control for withdrawal purposes.



     U.S. Eligible Accounts: at any time, the Accounts of the U.S. Borrowers at such date
except any Account:




     (a) which is not subject to a duly perfected security interest in favor of the Agent;




     (b) which is subject to any Lien (including Liens permitted by Section 10.2.2) other
than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority
over the Lien in favor of the Agent; provided that, with respect to any tax Lien having such
priority, eligibility of Accounts shall be reduced by the amount of such tax Lien having
such priority;




     (c) (i) owing by General Electric Company with respect to which more than 150 days have
elapsed since the date of the original invoice therefor (provided, that the aggregate amount
of all Accounts eligible under this clause (i) does not exceed $3,000,000 at any time) or
(ii) owing by any other Account Debtor with respect to which more than 120 days have elapsed
since the date of the original invoice therefor or which is more than 60 days past the due
date for payment;




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




     (e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to U.S. Borrowers exceeds 20% of the
aggregate U.S. Eligible Accounts (or such higher percentage as the Agent may establish for
the Account Debtor from time to time), in each case, only to the extent of such excess;




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



55









 






     (g) which (i) does not arise from the sale of goods or performance of services in the
Ordinary Course of Business, (ii) is not evidenced by an invoice, or other documentation
satisfactory to the Agent, which has been sent to the Account Debtor, (iii) represents a
progress billing, (iv) is contingent upon such U.S. Borrower’s completion of any further
performance, or (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return,
sale on approval, consignment which is billed prior to actual sale to the end user,
cash-on-delivery or any other repurchase or return basis, except with respect to up to
$10,000,000 of such Accounts in the aggregate for the U.S. Borrowing Base and the Total
Canadian Borrowing Base on a combined basis as described in this clause (v) and paragraph
(g)(v) of the Canadian Eligible Accounts;




     (h) for which the goods giving rise to such Account (other than Accounts described in
the foregoing paragraph (g)(v)) have not been shipped to the Account Debtor or for which the
services giving rise to such Account have not been performed by such U.S. Borrower;




     (i) with respect to which any check or other instrument of payment has been returned
uncollected for any reason;




     (j) which is owed by an Account Debtor in respect of which an Insolvency Proceeding has
been commenced or which is otherwise a debtor or a debtor in possession under any bankruptcy
law or any other federal, state or foreign (including any province or territory)
receivership, insolvency relief or other law or laws for the relief of debtors, including
the U.S. Bankruptcy Code, unless the payment of Accounts from such Account Debtor is secured
by assets of, or guaranteed by, in either case in a manner reasonably satisfactory to the
Agent, a Person that is reasonably acceptable to the Agent or, if the Account from such
Account Debtor arises subsequent to a decree or order for relief with respect to such
Account Debtor under the federal bankruptcy laws, as now or hereafter in effect, the Agent
shall have reasonably determined that the timely payment and collection of such Account will
not be impaired;




     (k) which is owed by an Account Debtor which has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs or is not Solvent;




     (l) which is owed by an Account Debtor which is not organized under applicable law of
the U.S. or Canada, any state of the U.S. or any province or territory of Canada and does
not have its principal place of business in the U.S. or Canada unless such Account is backed
by a letter of credit or other credit support reasonably acceptable to the Agent and which
is in the possession of the Agent;




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




     (n) which is owed by any Governmental Authority, unless (i) the Account Debtor is the
United States or any department, agency or instrumentality thereof, and the Account has been
assigned to the Agent in compliance with the U.S. Assignment of Claims Act, and any other
steps necessary to perfect or render opposable the Lien of the



56









 







Agent in such Account have been complied with to the Agent’s reasonable satisfaction,
(ii) the Account Debtor is the government of Canada or a province or territory thereof, and
the Account has been assigned to the Agent in compliance with the Financial Administration
Act (or similar Applicable Law of such province or territory), and any other steps necessary
to perfect or render opposable the Lien of the Agent in such Account have been complied with
to the Agent’s reasonable satisfaction, or (iii) such Account is backed by a letter of
credit reasonably acceptable to the Agent and which is in the possession of the Agent;




     (o) which is owed by any Affiliate, employee, director, or officer of any Loan Party;
provided that portfolio companies of the Sponsor that do business with a U.S. Borrower in
the Ordinary Course of Business will not be treated as Affiliates for purposes of this
clause (o);




     (p) which is owed by an Account Debtor or any Affiliate of such Account Debtor which is
the holder of Indebtedness issued or incurred by any Loan Party; provided, that any such
Account shall only be ineligible as to that portion of such Account which is less than or
equal to the amount owed by the Loan Party to such Person;




     (q) which is subject to any counterclaim, deduction, defense, setoff or dispute, but
only to the extent of the amount of such counterclaim, deduction, defense, setoff or
dispute, unless (i) the Agent, in its Permitted Discretion, has established appropriate U.S.
Availability Reserves and determines to include such Account as a U.S. Eligible Account or
(ii) such Account Debtor has entered into an agreement reasonably acceptable to the Agent to
waive such rights;




     (r) which is evidenced by any promissory note, Chattel Paper, or instrument (in each
case, other than any such items that are delivered to the Agent);




     (s) which is owed by an Account Debtor located in any jurisdiction that requires, as a
condition to access to the courts of such jurisdiction, that a creditor qualify to transact
business, file a business activities report or other report or form, or take one or more
other actions, unless such U.S. Borrower has so qualified, filed such reports or forms, or
taken such actions (and, in each case, paid any required fees or other charges), except to
the extent such U.S. Borrower may qualify subsequently as a foreign entity authorized to
transact business in such state or jurisdiction and gain access to such courts, without
incurring any cost or penalty reasonably viewed by the Agent to be material in amount, and
such later qualification cures any access to such courts to enforce payment of such Account;




     (t) with respect to which such U.S. Borrower has made any agreement with the Account
Debtor for any reduction thereof, but only to the extent of such reduction, other than
discounts and adjustments given in the Ordinary Course of Business; or




     (u) which the Agent determines is ineligible in its Permitted Discretion.



57









 




Subject to Sections 14.1 and 7.5 and the definition of U.S. Borrowing Base, the Agent may modify
the foregoing criteria in its Permitted Discretion.




     U.S. Eligible Inventory: at any date of determination thereof, the aggregate amount
of all Inventory owned by U.S. Borrowers at such date except any Inventory:




     (a) which is not subject to a duly perfected Lien in favor of the Agent;




     (b) which is subject to any Lien (including Liens permitted by Section 10.2.2) other
than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority
over the Lien in favor of the Agent (other than any bailee, warehouseman, landlord or
similar non-consensual Liens having priority of operation of law to the extent either
subclause (i) or (ii) of clauses (h) or (i) below of U.S. Eligible Inventory is satisfied
with respect to the relevant Inventory); provided that, with respect to any tax Lien having
such priority, eligibility of Inventory shall be reduced by the amount of such tax Lien
having such priority;




     (c) which is, in the Agent’s Permitted Discretion, slow moving, obsolete,
unmerchantable, defective, unfit for sale, not salable at prices approximating at least the
cost of such Inventory in the Ordinary Course of Business unacceptable due to age, type,
category and/or quantity;




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




     (e) which does not conform in all material respects to all standards imposed by any
applicable Governmental Authority (except that any standard that is qualified as to
“materiality” shall have been conformed to in all respects);




     (f) which constitutes packaging and shipping material, manufacturing supplies, display
items, bill-and-hold goods (other than bill-and-hold goods, the sale of which been excluded
from U.S. Eligible Accounts, pursuant to clause (g)(v) of the definition thereof), returned
or repossessed goods (other than goods that are undamaged and able to be resold in the
Ordinary Course of Business), defective goods, goods held on consignment, goods to be
returned to the such U.S. Borrower’s suppliers or goods which are not of a type held for
sale in the Ordinary Course of Business;




     (g) which is not located in the United States or Canada or is not at a location listed
on Schedule 8.4.1 (as updated from time to time in accordance with the provisions hereof)
other than goods in transit between locations of the Loan Parties;




     (h) which is located, at any time after the Temporary Eligibility Period, in any
location leased by such U.S. Borrower unless (i) the lessor has delivered to the Agent a
Collateral Access Agreement or (ii) a U.S. Rent Reserve has been established by the Agent;




     (i) which is located, at any time after the Temporary Eligibility Period, in any third
party warehouse or is in the possession of a bailee, processor or other Person and is



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not evidenced by a Document, unless (i) such warehouseman, bailee, processor or other
Person has delivered to the Agent a Collateral Access Agreement and/or such other
documentation as the Agent may reasonably require or (ii) appropriate U.S. Availability
Reserves have been established by the Agent in its Permitted Discretion;




     (j) which is the subject of a consignment by such U.S. Borrower as consignor unless (i)
a protective UCC-1 financing statement has been properly filed against the consignee (as
assigned to the Agent), and (ii) there is a written agreement acknowledging that such
Inventory is held on consignment, that such U.S. Borrower retains title to such Inventory,
that no Lien arising by, through or under such consignee has attached or will attach to such
Inventory and requiring consignee to segregate the consigned Inventory from the consignee’s
other personal or movable property and having other terms consistent with such U.S.
Borrower’s past practices for consigned Inventory;




     (k) which is perishable as determined in accordance with GAAP; or




     (l) which contains or bears any intellectual property rights licensed to such U.S.
Borrower unless the Agent is satisfied that it may sell or otherwise dispose of such
Inventory without (i) infringing the rights of such licensor in any material respect or (ii)
incurring any material liability with respect to payment of royalties other than royalties
incurred pursuant to sale of such Inventory under the current licensing agreement.


Subject to Sections 14.1 and 7.5 and the definition of U.S. Borrowing Base, the Agent may modify
the foregoing criteria in its Permitted Discretion.




     U.S. Facility Collateral: Collateral that now or hereafter secures (or is intended to
secure) any of the U.S. Facility Secured Obligations.



     U.S. Facility Guarantee: each guarantee agreement (including this Agreement) at any
time executed by a U.S. Facility Guarantor in favor of Agent guaranteeing all or any portion of the
U.S. Facility Secured Obligations.



     U.S. Facility Guarantor: each U.S. Subsidiary that, after the date hereof, has
executed a supplement or joinder to this Agreement in accordance with Section 10.1.13(c) specifying
that it wishes to be a U.S. Facility Guarantor.



     U.S. Facility Loan Party: a U.S. Borrower or a U.S. Facility Guarantor.



     U.S. Facility Obligations: all Obligations of the U.S. Facility Loan Parties
(including, for the avoidance of doubt, the Obligations of the U.S. Domiciled Loan Parties as
guarantors of the Canadian Facility Obligations).



     U.S. Facility Secured Obligations: all Secured Obligations of the U.S. Facility Loan
Parties (including, for the avoidance of doubt, the Secured Obligations of the U.S. Domiciled Loan
Parties as guarantors of the Canadian Facility Secured Obligations).



     U.S. Facility Secured Parties: the Agent, any U.S. Fronting Bank, U.S. Lenders and
Secured Bank Product Providers of Bank Products to U.S. Facility Loan Parties.



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     U.S. Fronting Bank: Bank of America or any Affiliate thereof that agrees to issue
U.S. Letters of Credit or, if reasonably acceptable to Loan Party Agent, any other U.S. Lender or
Affiliate thereof that agrees to issue U.S. Letters of Credit.



     U.S. Fronting Bank Indemnitees: any U.S. Fronting Bank and its officers, directors,
employees, Affiliates and agents.



     U.S. LC Application: an application by Loan Party Agent on behalf of a U.S. Borrower
to a U.S. Fronting Bank for issuance of a U.S. Letter of Credit, in form and substance reasonably
satisfactory to such U.S. Fronting Bank.



     U.S. LC Conditions: the following conditions necessary for issuance of a U.S. Letter
of Credit: (a) each of the conditions set forth in Section 6 being satisfied or waived; (b) after
giving effect to such issuance, total U.S. LC Obligations do not exceed the U.S. Letter of Credit
Sublimit and no U.S. Overadvance exists or would result therefrom; (c) the expiration date of such
U.S. Letter of Credit is (i) no more than 365 days from issuance (provided that each U.S. Letter of
Credit may, upon request of the applicable U.S. Borrower, include a provision whereby such Letter
of Credit shall be renewed automatically for additional consecutive periods of twelve (12) months
or less (but no later than 20 Business Days prior to the Facility Terminations Date), and (ii)
unless the U.S. Fronting Bank and Agent otherwise consent (subject to the satisfaction of the Cash
Collateral requirements set forth in Section 2.2.3), at least 20 Business Days prior to the
Facility Termination Date; (d) the U.S. Letter of Credit and payments thereunder are denominated in
Dollars; (e) the form of the proposed U.S. Letter of Credit is reasonably satisfactory to Agent and
the applicable U.S. Fronting Bank; and (f) the proposed use of the U.S. Letter of Credit is for a
lawful purpose.



     U.S. LC Documents: all documents, instruments and agreements (including U.S. LC
Requests and U.S. LC Applications) delivered by Loan Party Agent on behalf a U.S. Borrower or by
any other Person to U.S. Fronting Bank or Agent in connection with issuance, amendment or renewal
of, or payment under, any U.S. Letter of Credit.



     U.S. LC Obligations: the sum (without duplication) of (a) all amounts owing by U.S.
Borrowers for any drawings under U.S. Letters of Credit; (b) the stated amount of all outstanding
U.S. Letters of Credit; and (c) all fees and other amounts owing with respect to U.S. Letters of
Credit.



     U.S. LC Request: a request for issuance of a U.S. Letter of Credit, to be provided by
Loan Party Agent on behalf of a U.S. Borrower to U.S. Fronting Bank, in form reasonably
satisfactory to Agent and U.S. Fronting Bank.



     U.S. LC Reserve: the aggregate of all U.S. LC Obligations, other than (a) those that
have been Cash Collateralized; and (b) if no Event of Default exists, those constituting charges
owing to the U.S. Fronting Bank.



     U.S. Lenders: Bank of America and each other Lender (other than Canadian Lenders)
party hereto.



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     U.S. Letter of Credit: any standby or documentary letter of credit issued by U.S.
Fronting Bank for the account of a U.S. Borrower, or any indemnity, guarantee, exposure transmittal
memorandum or similar form of credit support issued by Agent or U.S. Fronting Bank for the benefit
of a U.S. Borrower, including any Existing Letter of Credit.



     U.S. Letter of Credit Sublimit: $80,000,000.



     U.S. Overadvance: as defined in Section 2.1.5.



     U.S. Overadvance Loan: a U.S. Base Rate Loan made to a U.S. Borrower when a U.S.
Overadvance exists or is caused by the funding thereof.



     U.S. Prime Rate: the rate of interest announced by Bank of America from time to time
as its prime rate. Such rate is set by Bank of America on the basis of various factors, including
its costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below such rate. Any
change in such rate announced by Bank of America shall take effect at the opening of business on
the day specified in the public announcement of such change.



     U.S. Protective Advances: as defined in Section 2.1.6(a).



     U.S. Reimbursement Date: as defined in Section 2.2.2(a).



     U.S. Rent Reserve: the aggregate of (a) all past due rent and other past due charges
owing by any U.S. Borrower to any landlord or other Person who possesses any U.S. Facility
Collateral or could assert a Lien on any U.S. Facility Collateral; plus (b) a reserve in an
amount not to exceed rent and other charges that could be payable to any such Person for the time
period used to determine the Net Orderly Liquidation Value.



     U.S. Revolver Commitment Increase: as defined in Section 2.1.7(a).



     U.S. Revolver Commitment: for any U.S. Lender, its obligation to make U.S. Revolver
Loans and to issue U.S. Letters of Credit, in the case of any U.S. Fronting Bank, or participate in
U.S. LC Obligations, in the case of the other U.S. Lenders, to the U.S. Borrowers up to the maximum
principal amount, in each case, shown on Schedule 2.1.1(a), or as hereafter determined pursuant to
each Assignment and Acceptance to which it is a party, as such U.S. Revolver Commitment may be
adjusted from time to time in accordance with the provisions of Section 2.1.4, 2.1.7 or 11.1.
“U.S. Revolver Commitments” means the aggregate amount of such commitments of all U.S.
Lenders.



     U.S. Revolver Commitment Termination Date: the earliest of (a) the Facility
Termination Date, (b) the date on which the Loan Party Agent terminates or reduces to zero the U.S.
Revolver Commitments pursuant to Section 2.1.4, and (c) the date on which the U.S. Revolver
Commitments are terminated pursuant to Section 11.1.



     U.S. Revolver Exposure: on any date, an amount equal to the sum of the (a) U.S.
Revolver Loans outstanding on such date and (b) U.S. LC Obligations on such date.



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     U.S. Revolver Loan: a Revolver Loan made by a U.S. Lender to a U.S. Borrower pursuant
to Section 2.1.1(a), which Loan shall be denominated in Dollars and shall be either a U.S. Base
Rate Loan or a LIBOR Loan, in each case as selected by Loan Party Agent, and including any U.S.
Swingline Loan, U.S. Overadvance Loan or U.S. Protective Advance.



     U.S. Revolver Notes: the promissory notes, if any, executed by U.S. Borrowers in
favor of each U.S. Lender to evidence the U.S. Revolver Loans funded from time to time by such U.S.
Lender, which shall be in the form of Exhibit C-2 to this Agreement, together with any replacement
or successor notes therefor.



     U.S. Subsidiary: a Wholly-Owned Subsidiary of any U.S. Borrower that is organized
under the laws of the United States, any state of the United States or the District of Columbia.



     U.S. Swingline Commitment: $75,000,000.



     U.S. Swingline Commitment Termination Date: with respect to any U.S. Swingline Loan,
the date that is five Business Days prior to the U.S. Revolver Commitment Termination Date.



     U.S. Swingline Lender: Bank of America or an Affiliate of Bank of America.



     U.S. Swingline Loan: a Swingline Loan made by the U.S. Swingline Lender to a U.S.
Borrower pursuant to Section 2.1.8(a), which Swingline Loan shall be denominated in Dollars and
shall be a U.S. Base Rate Loan.



     Voting Stock: with respect to any Person, any class or classes of equity interests
pursuant to which the holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors of such Person.



     Wholly-Owned: with respect to any Person at any time, any Subsidiary, 100% of whose
Stock (other than, in the case of any Foreign Subsidiary, nominal directors’ qualifying shares) are
at such time owned, directly or indirectly, by such Person.



     1.2 Accounting Terms. Under the Loan Documents (except as otherwise specified
herein), all accounting terms shall be interpreted, all accounting determinations shall be made,
and all financial statements shall be prepared, in accordance with GAAP applied on a basis
consistent with the most recent audited financial statements of the Loan Parties delivered to Agent
before the Closing Date. In the event that any “Accounting Changes” (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 at the Loan Party Agent’s request, Agent and the Lenders shall
enter into negotiations with Loan Party Agent in order to amend such provisions of this Agreement
so as to reflect equitably such Accounting Changes with the desired result that the criteria for
evaluating the financial condition of the Loan Parties 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 Loan Parties, the Agent and the 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 (i) required by the



62









 




promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants or, if applicable, the
SEC or (ii) otherwise proposed by the Loan Party Agent to, and approved by, Agent.




     1.3 Uniform Commercial Code/PPSA. As used herein, the following terms are defined in
accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper,”
“Commercial Tort Claim”, “Equipment”, “Instrument”, “Investment Property” and, as such terms relate
to any such Property of any Canadian Domiciled Loan Party, such terms shall refer to such Property
as defined in the PPSA to the extent applicable. In addition, other terms relating to Collateral
used and not otherwise defined herein that are defined in the UCC and/or the PPSA shall have the
meanings set forth in the UCC and/or the PPSA, as applicable and as the context requires.



     1.4 Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the
computation of periods of time from a specified date to a later specified date, “from” means “from
and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each Loan Document, the
parties agree that the rule of ejusdem generis shall not be applicable to limit any provision.
Section titles appear as a matter of convenience only and shall not affect the interpretation of
any Loan Document. All references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any reference to any Loan Document shall
be deemed to include any amendments, waivers and other modifications, extensions or renewals of
such Loan Document; (c) section means, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and
schedules attached hereto, which are hereby incorporated by reference; (e) any Person include
successors and assigns of such Person; (f) time of day means time of day in Dallas, Texas (Central
Time); or (g) discretion of the Agent, any Fronting Bank or any Lender means the sole and absolute
discretion of such Person exercised in a manner consistent with its duties of good faith and fair
dealing. Except as expressly otherwise provided herein, all fundings of Loans, issuances of
Letters of Credit and payments of Obligations shall be in Dollars and, unless the context otherwise
requires, all determinations (including calculations of Borrowing Base and financial covenants)
made from time to time under the Loan Documents shall be made in light of the circumstances
existing at such time. To the extent not otherwise specified herein, Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and otherwise reasonably
satisfactory to Agent (and not necessarily calculated in accordance with GAAP). Loan Parties shall
have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent,
Fronting Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to have, drafted the
provision. Whenever any payment, certificate, notice or other delivery shall be stated to be due
on a day other than a Business Day, the due date for such payment or delivery shall be extended to
the next succeeding Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; provided, however, that if such extension
would cause payment of interest on or principal of any LIBOR Loan to be made in the next calendar
month, such payment shall be made on the immediately preceding Business Day.



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     1.5 Interpretation (Quebec). For purposes of any Collateral located in the Province
of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other
purposes pursuant to which the interpretation or construction of a Loan Document may be subject to
the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province
of Québec, (a) “personal property” shall be deemed to include “movable property”, (b) “real
property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed
to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal
property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”,
“prior claim” and a “resolutory clause”, (f) all references to filing, registering or recording
under the UCC or the PPSA shall be deemed to include publication under the Civil Code, (g) all
references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an
“opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of
setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods”
shall be deemed to include “corporeal movable property” other than chattel paper, documents of
title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary”,
(k) “construction liens” shall be deemed to include “legal hypothecs”, (l) “joint and several”
shall be deemed to include “solidary”, (m) “gross negligence or willful misconduct” shall be deemed
to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include
“ownership on behalf of another as mandatary”, (o) “servitude” shall be deemed to include
“easement”, (p) “priority” shall be deemed to include “prior claim”, (q) “survey” shall be deemed
to include “certificate of location and plan”, and (r) “fee simple title” shall be deemed to
include “absolute ownership”. The parties hereto confirm that it is their wish that this Agreement
and any other document executed in connection with the transactions contemplated herein be drawn up
in the English language only and that all other documents contemplated thereunder or relating
thereto, including notices, may also be drawn up in the English language only. Les parties aux
présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit
soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis,
envisagés par cette convention et les autres documents peuvent être rédigés en la langue anglaise
seulement.



SECTION 2. CREDIT FACILITIES




     2.1 Commitment.



          2.1.1 Revolver Loans.




          (a) U.S. Revolver Loans to U.S. Borrowers. Each U.S. Lender agrees, severally and not
jointly with the other U.S. Lenders, upon the terms and subject to the conditions set forth herein,
to make U.S. Revolver Loans to any of the U.S. Borrowers on any Business Day during the period from
the Closing Date to the U.S. Revolver Commitment Termination Date, not to exceed in aggregate
principal amount outstanding at any time, together with such U.S. Lender’s portion of the U.S. LC
Obligations, such U.S. Lender’s U.S. Revolver Commitment at such time, which U.S. Revolver Loans
may be repaid and reborrowed in accordance with the provisions of this Agreement; provided,
however, that such U.S. Lenders shall have no obligation to U.S. Borrowers whatsoever to honor any
request for a U.S. Revolver Loan on or after the U.S. Revolver Commitment Termination Date or if
the amount of the proposed U.S. Revolver Loan exceeds U.S. Availability on the proposed funding
date for such






64









 







U.S. Revolver Loan. Each Borrowing of U.S. Revolver Loans shall be funded by U.S. Lenders on
a Pro Rata basis. The U.S. Revolver Loans shall bear interest as set forth in Section 3.1. Each
U.S. Revolver Loan shall, at the option of the Loan Party Agent, be made or continued as, or
converted into, part of one or more Borrowings that, unless specifically provided herein, shall
consist entirely of U.S. Base Rate Loans or LIBOR Loans. The U.S. Revolver Loans shall be repaid
in accordance with the terms of this Agreement and shall be secured by all of the U.S. Facility
Collateral. U.S. Borrowers shall be jointly and severally liable to pay all of the U.S. Revolver
Loans. Each U.S. Revolver Loan shall be funded and repaid in Dollars.




          (b) Canadian Revolver Loans to Canadian Borrowers. Each Canadian Lender agrees,
severally and not jointly with the other Canadian Lenders, upon the terms and subject to the
conditions set forth herein, to make Canadian Revolver Loans to any of the Canadian Borrowers on
any Business Day during the period from the Closing Date to the Canadian Revolver Commitment
Termination Date, not to exceed in aggregate principal amount outstanding at any time, together
with such Canadian Lender’s portion of the Canadian LC Obligations, such Canadian Lender’s Canadian
Revolver Commitment at such time, which Canadian Revolver Loans may be repaid and reborrowed in
accordance with the provisions of this Agreement; provided, however, that Canadian Lenders shall
have no obligation to the Canadian Borrowers whatsoever to honor any request for a Canadian
Revolver Loan on or after the Canadian Revolver Commitment Termination Date or if the amount of the
proposed Canadian Revolver Loan exceeds Canadian Availability on the proposed funding date for such
Canadian Revolver Loan or, in the case of any Canadian Borrower, the limit contained in Section
2.3. Each Borrowing of Canadian Revolver Loans shall be funded by Canadian Lenders on a Pro Rata
basis. The Canadian Revolver Loans shall bear interest as set forth in Section 3.1. Each Canadian
Revolver Loan shall, at the option of the Initial Canadian Borrower, be made or continued as, or
converted into, part of one or more Borrowings that, unless specifically provided herein, shall
consist entirely of Canadian Prime Rate Loans or Canadian BA Rate Loans if denominated in Canadian
Dollars, or Canadian Base Rate Loans or LIBOR Loans if denominated in Dollars. The Canadian
Revolver Loans shall be repaid in accordance with the terms of this Agreement and shall be secured
by all of the Canadian Facility Collateral. Each Canadian Revolver Loan shall be funded in
Canadian Dollars or, at the option of the Initial Canadian Borrower, Dollars and repaid in the same
currency as the underlying Canadian Revolver Loan was made.




          (c) Cap on Total Revolver Exposure. Notwithstanding anything to the contrary
contained in this Section 2.1.1, in no event shall any Borrower be entitled to receive a Revolver
Loan if at the time of the proposed funding of such Loan (and after giving effect thereto and all
pending requests for Loans), the Total Revolver Exposure exceeds (or would exceed) the lesser of
the (a) the Maximum Facility Amount and (b) the Commitments.




          2.1.2 Revolver Notes. The Revolver Loans made by each Lender and interest accruing
thereon shall be evidenced by the records of the Agent and such Lender. At the request of any
Lender, the Borrowers within the Borrower Group to which such Lender has extended Commitments shall
deliver a Revolver Note to such Lender in the amount of such Lender’s aggregate U.S. Revolver
Commitment or Canadian Revolver Commitment, as applicable.







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          2.1.3 Use of Proceeds. The proceeds of Loans shall be used by Borrowers solely to (a)
refinance MRC’s Indebtedness under the Existing U.S. Credit Agreement, (b) to refinance the Initial
Canadian Borrower’s Indebtedness under the Existing Canadian Credit Agreement and the ATB Financial
Debt, (c) to issue Letters of Credit, (d) to finance ongoing working capital needs and (e) for
other general corporate purposes of the Borrowers and their Subsidiaries, including to fund
permitted distributions.




          2.1.4 Reduction or Termination of Commitments.




          (a) The Canadian Revolver Commitments shall terminate on the Canadian Revolver Commitment
Termination Date and the U.S. Revolver Commitments shall terminate on the U.S. Revolver Commitment
Termination Date, in each case, unless sooner terminated in accordance with this Agreement. The
Swingline Commitment shall terminate at 5:00 p.m. on the Swingline Commitment Termination Date.
Upon at least 30 days’ prior written notice to the Agent from the Loan Party Agent, (i) U.S.
Borrowers may, at their option, terminate the U.S. Revolver Commitments and/or (ii) the Canadian
Borrowers may, at their option, terminate the Canadian Revolver Commitments, in each case, without
premium or penalty (other than funding losses payable pursuant to Section 3.9). If the U.S.
Borrowers elect to reduce to zero or terminate the U.S. Revolver Commitments pursuant to the
previous sentence, the Canadian Revolver Commitments shall automatically terminate concurrently
with the termination of the U.S. Revolver Commitments. Any notice of termination given by the
Borrowers pursuant to this Section 2.1.4 shall be irrevocable; provided, however, that notice may
be contingent on the occurrence of a financing or refinancing or the consummation of a sale,
transfer, lease or other disposition of assets or the occurrence of a Change of Control and may be
revoked or the termination date deferred if the financing or refinancing or sale, transfer, lease
or other disposition of assets or Change of Control does not occur. On the Canadian Revolver
Commitment Termination Date, the Canadian Facility Loan Parties shall make Full Payment of all
Canadian Facility Obligations. On the U.S. Revolver Commitment Termination Date, the U.S. Facility
Loan Parties shall make Full Payment of all U.S. Facility Obligations.




          (b) So long as no Default or Event of Default then exists or would result therefrom and after
giving effect thereto, the Loan Party Agent may permanently and irrevocably reduce the Maximum
Facility Amount by giving the Agent at least 10 Business Days’ prior irrevocable written notice
thereof (or such lesser time as Agent may consent to) from a Senior Officer of the Loan Party
Agent, which notice shall (1) specify the date (which shall be a Business Day) and amount of such
reduction (which shall, in the case of the Maximum U.S. Facility Amount, be in a minimum amount of
$10,000,000 and increments of $10,000,000 in excess thereof and, in the case of the Maximum
Canadian Facility Amount, be in a minimum amount of Cdn$1,000,000 and increments of Cdn$1,000,000
in excess thereof), and (2) specify the allocation of such reduction to, and the corresponding
reductions of, each of the Maximum Canadian Facility Amount and/or the Maximum U.S. Facility Amount
(and the respective Canadian Revolver Commitments and the U.S. Revolver Commitments in respect
thereof, each of which shall be allocated to the Lenders among the Borrower Groups on a Pro Rata
basis at the time of such reduction). Without limiting the foregoing, (i) each reduction in the
Maximum U.S. Facility Amount shall in no event exceed U.S Availability, and (ii) each reduction in
the Maximum Canadian Facility Amount shall in no event exceed Canadian Availability.







66









 








          2.1.5 Overadvances. If at any time (i) the aggregate principal balance of all
Canadian Revolver Loans owing by a Canadian Borrower exceeds the Canadian Borrowing Base of such
Canadian Borrower (a “Canadian Overadvance”) or (ii) the aggregate principal balance of all
U.S. Revolver Loans exceeds the U.S. Borrowing Base (a “U.S. Overadvance”), the excess
amount shall, subject to Section 5.2, be payable by the Applicable Canadian Borrower or the U.S.
Borrowers, as applicable on demand by Agent. Agent may require Applicable Lenders to honor
requests for Overadvance Loans and to forbear from requiring the applicable Borrower(s) to cure an
Overadvance, (a) when no other Event of Default is known to Agent, as long as (i) such Overadvance
does not continue for more than 30 consecutive days (and no Overadvance may exist for at least five
consecutive days thereafter before further Overadvance Loans are required), (ii) such Overadvance
is not known by Agent to exceed ten percent (10%) of the Total Canadian Borrowing Base, with
respect to all Canadian Borrowers, or ten percent (10%) of the U.S. Borrowing Base, with respect to
U.S. Borrowers and (iii) the aggregate amount of the Overadvances existing at any time, together
with the Protective Advances outstanding at any time pursuant to Section 2.1.6 below, do not exceed
fifteen percent (15%) of the Commitments then in effect; and (b) regardless of whether an Event of
Default exists, if Agent discovers an Overadvance not previously known by it to exist, as long as
from the date of such discovery the Overadvance does not continue for more than 30 consecutive
days. In no event shall Overadvance Loans be required that would cause(i) the Canadian Revolver
Exposure to exceed the aggregate Canadian Revolver Commitments or (ii) the U.S. Revolver Exposure
to exceed the aggregate U.S. Revolver Commitments. All Canadian Overadvance Loans shall constitute
Canadian Facility Obligations secured by the Canadian Facility Collateral and shall be entitled to
all benefits of the Loan Documents. All U.S. Overadvance Loans shall constitute U.S. Facility
Obligations secured by the U.S. Facility Collateral and shall be entitled to all benefits of the
Loan Documents. Required Borrower Group Lenders may at any time revoke Agent’s authority to make
further Overadvance Loans to the Borrower or Borrowers of the applicable Borrower Group by written
notice to the Agent. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not
constitute a waiver by Agent or Lenders of the Event of Default caused thereby. In no event shall
any Borrower or other Loan Party be deemed a beneficiary of this Section 2.1.5 nor authorized to
enforce any of its terms.




          2.1.6 Protective Advances.




          (a) The Agent shall be authorized by each Borrower and the Applicable Lenders, from time to
time in the Agent’s sole discretion (but shall have absolutely no obligation to), to make U.S. Base
Rate Loans to the U.S. Borrowers on behalf of the U.S. Lenders (any of such Loans are herein
referred to as “U.S. Protective Advances”) and Canadian Base Rate Loans or Canadian Prime
Rate Loans to any Canadian Borrower on behalf of the Canadian Lenders (any of such Loans are herein
referred to as “Canadian Protective Advances”) which the Agent, in its Permitted
Discretion, deems necessary or desirable to (i) preserve or protect Collateral or any portion
thereof or (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations; provided that no U.S. Protective Advance shall cause the aggregate amount of the
U.S. Revolver Exposure at such time to exceed the Borrower Group Commitment then in effect, and no
Canadian Protective Advance shall cause the aggregate amount of the Canadian Revolver Exposure at
such time to exceed the Borrower Group Commitment (or any Applicable Canadian Borrower Commitment)
then in effect; provided further that, the aggregate amount of U.S. Protective Advances and
Canadian Protective






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Advances outstanding at any time pursuant to clauses (i) and (ii) above shall not exceed seven
and a half percent (7.5%) of the Commitments then in effect; provided further that, the aggregate
amount of U.S. Protective Advances and Canadian Protective Advances outstanding at any time
pursuant to clauses (i) and (ii) above, together with the Overadvances existing at any time
pursuant to Section 2.1.5 above, shall not exceed fifteen percent (15%) of the Commitments then in
effect. Protective Advances may be made even if the conditions set forth in Section 6 have not
been satisfied. Each Applicable Lender shall participate in each Protective Advance on a Pro Rata
basis. Required Borrower Group Lenders may at any time revoke Agent’s authority to make further
Protective Advances to the Borrower or Borrowers of the applicable Borrower Group by written notice
to the Agent. Absent such revocation, the Agent’s determination that funding of a Protective
Advance is appropriate shall be conclusive. All U.S. Protective Advances made by the Agent with
respect to U.S. Facility Loan Parties shall be U.S. Facility Obligations, secured by the U.S.
Facility Collateral and shall be treated for all purposes as U.S. Base Rate Loans; and all Canadian
Protective Advances made by the Agent with respect to Canadian Facility Loan Parties shall be
Canadian Facility Obligations, secured by the Canadian Facility Collateral and, if denominated in
Canadian dollars, shall be treated for all purposes as a Canadian Prime Rate Loan and, if
denominated in Dollars, shall be treated for all purposes as a Canadian Base Rate Loan. At any
time that there is sufficient Excess Availability and the conditions precedent set forth in Section
6 have been satisfied, the Agent may request the Applicable Lenders to make a U.S. Revolver Loan or
a Canadian Revolver Loan, as applicable, to repay a Protective Advance. At any other time, the
Agent may require the Applicable Lenders to fund their risk participations described in Section
2.1.6(b).




          (b) Upon the making of a Protective Advance by the Agent (whether before or after the
occurrence of a Default or Event of Default), each Lender shall be deemed, without further action
by any party hereto, to have unconditionally and irrevocably purchased from the Agent without
recourse or warranty, an undivided interest and participation in such Protective Advance in
proportion to its Pro Rata share of such Protective Advance. Each Lender shall transfer (a
“Transfer”) the amount of such Lender’s Pro Rata share of the outstanding principal amount
of the applicable Protective Advance with respect to such purchased interest and participation
promptly when requested to the Agent, to such account of the Agent as the Agent may designate, but
in any case not later than 3:00 p.m. on the Business Day notified (if notice is provided by the
Agent prior to 12:00 p.m. and otherwise on the immediately following Business Day (the
“Transfer Date”). Transfers may occur during the existence of a Default or Event of
Default and whether or not the applicable conditions precedent set forth in Section 6 have then
been satisfied. Such amounts transferred to the Agent shall be applied against the amount of the
Protective Advance and, together with Lender’s Pro Rata share of such Protective Advance, shall
constitute Loans of such Lenders, respectively. If any such amount is not transferred to the Agent
by any Lender on such Transfer Date, the Agent shall be entitled to recover such amount on demand
from such Lender together with interest thereon as specified in Section 3.1. From and after the
date, if any, on which any Lender is required to fund, and funds, its participation in any
Protective Advance purchased hereunder, the Agent shall promptly distribute to such Lender, such
Lender’s Pro Rata share of all payments of principal and interest and all proceeds of Collateral
received by the Agent in respect of such Protective Advance.







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          2.1.7 Increase in Revolver Commitments.




          (a) (i) The Loan Party Agent may by written notice to the Agent elect to increase the Maximum
Canadian Facility Amount then in effect (a “Canadian Revolver Commitment Increase”) and
(ii) the Loan Party Agent may by written notice to the Agent elect to increase the Maximum U.S.
Facility Amount then in effect (a “U.S. Revolver Commitment Increase” and together with the
Canadian Revolver Commitment Increase, the “Revolver Commitment Increases” and each, a
“Revolver Commitment Increase”), in each case, by increasing the Commitment of an
Applicable Lender or by causing a Person reasonably acceptable to the Agent that at such time is
not a Lender to become a Lender (an “Additional Lender”). Each such notice shall specify
the proposed date (each, an “Increase Date”) for the effectiveness of the Revolver
Commitment Increase, which date shall be not less than ten Business Days after the date on which
such notice is delivered to Agent. Any increase in the Maximum Canadian Facility Amount or the
Maximum U.S. Facility Amount shall be subject to the following additional conditions: (i) no
Default or Event of Default shall have occurred and be continuing as of the date of such notice or
both immediately before and after giving effect thereto as of the Increase Date; (ii) no Lender
shall be obligated or have a right to participate in the Revolver Commitment Increase by increasing
its Commitment; (iii) the Revolver Commitment Increase, to the extent arising from the admission of
an Additional Lender, shall be effected pursuant to one or more joinder agreements executed and
delivered by the Borrowers and the Agent, and each of which shall be in form and substance
reasonably satisfactory to the Agent; (iv) the Loan Party Agent shall deliver or cause to be
delivered any officers’ certificates, board resolutions, legal opinions or other documents
reasonably requested by Agent in connection with the Revolver Commitment Increase; (v) the
Borrowers shall pay all reasonable and documented fees and expenses in connection with the Revolver
Commitment Increase, including payments required pursuant to Section 3.9 in connection with the
Revolver Commitment Increase; (vi) such increase shall be in a minimum amount of $25,000,000 or, in
the case of the Canadian Revolver Commitments, in a minimum amount of Cdn$25,000,000; and (vii) the
Agent shall have received a certification from a Senior Officer of the Loan Party Agent, or other
evidence reasonably satisfactory to the Agent, that such increase is permitted under the Senior
Secured Notes Indenture. Any Revolver Commitment Increase shall concurrently increase, as
applicable, (1) the U.S. Revolver Commitments then in effect Pro Rata among the U.S. Lenders
(including any Additional Lenders who become U.S. Lenders as a result of such Revolver Commitment
Increase) and (2) the Canadian Revolver Commitments then in effect Pro Rata among the Canadian
Lenders (including any Additional Lenders who become Canadian Lenders as a result of such Revolver
Commitment Increase). After giving effect to any Canadian Revolver Commitment Increase, the
Canadian Revolver Commitment of each Canadian Lender (and the percentage of each Canadian Revolver
Loan that each Participant must purchase a Canadian Revolver Loan participation in) shall be equal
to such Canadian Lender’s (or Participant’s) Pro Rata share of the amount of the increased Canadian
Revolver Commitments. After giving effect to any U.S. Revolver Commitment Increase, the U.S.
Revolver Commitment of each U.S. Lender (and the percentage of each U.S. Revolver Loan that each
Participant must purchase a U.S. Revolver Loan participation in) shall be equal to such U.S.
Lender’s (or Participant’s) Pro Rata share of the amount of the increased U.S. Revolver
Commitments. Notwithstanding the foregoing, in no
event shall the aggregate amount of all Revolver
Commitment Increases made under this Section 2.1.7 exceed $250,000,000, including the Dollar
Equivalent of Canadian Revolver Commitment Increases.







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          (b) The Agent shall promptly inform the Lenders of any request for a Revolver Commitment
Increase made by the Loan Party Agent. If the conditions set forth in clause (a) above are not
satisfied on the applicable Increase Date (or, to the extent such conditions relate to an earlier
date, such earlier date), the Agent shall notify the Loan Party Agent in writing that the requested
Revolver Commitment Increase will not be effectuated. On each Increase Date, the Agent shall
notify the Lenders and the Loan Party Agent, on or before 3:00 p.m., by telecopier, e-mail or
telex, of the occurrence of the Revolver Commitment Increase to be effected on such Increase Date,
the amount of Revolver Loans held by each Lender as a result thereof, the amount of the U.S.
Revolver Commitment of each U.S. Lender (and the percentage of each U.S. Revolver Loan, if any,
that each Participant must purchase a participation interest in) and the amount of the Canadian
Revolver Commitment of each Canadian Lender (and the percentage of each Canadian Revolver Loan, if
any, that each Participant must purchase a participation interest in) as a result thereof.




          2.1.8 Swingline Loans.




          (a) U.S. Swingline Loans to U.S. Borrowers. The U.S. Swingline Lender shall make U.S.
Swingline Loans to any of the U.S. Borrowers on any Business Day during the period from the Closing
Date to the U.S. Swingline Commitment Termination Date, not to exceed the U.S. Swingline Commitment
in aggregate principal amount outstanding at any time, which U.S. Swingline Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement; provided, however, that the U.S.
Swingline Lender shall not honor any request for a U.S. Swingline Loan on or after the U.S.
Swingline Commitment Termination Date or if the amount of the proposed U.S. Swingline Loan exceeds
U.S. Availability on the proposed funding date for such U.S. Swingline Loan. The U.S. Swingline
Loans shall be U.S. Base Rate Loans and bear interest as set forth in Section 3.1. Each U.S.
Swingline Loan shall constitute a Revolver Loan for all purposes except that payments thereon shall
be made to the U.S. Swingline Lender for its own account. The U.S. Swingline Loans shall be repaid
in accordance with the terms of this Agreement and shall be secured by all of the U.S. Facility
Collateral. The U.S. Borrowers shall be jointly and severally liable to pay all of the U.S.
Swingline Loans. Each U.S. Swingline Loan shall be funded and repaid in Dollars.




     (b) Canadian Swingline Loans to Canadian Borrowers. The Canadian Swingline Lender
shall make Canadian Swingline Loans to any of the Canadian Borrowers on any Business Day during the
period from the Closing Date to the Canadian Swingline Commitment Termination Date, not to exceed
the Canadian Swingline Commitment in aggregate principal amount outstanding at any time, which
Canadian Swingline Loans may be repaid and reborrowed in accordance with the provisions of this
Agreement; provided, however, that the Canadian Swingline Lender shall not honor any request for a
Canadian Swingline Loan on or after the Canadian Swingline Commitment Termination Date, if the
amount of the proposed Canadian Swingline Loan exceeds Canadian Availability of the Applicable
Canadian Borrower on the proposed funding date for such Canadian Swingline Loan or if the
requirements of Section 2.3 are not satisfied. The Canadian Swingline Loans shall be Canadian
Prime Rate Loans if denominated in Canadian Dollars and Canadian Base Rate Loans if denominated in
Dollars and bear interest as set forth in Section 3.1. Each Canadian Swingline Loan shall
constitute a Revolver Loan for all purposes except that payments thereon shall be made to the
Canadian Swingline Lender for its own account. The Canadian Swingline Loans shall be repaid



70









 




in accordance with the terms of this Agreement and shall be secured by all of the Canadian
Facility Collateral. Each Canadian Swingline Loan shall be funded in Canadian Dollars or, at the
option of the Initial Canadian Borrower, Dollars and repaid in the same currency as the underlying
Canadian Swingline Loan was made.




          (c) The Swingline Loans made by each Swingline Lender and interest accruing thereon shall be
evidenced by the records of the Agent and such Swingline Lender and need not be evidenced by any
promissory note.




     2.2 Letter of Credit Facilities.



          2.2.1 Issuance of U.S. Letters of Credit. U.S. Fronting Bank agrees to issue U.S.
Letters of Credit for the account of any U.S. Borrower or its U.S. Subsidiaries that are Restricted
Subsidiaries (provided that a U.S. Borrower shall be a co-applicant, and jointly and severally
liable with respect to, any U.S. Letter of Credit issued for the account of a Restricted
Subsidiary) from time to time until the Facility Termination Date (or until the U.S. Revolver
Commitment Termination Date, if earlier), on the terms set forth herein, including the following:





     (a) Each U.S. Borrower acknowledges that U.S. Fronting Bank’s willingness to issue any
U.S. Letter of Credit is conditioned upon U.S. Fronting Bank’s receipt of a U.S. LC
Application with respect to the requested U.S. Letter of Credit, as well as such other
instruments and agreements as U.S. Fronting Bank may customarily require for issuance of a
letter of credit of similar type and amount. U.S. Fronting Bank shall have no obligation to
issue any U.S. Letter of Credit unless (i) U.S. Fronting Bank receives a U.S. LC Request and
U.S. LC Application at least three Business Days prior to the requested date of issuance;
(ii) each U.S. LC Condition is satisfied; and (iii) if a Defaulting Lender that is a U.S.
Lender exists, U.S. Borrowers have entered into arrangements reasonably satisfactory to
Agent and U.S. Fronting Bank to eliminate any funding risk associated with such Defaulting
Lender. If U.S. Fronting Bank receives written notice from a U.S. Lender at least three
Business Days before issuance of a U.S. Letter of Credit that any U.S. LC Condition has not
been satisfied, U.S. Fronting Bank shall have no obligation to issue the requested U.S.
Letter of Credit (or any other) until such notice is withdrawn in writing by the Required
Lenders or until the Required Lenders have waived such condition in accordance with this
Agreement. Prior to receipt of any such notice, U.S. Fronting Bank shall not be deemed to
have knowledge of any failure of U.S. LC Conditions. All Existing Letters of Credit shall
be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be
subject to and governed by the terms and conditions hereof.



          (b) The renewal or extension of any U.S. Letter of Credit shall be treated as the issuance of
a new U.S. Letter of Credit, except that delivery of a new U.S. LC Application shall be required at
the discretion of U.S. Fronting Bank. No U.S. Fronting Bank shall renew or extend any U.S. Letter
of Credit if it receives written notice from the Agent or the Required Lenders of the existence of
a Default or Event of Default.




          (c) U.S. Borrowers assume all risks of the acts, omissions or misuses of any U.S. Letter of
Credit by the beneficiary. In connection with issuance of any U.S. Letter of






71









 







Credit, none of Agent, U.S. Fronting Bank or any Lender shall be responsible for the
existence, character, quality, quantity, condition, packing, value or delivery of any goods
purported to be represented by any Documents; any differences or variation in the character,
quality, quantity, condition, packing, value or delivery of any goods from that expressed in any
Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents
or of any endorsements thereon; the time, place, manner or order in which shipment of goods is
made; partial or incomplete shipment of, or failure to ship, any goods referred to in a U.S. Letter
of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or
other Person in connection with any goods, shipment or delivery; any breach of contract between a
shipper or vendor and a U.S. Borrower; errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or
otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any
U.S. Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the
control of U.S. Fronting Bank, Agent or any U.S. Lender, including any act or omission of a
Governmental Authority. The rights and remedies of U.S. Fronting Bank under the Loan Documents
shall be cumulative. U.S. Fronting Bank shall be fully subrogated to the rights and remedies of
each beneficiary whose claims against Borrowers are discharged with proceeds of any U.S. Letter of
Credit.




          (d) In connection with its administration of and enforcement of rights or remedies under any
U.S. Letters of Credit or U.S. LC Documents, U.S. Fronting Bank shall be entitled to act, and shall
be fully protected in acting, upon any certification, documentation or communication in whatever
form believed by U.S. Fronting Bank, in good faith, to be genuine and correct and to have been
signed, sent or made by a proper Person. U.S. Fronting Bank may consult with and employ legal
counsel, accountants and other experts to advise it concerning its obligations, rights and
remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in
good faith reliance upon, any advice given by such experts. U.S. Fronting Bank may employ agents
and attorneys-in-fact in connection with any matter relating to U.S. Letters of Credit or U.S. LC
Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact
selected with reasonable care.




          2.2.2 U.S. Reimbursement; U.S. Participations.




          (a) If U.S. Fronting Bank honors any request for payment under a U.S. Letter of Credit, U.S.
Borrowers shall pay to U.S. Fronting Bank, on the same day (“U.S. Reimbursement Date”), the
amount paid by U.S. Fronting Bank under such U.S. Letter of Credit, together with interest at the
interest rate for U.S. Base Rate Loans from the U.S. Reimbursement Date until payment by U.S.
Borrowers. The obligation of U.S. Borrowers to reimburse U.S. Fronting Bank for any payment made
under a U.S. Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several,
and shall be paid without regard to any lack of validity or enforceability of any U.S. Letter of
Credit or the existence of any claim, setoff, defense or other right that U.S. Borrowers or Loan
Parties may have at any time against the beneficiary. Whether or not Loan Party Agent submits a
Notice of Borrowing, U.S. Borrowers shall be deemed to have requested a Borrowing of U.S. Base Rate
Loans in an amount necessary to pay all amounts due U.S. Fronting Bank on any U.S. Reimbursement
Date and each U.S. Lender agrees to fund its Pro Rata share of such Borrowing whether or not the
Commitments






72









 







have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6
are satisfied.




          (b) Upon issuance of a U.S. Letter of Credit, each U.S. Lender shall be deemed to have
irrevocably and unconditionally purchased from U.S. Fronting Bank, without recourse or warranty, an
undivided Pro Rata interest and participation in all U.S. LC Obligations relating to the U.S.
Letter of Credit. If U.S. Fronting Bank makes any payment under a U.S. Letter of Credit and U.S.
Borrowers do not reimburse such payment on the U.S. Reimbursement Date, Agent shall promptly notify
U.S. Lenders and each U.S. Lender shall promptly (within one Business Day) and unconditionally pay
to Agent, for the benefit of U.S. Fronting Bank, the U.S. Lender’s Pro Rata share of such payment.
Upon request by a U.S. Lender, U.S. Fronting Bank shall furnish copies of any U.S. Letters of
Credit and U.S. LC Documents in its possession at such time.




          (c) The obligation of each U.S. Lender to make payments to Agent for the account of U.S.
Fronting Bank in connection with U.S. Fronting Bank’s payment under a U.S. Letter of Credit shall
be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification
or exception whatsoever, and shall be made in accordance with this Agreement under all
circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any
draft, certificate or other document presented under a U.S. Letter of Credit having been determined
to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or the existence of any setoff or defense that any Loan Party
may have with respect to any Obligations. U.S. Fronting Bank does not assume any responsibility
for any failure or delay in performance or any breach by any U.S. Borrower or other Person of any
obligations under any U.S. LC Documents. U.S. Fronting Bank does not make any express or implied
warranty, representation or guarantee to U.S. Lenders with respect to the U.S. Facility Collateral,
U.S. LC Documents or any U.S. Facility Loan Party. U.S. Fronting Bank shall not be responsible to
any U.S. Lender for any recitals, statements, information, representations or warranties contained
in, or for the execution, validity, genuineness, effectiveness or enforceability of any U.S. LC
Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any
U.S. Facility Collateral or the perfection of any Lien therein; or the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal status of any U.S.
Facility Loan Party.




          (d) No U.S. Fronting Bank Indemnitee shall be liable to any Loan Party or other Person for any
action taken or omitted to be taken in connection with any U.S. LC Documents except as a result of
the U.S. Fronting Bank’s actual gross negligence, willful misconduct or bad faith, as determined by
a final, nonappealable judgment of a court of competent jurisdiction. U.S. Fronting Bank shall not
have any liability to any Lender if U.S. Fronting Bank refrains from any action under any U.S.
Letter of Credit or U.S. LC Documents until it receives written instructions from Required Borrower
Group Lenders of the Borrower Group consisting of the U.S. Borrowers.




          2.2.3 U.S. Cash Collateral. If any U.S. LC Obligations, whether or not then due or
payable, shall for any reason be outstanding at any time (a) that an Event of Default exists, (b)
that a U.S. Overadvance exists, (c) after the U.S. Revolver Commitment Termination Date, or (d)
within five Business Days prior to the Facility Termination Date, then U.S.






73









 







Borrowers shall, within one Business Day of U.S. Fronting Bank’s or Agent’s request, Cash
Collateralize the stated amount of all outstanding U.S. Letters of Credit and pay to U.S. Fronting
Bank the amount of all other U.S. LC Obligations. U.S. Borrowers shall, within one Business Day of
demand by U.S. Fronting Bank or Agent from time to time, Cash Collateralize the U.S. LC Obligations
of any Defaulting Lender that is a U.S. Lender. If U.S. Borrowers fail to provide any Cash
Collateral as required hereunder, Lenders may (and shall upon direction of Agent) advance, as U.S.
Revolver Loans, the amount of the Cash Collateral required (whether or not the U.S. Revolver
Commitments have terminated, any U.S. Overadvance exists or would result therefrom or the
conditions in Section 6 are satisfied).




          2.2.4 Issuance of Canadian Letters of Credit. Canadian Fronting Bank agrees to issue
Canadian Letters of Credit for the account of any Canadian Borrower from time to time until the
Facility Termination Date (or until the Canadian Revolver Commitment Termination Date, if earlier),
on the terms set forth herein, including the following:




          (a) Each Canadian Borrower acknowledges that Canadian Fronting Bank’s willingness to issue any
Canadian Letter of Credit is conditioned upon Canadian Fronting Bank’s receipt of a Canadian LC
Application with respect to the requested Canadian Letter of Credit, as well as such other
instruments and agreements as Canadian Fronting Bank may customarily require for issuance of a
letter of credit of similar type and amount. Canadian Fronting Bank shall have no obligation to
issue any Canadian Letter of Credit unless (i) Canadian Fronting Bank receives a Canadian LC
Request and Canadian LC Application at least three Business Days prior to the requested date of
issuance; (ii) each Canadian LC Condition is satisfied; and (iii) if a Defaulting Lender that is a
Canadian Lender exists, such Lender or Canadian Borrowers have entered into arrangements reasonably
satisfactory to Agent and Canadian Fronting Bank to eliminate any funding risk associated with such
Defaulting Lender. If Canadian Fronting Bank receives written notice from a Canadian Lender at
least three Business Days before issuance of a Canadian Letter of Credit that any Canadian LC
Condition has not been satisfied, Canadian Fronting Bank shall have no obligation to issue the
requested Canadian Letter of Credit (or any other) until such notice is withdrawn in writing by the
Required Lenders or until the Required Lenders have waived such condition in accordance with this
Agreement. Prior to receipt of any such notice, Canadian Fronting Bank shall not be deemed to have
knowledge of any failure of Canadian LC Conditions.




          (b) The renewal or extension of any Canadian Letter of Credit shall be treated as the issuance
of a new Canadian Letter of Credit, except that delivery of a new Canadian LC Application shall be
required at the discretion of Canadian Fronting Bank. No Canadian Fronting Bank shall renew or
extend any Canadian Letter of Credit if it receives written notice from the Agent or the Required
Lenders of the existence of a Default or Event of Default.




          (c) Canadian Borrowers assume all risks of the acts, omissions or misuses of any Canadian
Letter of Credit by the beneficiary. In connection with issuance of any Canadian Letter of Credit,
none of Agent, Canadian Fronting Bank or any Lender shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of any goods purported to be
represented by any Documents; any differences or variation in the character, quality, quantity,
condition, packing, value or delivery of any goods from that expressed in any Documents; the form,
validity, sufficiency, accuracy, genuineness or legal effect of any






74









 







Documents or of any endorsements thereon; the time, place, manner or order in which shipment
of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a
Canadian Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by
any shipper or other Person in connection with any goods, shipment or delivery; any breach of
contract between a shipper or vendor and a Canadian Borrower; errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy,
e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by
a beneficiary of any Canadian Letter of Credit or the proceeds thereof; or any consequences arising
from causes beyond the control of Canadian Fronting Bank, Agent or any Canadian Lender, including
any act or omission of a Governmental Authority. The rights and remedies of Canadian Fronting Bank
under the Loan Documents shall be cumulative. Canadian Fronting Bank shall be fully subrogated to
the rights and remedies of each beneficiary whose claims against Borrowers are discharged with
proceeds of any Canadian Letter of Credit.




          (d) In connection with its administration of and enforcement of rights or remedies under any
Canadian Letters of Credit or Canadian LC Documents, Canadian Fronting Bank shall be entitled to
act, and shall be fully protected in acting, upon any certification, documentation or communication
in whatever form believed by Canadian Fronting Bank, in good faith, to be genuine and correct and
to have been signed, sent or made by a proper Person. Canadian Fronting Bank may consult with and
employ legal counsel, accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken
in good faith reliance upon, any advice given by such experts. Canadian Fronting Bank may employ
agents and attorneys-in-fact in connection with any matter relating to Canadian Letters of Credit
or Canadian LC Documents, and shall not be liable for the negligence or misconduct of agents and
attorneys-in-fact selected with reasonable care.




          2.2.5 Canadian Reimbursement; Canadian Participations.




          (a) If Canadian Fronting Bank honors any request for payment under a Canadian Letter of
Credit, the Applicable Canadian Borrower shall pay to Canadian Fronting Bank, on the same day
(“Canadian Reimbursement Date”), the amount paid by Canadian Fronting Bank under such
Letter of Credit, together with interest at the interest rate for Canadian Prime Rate Loans (if the
Canadian Letter of Credit was denominated in Canadian Dollars) and Canadian Base Rate Loans (if the
Canadian Letter of Credit was denominated in Dollars), in each case, from the Canadian
Reimbursement Date until payment by Canadian Borrower. The obligation of the Applicable Canadian
Borrower to reimburse Canadian Fronting Bank for any payment made under a Canadian Letter of Credit
shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without
regard to any lack of validity or enforceability of any Canadian Letter of Credit or the existence
of any claim, setoff, defense or other right that the Applicable Canadian Borrower or Loan Parties
may have at any time against the beneficiary. Whether or not the Initial Canadian Borrower submits
a Notice of Borrowing, the Applicable Canadian Borrower shall be deemed to have requested a
Borrowing of Canadian Prime Rate Loans or Canadian Base Rate Loans, as applicable, in an amount
necessary to pay all amounts due Canadian Fronting Bank in the applicable currency on any Canadian
Reimbursement Date and each Canadian Lender agrees to fund its Pro Rata share of such Borrowing
whether or not






75









 







the Commitments have terminated, an Overadvance exists or is created thereby, or the
conditions in Section 6 are satisfied.




          (b) Upon issuance of a Canadian Letter of Credit, each Canadian Lender shall be deemed to have
irrevocably and unconditionally purchased from Canadian Fronting Bank, without recourse or
warranty, an undivided Pro Rata interest and participation in all Canadian LC Obligations relating
to the Canadian Letter of Credit. If Canadian Fronting Bank makes any payment under a Canadian
Letter of Credit and the Applicable Canadian Borrower does not reimburse such payment on the
Canadian Reimbursement Date, Agent shall promptly notify Canadian Lenders and each Canadian Lender
shall promptly (within one Business Day) and unconditionally pay to Agent, for the benefit of
Canadian Fronting Bank, the Canadian Lender’s Pro Rata share of such payment. Upon request by a
Canadian Lender, Canadian Fronting Bank shall furnish copies of any Canadian Letters of Credit and
Canadian LC Documents in its possession at such time.




          (c) The obligation of each Canadian Lender to make payments to Agent for the account of
Canadian Fronting Bank in connection with Canadian Fronting Bank’s payment under a Canadian Letter
of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim,
setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement
under all circumstances, irrespective of any lack of validity or unenforceability of any Loan
Documents; any draft, certificate or other document presented under a Canadian Letter of Credit
having been determined to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or the existence of any setoff or
defense that any Loan Party may have with respect to any Obligations. Canadian Fronting Bank does
not assume any responsibility for any failure or delay in performance or any breach by any Canadian
Borrower or other Person of any obligations under any Canadian LC Documents. Canadian Fronting
Bank does not make to Canadian Lenders any express or implied warranty, representation or guarantee
with respect to the Canadian Facility Collateral, Canadian LC Documents or any Canadian Domiciled
Loan Party. Canadian Fronting Bank shall not be responsible to any Canadian Lender for any
recitals, statements, information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of any Canadian LC Documents; the
validity, genuineness, enforceability, collectability, value or sufficiency of any Canadian
Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal status of any Canadian
Facility Loan Party.




          (d) No Canadian Fronting Bank Indemnitee shall be liable to any Loan Party or other Person for
any action taken or omitted to be taken in connection with any Canadian LC Documents except as a
result of the Canadian Fronting Bank’s actual gross negligence, willful misconduct or bad faith, as
determined by a final, nonappealable judgment of a court of competent jurisdiction. Canadian
Fronting Bank shall not have any liability to any Lender if Canadian Fronting Bank refrains from
any action under any Canadian Letter of Credit or Canadian LC Documents until it receives written
instructions from Required Borrower Group Lenders of Canadian Borrowers.







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          2.2.6 Canadian Cash Collateral. If any Canadian LC Obligations, whether or not then
due or payable, shall for any reason be outstanding at any time (a) that an Event of Default
exists, (b) that a Canadian Overadvance exists, (c) after the Canadian Revolver Commitment
Termination Date, or (d) within five Business Days prior to the Facility Termination Date, then
Canadian Borrowers shall, within one Business Day of Canadian Fronting Bank’s or Agent’s request,
Cash Collateralize the stated amount of all outstanding Canadian Letters of Credit and pay to
Canadian Fronting Bank the amount of all other Canadian LC Obligations. Canadian Borrowers shall,
within one Business Day of demand by Canadian Fronting Bank or Agent from time to time, Cash
Collateralize the LC Obligations of any Defaulting Lender that is a Canadian Lender. If Canadian
Borrowers fail to provide any Cash Collateral as required hereunder, Canadian Lenders may (and
shall upon direction of Agent) advance, as Canadian Revolver Loans, the amount of the Cash
Collateral required (whether or not the Canadian Revolver Commitments have terminated, any Canadian
Overadvance exists or would result therefrom or the conditions in Section 6 are satisfied).




     2.3 Canadian Borrowers’ Sublimit. Notwithstanding anything to the contrary contained
in this Section 2, in no event shall any Canadian Borrower be entitled to receive a Canadian
Revolver Loan or the issuance of a Canadian Letter of Credit if at the time of the proposed funding
of such Canadian Revolver Loan or the issuance of such Canadian Letter of Credit (and after giving
effect thereto and all pending requests for Canadian Revolver Loans and Canadian Letters of Credit
by or on behalf of such Canadian Borrower), the sum of (a) the outstanding amount of all Canadian
Revolver Loans made to such Canadian Borrower on such date and (b) the Canadian LC Obligations of
such Canadian Borrower on such date exceeds the lesser of such Canadian Borrower’s Canadian
Borrowing Base (without giving effect to its allocable portion of the Canadian LC Reserve) or
Applicable Canadian Borrower Commitment. In no event shall the aggregate Applicable Canadian
Borrower Commitments for all Canadian Borrowers exceed the Canadian Revolver Commitments.



     2.4 Obligations of the Canadian Domiciled Loan Party. Notwithstanding anything in
this Agreement or any other Loan Document to the contrary, except as otherwise expressly agreed by
the Agent and the Loan Party Agent, no Excluded Loan Party shall be liable or in any manner
responsible for, or be deemed to have guaranteed, directly or indirectly, whether as a primary
obligor, guarantor, indemnitor, or otherwise, and none of their assets shall secure, directly or
indirectly, any U.S. Facility Secured Obligations (including, without limitation, principal,
interest, fees, penalties, premiums, expenses, charges, reimbursements, indemnities or any other
U.S. Facility Secured Obligations) under this Agreement or any other Loan Document.



SECTION 3. INTEREST, FEES AND CHARGES




     3.1 Interest.



          3.1.1 Rates and Payment of Interest.




          (a) The Obligations shall bear interest (i) if a U.S. Base Rate Loan, at the U.S. Base Rate in
effect from time to time, plus the Applicable Margin; (ii) if a LIBOR Loan, at LIBOR for the
applicable Interest Period, plus the Applicable Margin; (iii) if a Canadian Prime






77









 







Rate Loan, at the Canadian Prime Rate in effect from time to time, plus the Applicable Margin,
(iv) if a Canadian Base Rate Loan, at the Canadian Base Rate in effect from time to time, plus the
Applicable Margin, (v) if a Canadian BA Rate Loan, at the Canadian BA Rate for the applicable
Interest Period, plus the Applicable Margin, (vi) if any other U.S. Facility Obligation that is
then due and payable (including, to the extent permitted by law, interest not paid when due), at
the U.S. Base Rate in effect from time to time, plus the Applicable Margin for U.S. Base Rate
Loans; and (vii) if any other Canadian Facility Obligation that is then due and payable (including,
to the extent permitted by law, interest not paid when due), at the Canadian Prime Rate in effect
from time to time, plus the Applicable Margin for Canadian Prime Rate Loans. Interest shall accrue
from the date the Loan is advanced or the Obligation becomes payable, until paid by the applicable
Borrower(s). If a Loan is repaid on the same day made, one day’s interest shall accrue.




          (b) Interest on the Revolver Loans shall be payable in the currency (i.e., Dollars or Canadian
Dollars, as the case may be) of the underlying Revolver Loan.




          (c) If all or a portion of (i) the principal amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest (including post-petition interest during the pendency of
any Insolvency Proceeding) at a rate per annum that is (x) in the case of overdue principal, the
Default Rate or (y) in the case of any overdue interest, to the extent permitted by applicable law,
the Default Rate from and including the date of such non-payment to but excluding the date on which
such amount is paid in full (after as well as before judgment). Payment or acceptance of the
increased rates of interest provided for in this Section 3.1.1 is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of the Agent or any Lender.




          (d) Interest accrued on the Loans shall be due and payable in arrears, (i) for any U.S. Base
Rate Loan, Canadian Base Rate Loan or Canadian Prime Rate Loan, quarterly on the first day of each
January, April, July and October; (ii) for any LIBOR Loan or Canadian BA Rate Loan, on the last day
of its Interest Period (and, if its Interest Period exceeds three months, at the end of each period
of three months) and (iii) on any date of prepayment, with respect to the principal amount of Loans
being prepaid. In addition, interest accrued on the Canadian Revolver Loans shall be due and
payable in arrears on the Canadian Revolver Commitment Termination Date, and interest accrued on
the U.S. Revolver Loans shall be due and payable in arrears on the U.S. Revolver Commitment
Termination Date. Interest accrued on any other Obligations shall be due and payable as provided
in the Loan Documents and, if no payment date is specified, shall be due and payable on demand.
Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on
demand.




          3.1.2 Application of LIBOR to Outstanding Loans.




          (a) Borrowers may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation and the other terms hereof, elect to convert any portion of the U.S. Base
Rate Loans or the Canadian Base Rate Loans, as applicable to, or to continue any LIBOR Loan at the
end of its Interest Period as, a LIBOR Loan. During any Event of Default, Agent






78









 







may (and shall at the direction of Required Borrower Group Lenders of the applicable Borrower
Group) declare that no Loan may be made, converted or continued as a LIBOR Loan.




          (b) Whenever Borrowers within a Borrower Group desire to convert or continue Loans as LIBOR
Loans, Loan Party Agent shall give Agent a Notice of Conversion/Continuation, no later than 1:00
p.m. at least three Business Days prior to the requested conversion or continuation date. Promptly
after receiving any such notice, Agent shall notify each Applicable Lender thereof. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted
or continued, the conversion or continuation date (which shall be a Business Day), and the duration
of the Interest Period (which shall be deemed to be one month if not specified). If, upon the
expiration of any Interest Period in respect of any LIBOR Loans, Loan Party Agent shall have failed
to deliver a Notice of Conversion/Continuation with respect thereto as required above, Borrowers
shall be deemed to have elected to convert such Loans into U.S. Base Rate Loans (if owing by the
U.S. Borrowers) or Canadian Base Rate Loans (if owing by any Canadian Borrower).




          3.1.3 Application of Canadian BA Rate to Outstanding Loans.




          (a) The Initial Canadian Borrower may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation and the other terms hereof, elect to convert any portion of the Canadian
Prime Rate Loans, or to continue any Canadian BA Rate Loan at the end of its Interest Period as a
Canadian BA Rate Loan; provided, however, that such Canadian BA Rate Loans may only be so converted
at the end of the Interest Period applicable thereto. During any Event of Default, Agent may (and
shall at the direction of Required Borrower Group Lenders of the Borrower Group that consists of
the Canadian Borrowers) declare that no Loan may be made, converted or continued as a Canadian BA
Rate Loan.




          (b) Whenever the Initial Canadian Borrower desires to convert or continue Loans as Canadian BA
Rate Loans, Loan Party Agent shall give Agent a Notice of Conversion/Continuation, no later than
1:00 p.m. at least three Business Days prior to the requested conversion or continuation date.
Promptly after receiving any such notice, Agent shall notify each Canadian Lender thereof. Each
Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be
converted or continued, the conversion or continuation date (which shall be a Business Day), and
the duration of the Interest Period (which shall be deemed to be one month if not specified). If,
upon the expiration of any Interest Period in respect of any Canadian BA Rate Loans, Loan Party
Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as
required above, the Initial Canadian Borrower shall be deemed to have elected to convert such Loans
into Canadian Prime Rate Loans.




          3.1.4 Interest Periods. In connection with the making, conversion or continuation of
any LIBOR Loans or Canadian BA Rate Loans, Loan Party Agent, on behalf of the applicable
Borrower(s), shall select an interest period to apply (the “Interest Period”), which
interest period shall be a one, two, three, six (or if available to all Lenders as determined by
such Lenders in good faith based upon prevailing market conditions) nine or twelve month period;
provided, however, that:







79









 








          (a) the Interest Period shall commence on the date the Loan is made or continued as, or
converted into, a LIBOR Loan or Canadian BA Rate Loan, and shall expire on the numerically
corresponding day in the calendar month at its end;




          (b) if any Interest Period commences on a day for which there is no corresponding day in the
calendar month at its end or if such corresponding day falls after the last Business Day of such
month, then the Interest Period shall expire on the last Business Day of such month;




          (c) if any Interest Period would expire on a day that is not a Business Day, the period shall
expire on the next Business Day; and




          (d) no Interest Period shall extend beyond the Facility Termination Date (or, in the case of
any Loan owing by any Canadian Borrower, the Canadian Revolver Commitment Termination Date, if
earlier).




     3.2 Fees.



          3.2.1 Unused Line Fee.




          (a) Canadian Borrowers shall pay to Agent, for the Pro Rata benefit of Canadian Lenders, a fee
equal to .375% per annum times the average daily amount by which the Canadian Revolver Commitments
exceed the Canadian Revolver Exposure during any month. Such fee shall be payable in arrears, on
the first day of each month and on the Canadian Revolver Commitment Termination Date.




          (b) U.S. Borrowers shall pay to Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal
to .375% per annum times the average daily amount by which the U.S. Revolver Commitments exceed the
daily balance of U.S. Revolver Loans and stated amount of Letters of Credit during any month. Such
fee shall be payable in arrears, on the first day of each month and on the U.S. Revolver Commitment
Termination Date.




          3.2.2 U.S. Letters of Credit Fees. U.S. Borrowers shall pay (a) to Agent, for the Pro
Rata benefit of U.S. Lenders, a fee equal to the per annum rate of the Applicable Margin in effect
for LIBOR Loans times the average daily stated amount of U.S. Letters of Credit, which fee shall be
payable monthly in arrears, on the first day of each month; (b) to U.S. Fronting Bank, for its own
account, a fronting fee equal to .125% per annum on the stated amount of each U.S. Letter of
Credit, which fee shall be payable upon the issuance of such U.S. Letter of Credit and at the time
of each renewal or extension of each U.S. Letter of Credit; and (c) to U.S. Fronting Bank, for its
own account, all customary charges associated with the issuance, amending, negotiating, payment,
processing, transfer and administration of U.S. Letters of Credit, which charges shall be paid as
and when incurred.




          3.2.3 Canadian Letters of Credit Fees. Each Applicable Canadian Borrower shall pay
(a) to Agent, for the Pro Rata benefit of Canadian Lenders, a fee equal to the per annum rate of
the Applicable Margin in effect for LIBOR Loans times the average daily stated amount of such
Applicable Canadian Borrower’s Canadian Letters of Credit, which fee shall be payable monthly in
arrears, on the first day of each month; (b) to Canadian Fronting Bank, for its own






80









 







account, a fronting fee equal to .125% per annum on the stated amount of each Canadian Letter
of Credit, which fee shall be payable upon the issuance of such Canadian Letter of Credit and at
the time of each renewal or extension of each Canadian Letter of Credit; and (c) to Canadian
Fronting Bank, for its own account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Canadian Letters of Credit, which
charges shall be paid as and when incurred.




          3.2.4 Other Fees. Borrowers shall pay such other fees as described in the Fee Letter.




     3.3 Computation of Interest, Fees, Yield Protection. All interest, as well as fees
and other charges calculated on a per annum basis, shall be computed for the actual days elapsed,
based on a year of 360 days, or, in the case of interest based on the Canadian Prime Rate or
Canadian BA Rate, on the basis of a 365 day year. Each determination by Agent of any interest,
fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent
manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund
or proration. All fees payable under Section 3.2 are compensation for services and are not, and
shall not be deemed to be, interest or any other charge for the use, forbearance or detention of
money, except to the extent such treatment is inconsistent with any Requirement of Law. A
certificate setting forth in reasonable detail amounts payable by any Borrower under Section 3.4,
3.7 or 3.9 and the basis therefor, submitted to Loan Party Agent by Agent or the affected Lender or
U.S. Fronting Bank or Canadian Fronting Bank, as applicable, shall be final, conclusive and binding
for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate
party within 10 Business Days following receipt of the certificate. For the purposes of the
Interest Act (Canada), the yearly rate of interest to which any rate calculated on the basis of a
period of time different from the actual number of days in the year (360 days, for example) is
equivalent is the stated rate multiplied by the actual number of days in the year (365 or 366, as
applicable) and divided by the number of days in the shorter period (360 days, in the example), and
the parties hereto acknowledge that there is a material distinction between the nominal and
effective rates of interest and that they are capable of making the calculations necessary to
compare such rates and that the calculations herein are to be made using the nominal rate method
and not on any basis that gives effect to the principle of deemed reinvestment of interest.



     3.4 Reimbursement Obligations. Borrowers within each Borrower Group shall reimburse
Agent for all Extraordinary Expenses incurred by Agent in reference to such Borrower Group or its
related Loan Party Group Obligations or Collateral of its related Loan Party Group. In addition to
such Extraordinary Expenses, such Borrowers shall also reimburse Agent for all reasonable and
documented legal, accounting, appraisal, and other reasonable and documented fees, costs and
expenses, without duplication, incurred by it in connection with (a) negotiation and preparation of
any Loan Documents, including any amendment or other modification thereof; (b) administration of
and actions relating to any Collateral, including any actions taken to perfect or maintain priority
of Agent’s Liens on any such Collateral, to maintain any insurance required hereunder or to verify
such Collateral; and (c) each inspection, audit or appraisal with respect to any Loan Party within
such Borrowers’ related Loan Party Group or Collateral securing such Loan Party Group’s
Obligations, whether prepared by Agent’s personnel or a third party (subject to the limitations of
Section 10.1.15). All legal and accounting fees incurred by Agent Professionals in reference to a
Borrower’s related Loan Party Group or its related Loan



81









 




Party Group Obligations or Collateral of such Borrower’s related Loan Party Group shall be
charged to Borrowers within such Borrower Group at the actual rate charged by such Agent
Professionals; provided that Borrowers’ obligation to reimburse Agent for legal fees shall be
limited to the reasonable and documented legal fees and expenses of Vinson & Elkins LLP, counsel to
Agent and Ogilvy Renault LLP, Canadian counsel to Agent and, if necessary, of one local counsel in
each other relevant jurisdiction (which may include a local counsel acting in multiple
jurisdictions). In addition to the Extraordinary Expenses of Agent, upon the occurrence and during
the continuance of an Event Default, Borrowers shall reimburse Fronting Banks and Lenders for the
reasonable and documented fees, charges and disbursements of one counsel for the Fronting Banks and
Lenders, as a whole, in connection with the enforcement, collection or protection of their
respective rights under the Loan Documents, including all such expenses incurred during any
workout, restructuring or Insolvency Proceeding. If, for any reason (including
inaccurate reporting on financial statements), it is determined that a higher Applicable Margin
should have applied to a period than was actually applied, then the proper margin shall be applied
retroactively and Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders, an amount
equal to the difference between the amount of interest and fees that would have accrued using the
proper margin and the amount actually paid. All amounts payable by Borrowers under this Section
3.4 shall be due and payable in accordance with Section 3.3.




     3.5 Illegality. If any Lender determines that any Applicable Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make, maintain or fund Interest Period Loans, or to determine or
charge interest rates based upon LIBOR or the Canadian BA Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, or Canadian Dollars through bankers’
acceptances then, on notice thereof by such Lender to Agent, any obligation of such Lender to make
or continue Interest Period Loans or to convert Floating Rate Loans to Interest Period Loans shall
be suspended until such Lender notifies Agent that the circumstances giving rise to such
determination no longer exist. Upon delivery of such notice, Borrowers of the affected Borrower
Group shall prepay or, if applicable, convert all Interest Period Loans of such Lender to Floating
Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Interest Period Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Interest Period Loans. Upon any such prepayment or conversion,
Borrowers of the affected Borrower Group shall also pay accrued interest on the amount so prepaid
or converted. If any Lender invokes this Section 3.5, such Lender shall use reasonable efforts to
notify Loan Party Agent and Agent when the conditions giving rise to such action no longer exists,
provided, however, that such Lender shall have no liability to Borrowers or to any other Person for
its failure to provide such notice.



     3.6 Inability to Determine Rates. If Required Lenders notify Agent for any reason in
connection with a request for a Borrowing of, or conversion to or continuation of, an Interest
Period Loan that (a) Dollar deposits or bankers’ acceptances are not being offered to, as regards
LIBOR, banks in the London interbank Eurodollar market or, as regards Canadian BA Rate, Persons in
Canada, for the applicable amount and Interest Period of such Loan, (b) adequate and reasonable
means do not exist for determining LIBOR or the Canadian BA Rate for the requested Interest Period,
or (c) LIBOR or the Canadian BA Rate for the requested Interest Period does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, then



82









 




Agent will promptly so notify Loan Party Agent and each Applicable Lender. Thereafter, the
obligation of the Applicable Lenders to make or maintain affected Interest Period Loans, shall be
suspended until Agent (upon instruction by Required Lenders) revokes such notice. Upon receipt of
such notice, Loan Party Agent may revoke any pending request for a Borrowing of, conversion to or
continuation of an Interest Period Loan or, failing that, will be deemed to have submitted a
request for a Floating Rate Loan. If any Lender invokes this Section 3.6, such Lender shall use
reasonable efforts to notify Loan Party Agent and Agent when the conditions giving rise to such
action no longer exists, provided, however, that such Lender shall have no liability to Borrowers
or to any other Person for its failure to provide such notice.




     3.7 Increased Costs; Capital Adequacy.



          3.7.1 Change in Law. If any Change in Law shall:




          (a) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance
charge or similar requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR or
the Canadian BA Rate), U.S. Fronting Bank or Canadian Fronting Bank; or




          (b) impose on any Lender, U.S. Fronting Bank or Canadian Fronting Bank or the London interbank
market any other condition, cost or expense affecting any Loan, Loan Document, U.S. Letter of
Credit or participation in U.S. LC Obligations or Canadian Letter of Credit or participation in
Canadian LC Obligations;




and the result thereof shall be to increase the cost to such Lender of making or maintaining any
Interest Period Loan (or of maintaining its obligation to make any such Loan), or to increase the
cost to such Lender, U.S. Fronting Bank or Canadian Fronting Bank of participating in, issuing or
maintaining any U.S. Letter of Credit or Canadian Letter of Credit (or of maintaining its
obligation to participate in or to issue any U.S. Letter of Credit or Canadian Letter of Credit, as
applicable), or to reduce the amount of any sum received or receivable by such Lender, U.S.
Fronting Bank or Canadian Fronting Bank hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender, U.S. Fronting Bank or Canadian Fronting Bank, the
Borrower Group to which such Lenders, U.S. Fronting Bank or Canadian Fronting Bank has a Commitment
shall pay to such Lender, U.S. Fronting Bank or Canadian Fronting Bank such additional amount or
amounts as will compensate such Lender, U.S. Fronting Bank or Canadian Fronting Bank for such
additional costs incurred or reduction suffered, in each case, in accordance with Section 3.3. For
the avoidance of doubt, this Section 3.7.1 shall not apply to any Taxes.




          3.7.2 Capital Adequacy. If any Lender, U.S. Fronting Bank or Canadian Fronting Bank
determines that any Change in Law affecting such Lender, U.S. Fronting Bank or Canadian Fronting
Bank or any Lending Office of such Lender or such Lender’s, U.S. Fronting Bank’s or Canadian
Fronting Bank’s holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s, U.S. Fronting Bank’s, Canadian Fronting
Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s, U.S.
Fronting Bank’s or Canadian Fronting Bank’s Commitments,






83









 







Loans, U.S. Letters of Credit or participations in U.S. LC Obligations, Canadian Letters of
Credit or participations in Canadian LC Obligations to a level below that which such Lender, U.S.
Fronting Bank, Canadian Fronting Bank or holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s, U.S. Fronting Bank’s, Canadian Fronting Bank’s and
holding company’s policies with respect to capital adequacy), then from time to time the Borrower
Group to which such Lender, U.S. Fronting Bank or Canadian Fronting Bank has a Commitment will pay
to such Lender, U.S. Fronting Bank or Canadian Fronting Bank, as the case may be, such additional
amount or amounts as will compensate it or its holding company for any such reduction suffered, in
each case, in accordance with Section 3.3.




          3.7.3 Compensation. Failure or delay on the part of any Lender, U.S. Fronting Bank or
Canadian Fronting Bank to demand compensation pursuant to this Section 3.7 shall not constitute a
waiver of its right to demand such compensation, but Borrowers of a Borrower Group shall not be
required to compensate a Lender to such Borrower Group, U.S. Fronting Bank or Canadian Fronting
Bank for any increased costs incurred or reductions suffered more than six months prior to the date
that the Lender, U.S. Fronting Bank or Canadian Fronting Bank notifies Loan Party Agent of the
Change in Law giving rise to such increased costs or reductions and of such Lender’s, U.S. Fronting
Bank’s or Canadian Fronting Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the six month
period referred to above shall be extended to include the period of retroactive effect thereof).



     3.8 Mitigation. If any Lender gives a notice under Section 3.5 or requests
compensation under Section 3.7, or if any Borrower is required to pay additional amounts or
indemnity payments with respect to a Lender under Section 5.8, then such Lender shall use
reasonable efforts to designate a different Lending Office or to assign its rights and obligations
hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender,
such designation or assignment (a) would eliminate the need for such notice or reduce amounts
payable or to be withheld in the future, as applicable; and (b) in each case, would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be materially
disadvantageous to such Lender or unlawful. The Borrower or Borrowers of each affected Borrower
Group shall pay all reasonable costs and expenses incurred by any Lender that has issued a
Commitment to such Borrower Group in connection with any such designation or assignment.



     3.9 Funding Losses. If for any reason (other than default by a Lender) (a) any
Borrowing of, or conversion to or continuation of, an Interest Period Loan does not occur on the
date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or
not withdrawn), (b) any repayment or conversion of an Interest Period Loan occurs on a day other
than the end of its Interest Period, or (c) any Borrower of either Borrower Group fails to repay an
Interest Period Loan when required hereunder, then Borrowers of such Borrower Group shall pay to
Agent its customary administrative charge and to each Lender all losses and expenses that it
sustains as a consequence thereof, including any loss or expense arising from liquidation or
redeployment of funds or from fees payable to terminate deposits of matching funds, but excluding
loss of margin. All amounts payable by Borrowers under this Section 3.9 shall be due and payable
in accordance with Section 3.3. Lenders shall not be required to



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purchase Dollar deposits in the London interbank market or any other offshore Dollar market to
fund any LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender had
purchased such deposits to fund its LIBOR Loans.




     3.10 Maximum Interest. Notwithstanding anything to the contrary contained in any Loan
Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by Applicable Law (“maximum rate”). If
Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess
interest shall be applied to the principal of the Obligations of the Borrower Group to which such
excess interest relates or, if it exceeds such unpaid principal, refunded to such Borrower Group.
In determining whether the interest contracted for, charged or received by Agent or a Lender
exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a)
characterize any payment that is not principal as an expense, fee or premium rather than interest;
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and
spread in equal or unequal parts the total amount of interest throughout the contemplated term of
the Obligations hereunder. Without limiting the generality of the foregoing provisions of Section
3.10, if any provision of any of the Loan Documents would obligate any Canadian Domiciled Loan
Party to make any payment of interest with respect to the Canadian Facility Obligations in an
amount or calculated at a rate which would be prohibited by Applicable Law or would result in the
receipt of interest with respect to the Canadian Facility Obligations at a criminal rate (as such
terms are construed under the Criminal Code (Canada)), then notwithstanding such provision, such
amount or rates 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 the applicable recipient of interest with respect to the Canadian Facility Obligations
at a criminal rate, such adjustment to be effected, to the extent necessary, as follows: (i)
first, by reducing the amount or rates of interest required to be paid by the Canadian Facility
Loan Parties to the applicable recipient under the Loan Documents; and (ii) thereafter, by reducing
any fees, commissions, premiums and other amounts required to be paid by the Canadian Facility Loan
Parties to the applicable recipient which would constitute interest with respect to the Canadian
Facility Obligations for purposes of Section 347 of the Criminal Code (Canada). Notwithstanding
the foregoing, and after giving effect to all adjustments contemplated thereby, if the applicable
recipient shall have received an amount in excess of the maximum permitted by that section of the
Criminal Code (Canada), then Canadian Facility Loan Parties shall be entitled, by notice in writing
to Agent, to obtain reimbursement from the applicable recipient in an amount equal to such excess,
and pending such reimbursement, such amount shall be deemed to be an amount payable by the
applicable recipient to the applicable Canadian Facility Loan Party. Any amount or rate of
interest with respect to the Canadian Facility Obligations referred to in this Section 3.10 shall
be determined in accordance with generally accepted actuarial practices and principles as an
effective annual rate of interest over the term that any Canadian Revolver Loans to any Canadian
Borrower remains outstanding on the assumption that any charges, fees or expenses that fall within
the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a
specific period of time, be pro rated over that period of time and otherwise be pro rated over the
period from the Closing Date to the date of Full Payment of the Canadian Facility Obligations, and,
in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such determination.



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SECTION 4. LOAN ADMINISTRATION




     4.1 Manner of Borrowing and Funding Loans.



          4.1.1 Notice of Borrowing.




          (a) Whenever any Borrower within a Borrower Group desires funding of a Borrowing of Revolver
Loans, the Loan Party Agent shall give Agent a Notice of Borrowing. Such notice must be received
by Agent no later than 11:00 a.m. (i) on the Business Day of the requested funding date, in the
case of Floating Rate Loans, (ii) at least three Business Days prior to the requested funding date,
in the case of LIBOR Loans, and (iii) at least three Business Days prior to the requested funding
date, in the case of Canadian BA Rate Loans. Notices received after 11:00 a.m. shall be deemed
received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify
(A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C)
whether the Borrowing is to be made as a U.S. Base Rate Loan or a LIBOR Revolver Loan, in the case
of a U.S. Borrower, or a Canadian Base Rate Loan, LIBOR Revolver Loan, Canadian Prime Rate Loan or
Canadian BA Rate Loan, in the case of a Canadian Borrower, (D) in the case of Interest Period
Loans, the duration of the applicable Interest Period (which shall be deemed to be one month if not
specified) and (E) the Borrower Group Commitment under which such Borrowing is proposed to be made
and, if such Borrowing is requested for a Canadian Borrower, the name of the Applicable Canadian
Borrower and whether such Loan is to be denominated in Dollars or Canadian Dollars.




          (b) Whenever any Borrower within a Borrower Group desires funding of a Borrowing of Swingline
Loans, the Initial Canadian Borrower, in the case of Canadian Swingline Loans, or the Loan Party
Agent, in the case of U.S. Swingline Loans shall give the Agent a Notice of Borrowing. Such notice
must be received by the Agent no later than 11:00 a.m. on the Business Day of the requested funding
date. Notices received after 11:00 a.m. shall be deemed received on the next Business Day. Each
Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the
requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a
Canadian Base Rate Loan or Canadian Prime Rate Loan, in the case of a Canadian Borrower, and (D)
the Borrower Group Commitment under which such Borrowing is proposed to be made and, if such
Borrowing is requested for a Canadian Borrower, the name of the Applicable Canadian Borrower and
whether such Loan is to be denominated in Dollars or Canadian Dollars.




          (c) Unless payment is otherwise timely made by each Borrower within a Borrower Group, the
becoming due of any amount required to be paid with respect to any of the Obligations of the Loan
Party Group to which such Borrower Group belongs (whether principal, interest, fees or other
charges, including Extraordinary Expenses, U.S. LC Obligations, Canadian LC Obligations and Cash
Collateral) shall be deemed to be a request for Revolver Loans by such Borrower Group on the due
date, in the amount of such Obligations and shall bear interest at the per annum rate applicable
hereunder to U.S. Base Rate Loans, in the case of such Obligations owing by any U.S. Facility Loan
Party, or to Canadian Prime Rate Loans, in the case of such Obligations owing by a Canadian
Domiciled Loan Party. The proceeds of such Revolver Loans shall be disbursed as direct payment of
the relevant Obligation.







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          (d) If any Borrower within a Borrower Group establishes a controlled disbursement account with
Bank of America or any branch or Affiliate of Bank of America, then the presentation for payment of
any check, ACH or electronic debit or other payment item drawn on such account at a time when there
are insufficient funds to cover it shall be deemed to be a request for Revolver Loans by such
Borrower Group on the date of such presentation, in the amount of such payment item, and shall bear
interest at the per annum rate applicable hereunder to U.S. Base Rate Loans, in the case of
insufficient funds owing by any U.S. Facility Loan Party, or to Canadian Prime Rate Loans, in the
case of insufficient funds owing by a Canadian Facility Loan Party. The proceeds of such Revolver
Loans may be disbursed directly to the controlled disbursement account or other appropriate
account.




          4.1.2 Fundings by Lenders; Settlement.




          (a) Each Applicable Lender shall timely honor its Borrower Group Commitment by funding its Pro
Rata share of each Borrowing of Revolver Loans under such Borrower Group Commitment that is
properly requested hereunder; provided, however, that no Lender shall be required to honor its
Borrower Group Commitment by funding its Pro Rata share of any Borrowing that would cause the U.S.
Revolver Loans to exceed the U.S. Borrowing Base or the Canadian Revolver Loans to exceed the Total
Canadian Borrowing Base, as applicable. Agent shall endeavor to notify the Applicable Lenders of
each Notice of Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed funding
date for Floating Rate Loans or by 11:00 a.m. at least two Business Days before any proposed
funding of Interest Period Loans. Each Applicable Lender shall fund to Agent such Lender’s Pro
Rata share of the Borrowing to the account specified by Agent in immediately available funds not
later than 2:00 p.m. on the requested funding date, unless Agent’s notice is received after the
times provided above, in which event each Applicable Lender shall fund its Pro Rata share by 11:00
a.m. on the next Business Day. Subject to its receipt of such amounts from the Applicable Lenders,
Agent shall disburse the proceeds of the Revolver Loans as directed by Loan Party Agent. Unless
Agent shall have received (in sufficient time to act) written notice from an Applicable Lender that
it does not intend to fund its Pro Rata share of a Borrowing, Agent may assume that such Applicable
Lender has deposited or promptly will deposit its share with Agent, and Agent may disburse a
corresponding amount to the Borrower or Borrowers within such Borrower Group. If an Applicable
Lender’s share of any Borrowing is not received by Agent, then the Borrower or Borrowers within the
Borrower Group agree to repay to Agent on demand the amount of such share, together with interest
thereon from the date disbursed until repaid, at the rate applicable to such Borrowing.
Notwithstanding the foregoing, the Agent may, in its discretion, fund any request for a Borrowing
of Canadian Revolver Loans or U.S. Revolver Loans as Canadian Swingline Loans or U.S. Swingline
Loans, as applicable.




          (b) To facilitate administration of the Revolver Loans, the Lenders, the Swingline Lenders and
the Agent agree (which agreement is solely among them, and not for the benefit of or enforceable by
any Borrower or any other Loan Party) that settlement among them with respect to Swingline Loans
and other Revolver Loans may take place on a date determined from time to time by the Agent, which
shall occur at least once every five Business Days with respect to Swingline Loans and any other
Revolver Loans. On each settlement date, settlement shall be made with each Lender in accordance
with the Settlement Report delivered by the Agent to the Lenders. Between settlement dates, the
Agent may in its discretion apply payments on






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Revolver Loans to Swingline Loans, regardless of any designation by Loan Party Agent or any
Borrower or any provision herein to the contrary. Each Lender’s obligation to make settlements
with the Agent is absolute and unconditional, without offset, counterclaim or other defense, and
whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section
6 are satisfied. If, due to an Insolvency Proceeding with respect to any Borrower or any other
Loan Party or otherwise, any Swingline Loan may not be settled among the Lenders hereunder, then
each Applicable Lender shall be deemed to have purchased from the applicable Swingline Lender a Pro
Rata participation in each unpaid U.S. Swingline Loan or Canadian Swingline Loan, as applicable,
and shall transfer the amount of such participation to the applicable Swingline Lender, in
immediately available funds, within one Business Day after the Agent’s request therefor.




          4.1.3 Notices. Each Borrower authorizes the Agent and Lenders to extend Loans,
convert or continue Revolver Loans, effect selections of interest rates, and transfer funds to or
on behalf of applicable Borrowers based on telephonic or e-mailed instructions by the Loan Party
Agent to the Agent. The Loan Party Agent shall confirm each such request by reasonably prompt
delivery to the Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable,
but if it differs in any material respect from the action taken by the Agent or Lenders, the
records of the Agent and Lenders shall govern. Neither the Agent nor any Lender shall have any
liability for any loss suffered by a Borrower as a result of the Agent or any Lender acting upon
its understanding of telephonic or e-mailed instructions from a person believed in good faith by
the Agent or any Lender to be a person authorized to give such instructions on the Loan Party
Agent’s behalf.




     4.2 Defaulting Lender.



          4.2.1 Reallocation of Pro Rata Share; Amendments. For purposes of determining Lenders’ obligations to fund or participate in Loans or Letters of
Credit, the Agent may exclude the Commitments and Loans of any Defaulting Lender from the
calculation of Pro Rata shares. A Defaulting Lender shall have no right to vote on any amendment,
waiver or other modification of a Loan Document, except as provided in Section 14.1.1(c).




          4.2.2 Payments; Fees. The Agent may, in its discretion, receive and retain any amounts payable to a Defaulting
Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to the
Agent such amounts until all Obligations owing to the Agent, non-Defaulting Lenders and other
Secured Parties have been paid in full. The Agent may apply such amounts to the Defaulting
Lender’s defaulted obligations, use the funds to Cash Collateralize such Lender’s LC Obligations,
or readvance the amounts to Borrowers hereunder. A Lender shall not be entitled to receive any
fees accruing hereunder during the period in which it is a Defaulting Lender, and the unfunded
portion of its Commitment shall be disregarded for purposes of calculating the unused line fee
under Section 3.2.1. If any LC Obligations owing to a Defaulting Lender are reallocated to other
Lenders, fees attributable to such LC Obligations under Section 3.2.2 or Section 3.2.3 shall be
paid to such Lenders. Notwithstanding anything to the contrary in
this Section 4.2.2, the LC Obligations owing to a Defaulting Lender may be reallocated to the
other Lenders only to the extent that such reallocation does not cause the U.S. Revolver Exposure
and/or the Canadian Revolver Exposure, as applicable, of any non-Defaulting Lender to exceed such
non-Defaulting Lender’s





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Commitment The Agent shall be paid all fees attributable to LC Obligations
that are not reallocated.




          4.2.3 Cure. Borrowers, the Agent and each Fronting Bank may agree in writing that a Lender is no longer a
Defaulting Lender. At such time, Pro Rata shares shall be reallocated without exclusion of such
Lender’s Commitment and Loans, and all outstanding Revolver Loans, LC Obligations and other
exposures under the Commitments shall be reallocated among Lenders and settled by the Agent (with
appropriate payments by the reinstated Lender) in accordance with the readjusted Pro Rata shares.
Unless expressly agreed by Borrowers, the Agent and each Fronting Bank, no reinstatement of a
Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure
of any Lender to fund a Loan, to make a payment in respect of LC Obligations or otherwise to
perform its obligations hereunder shall not relieve any other Lender of its obligations, and no
Lender shall be responsible for default by another Lender.




     4.3 Number and Amount of Interest Period Loans; Determination of Rate. For ease of
administration, all Interest Period Loans of the same Type to a Borrower Group having the same
length and beginning date of their Interest Periods and the same currency shall be aggregated
together, and such Loans shall be allocated among the Applicable Lenders on a Pro Rata basis. With
respect to U.S. Borrowers, no more than six (6) Borrowings of LIBOR Loans may be outstanding at any
time, and each Borrowing of LIBOR Loans when made, continued or converted shall be in a minimum
amount of $1,000,000, or an increment of $100,000 in excess thereof. With respect to Canadian
Borrowers, no more than six (6) Borrowings of Interest Period Loans may be outstanding at any time,
and each Borrowing of Interest Period Loans when made, continued or converted shall be in a minimum
amount of $1,000,000 in the case of LIBOR Loans, or an increment of $100,000 in excess thereof, or
Cdn$1,000,000 in the case of Canadian BA Rate Loans, or an increment of Cdn$100,000 in excess
thereof. Upon determining LIBOR or the Canadian BA Rate for any Interest Period requested by
Borrowers within a Borrower Group, Agent shall promptly notify Loan Party Agent thereof by
telephone or electronically and, if requested by Loan Party Agent, shall confirm any telephonic
notice in writing.



     4.4 Loan Party Agent. Each Loan Party hereby designates MRC (“Loan Party
Agent”) as its representative and agent for all purposes under the Loan Documents, including
requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of
communications, preparation and delivery of any Borrowing Base and financial reports, receipt and
payment of Obligations, requests for waivers, amendments or other accommodations, actions under the
Loan Documents (including in respect of compliance with covenants), and all other dealings with
Agent, any U.S. Fronting Bank, any Canadian Fronting Bank or any Lender. Loan Party Agent hereby
accepts such appointment. Agent and any Lender shall be entitled to rely upon, and shall be fully
protected in relying upon, any notice or communication (including any Notice of Borrowing)
delivered by Loan Party Agent on behalf of any Loan Party. Agent and any Lender may give any
notice or communication with a Loan Party hereunder to Loan Party Agent on behalf of such Loan
Party. Each of Agent, any U.S. Fronting Bank, any Canadian
Fronting Bank and any Lender shall have the right, in its discretion, to deal exclusively with
Loan Party Agent for any or all purposes under the Loan Documents. Each Loan Party agrees that any
notice, election, communication, representation, agreement or undertaking made on its behalf by
Loan Party Agent shall be binding upon and enforceable against it.



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     4.5 One Obligation. Without in any way limiting any Guarantee of the Secured
Obligations, the U.S. Facility Secured Obligations owing by each U.S. Facility Loan Party shall
constitute one general obligation of the U.S. Facility Loan Parties and (unless otherwise expressly
provided in any Credit Document) shall be secured by Agent’s Lien upon all Collateral of each U.S.
Facility Loan Party; provided, however, that each Credit Party shall be deemed to be a creditor of,
and the holder of a separate claim against, each U.S. Facility Loan Party to the extent of any U.S.
Facility Secured Obligations owed by such U.S. Facility Loan Party to such Credit Party.



     4.6 Effect of Termination. On the effective date of any termination of the
Commitments, all Obligations shall be immediately due and payable, and any Lender may terminate its
and its Affiliates’ Bank Products (including, only with the consent of Agent, any Cash Management
Services). All undertakings of Loan Parties contained in the Loan Documents shall survive, and
Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan
Documents until Full Payment of the Secured Obligations. Notwithstanding Full Payment of the
Secured Obligations, Agent shall not be required to terminate its Liens in any Collateral unless,
with respect to any damages Agent may incur as a result of the dishonor or return of Payment Items
applied to Secured Obligations, Agent receives (a) a written agreement, executed by the Loan Party
Agent and any Person whose advances are used in whole or in part to satisfy the Secured
Obligations, indemnifying Agent and Lenders from any such damages; or (b) such Cash Collateral as
Agent, in its reasonable discretion, deems necessary to protect against any such damages. Sections
2.2, 3.4, 3.6, 3.7, 3.9, 5.4, 5.8, 5.9, 12, 14.2 and this Section 4.6, and the obligation of each
Loan Party and Lender with respect to each indemnity given by it in any Loan Document, shall
survive Full Payment of the Secured Obligations and any release relating to this credit facility.



SECTION 5. PAYMENTS




     5.1 General Payment Provisions. All payments of Obligations shall be made without
offset, counterclaim or defense of any kind, and in immediately available funds, not later than
1:00 p.m. on the due date. Any payment after such time shall be deemed made on the next Business
Day. If any payment under the Loan Documents shall be stated to be due on a day other than a
Business Day, the due date shall be extended to the next Business Day and such extension of time
shall be included in any computation of interest and fees. Any payment of an Interest Period Loan
prior to the end of its Interest Period shall be accompanied by all amounts due under Section 3.9.
Any prepayment of Loans to a Borrower Group shall be applied first to Floating Rate Loans of such
Borrower Group and then to Interest Period Loans of such Borrower Group; provided, however, that as
long as no Default or Event of Default exists, prepayments of Interest Period Loans may, at the
option of Borrowers of the applicable Borrower Group and Agent, be held by Agent as Cash Collateral
and applied to such Loans at the end of their Interest Periods. All payments with respect to any
U.S. Facility Obligations shall be made in Dollars and all payments with respect to any Canadian
Facility Obligations shall be made in Canadian Dollars or, if any portion of such Canadian Facility Obligations is denominated in Dollars,
then in Dollars.



     5.2 Repayment of Obligations. All Canadian Facility Obligations shall be immediately
due and payable in full on the Canadian Revolver Commitment Termination Date



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and all U.S. Facility
Obligations shall be immediately due and payable in full on the U.S. Revolver Commitment
Termination Date, in each case, unless payment of such Obligations is sooner required hereunder.
Revolver Loans may be prepaid from time to time, without penalty or premium, subject to, in the
case of Interest Period Loans, the payment of costs set forth in Section 3.9. Notwithstanding
anything herein to the contrary, if an Overadvance exists, Borrowers of the Borrower Group owing
such Overadvance shall, on the sooner of Agent’s demand or the first Business Day after any
Borrower of such Borrower Group has knowledge thereof, repay the outstanding Loans in an amount
sufficient to reduce the principal balance of the related Overadvance Loan to zero.



     5.3 Payment of Other Obligations. Obligations shall be paid by Borrowers as provided
in the Loan Documents or, if no payment date is specified, within 10 Business Days of demand by
Agent therefor.



     5.4 Marshaling; Payments Set Aside. None of Agent or Lenders shall be under any
obligation to marshal any assets in favor of any Loan Party or against any Obligations. If any
payment by or on behalf of any Borrower or Borrowers is made to Agent, U.S. Fronting Bank, Canadian
Fronting Bank or any Lender, or Agent, U.S. Fronting Bank, Canadian Fronting Bank or any Lender
exercises a right of setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Agent, U.S. Fronting Bank, Canadian Fronting
Bank or such Lender in its discretion) to be repaid to a Creditor Representative or any other
Person, then to the extent of such recovery, the Obligation originally intended to be satisfied,
and all Liens, rights and remedies relating thereto, shall be revived and continued in full force
and effect as if such payment had not been made or such setoff had not occurred.



     5.5 Post-Default Allocation of Payments.



          5.5.1 Allocation. Notwithstanding anything herein to the contrary, during an Event of
Default, monies to be applied to the Secured Obligations, whether arising from payments by or on
behalf of any Loan Party, realization on Collateral, setoff or otherwise, shall be allocated as
follows:




          (a) with respect to monies, payments, Property or Collateral of or from any U.S. Facility Loan
Parties:





          (i) first, to all costs and expenses, including Extraordinary Expenses, owing to Agent,
to the extent owing by any U.S. Domiciled Loan Party;




          (ii) second, to all amounts owing to U.S. Swingline Lender on U.S. Swingline Loans;




          (iii) third, to all amounts owing to any U.S. Fronting Bank on U.S. LC Obligations;



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          (iv) fourth, to all U.S. Facility Obligations constituting fees owing by the U.S.
Facility Loan Parties (exclusive of any such amounts owing by the Canadian Domiciled Loan
Parties which are guaranteed by the U.S. Domiciled Loan Parties);




          (v) fifth, to all U.S. Facility Obligations constituting interest owing by the U.S.
Facility Loan Parties (exclusive of any such amounts owing by the Canadian Domiciled Loan
Parties which are guaranteed by the U.S. Domiciled Loan Parties);




          (vi) sixth, to Cash Collateralization of U.S. LC Obligations;




          (vii) seventh, to all U.S. Revolver Loans;




          (viii) eighth, to all other U.S. Facility Secured Obligations (exclusive of any such
amounts owing by the Canadian Domiciled Loan Parties which are guaranteed by the U.S.
Domiciled Loan Parties); and




          (ix) ninth, to be applied in accordance with clause (b) below, to the extent there are
insufficient funds for the Full Payment of all Secured Obligations owing by the Canadian
Domiciled Loan Parties.



          (b) with respect to monies, payments, Property or Collateral of or from any Canadian Domiciled
Loan Parties, together with any allocations pursuant to subclause (ix) of clause (a) above:





          (i) first, to all costs and expenses, including Extraordinary Expenses, owing to Agent,
to the extent owing by any Canadian Domiciled Loan Party;




          (ii) second, to all amounts owing to Canadian Swingline Lender on Canadian Swingline
Loans;




          (iii) third, to all amounts owing to any Canadian Fronting Bank on Canadian LC
Obligations;




          (iv) fourth, to all Canadian Facility Obligations constituting fees;




          (v) fifth, to all Canadian Facility Obligations constituting interest;




          (vi) sixth, to Cash Collateralization of Canadian LC Obligations




          (vii) seventh, to all Canadian Revolver Loans; and




          (viii) eighth, to all other Canadian Facility Secured Obligations.


Amounts shall be applied to each category of Secured Obligations set forth within subsection (a) or
(b) above, as applicable, until Full Payment thereof and then to the next category. If amounts are
insufficient to satisfy a category, they shall be applied on a pro rata basis among the Secured
Obligations in the category. Amounts distributed with respect to any Secured Bank Product
Obligations shall be the lesser of the maximum Secured Bank Product Obligations last reported




92









 







to Agent or the actual Secured Bank Product Obligations as calculated by the methodology reported to
Agent for determining the amount due. Agent shall have no obligation to calculate the amount to be
distributed with respect to any Secured Bank Product Obligations, and may request a reasonably
detailed calculation of such amount from the applicable Secured Party. If a Secured Party fails to
deliver such calculation within five days following request by Agent, Agent may assume the amount
to be distributed is zero. The allocations set forth in this Section 5.5.1 are solely to determine
the rights and priorities of Agent and Secured Parties as among themselves, and any allocation
within subsection (a) or (b) of proceeds of the realization of Collateral may be changed by
agreement among them without the consent of any Loan Party. This Section 5.5.1 is not for the
benefit of or enforceable by any Borrower. Notwithstanding the preceding two sentences and
anything else to the contrary set forth in any of the Loan Documents, (i) all payments by or on
behalf of any Canadian Facility Loan Party or in respect of any Canadian Facility Secured
Obligations shall be applied only to the Canadian Facility Secured Obligations, and (ii) all
payments by or on behalf of any U.S. Facility Loan Party or in respect of any U.S. Facility Secured
Obligations shall be applied first to U.S. Facility Secured Obligations then due until paid in full
and then to all other Secured Obligations until paid in full.




          5.5.2 Erroneous Application. Agent shall not be liable for any application of amounts
made by it in good faith and, if any such application is subsequently determined to have been made
in error, the sole recourse of any Lender or other Person to which such amount should have been
made shall be to recover the amount from the Person that actually received it (and, if such amount
was received by any Lender, such Lender hereby agrees to return it).




     5.6 Application of Payments. The ledger balance in the main Dominion Account of each
Borrower Group as of the end of a Business Day shall be applied to the Loan Party Group Obligations
of such Borrower Group at the beginning of the next Business Day during the existence of any Cash
Dominion Event. If, as a result of such application, a credit balance exists, the balance shall
not accrue interest in favor of Borrowers and shall be made available to Borrowers of the
applicable Borrower Group as long as no Event of Default exists. Each Borrower irrevocably waives
the right to direct the application of any payments or Collateral proceeds, and agrees that Agent
shall have the continuing, exclusive right to apply and reapply same against the Obligations, in
such manner as Agent deems advisable; provided, however, that, unless an Event of Default has
occurred and is continuing, Agent shall not apply any payments to any Interest Period Loans prior
to the last day of the applicable Interest Period.



     5.7 Loan Account; Account Stated.



          5.7.1 Loan Account. Agent shall maintain in accordance with its usual and customary
practices an account or accounts (“Loan Account”) evidencing the Obligations of Borrowers
within each Borrower Group resulting from each Loan made to such Borrowers or issuance of a Letter
of Credit for the account of Borrowers from time to time. Any failure of Agent to record anything
in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation
of any Borrower to pay any amount owing hereunder. Agent may maintain a single Loan Account in the
name of Loan Party Agent, and each U.S. Borrower confirms that such arrangement shall have no
effect on the joint and several character of its liability for the Secured Obligations including its guarantee of the Secured Obligations of
the Canadian Borrowers.




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          5.7.2 Entries Binding. Entries made in the Loan Account shall constitute presumptive
evidence of the information contained therein. If any information contained in the Loan Account is
provided to or inspected by any Person, then such information shall be conclusive and binding on
such Person for all purposes absent manifest error, except to the extent such Person notifies Agent
in writing within 45 days after receipt or inspection that specific information is subject to
dispute.




     5.8 Taxes.



          5.8.1 Payments Free of Taxes. All payments by or on behalf of any Loan Party of
Obligations shall be free and clear of and without deduction or withholding for any Indemnified
Taxes or Other Taxes, unless required by Applicable Law. If Applicable Law requires any Loan Party
or Agent to withhold or deduct any Indemnified Taxes or Other Taxes, the withholding or deduction
shall be based on Applicable Law and the information provided pursuant to Section 5.9, and the
applicable Loan Party or Agent shall pay the amount withheld or deducted to the relevant
Governmental Authority. If the withholding or deduction is made on account of Indemnified Taxes or
Other Taxes, the sum payable by Borrowers shall be increased so that Agent, Lender, U.S. Fronting
Bank or Canadian Fronting Bank, as applicable, receives an amount equal to the sum it would have
received if no such withholding or deduction (including deductions applicable to additional sums
payable under this Section 5.8.1) had been made. Without limiting the foregoing, Borrowers shall
timely pay all Other Taxes to the relevant Governmental Authorities.




          5.8.2 Payment. Borrowers shall indemnify, hold harmless and reimburse (within 10 days
after written demand therefor) Agent, Applicable Lenders and, in the case of U.S. Borrowers, U.S.
Fronting Bank, and, in the case of each Canadian Borrower, Canadian Fronting Bank, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes and Other Taxes
attributable to amounts payable under this Section 5.8.2) paid by Agent, any Applicable Lender or,
in the case of the U.S. Borrowers, U.S. Fronting Bank, or, in the case of each Canadian Borrower,
Canadian Fronting Bank, with respect to any Obligations of such Borrower’s Borrower Group, U.S.
Letters of Credit (in the case of U.S. Borrowers), Canadian Letters of Credit (in the case of
Canadian Borrowers) or Loan Documents (to the extent relating to Obligations), whether or not such
Taxes were properly asserted by the relevant Governmental Authority, and including all penalties,
interest and reasonable expenses relating thereto. A certificate setting forth in reasonable
detail the amount and basis for calculation of any such payment or liability delivered to Loan
Party Agent by Agent, or by an Applicable Lender, U.S. Fronting Bank or Canadian Fronting Bank
(with a copy to Agent), shall be conclusive, absent manifest error and all amounts payable by
Borrowers under this Section 5.8.2 shall be due in accordance with Section 3.3. As soon as
reasonably practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower, Loan
Party Agent shall deliver to Agent a receipt from the Governmental Authority or other evidence of
payment reasonably satisfactory to Agent.




          5.8.3 Treatment of Certain Refunds. If Agent, any Lender, U.S. Fronting Bank or
Canadian Fronting Bank shall become aware that it is entitled to claim a refund or credit from a
Governmental Authority in respect of any Indemnified Tax or Other Taxes as to which is has been
indemnified by any Borrower or with respect to which any Borrower has paid





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additional amounts pursuant to this Section 5.8, the Agent, such Lender, U.S. Fronting Bank or
Canadian Fronting Bank, as applicable, shall promptly notify such Borrower of the availability of
such refund claim and, if the Agent, such Lender, U.S. Fronting Bank or Canadian Fronting Bank
determines in good faith that making a claim for refund will not have a material adverse effect on
its Taxes or business operations, shall, within 60 days after receipt of a request by such
Borrower, make a claim to such Governmental Authority for such refund. If Agent, a Lender, any
U.S. Fronting Bank or Canadian Fronting Bank determines, in its sole discretion, that it has
received a refund of any Indemnified Tax or Other Taxes as to which it has been indemnified by any
Borrower or with respect to which any Borrower has paid additional amounts pursuant to this Section
5.8, it shall pay to such Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by Borrowers under this Section 5.8 with
respect to the Indemnified Tax or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Agent, such Lender, U.S. Fronting Bank or Canadian Fronting Bank, as the case may
be, and without interest (other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided that Borrowers agree in writing to repay the amount paid over to
Borrowers (plus interest attributable to the period during which the Borrowers held such funds) to
Agent, such Lender, U.S. Fronting Bank or Canadian Fronting Bank in the event that Agent, such
Lender, U.S. Fronting Bank or Canadian Fronting Bank is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require Agent, any Lender, U.S.
Fronting Bank or Canadian Fronting Bank to make available its tax returns (or any other information
relating to its taxes) to any Borrower or any other Person.




     5.9 Lender Tax Information.



          5.9.1 Generally. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which an Loan Party is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
under any Loan Document shall deliver to Agent and Loan Party Agent, at the time or times
prescribed by Applicable Law or reasonably requested by Agent or Loan Party Agent, 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 of withholding. In addition, any Lender, if
requested by Agent or Loan Party Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by Agent or Loan Party Agent as will enable Agent and Loan
Party Agent to determine whether or not such Lender is subject to backup withholding or information
reporting requirements.




          5.9.2 U.S. Borrowers. If a Borrower is resident for tax purposes in the United
States, any Lender that is a “United States person” within the meaning of section 7701(a)(30) of
the Code shall deliver to Agent and Loan Party Agent IRS Form W-9 or such other documentation or
information prescribed by Applicable Law or reasonably requested by Agent or Loan Party Agent to
determine whether such Lender is subject to information reporting requirements and to establish
that such Lender is not subject to backup withholding. If any Foreign Lender is entitled to any
exemption from or reduction of withholding tax for payments with respect to the U.S. Facility
Obligations, it shall deliver to Agent and Loan Party Agent, on or prior to the date on which it
becomes a Lender hereunder (and from time to time thereafter upon request by Agent or Loan Party
Agent, but only if such Foreign Lender is legally entitled to




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do so) two original executed copies of, (a) IRS Form W-8BEN claiming eligibility for benefits
of an income tax treaty to which the United States is a party; (b) IRS Form W-8ECI; (c) IRS Form
W-8IMY and all required supporting documentation (including, a certificate in the form of Exhibit
J-2 (a “Non-Bank Certificate”) applicable to a partnership, if applicable); (d) in the case
of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section
871(h) or section 881(c) of the Code, IRS Form W-8BEN and a Non-Bank Certificate in the form of
Exhibit J-1 or Exhibit J-2, as applicable; and/or (e) any other form prescribed by Applicable Law
as a basis for claiming exemption from or a reduction in withholding tax, together with such
supplementary documentation as may be necessary to allow Agent and U.S. Borrowers to determine the
withholding or deduction required to be made.




          5.9.3 Lender Obligations. Each Applicable Lender, U.S. Fronting Bank and Canadian
Fronting Bank shall promptly notify Loan Party Agent and Agent of any change in circumstances that
would change any claimed Tax exemption or reduction. Each Applicable Lender, U.S. Fronting Bank
and Canadian Fronting Bank, in each case, severally and not jointly with any other Applicable
Lender, U.S. Fronting Bank and/or Canadian Fronting Bank, shall indemnify, hold harmless and
reimburse (within 10 days after demand therefor) affected Borrowers of the Borrower Group to which
such Lender, U.S. Fronting Bank or Canadian Fronting Bank has issued a Commitment and Agent for any
Taxes, losses, claims, liabilities, penalties, interest and expenses (including reasonable and
documented attorneys’ fees limited to the fees, disbursements and other charges or one primary
counsel and one local counsel in each relevant jurisdiction) incurred by or asserted against such
affected Borrower of such Borrower Group or Agent by any Governmental Authority due to such
Applicable Lender’s, U.S. Fronting Bank’s or Canadian Fronting Bank’s failure to deliver, or
inaccuracy or deficiency in, any documentation required to be delivered by it pursuant to this
Section. Each Applicable Lender, U.S. Fronting Bank and Canadian Fronting Bank authorizes Agent to
set off any amounts due to Agent under this Section against any amounts payable to such Applicable
Lender, U.S. Fronting Bank or Canadian Fronting Bank under any Loan Document. If a payment made to
Agent, a Lender or a Fronting Bank under any Loan Document would be subject to United States
withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA, Agent, such Lender or such Fronting Bank shall deliver to the
Borrowers and the Agent at the time or times prescribed by Applicable Law and at such time or times
reasonably requested by the Borrowers or Agent such documentation prescribed by Applicable Law and
such additional documentation reasonably requested by the Borrowers or Agent as may be necessary
for the Borrowers and Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with its obligations under such sections, or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this Section 5.9.3, “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.




     5.10 Guarantee by U.S. Facility Loan Parties.



          5.10.1 Joint and Several Liability. Each U.S. Domiciled Loan Party agrees that it is
jointly and severally liable for, and absolutely and unconditionally guarantees to Agent and
Lenders the prompt payment and performance of, all Secured Obligations and all agreements of each
other Loan Party under the Credit Documents. Each U.S. Domiciled Loan Party agrees that its
guarantee obligations as a U.S. Facility Guarantor and as a Canadian Facility Guarantor






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hereunder constitute a continuing guarantee of payment and not of collection, that such
guarantee obligations shall not be discharged until Full Payment of the Secured Obligations, and
that such guarantee obligations are absolute and unconditional, irrespective of (a) the
genuineness, validity, regularity, enforceability, subordination or any future modification of, or
change in, any Secured Obligations or Credit Document, or any other document, instrument or
agreement to which any Loan Party is or may become a party or be bound; (b) the absence of any
action to enforce this Agreement (including this Section 5.10) or any other Credit Document, or any
waiver, consent or indulgence of any kind by Agent or any Lender with respect thereto; (c) the
existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any
security or guarantee for the Secured Obligations or any action, or the absence of any action, by
Agent or any Lender in respect thereof (including the release of any security or guarantee); (d)
the insolvency of any Loan Party; (e) any election by Agent or any Lender in an Insolvency
Proceeding for the application of Section 1111(b)(2) of the U.S. Bankruptcy Code; (f) any borrowing
or grant of a Lien by any other Loan Party, as debtor-in-possession under Section 364 of the U.S.
Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any Lender against any
Loan Party for the repayment of any Secured Obligations under Section 502 of the U.S. Bankruptcy
Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, except Full Payment of all Secured
Obligations.




          5.10.2 Waivers.



          (a) Each U.S. Domiciled Loan Party hereby expressly waives all rights that it may have now or
in the future under any statute, at common law, in equity or otherwise, to compel Agent or Lenders
to marshal assets or to proceed against any Loan Party, other Person or security for the payment or
performance of any Secured Obligations before, or as a condition to, proceeding against such Loan
Party. To the extent permitted by Applicable Law, each U.S. Domiciled Loan Party waives all
defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of
all Secured Obligations. It is agreed among each U.S. Domiciled Loan Party, Agent and Lenders that
the provisions of this Section 5.10 are of the essence of the transaction contemplated by the
Credit Documents and that, but for such provisions, Agent and Lenders would decline to make Loans
and issue Letters of Credit. Each U.S. Domiciled Loan Party acknowledges that its guarantee
pursuant to this Section is necessary to the conduct and promotion of its business, and can be
expected to benefit such business.




          (b) Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem
appropriate, including realization upon the Collateral by judicial foreclosure or non judicial sale
or enforcement, to the extent permitted under Applicable Law, without affecting any rights and
remedies under this Section 5.10. If, in taking any action in connection with the exercise of any
rights or remedies, Agent or any Lender shall forfeit any other rights or remedies, including the
right to enter a deficiency judgment against any U.S. Domiciled Party or other Person, whether
because of any Applicable Laws pertaining to “election of remedies” or otherwise, each U.S.
Domiciled Loan Party consents to such action and, to the extent permitted under Applicable Law,
waives any claim based upon it, even if the action may result in loss of any rights of subrogation
that any U.S. Domiciled Loan Party might otherwise have had. To the extent permitted under
Applicable Law, any election of remedies that results in denial or impairment of the right of Agent
or any Lender to seek a deficiency






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judgment against any U.S. Domiciled Loan Party shall not impair any other U.S. Domiciled Loan
Party’s obligation to pay the full amount of the Secured Obligations. To the extent permitted
under Applicable Law, each U.S. Domiciled Loan Party waives all rights and defenses arising out of
an election of remedies, such as nonjudicial foreclosure with respect to any security for the
Secured Obligations, even though that election of remedies destroys such U.S. Domiciled Loan
Party’s rights of subrogation against any other Person. To the extent permitted under Applicable
Law, Agent may bid all or a portion of the Secured Obligations at any foreclosure or trustee’s sale
or at any private sale, and the amount of such bid need not be paid by Agent but shall be credited
against the Secured Obligations in accordance with the terms of this Agreement. To the extent
permitted under Applicable Law, the amount of the successful bid at any such sale, whether Agent or
any other Person is the successful bidder, shall be conclusively deemed to be the fair market value
of the Collateral, and the difference between such bid amount and the remaining balance of the
Secured Obligations shall be conclusively deemed to be the amount of the Secured Obligations
guaranteed under this Section 5.10, notwithstanding that any present or future law or court
decision may have the effect of reducing the amount of any deficiency claim to which Agent or any
Lender might otherwise be entitled but for such bidding at any such sale.




          5.10.3 Extent of Liability; Contribution.



          (a) Notwithstanding anything herein to the contrary, each U.S. Domiciled Loan Party’s
liability under this Section 5.10 shall be limited to the greater of (i) all amounts for which such
U.S. Domiciled Loan Party is primarily liable, as described below, and (ii) such U.S. Domiciled
Loan Party’s Allocable Amount.




          (b) If any U.S. Domiciled Loan Party makes a payment under this Section 5.10 of any Secured
Obligations (other than amounts for which such U.S. Domiciled Loan Party is primarily liable) (a
“Guarantor Payment”) that, taking into account all other Guarantor Payments previously or
concurrently made by any other U.S. Domiciled Loan Party, exceeds the amount that such U.S.
Domiciled Loan Party would otherwise have paid if each U.S. Domiciled Loan Party had paid the
aggregate Secured Obligations satisfied by such Guarantor Payments in the same proportion that such
U.S. Domiciled Loan Party’s Allocable Amount bore to the total Allocable Amounts of all U.S.
Domiciled Loan Parties, then such U.S. Domiciled Loan Party shall be entitled to receive
contribution and indemnification payments from, and to be reimbursed by, each other U.S. Domiciled
Loan Party for the amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment. The “Allocable Amount” for any U.S.
Domiciled Loan Party shall be the maximum amount that could then be recovered from such U.S.
Domiciled Loan Party under this Section 5.10 without rendering such payment voidable under Section
548 of the U.S. Bankruptcy Code or under any applicable state fraudulent transfer or conveyance
act, or similar statute or common law.




          (c) Nothing contained in this Section 5.10 shall limit the liability of any Loan Party to pay
Loans made directly or indirectly to that Loan Party (including Loans advanced to any other Loan
Party and then re-loaned or otherwise transferred to, or for the benefit of, such Loan Party), U.S.
LC Obligations relating to U.S. Letters of Credit issued to support such Loan Party’s business (in
the case of a U.S. Borrower), Canadian LC Obligations relating to Canadian






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Letters of Credit issued to support such Loan Party’s business (in the case of a Canadian
Borrower), and all accrued interest, fees, expenses and other related Secured Obligations with
respect thereto, for which such Loan Party shall be primarily liable for all purposes hereunder.




          5.10.4 Joint Enterprise. Each Borrower has requested that Agent and Lenders make this
credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business
most efficiently and economically. Borrowers and Guarantors make up a related organization of
various entities constituting a single economic and business enterprise so that Borrowers and
Guarantors share an identity of interests such that any benefit received by any one of them
benefits the others. Borrowers and Guarantors render services to or for the benefit of the other
Borrowers and/or Guarantors, as the case may be, purchase or sell and supply goods to or from or
for the benefit of the others, make loans, advances and provide other financial accommodations to
or for the benefit of the other Borrowers and Guarantors (including inter alia, the payment by
Borrowers and Guarantors of creditors of the other Borrowers or Guarantors and guarantees by
Borrowers and Guarantors of indebtedness of the other Borrowers and Guarantors and provide
administrative, marketing, payroll and management services to or for the benefit of the other
Borrowers and Guarantors). Borrowers and Guarantors have centralized accounting and legal
services, certain common officers and directors and generally do not provide consolidating
financial statements to creditors. Borrowers acknowledge and agree that Agent’s and Lenders’
willingness to extend credit to Borrowers and to administer the Collateral on a combined basis, as
set forth herein, is done solely as an accommodation to Borrowers and at Borrowers’ request.




          5.10.5 Subordination. Each Loan Party hereby subordinates any claims, including any
rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution,
indemnification or set off, that it may have at any time against any other Loan Party, howsoever
arising, to the Full Payment of all Secured Obligations.




     5.11 Currency Matters. Dollars are the currency of account and payment for each and
every sum at any time due from Borrowers hereunder unless otherwise specifically provided in this
Agreement, any other Loan Document or otherwise agreed to by Agent.



          5.11.1 Each repayment of a Revolver Loan, U.S. LC Obligation or Canadian LC Obligation or a
part thereof shall be made in the currency in which such Revolver Loan, U.S. LC Obligation or
Canadian LC Obligation is denominated at the time of that repayment;




          5.11.2 Each payment of interest shall be made in the currency in which the principal or other
sum in respect of which such interest is denominated;




          5.11.3 Each payment of fees by a U.S. Borrower pursuant to Section 3.2 shall be in Dollars;




          5.11.4 Each payment of fees by a Canadian Borrower pursuant to Section 3.2 shall be in
Canadian Dollars;




          5.11.5 Each payment in respect of Extraordinary Expenses and any other costs, expenses and
indemnities shall be made in the currency in which the same were incurred by the party to whom
payment is to be made; and







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          5.11.6 Any amount expressed to be payable in Canadian Dollars shall be paid in Canadian
Dollars.



No payment to any Credit Party (whether under any judgment or court order or otherwise) shall
discharge the obligation or liability of the Loan Party in respect of which it was made unless and
until such Credit Party shall have received Full Payment in the currency in which such obligation
or liability is payable pursuant to the above provisions of this Section 5.11. To the extent that
the amount of any such payment shall, on actual conversion into such currency, fall short of such
obligation or liability actual or contingent expressed in that currency, such Loan Party (together
with the other Loan Parties within its Loan Party Group or other obligors pursuant to any Guarantee
of the Obligations of such Loan Party Group) agrees to indemnify and hold harmless such Credit
Party, with respect to the amount of the shortfall with respect to amounts payable by such Loan
Party hereunder, with such indemnity surviving the termination of this Agreement and any legal
proceeding, judgment or court order pursuant to which the original payment was made which resulted
in the shortfall. To the extent that the amount of any such payment to a Credit Party shall, upon
an actual conversion into such currency, exceed such obligation or liability, actual or contingent,
expressed in that currency, such Credit Party shall return such excess to the members of the
affected Borrower Group.



SECTION 6. CONDITIONS PRECEDENT




     6.1 Conditions Precedent to Initial Loans. In addition to the conditions set forth in
Section 6.2, Lenders shall not be required to fund any requested Loan, issue any Letter of Credit,
or otherwise extend credit to Borrowers hereunder, until the date (“Closing Date”) on which
each of the following conditions has been satisfied (and with respect to deliveries of Loan
Documents, each such delivery shall be fully-executed (where applicable) and in form and substance
reasonably satisfactory to the Agent and its counsel):



          (a) Loan Documents. Notes shall have been executed by each Borrower within a Borrower
Group and delivered to each Applicable Lender that requests issuance of a Note at least three
Business Days prior to the Closing Date. Each other Loan Document shall have been duly executed
(where applicable) by each of the signatories thereto and delivered to the Agent, and each Loan
Party shall be in compliance with all terms thereof.




          (b) Deposit Account Control Agreements. Except as provided for on Schedule
10.1.16(c), Agent shall have received evidence of the establishment of each Dominion Account and
related lockboxes, together with fully-executed Deposit Account Control Agreements with respect
thereto and covering the Deposit Accounts listed on Schedule 5 to the Perfection Certificate (other
than Excluded Deposit Accounts).




          (c) Securities Account Control Agreements. Agent shall have received fully-executed
Securities Account Control Agreements covering the Securities Accounts listed on Schedule 5 to the
Perfection Certificate.




          (d) Joinder to Intercreditor Agreement. The Agent shall have entered into a joinder
or amendment to the Intercreditor Agreement, in form and substance reasonably satisfactory to the
Agent, and the Intercreditor Agreement shall be in full force and effect.







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          (e) Perfected First-Priority Liens. The Agent shall have received (i) reasonably
satisfactory evidence that the Agent shall have a valid and perfected first priority (except as
otherwise permitted hereunder) Lien, security interest and hypothecation in the Collateral
(including acknowledgments of all filings or recordations necessary to perfect its Liens in the
Collateral) and (ii) releases, satisfactions and payoff letters terminating all Liens on the
Collateral arising under the Existing U.S. Credit Agreement, the Existing Canadian Credit Agreement
and the ATB Financial Debt and all other Liens not permitted under Section 10.2.2.




          (f) Lien Searches. The Agent shall have received UCC, PPSA, title and Lien searches
and other evidence reasonably satisfactory to Agent that its Liens are the only Liens upon the
Collateral, except Liens permitted under Section 10.2.2 and Liens being terminated under Section
6.1(e).




          (g) Payment of Recording Costs. All filing and recording fees and taxes shall have
been duly paid or arrangements satisfactory to the Agent shall have been made for the payment
thereof.




          (h) Closing Certificates. The Agent shall have received a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit H-1 with respect to the
Canadian Facility Loan Parties, and in the form of Exhibit H-2 with respect to the U.S. Facility
Loan Parties, with appropriate insertions, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Loan Party, and attaching the documents referred to in
Section 6.1(i).




          (i) Organic Documents; Incumbency. The Agent shall have received a copy of (i) each
Organic Document of each Loan Party certified, to the extent applicable, as of a recent date by the
applicable Governmental Authority, (ii) signature and incumbency certificates of the Senior
Officers of each Loan Party executing the Loan Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Loan Party (A) approving and
authorizing the execution, delivery and performance of the Loan Documents to which it is a party
and (B) in the case of each Borrower, the extensions of credit contemplated hereunder, certified as
of the Closing Date by its secretary or an assistant secretary as being in full force and effect
without modification or amendment and (d) a good standing certificate (or other similar instrument)
from the applicable Governmental Authority of each Loan Party’s jurisdiction of incorporation,
organization or formation.




          (j) Fees. The Joint Lead Arrangers and the Agent shall have received the fees to be
received on the Closing Date set forth in the Fee Letter. The Lenders shall have received the fees
in the amounts previously agreed in writing by the Agent, the Borrowers and such Lenders to be
received on the Closing Date, and all reasonable and documented out-of-pocket expenses of the Agent
(including the reasonable and documented fees, disbursements and other charges of counsel (which
shall be limited to the reasonable and documented out-of-pocket legal fees and expenses of Vinson &
Elkins LLP, counsel to Agent, Ogilvy Renault LLP, Canadian counsel to Agent, and, if necessary, of
one local counsel in each other relevant jurisdiction (which may include a local counsel acting in
multiple jurisdictions)) for which invoices have been presented prior to the Closing Date shall
have been paid.







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          (k) Solvency Certificate. On the Closing Date, the Agent shall have received a
certificate from a Senior Officer of the Loan Party Agent, with appropriate attachments and
demonstrating that after giving effect to the consummation of the transactions contemplated by this
Agreement, the Borrowers and the Guarantors, taken as a whole, are Solvent.




          (l) Historical Financial Statements. Lenders shall have received the Historical
Financial Statements.




          (m) Financial Projections. The Agent shall have received financial projections of the
Borrowers, which shall be reasonably acceptable to the Agent (and the Agent hereby acknowledges
that it has received the same prior to the date hereof).




          (n) Insurance. Certificates of insurance evidencing the existence of insurance to be
maintained by the Loan Parties pursuant to Section 10.1.5 and, if applicable, the designation of
the Agent as loss payee as its interest may appear thereunder, in each case, in form and substance
satisfactory to the Agent.




          (o) Borrowing Base Certificate. The Agent shall have received a Borrowing Base
Certificate setting forth the Canadian Borrowing Base and the U.S. Borrowing Base, in each case,
effective as of April 30, 2011.




          (p) Perfection Certificate. The Loan Party Agent shall deliver to the Agent a
completed Perfection Certificate, executed and delivered by a Senior Officer of the Loan Party
Agent, together with all attachments contemplated thereby.




          (q) Legal Opinions. The Agent shall have received reasonably satisfactory opinions of
counsel to the Loan Parties, in each case, customary for transactions of this type (which shall
cover, among other things, authority, legality, validity, binding effect and enforceability of the
Loans and the creation and perfection of Liens in the Collateral) and of appropriate local counsel
(including Canadian counsel of applicable jurisdictions).




          (r) No Material Adverse Change. There shall not have occurred since December 31, 2010
any Material Adverse Change or any event or condition that has had or could be reasonably expected,
either individually or in the aggregate, to have a Material Adverse Effect.




          (s) Excess Availability. Upon giving effect to the initial funding of Loans and
issuance of Letters of Credit, and the payment by the Borrowers of all fees and expenses incurred
in connection herewith and due on the Closing Date, as well as the amount of any payables stretched
beyond their customary payment practices, Excess Availability shall be at least $300,000,000.




          (t) No Litigation. There shall be no action, suit, investigation litigation or
proceeding pending or threatened in any court or before any arbitrator or Governmental Authority
that could reasonably be expected to have a Material Adverse Effect.




          (u) Third-Party Consents. The Agent shall have received a certificate of a Senior
Officer of each Loan Party either (i) attaching copies of all consents, licenses and






102









 







approvals required or appropriate to be obtained from any Governmental Authority or other
third-party in connection with the execution, delivery and performance by and the validity against
each Loan Party of the Loan Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (ii) stating that no such consents, licenses or
approvals are so required.




          (v) Payment of Existing Indebtedness. The ATB Financial Debt and all Indebtedness
arising under the Existing Canadian Credit Agreement and the Existing U.S. Credit Agreement shall
have been repaid in full or shall be repaid in full with the proceeds of the initial Loans, and the
Agent shall have received payoff letters or similar agreements which evidence the foregoing.




     6.2 Conditions Precedent to All Credit Extensions. The Agent, Fronting Bank and
Lenders shall not be required to fund any Loans, arrange for issuance of any Letters of Credit or
grant any other accommodation to or for the benefit of Borrowers (including the initial Loans on
the Closing Date), unless the following conditions are satisfied:



          (a) No Default or Event of Default shall exist at the time of, or result from, such funding,
issuance or grant;




          (b) The representations and warranties of each Loan Party in the Loan Documents shall be true
and correct in all material respects (or, with respect to representations and warranties qualified
by materiality, in all respects) as of the date of such extension of credit (it being understood
and agreed that any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of such specified date);




          (c) Excess Availability of not less than the amount of the proposed Borrowing shall exist;




          (d) Both immediately before and immediately after giving effect thereto, no Canadian
Overadvance or U.S. Overadvance shall exist or would result therefrom and the Total Revolver
Exposure would not exceed the Maximum Facility Amount;




          (e) With respect to the issuance of a Letter of Credit, the Canadian LC Conditions or the U.S.
LC Conditions, as applicable, shall be satisfied; and




          (f) With respect to the funding of any Canadian Revolver Loan, arrangement for issuance of any
Canadian Letter of Credit or grant any other accommodation to or for the benefit of any Canadian
Borrower, the requirements of Section 2.3 are satisfied.



Each request (or any deemed request, except a deemed request in connection with a Protective
Advance or pursuant to Sections 2.2.2(a) or 2.2.5(a)) by Loan Party Agent or any Borrower for
funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a
representation by all Borrowers that the foregoing conditions are satisfied on the date of such
request and on the date of such funding, issuance or grant.







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SECTION 7. COLLATERAL




     7.1 Grant of Security Interest. (a) To secure the prompt payment and performance of
all Secured Obligations (including all Secured Obligations of the Guarantors) whether arising under
the Credit Documents or otherwise, each U.S. Domiciled Loan Party hereby grants to the Agent, for
the benefit of the Secured Parties, and (b) to secure the prompt payment and performance of its
Applicable Canadian Borrower Secured Obligations, each Canadian Domiciled Loan Party hereby grants
to the Agent, for the benefit of the Canadian Facility Secured Parties, in each case, a continuing
security interest in and Lien upon all of the following Property of such Loan Party, whether now
owned or hereafter acquired, and wherever located:




          (i) all Accounts;




          (ii) all Inventory or Documents, customs receipts, insurance certificates, shipping
documents and other written materials related to the purchase or import of any Inventory;




          (iii) all Specified Revolving Credit Collateral;




          (iv) all Deposit Accounts (other than the Net Available Cash Account, to the extent
that it constitutes a Deposit Account) and Securities Accounts (other than the Net Available
Cash Account, to the extent it constitutes a Securities Account), including all cash,
marketable securities, securities entitlements, financial assets and other funds held in or
on deposit in any of the foregoing;




          (v) monies, cash and deposits;




          (vi) all Records, Supporting Obligations and related Letter-of-Credit Rights,
Commercial Tort Claims or other claims and causes of action, in each case, to the extent not
primarily related to Notes Priority Lien Collateral; and




          (vii) to the extent not otherwise included, all substitutions, replacements,
accessions, products and proceeds (including, insurance proceeds, investment property,
licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all
of the foregoing.



     7.2 Lien on Deposit Accounts; Cash Collateral.



          7.2.1 Deposit Accounts. (a) To further secure the prompt payment and performance of
all Secured Obligations, each U.S. Domiciled Loan Party hereby grants to the Agent, for the benefit
of the Secured Parties, and (b) to further secure the prompt payment and performance of all
Canadian Facility Secured Obligations, each Canadian Domiciled Loan Party hereby grants to Agent,
for the benefit of the Canadian Facility Secured Parties, in each case, a continuing security
interest in and Lien on all amounts credited to any Deposit Account and Dominion Account of such
Loan Party, including any sums in any blocked or lockbox accounts or in any accounts into which
such sums are swept. Each Loan Party hereby authorizes and directs each bank or other depository
to deliver to the Agent, upon request, all balances (other than the minimum balances required to be
retained therein by the related depository bank and






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agreed to by the Agent) in any Deposit Account and Dominion Account maintained by such Loan
Party, without inquiry into the authority or right of Agent to make such request.




          7.2.2 Cash Collateral. Any Cash Collateral may be invested, at Agent’s discretion, in
Permitted Investments, but Agent shall have no duty to do so, regardless of any agreement or course
of dealing with any Loan Party, and shall have no responsibility for any investment or loss. To
further secure the prompt payment and performance of all Secured Obligations, each U.S. Domiciled
Loan Party hereby grants to Agent, for the benefit of the Secured Parties, and to further secure
the prompt payment and performance of all Canadian Facility Secured Obligations, each Canadian
Domiciled Loan Party hereby grants to Agent, for the benefit of the Canadian Facility Secured
Parties, in each case, a continuing security interest in and Lien on all Cash Collateral held by
such Loan Party from time to time and all proceeds thereof, whether such Cash Collateral is held in
a Cash Collateral Account or otherwise. Agent may apply Cash Collateral of a U.S. Domiciled Loan
Party to the payment of any Secured Obligations, and may apply Cash Collateral of a Canadian
Domiciled Loan Party to the payment of any Canadian Facility Secured Obligations, in each case, in
such order as Agent may elect, as they become due and payable. Each Cash Collateral Account and
all Cash Collateral shall be under the sole dominion and control of Agent. No U.S. Domiciled Loan
Party or other Person claiming through or on behalf of any U.S. Domiciled Loan Party shall have any
right to any Cash Collateral, until Full Payment of all Secured Obligations. No Canadian Domiciled
Loan Party or other Person claiming through or on behalf of any Canadian Domiciled Loan Party shall
have any right to any Cash Collateral, until Full Payment of all Canadian Facility Secured
Obligations.




     7.3 Pledged Collateral.



          7.3.1 Pledged Stock and Debt Securities. As security for the payment or performance,
as the case may be, in full of its Applicable Canadian Borrower Secured Obligations, each Canadian
Borrower hereby assigns and pledges to Agent, its successors and assigns, for the benefit of the
Canadian Facility Secured Parties, and hereby grants to Agent, its successors and assigns, for the
benefit of the Canadian Facility Secured Parties, a security interest in, all of such Canadian
Borrower’s right, title and interest in, to and under (a) the Stock now owned or at any time
hereafter acquired by such Canadian Borrower (except for any Stock which such Canadian Borrower
owns in an entity that is not a Subsidiary of such Canadian Borrower or that is a Subsidiary of
such Canadian Borrower and for which such Canadian Borrower’s pledge hereunder would require
third-party consent that is not reasonably obtainable), including the Stock set forth opposite the
name of such Canadian Borrower on Schedule 7.3, and all certificates and other instruments
representing such Stock (collectively, the “Pledged Stock”); (b) the debt securities now
owned or at any time hereafter acquired by such Canadian Borrower, including the debt securities
set forth opposite the name of such Canadian Borrower on Schedule 7.3, and all promissory notes and
other instruments evidencing such debt securities (collectively, the “Pledged Debt
Securities”); (c) all other property that may be delivered to and held by the Agent pursuant to
the terms of this Section; (d) subject to Section 7.3.5, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received, receivable or otherwise
distributed in respect of, in exchange for or upon the conversion of, and all other proceeds
received in respect of, the securities and instruments referred to in clauses (a) and (b) above;
(e) subject to Section 7.3.5, all rights and privileges of such Canadian Borrower with respect to
the securities, instruments and






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other property referred to
in clauses (a), (b), (c) and (d) above; and (f) all proceeds of any and all of the foregoing
(the items referred to in clauses (a) through (f) above being collectively referred to as the
“Pledged Collateral”).




          7.3.2 Delivery of the Pledged Collateral.




          (a) Each Canadian Borrower agrees to deliver or cause to be delivered to the Agent any and all
Pledged Collateral at every time owned by such Canadian Borrower promptly following its acquisition
thereof.




          (b) Each Canadian Borrower will cause (i) all Indebtedness of any Subsidiary or any other of
its Affiliates and (ii) all Debt of any other person in a principal amount of $1,000,000 or more
that, in each case, is owing to such Canadian Borrower to be evidenced by a duly executed
promissory note that is pledged and delivered to Agent pursuant to the terms hereof.




          (c) Upon delivery to Agent, (i) any Pledged Stock shall be accompanied by undated stock powers
duly executed by the Applicable Canadian Borrower in blank or other instruments of transfer
satisfactory to Agent and by such other instruments and documents as Agent may reasonably request
and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by
undated proper instruments of assignment duly executed by the Applicable Canadian Borrower in blank
and by such other instruments and documents as Agent may reasonably request. Each delivery of
Pledged Collateral after the date hereof shall be accompanied by a schedule describing the Pledged
Collateral so delivered, which schedule shall be attached to Schedule 7.3 and made a part hereof;
provided that failure to attach any such schedule hereto or any error in a schedule so attached
shall not affect the validity of the pledge of any Pledged Collateral.




          7.3.3 Pledge Related Representations, Warranties and Covenants. Each Canadian
Borrower hereby represents, warrants and covenants to the Agent and the Secured Parties that:




          (a) Schedule 7.3 sets forth a true and complete list of (i) all the Stock owned by such
Canadian Borrower and the percentage of the issued and outstanding units of each class of the Stock
of the issuer thereof represented by the Pledged Stock owned by such Canadian Borrower and required
to be pledged hereunder and (ii) all debt securities owned by such Canadian Borrower, and all
promissory notes and other instruments evidencing such debt securities which are required to be
pledged hereunder. Schedule 7.3 sets forth all Stock, debt securities and promissory notes
required to be pledged hereunder.




          (b) The Pledged Stock and Pledged Debt Securities have been duly and validly authorized and
issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and
nonassessable and (ii) in the case of Pledged Debt Securities, are legal, valid and binding
obligations of the issuers thereof, subject to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance and transfer, moratorium or similar laws affecting creditors’ rights
generally and subject, as to enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity or at law).







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          (c) Except for the security interests granted hereunder, the Applicable Canadian Borrower (i)
is and, subject to any transfers or dispositions made in compliance with this Agreement, will
continue to be the direct owner, beneficially and of record, of the Pledged Collateral listed on
Schedule 7.3, (ii) holds the same free and clear of all Liens (other than the Liens permitted
pursuant to Section 10.2.2 and other Liens or transfers or dispositions permitted under this
Agreement), (iii) will make no assignment, pledge, hypothecation or transfer of, or create or
permit to exist any security interest in or other Lien on, the Pledged Collateral (other than the
Liens permitted pursuant to Section 10.2.2 and other Liens or transfers or dispositions permitted
under this Agreement) and (iv) will defend its title or interest thereto or therein against any and
all Liens (other than the Liens permitted pursuant to Section 10.2.2 and other Liens or transfers
or dispositions permitted under this Agreement), however arising, of all persons whomsoever.




          (d) Each Canadian Borrower has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated.




          (e) No Governmental Approval or any other action by any Governmental Authority and no consent
or approval of any securities exchange or any other person (including stockholders, partners,
members or creditors of the Applicable Canadian Borrower) is or will be required for the validity
of the pledge effected hereby (other than such as have been obtained and are in full force and
effect).




          (f) By virtue of the execution and delivery by each Canadian Borrower of this Agreement (or a
supplement or joinder to this Agreement, substantially in the form of Exhibit I) or, when any
Pledged Collateral of such Canadian Borrower is delivered to Agent (or its gratuitous bailee) in
accordance with this Agreement, Agent will obtain a legal, valid and perfected lien upon and
security interest in such Pledged Collateral as security for the payment and performance of its
Applicable Canadian Borrower Secured Obligations.




          7.3.4 Registration in Nominee Name; Denominations. Agent shall have the right (in its
sole and absolute discretion) to hold the Pledged Collateral in its own name as pledgee, in the
name of its nominee (as pledgee or as sub-agent) or in the name of the Applicable Canadian
Borrower, endorsed or assigned in blank or in favor of Agent. Each Canadian Borrower will promptly
give to Agent copies of any notices or other communications received by it with respect to its
Pledged Collateral. Agent shall at all times have the right to exchange the certificates
representing Pledged Collateral for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.




          7.3.5 Voting Rights; Dividends and Interest.




          (a) Unless and until an Event of Default shall have occurred and be continuing and Agent shall
have notified the Applicable Canadian Borrower that its rights under this Section are being
suspended:





          (i) The Applicable Canadian Borrower shall be entitled to exercise any and all voting
and other consensual rights and powers inuring to an owner of Pledged Collateral or any part
thereof for any purpose consistent with the terms of this Agreement



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and the other Loan Documents; provided that such rights and powers shall not be
exercised in any manner that could materially and adversely affect the rights inuring to a
holder of any Pledged Collateral or the rights and remedies of Agent or any other Secured
Party under this Agreement or any other Loan Document or the ability of the Secured Parties
to exercise the same.




          (ii) Agent shall execute and deliver to the Applicable Canadian Borrower, or cause to
be executed and delivered to the Applicable Canadian Borrower, all such proxies, powers of
attorney and other instruments as the Applicable Canadian Borrower may reasonably request
for the purpose of enabling the Applicable Canadian Borrower to exercise the voting and
other consensual rights and powers it is entitled to exercise pursuant to paragraph (i)
above.




          (iii) The Applicable Canadian Borrower shall be entitled to receive and retain any and
all dividends, interest, principal and other distributions paid on or distributed in respect
of its Pledged Collateral to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise paid or
distributed in accordance with, the terms and conditions of this Agreement, the other Loan
Documents and applicable laws; provided that any noncash dividends, interest, principal or
other distributions that would constitute Pledged Stock or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the outstanding Stock of
the issuer of any Pledged Collateral or received in exchange for Pledged Collateral or any
part thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or otherwise,
shall be and become part of the Pledged Collateral and, if received by the Applicable
Canadian Borrower, shall be held in trust for the benefit of the Agent, shall be segregated
from other property or funds of the Applicable Canadian Borrower and shall be forthwith
delivered to the Agent upon demand in the same form as so received (with any necessary
endorsement).



          (b) Upon the occurrence and during the continuance of an Event of Default, after Agent shall
have notified the Applicable Canadian Borrower of the suspension of its rights under paragraph
(a)(iii) of this Section, all rights of the Applicable Canadian Borrower to dividends, interest,
principal or other distributions that the Applicable Canadian Borrower is authorized to receive
pursuant to paragraph (a)(iii) of this Section shall cease, and all such rights shall thereupon
become vested in Agent, which shall have the sole and exclusive right and authority to receive and
retain such dividends, interest, principal or other distributions. All dividends, interest,
principal or other distributions received by the Applicable Canadian Borrower contrary to the
provisions of this Section shall be held in trust for the benefit of Agent, shall be segregated
from other property or funds of the Applicable Canadian Borrower and shall be forthwith delivered
to Agent upon demand in the same form as so received (with any necessary endorsement). Any and all
money and other property paid over to or received by Agent pursuant to the provisions of this
paragraph shall be retained by Agent in an account to be established by Agent upon receipt of such
money or other property, shall be held as security for the Applicable Canadian Borrower Secured
Obligations and shall be applied in accordance with the provisions of Section 5.6. After all
Events of Default have been cured or waived and Agent shall have received a certificate from a
Senior Officer of Loan Party Agent to that effect, Agent






108









 







shall promptly remit to the Applicable Canadian Borrower (without interest) all dividends,
interest, principal or other distributions that the Applicable Canadian Borrower would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section and that remain in
such account.




          (c) Upon the occurrence and during the continuance of an Event of Default, after Agent shall
have notified the Applicable Canadian Borrower of the suspension of its rights under paragraph
(a)(i) of this Section, all rights of the Applicable Canadian Borrower to exercise the voting and
other consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this
Section, and the obligations of Agent under paragraph (a)(ii) of this Section, shall cease, and all
such rights shall thereupon become vested in Agent, which shall have the sole and exclusive right
and authority to exercise such voting and other consensual rights and powers; provided that, unless
otherwise directed by the Required Lenders, Agent shall have the right from time to, in its sole
discretion, notwithstanding the continuance of an Event of Default, to permit the Applicable
Canadian Borrower to exercise such rights and powers.




     7.4 Other Collateral.



          7.4.1 Commercial Tort Claims. Loan Party Agent shall within 10 days of a Senior
Officer becoming aware thereof notify Agent in writing if any Loan Party has a Commercial Tort
Claim (other than, as long as no Default or Event of Default exists, Commercial Tort Claims
reasonably expected to result in awarded damages (net of anticipated legal expenses relating
thereto) of less than $1,000,000 in aggregate) and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to confer upon Agent (for the benefit of Secured Parties) a duly
perfected, first priority Lien upon such claim.




          7.4.2 Certain After-Acquired Collateral. Loan Party Agent shall notify Agent in
writing within 30 days if, after the Closing Date, any Loan Party obtains any interest in any
Property consisting of (a) Deposit Accounts other than Excluded Deposit Accounts, (b) Chattel
Paper, (c) negotiable Documents, (d) promissory notes and other Instruments (other than checks) or
(d) Investment Property consisting of any Securities Account and, upon Agent’s reasonable request,
shall promptly take such actions as Agent reasonably deems appropriate to effect Agent’s duly
perfected, first priority Lien upon such Collateral (so long as it does not constitute Notes
Priority Lien Collateral), including obtaining any appropriate possession, control agreement or
lien waiver (it being understood that there shall be no requirement to obtain lien waivers not
obtainable with commercially reasonable efforts), as appropriate and/or executing such additional
Security Documents as may be reasonably requested by Agent. If any Collateral is in the possession
of a third party, at Agent’s request, the applicable Loan Party having rights in such Collateral
shall use commercially reasonable efforts to obtain a Collateral Access Agreement in favor of the
Agent in each case to the extent the Cost of Inventory held by such third person exceeds $1,000,000
in the aggregate.




     7.5 Limitation on Permitted Discretion.



          (a) The Agent shall have the right to establish, modify or eliminate Reserves against Eligible
Accounts and Eligible Inventory from time to time in its Permitted Discretion. In addition, the
Agent reserves the right, at any time and from time to time after the Closing






109









 







Date, to adjust any of the applicable criteria, to establish new criteria and to adjust
advance rates with respect to Eligible Accounts and Eligible Inventory, in its Permitted
Discretion, subject to Section 14.1.1.




          (b) Notwithstanding the foregoing or any provision in this Agreement to the contrary,
circumstances, conditions, events or contingencies arising prior to the Closing Date and disclosed
to the Agent prior to the Closing Date shall not be the basis for any establishment or modification
of Reserves, eligibility criteria or advance rates unless (i) in the case of Reserves and
eligibility criteria, such Reserves or eligibility criteria were established on the Closing Date or
(ii) such circumstances, conditions, events or contingencies shall have changed in any material
respect since the Closing Date.




          (c) Any exercise of Permitted Discretion with respect to Reserves shall be based on a good
faith reasonable determination of the Agent that (i) the circumstances, conditions, events or
contingencies giving rise thereto will or reasonably could be expected to adversely affect a
material portion of the value of the Eligible Accounts or Eligible Inventory in either the Canadian
Borrowing Base or the U.S. Borrowing Base, the enforceability or priority of the Agent’s Liens
thereon or the amount the Secured Parties would likely receive in the liquidation of any material
portion of Eligible Accounts or Eligible Inventory in either the Canadian Borrowing Base or the
U.S. Borrowing Base and (ii) the proposed action to be taken by the Agent to mitigate the effects
described in clause (i) (including the amount of any Reserves) bears a reasonable relationship to
the circumstance, condition, event or other contingency that is the basis therefor.




          (d) Upon delivery of notice to the Loan Party Agent by the Agent of its intent to establish or
increase Reserves, the Agent shall be available to discuss the proposed Reserves or increase, and
Borrowers may take such action as may be required so that the circumstance, condition, event or
other contingency that is the basis for such Reserves or increase no longer exists, in a manner and
to the extent reasonably satisfactory to the Agent in the exercise of its Permitted Discretion. In
no event shall such notice and opportunity limit the right of the Agent to establish or change such
Reserves, unless the Agent shall have determined in its Permitted Discretion that the circumstance,
condition, event or other contingency that is the basis for such new Reserves or such change no
longer exists or has otherwise been adequately addressed by Borrowers.




     7.6 No Assumption of Liability. The Lien on Collateral granted hereunder is given as
security only and shall not subject Agent or any Lender to, or in any way modify, any obligation or
liability of Loan Parties relating to any Collateral.



     7.7 Further Assurances. Promptly upon Agent’s request, and subject to the other
provisions of this Section 7, Loan Party Agent shall deliver such instruments, assignments, title
certificates, or other documents or agreements, and shall take such actions, as Agent reasonably
deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or
otherwise to give effect to the intent of this Agreement.



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SECTION 8. COLLATERAL ADMINISTRATION




     8.1 Administration of Accounts.



          8.1.1 Records and Schedules of Accounts. Each Loan Party shall keep accurate and
complete records of its Accounts, including all payments and collections thereon, and shall submit
to Agent sales, collection, reconciliation and other reports in form reasonably satisfactory to
Agent in accordance with Section 10.1.1(g). If the collectability of Accounts of any Borrower
Group in an aggregate face amount exceeding $10,000,000 is impaired, Loan Party Agent shall notify
Agent of such occurrence promptly (and in any event within one Business Day) after any Loan Party
has knowledge thereof.




          8.1.2 Taxes. If an Account of any Loan Party includes a charge for any Taxes, Agent
is authorized, in its discretion, if the applicable Loan Party has not paid such Taxes when due, to
pay the amount thereof to the proper Governmental Authority for the account of such Loan Party and
to charge the Loan Parties therefor; provided, however, that neither Agent nor Lenders shall be
liable for any Taxes that may be due from the Loan Parties or with respect to any Collateral.




          8.1.3 Account Verification. During a Default, Event of Default or Cash Dominion
Event, Agent shall have the right, in the name of Agent, any designee of Agent or any Loan Party,
to verify the validity, amount or any other matter relating to any Accounts of the Loan Parties by
mail, telephone or otherwise. Loan Parties shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.




          8.1.4 Maintenance of Dominion Accounts. Borrowers shall maintain Dominion Accounts
pursuant to lockbox or other arrangements reasonably acceptable to Agent. Borrowers shall obtain a
Deposit Account Control Agreement from each lockbox servicer and Dominion Account bank,
establishing Agent’s control over and Lien in the lockbox or Dominion Account, requiring immediate
deposit of all remittances received in the lockbox to a Dominion Account and waiving offset rights
of such servicer or bank, except for customary administrative charges. If a Dominion Account is
not maintained with Bank of America, Agent may, during the existence of any Cash Dominion Event,
require immediate transfer of all funds in such account to a Dominion Account maintained with Bank
of America. Agent and Lenders assume no responsibility to Borrowers for any lockbox arrangement or
Dominion Account, including any claim of accord and satisfaction or release with respect to any
Payment Items accepted by any bank.




          8.1.5 Proceeds of Collateral. Borrowers shall request in writing and otherwise take
all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are
made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any Borrower
or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in
trust for Agent and within one (1) Business Day deposit same into a Dominion Account.




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     8.2 Administration of Inventory.



          8.2.1 Records and Reports of Inventory. Each Loan Party shall keep accurate and
complete records of its Inventory, including costs and daily withdrawals and additions, and shall
submit to Agent inventory and reconciliation reports (which reports shall set forth the Inventory
information by location) in form reasonably satisfactory to Agent in accordance with Section
10.1.1(g).




          8.2.2 Returns of Inventory. No Loan Party shall return any Inventory to a supplier,
vendor or other Person, whether for cash, credit or otherwise, unless (a) such return is in the
Ordinary Course of Business; (b) no Default, Event of Default or Overadvance exists or would result
therefrom; (c) Agent is promptly notified if the aggregate value of all Inventory returned in any
month exceeds $25,000,000, in aggregate; and (d) any payment received by a Loan Party for a return
is promptly remitted to Agent for application to the Obligations in accordance with Section 5.5 or
5.6, as applicable.




          8.2.3 Storage and Maintenance. Loan Parties shall use, store and maintain all
Inventory with reasonable care and caution, in accordance with applicable standards of any
insurance and in conformity in all material respects with all Applicable Law, including the FLSA,
if applicable, and shall make current rent payments (within applicable grace periods provided for
in leases) at all locations where any Collateral is located.




     8.3 Administration of Deposit Accounts. Schedule 8.3 sets forth all Deposit Accounts
maintained by Borrowers as of the date hereof, including all Dominion Accounts. Each Borrower
shall take all actions necessary to establish Agent’s control of each such Deposit Account through
a Deposit Account Control Agreement (other than Excluded Deposit Accounts). A Borrower shall be
the sole account holder of each Deposit Account and shall not allow any other Person (other than
Agent) to have control over a Deposit Account or any Property deposited therein. Notwithstanding
the preceding sentence, a U.S. Facility Loan Party may establish a deposit account that does not
contain proceeds of Loans, Inventory, Accounts or Specified Revolving Credit Collateral, which
deposit account shall be (a) identified as such in writing to the Agent and (b) solely for the
deposit of proceeds from the sale of Notes Priority Collateral pending final application thereof to
the Senior Secured Notes (such account, the “Net Available Cash Account”). Loan Party
Agent shall promptly notify Agent of any opening or closing of a Deposit Account and, with the
consent of Agent, will amend Schedule 8.3 to reflect same.



     8.4 General Provisions.



          8.4.1 Location of Collateral. All tangible items of Collateral, other than Inventory
in transit, shall at all times be kept by Loan Parties at the Borrowers’ business locations set
forth in Schedule 8.4.1, except that Loan Parties may (a) make sales or other dispositions of
Collateral in accordance with Section 10.2.4; (b) in the case of any U.S. Facility Loan Party, move
Collateral to another location in the United States and (c) in the case of a Canadian Domiciled
Loan Party, move Collateral to another location in Canada set forth on Schedule 8.4.1 or, (i) upon
15 Business Days prior written notice to Agent, and (ii) so long as all






112









 







actions shall have been taken prior to such move to ensure that the Agent has a perfected
first priority security interest in and Lien on such Collateral, any other location in Canada.




          (a) Each Borrower shall maintain insurance with respect to the Collateral, covering casualty,
hazard, theft, malicious mischief, flood and other risks, in amounts, with endorsements and with
insurers (having a Best’s Financial Strength Rating of at least VII, unless otherwise approved by
Agent) as are reasonably satisfactory to Agent. From time to time upon request, Borrowers shall
deliver to Agent the originals or certified copies of their insurance policies and updated flood
plain searches. Unless Agent shall agree otherwise, each policy shall include satisfactory
endorsements (i) showing Agent as loss payee or additional insured, as appropriate; (ii) requiring
10 days prior written notice to Agent (or such shorter period as agreed to by Agent) in the event
of cancellation of the policy for any reason whatsoever; and (iii) specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of any Borrower or the owner of
the Property, nor by the occupation of the premises for purposes more hazardous than are permitted
by the policy. If any Borrower fails to provide and pay for any insurance, Agent may, at its
option, but shall not be required to, procure the insurance and charge such Borrower therefor.
Each Borrower agrees to deliver to Agent, promptly upon the request of Agent, copies of all reports
made to insurance companies. While no Event of Default exists, Borrowers may settle, adjust or
compromise any insurance claim, as long as the proceeds are delivered to Agent. If an Event of
Default has occurred and is continuing, only Agent shall be authorized to settle, adjust and
compromise such claims.




          8.4.2 Protection of Collateral. All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping any Collateral of a Loan Party Group, all Taxes
payable with respect to any Collateral of a Loan Party Group (including any sale thereof), and all
other payments required to be made by Agent to any Person to realize upon any Collateral of a Loan
Party Group, shall be borne and paid by Loan Parties of such Loan Party Group. Agent shall not be
liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage
thereto (except for reasonable care in its custody while Collateral is in Agent’s actual
possession), for any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Loan
Parties’ sole risk.




          8.4.3 Defense of Title to Collateral. Each Loan Party shall at all times (a) defend
its title to Collateral and Agent’s Liens therein against all Persons, claims and demands
whatsoever, except Permitted Liens.




     8.5 Power of Attorney. Each Loan Party hereby irrevocably constitutes and appoints
Agent (and all Persons designated by Agent) as such Loan Party’s true and lawful attorney (and
agent-in-fact), coupled with an interest, for the purposes provided in this Section. Agent, or
Agent’s designee, may, without notice and in either its or a Loan Party’s name, but at the cost and
expense of Loan Parties within such Loan Party’s Loan Party Group:



          (a) Endorse a Loan Party’s name on any Payment Item or other proceeds of Collateral (including
proceeds of insurance) that come into Agent’s possession or control; and







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          (b) During an Event of Default, (i) notify any Account Debtors of the assignment of their
Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise, and generally
exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise,
discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for
such amounts and at such times as Agent deems advisable; (iv) collect, liquidate and receive
balances in Deposit Accounts or Securities Accounts, and take control, in any manner, of proceeds
of Collateral; (v) prepare, file and sign a Loan Party’s name to a proof of claim or other document
in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or
similar document; (vi) receive, open and dispose of mail addressed to a Loan Party, and notify
postal authorities to deliver any such mail to an address designated by Agent; (vii) endorse any
Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use a Loan Party’s stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (ix) use information contained in any
data processing, electronic or information systems relating to Collateral; (x) make and adjust
claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain
payment under any letter of credit, banker’s acceptance or other instrument for which a Loan Party
is a beneficiary; and (xii) take all other actions as Agent reasonably deems appropriate to fulfill
any Loan Party’s obligations under the Loan Documents.



SECTION 9. REPRESENTATIONS AND WARRANTIES




     9.1 General Representations and Warranties. In order to induce the Lenders to enter
into this Agreement, to make the Loans and issue or participate in Letters of Credit as provided
for herein, each Borrower (with respect to itself and its subsidiaries) makes the following
representations and warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and the making of the Loans and the issuance of the
Letters of Credit:



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




          9.1.2 Corporate Power and Authority. Each Loan Party has the corporate or other
organizational power and authority to execute, deliver and carry out the terms and provisions of
the Loan Documents to which it is a party and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of the Loan Documents to
which it is a party. Each Loan Party has duly executed and delivered each Loan Document to which
it is a party and each such Loan Document constitutes the legal, valid and binding obligation of
such Loan Party enforceable in accordance with is terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
subject to general principles of equity. Each Loan Party is in






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compliance with all laws, orders, writs and injunctions except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.




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




          9.1.4 Litigation. There are no actions, suits or proceedings (including Environmental
Claims) pending or, to the knowledge of such Borrower, threatened with respect to such Borrower or
any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect or
a Material Adverse Change.




          9.1.5 Margin Regulations. Neither such Borrower nor any of its Subsidiaries is
engaged principally, as one or more of its important activities, in the business of extending
credit for the purpose of purchasing any “margin stock” as defined in Regulation U. Neither the
making of any Loan hereunder nor the use of the proceeds thereof will violate the provisions of
Regulation T, U or X of the Board of Governors.




          9.1.6 Governmental Approvals. The execution, delivery and performance of each Loan
Document does not require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except for (a) such as have been obtained or made and are in
full force and effect, (b) filings and recordings in respect of the Liens created pursuant to the
Loan Documents and (c) such licenses, approvals, authorizations or consents the failure to obtain
or make could not reasonably be expected to have a Material Adverse Effect.




          9.1.7 Investment Company Act. No Loan Party is an “investment company”, or a company
“controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940,
as amended.




          9.1.8 True and Complete Disclosure.




          (a) None of the factual information and data (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of such Borrower, any of such Borrower’s Subsidiaries
or any of their respective authorized representatives in writing to the Agent and/or any Lender on
or before the Closing Date (including (i) the Confidential Information Memorandum and (ii) all
information contained in the Loan Documents) for purposes of or in connection with this Agreement
or any transaction contemplated herein contained any untrue






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statement or omitted to state any material fact necessary to make such information and data
(taken as a whole) not misleading at such time in light of the circumstances under which such
information or data was furnished, it being understood and agreed that for purposes of this Section
9.1.8(a), such factual information and data shall not include projections.




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




          9.1.9 Financial Condition; Financial Statements. The (a) unaudited historical
consolidated financial information of the Parent as set forth in the Confidential Information
Memorandum, (b) Historical Financial Statements and (c) the financial statements delivered pursuant
to Section 10.1.1, in each case present or will, when provided, present fairly in all material
respects the consolidated financial position of the Parent and its Subsidiaries at the respective
dates of said information, statements and the consolidated results of operations for the respective
periods covered thereby. The financial statements referred to in clauses (b) and (c) of this
Section 9.1.9 have been prepared in accordance with GAAP, consistently applied (except to the
extent provided in the notes to said financial statements), and the audit reports accompanying such
financial statements are not subject to any qualification as to the scope of the audit or the
status of the Parent as a going concern. There has been no Material Adverse Change since December
31, 2010.




          9.1.10 Tax Returns and Payments. Such Borrower and each of its Subsidiaries have
filed all federal and provincial income tax returns and all other material tax returns, domestic
and foreign, required to be filed by any of them and have paid all income and other material Taxes
payable by them that have become due, other than those (a) not yet delinquent or (b) contested in
good faith as to which adequate reserves have been provided in accordance with GAAP and which could
not reasonably be expected to result in a Material Adverse Effect. Such Borrower and each of its
Subsidiaries have paid, or have provided adequate reserves (in the good faith judgment of the
management of such Borrower) in accordance with GAAP for the payment of, all material federal,
state, provincial and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to the Closing Date.




          9.1.11 Compliance with ERISA.




          (a) Each Plan is in compliance with ERISA, the Code and any applicable Requirement of Law; no
Reportable Event has occurred (or is reasonably likely to occur) with respect to any Plan; no Plan
is insolvent or in reorganization (or is reasonably likely to be insolvent or in reorganization),
and no written notice of any such insolvency or reorganization has been given to such Borrower, any
Subsidiary or any ERISA Affiliate; no Plan (other than a multiemployer plan) has an accumulated or
waived funding deficiency (or is reasonably likely to have such a deficiency); none of such
Borrower, any Subsidiary or any ERISA Affiliate has incurred (or is reasonably likely expected to
incur) any liability to or on account of a Plan






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pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
Section 4971 or 4975 of the Code or has been notified in writing that it will incur any liability
under any of the foregoing Sections with respect to any Plan; no proceedings have been instituted
(or are reasonably likely to be instituted) to terminate or to reorganize any Plan or to appoint a
trustee to administer any Plan, and no written notice of any such proceedings has been given to
such Borrower, any Subsidiary or any ERISA Affiliate; and no lien imposed under the Code or ERISA
on the assets of such Borrower or any Subsidiary or any ERISA Affiliate exists (or is reasonably
likely to exist) nor has such Borrower, any Subsidiary or any ERISA Affiliate been notified in
writing that such a lien will be imposed on the assets of such Borrower, any Subsidiary or any
ERISA Affiliate on account of any Plan, except to the extent that a breach of any of the
representations, warranties or agreements in this Section 9.1.11 would not result, individually or
in the aggregate, in an amount of liability that would be reasonably likely to have a Material
Adverse Effect. No Plan (other than a multiemployer plan) has an Unfunded Current Liability that
would, individually or when taken together with any other liabilities referenced in this Section
9.1.11, be reasonably likely to have a Material Adverse Effect. With respect to Plans that are
Multiemployer Plans, the representations and warranties in this Section 9.1.11(a), other than any
made with respect to (i) liability under Section 4201 or 4204 of ERISA or (ii) liability for
termination or reorganization of such Plans under ERISA, are made to the best knowledge of such
Borrower.




          (b) Canadian Employee Plans.





     (i) No Canadian Employee Plan enacted or adopted after the Closing Date
provides for medical, life or other welfare benefits (through insurance or
otherwise), with respect to any current or former employee of any Canadian Domiciled
Loan Party or any Affiliate thereof after retirement or other termination of service
(other than coverage mandated by Requirements of Law or coverage provided through
the end of the month containing the date of termination from service or otherwise
where part of a severance package or with respect to injured or disabled employees).
Except as could not reasonably be expected to give rise, individually or in the
aggregate, to Material Adverse Effect (it being acknowledged that, for purposes of
this Section 9.1.11(b), funding deficiencies, other benefit liabilities and events,
conditions and circumstances that could give rise to liabilities, as such
deficiencies, liabilities and circumstances exist as of the Closing Date, to the
extent that they remain applicable at the relevant determination date, and any
future obligations arising therefrom shall be included or considered in the
determination of whether as of any date a Material Adverse Effect has occurred,
exists or could reasonably be expected to occur):




     (ii) Canadian Domiciled Loan Parties are in compliance in all material respects
with the requirements of the PBA and any binding FSCO requirements of general
application with respect to each Canadian Pension Plan and in compliance with any
FSCO directive or order directed specifically at a Canadian Pension Plan. No
Canadian Pension Plan has any Unfunded Pension Liability. No fact or situation that
may reasonably be expected to result in a Material Adverse Effect exists in
connection with any Canadian Pension Plan. No Canadian Domiciled Loan Party or
Subsidiary contributes to or participates in a Canadian Multi-



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Employer Plan. No Canadian Domiciled Loan Party or an Affiliate thereof
maintains, contributes or has any liability with respect to a Canadian Pension Plan
which provides benefits on a defined benefit basis. No Termination Event has
occurred. All contributions required to be made by any Canadian Domiciled Loan
Party or Subsidiary to any Canadian Pension Plan have been made in a timely fashion
in accordance with the terms of such Canadian Pension Plan and the PBA. No Lien has
arisen, choate or inchoate, in respect of any Canadian Domiciled Loan Party or their
property in connection with any Canadian Pension Plan (save for contribution amounts
not yet due).



          (c) All Foreign Plans are in compliance with, and have been established, administered and
operated in accordance with, the terms of such Foreign Plans and applicable law, except for any
failure to so comply, establish, administer or operate the Foreign Plans as would not reasonably be
expected to have a Material Adverse Effect. All contributions or other payments which are due with
respect to each Foreign Plan have been made in full and there are no funding deficiencies
thereunder, except to the extent any such events would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.




          9.1.12 Subsidiaries. Schedule 9.1.12 lists each Subsidiary of such Borrower (and the
direct and indirect ownership interest of such Borrower therein), in each case existing on the
Closing Date. To the knowledge of such Borrower, after due inquiry, each Material Subsidiary as of
the Closing Date has been so designated on Schedule 9.1.12.




          9.1.13 Intellectual Property. Such Borrower and each of the Restricted Subsidiaries
have obtained all rights to intellectual property, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as currently conducted and as proposed
to be conducted, except where the failure to obtain any such rights could not reasonably be
expected to have a Material Adverse Effect.




          9.1.14 Environmental Laws.




          (a) Except as could not reasonably be expected to have a Material Adverse Effect: (i) such
Borrower and each of the Subsidiaries and all Real Estate are, and have been, in compliance with,
and possess all permits, licenses and registrations required pursuant to, all Environmental Laws;
(ii) neither such Borrower, nor any of the Subsidiaries is subject to any Environmental Claim or
any other liability under any Environmental Law; (iii) such Borrower and its Subsidiaries are not
conducting, or required to conduct, any investigation, removal, remedial or other corrective action
pursuant to any Environmental Law at any location, including any Real Estate currently owned or
leased by such Borrower or any of its Subsidiaries, and any real property to which such Borrower or
any of its Subsidiaries may have sent Hazardous Materials; and (iv) no underground storage tank or
related piping, or any impoundment or other disposal area containing Hazardous Materials is located
at, on or under any Real Estate currently owned or leased by such Borrower or any of its
Subsidiaries.




          (b) Neither such Borrower, nor any of the Subsidiaries has treated, stored, transported,
released or disposed or arranged for disposal or transport for disposal of Hazardous






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Materials at, on, under or from any currently or formerly owned or leased Real Estate or
facility in a manner that could reasonably be expected to have a Material Adverse Effect.




          9.1.15 Properties. Such Borrower and each of the Subsidiaries have good and
marketable title to or leasehold interest in all properties that are necessary for the operation of
their respective businesses as currently conducted and as proposed to be conducted, free and clear
of all Liens (other than any Liens permitted by this Agreement or the Senior Secured Notes
Indenture) and except where the failure to have such good title or such leasehold interest could
not reasonably be expected to have a Material Adverse Effect. All Liens of Agent in the Collateral
are duly perfected, opposable and first priority Liens, subject only to Liens permitted pursuant to
Section 10.2.2 that are expressly allowed to have priority over Agent’s Liens.




          9.1.16 Solvency. On the Closing Date, immediately following the making of each Loan
and after giving effect to the application of the proceeds of such Loans, the Borrowers and the
Guarantors, taken as a whole, are Solvent.




          9.1.17 Accounts. Agent may rely, in determining which Accounts are Eligible Accounts,
on all statements and representations made by Borrowers with respect thereto. Each Borrower
warrants with respect to each of its Accounts at the time it is shown as an Eligible Account in a
Borrowing Base Certificate, that, to such Borrower’s knowledge, in all material respects:




          (a) it is genuine and what it purports to be, and is not evidenced by a judgment;




          (b) it arises out of a completed, bona fide sale and delivery of goods or rendition of
services in the Ordinary Course of Business, and substantially in accordance with any purchase
order, contract or other document relating thereto;




          (c) it is for a sum certain, maturing as stated in the invoice covering such sale or rendition
of services, a copy of which has been furnished or is available to Agent on request;




          (d) it is not subject to any offset, Lien (other than those Liens permitted pursuant to
Section 10.2.2), deduction, defense, dispute, counterclaim or other adverse condition except as
arising in the Ordinary Course of Business and disclosed to Agent; and it is absolutely owing by
the Account Debtor, without contingency in any respect;




          (e) no purchase order, agreement, document or Applicable Law restricts assignment of the
Account to Agent (regardless of whether, under the UCC, the PPSA or the Civil Code, the restriction
is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the
invoice;




          (f) no extension, compromise, settlement, modification, credit, deduction or return has been
authorized with respect to the Account, except discounts or allowances granted in the Ordinary
Course of Business for prompt payment that are reflected on the face of the invoice related thereto
and in the reports submitted to Agent hereunder; and







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          (g) (i) there are no facts or circumstances that are reasonably likely to impair the
enforceability or collectability of such Account; (ii) the Account Debtor had the capacity to
contract when the Account arose, continues to meet the applicable Borrower’s customary credit
standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not
failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions
threatened or pending against any Account Debtor that could reasonably be expected to have a
material adverse effect on the Account Debtor’s financial condition.



SECTION 10. COVENANTS AND CONTINUING AGREEMENTS




     10.1 Affirmative Covenants. The Borrowers, jointly and severally, hereby covenant and
agree that on the Closing Date and thereafter, until the Commitments, the Swingline Commitments and
each Letter of Credit have terminated and the Loans, together with interest, Fees and all other
Obligations, are paid in full:



          10.1.1 Financial and Other Information. The Borrowers will furnish to the Agent:




          (a) as soon as available and in any event on or before the date on which such financial
statements are required to be filed with the SEC (or, if such financial statements are not required
to be filed with the SEC, on or before the date that is 105 days after the end of each such fiscal
year), (i) the consolidated balance sheet of MRC and its Subsidiaries (or, so long as the Parent is
a Passive Entity which owns MRC, the Parent and its Subsidiaries) as at the end of such fiscal
year, and the related consolidated statement of operations and consolidated statement of cash flows
for such fiscal year, setting forth comparative consolidated figures for the preceding fiscal year,
and certified by independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit or as to the status of MRC or the Parent,
as applicable, or any of the Material Subsidiaries (or group of Subsidiaries that together would
constitute a Material Subsidiary) as a going concern, together in any event with a certificate of
such accounting firm stating that in the course of its regular audit of the business of MRC or the
Parent, as applicable, and the Material Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm has obtained no knowledge of any
Default or Event of Default that has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof which shall be certified by a Senior Officer of MRC or the Parent, as
applicable, and (ii) the unaudited consolidating financial statements of MRC and its Subsidiaries
(or, so long as the Parent is a Passive Entity which owns MRC, the Parent and its Subsidiaries)
containing a balance sheet as of the end of such fiscal year and a statement of operations for such
fiscal year prepared in reasonable detail;




          (b) as soon as available and in any event on or before the date on which such financial
statements are required to be filed with the SEC with respect to each of the first three quarterly
accounting periods in each fiscal year of MRC (or, if such financial statements are not required to
be filed with the SEC, on or before the date that is sixty (60) days after the end of each such
quarterly accounting period), the consolidated balance sheet of MRC and its Subsidiaries (or, so
long as the Parent is a Passive Entity which owns MRC, Parent and its Subsidiaries), in each case
as at the end of such quarterly period and the related consolidated






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statement of operations for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, and the related consolidated
statement of cash flows for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and setting forth comparative consolidated figures for the related periods in the
prior fiscal year or, in the case of such consolidated balance sheet, for the last day of the prior
fiscal year, all of which shall be certified by a Senior Officer of MRC or the Parent, as
applicable, subject to changes resulting from audit and normal year-end audit adjustments;




          (c) as soon as available and in any event on or before the date that is thirty (30) days after
the end of each fiscal month of MRC, the consolidated balance sheet of MRC and its Subsidiaries
(or, so long as the Parent is a Passive Entity which owns MRC, the Parent and its Subsidiaries), in
each case as at the end of such fiscal month and the related consolidated statement of operations
for such fiscal month and for the elapsed portion of the fiscal year ended with the last day of
such fiscal month, and the related consolidated statement of cash flows for the elapsed portion of
the fiscal year ended with the last day of such fiscal month, and setting forth comparative
consolidated figures for the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year, all of which shall be
certified by a Senior Officer of MRC or the Parent, as applicable, subject to changes resulting
from audit and normal year-end audit adjustments;




          (d) not more than sixty (60) days after the commencement of each fiscal year of MRC, a budget
of the Borrowers in reasonable detail for such fiscal year on a quarterly basis and as customarily
prepared by management of the Borrowers for their internal use consistent in scope with the
financial statements provided pursuant to Section 10.1.1(a), setting forth the principal
assumptions upon which such budgets are based;




          (e) at the time of the delivery of the financial statements provided for in Sections 10.1.1(a)
and (b), a certificate of a Senior Officer of MRC to the effect that no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof,
which certificate shall set forth (i) the Consolidated Fixed Charge Coverage Ratio (and
accompanying calculations) as at the end of such fiscal year or period, as the case may be, (ii) a
specification of any change in the identity of the Restricted Subsidiaries and Unrestricted
Subsidiaries as at the end of such fiscal year or period, as the case may be, from the Restricted
Subsidiaries and Unrestricted Subsidiaries, respectively, provided to the Lenders on the Closing
Date or the most recent fiscal year or period, as the case may be, (iii) the then applicable level
of the Applicable Margin and (iv) the amount of any Pro Forma Adjustment not previously set forth
in a Pro Forma Adjustment Certificate or any change in the amount of a Pro Forma Adjustment set
forth in any Pro Forma Adjustment Certificate previously provided and, in either case, in
reasonable detail, the calculations and basis therefor. At the time of the delivery of the
financial statements provided for in Section 10.1.1(a), a certificate of a Senior Officer of Loan
Party Agent setting forth the information required pursuant to Section 1(a) of the Perfection
Certificate or confirming that there has been no change in such information since the Closing Date
or the date of the most recent certificate delivered pursuant to this subsection (e), as the case
may be;




          (f) as soon as available but in any event within twenty-five (25) days of the end of each
calendar month, a Borrowing Base Certificate (which shall be calculated in a






121









 







consistent manner with the most recently delivered Borrowing Base Certificate) and supporting
information in connection therewith, provided that the Borrowers will be required to furnish a
Borrowing Base Certificate and supporting information in connection therewith within four (4) days
of the end of each calendar week as of the end of such calendar week during which a FCCR Test Event
is continuing;




          (g) as soon as available but in any event within twenty-five (25) days of the end of each
calendar month (or, if requested by Agent, on a weekly basis if a FCCR Test Event has occurred and
is continuing), in each case, as of the period then ended:





          (i) a schedule detailing the Borrowers’ Inventory, in form reasonably satisfactory to
Agent, (1) by Borrower and by location (showing Inventory located with a third party under
any consignment, bailee arrangement, or warehouse agreement, in each case, to the extent the
Cost of Inventory at such location exceeds $1,000,000 in the aggregate), (2) including a
report of material variances or other results of Inventory counts performed by the Borrowers
since the last Inventory schedule and (3) reconciled to the Borrowing Base Certificate
delivered as of such date.




          (ii) a worksheet of calculations prepared by the Borrowers to determine Eligible
Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory
excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;




          (iii) a schedule and aging of each Borrower’s and each Guarantor’s accounts payable
presented at the vendor level; and




          (iv) a detailed aged trial balance of all Accounts of each Borrower as of the end of
the preceding month (or shorter applicable period), specifying each Account’s Account Debtor
name and address (if requested), amount, invoice date and due date and, at the Agent’s
reasonable request, showing any discount, allowance, credit, authorized return or dispute,
and including such proof of delivery, copies of invoices and invoice registers, copies of
related documents, repayment histories, status reports and other information as Agent may
reasonably request.



          (h) promptly after a Senior Officer of any Borrower or any Subsidiary obtains knowledge
thereof, notice of (i) the occurrence of any event that constitutes a Default or Event of Default,
which notice shall specify the nature thereof, the period of existence thereof and what action the
applicable Borrower proposes to take with respect thereto and (ii) any litigation or governmental
proceeding pending against any Borrower or any Subsidiary that could reasonably be expected to
result in a Material Adverse Effect or a Material Adverse Change;




          (i) any Borrower will promptly advise the Agent in writing after obtaining knowledge of any
one or more of the following environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such matters, be reasonably expected to result in a
Material Adverse Effect:





          (i) Any pending or threatened Environmental Claim against any Loan Party or any current
or former Real Estate;



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          (ii) Any condition or occurrence on or otherwise related to any current or former Real
Estate that (A) could reasonably be expected to result in noncompliance by any Loan Party
with any applicable Environmental Law or (B) could reasonably be anticipated to form the
basis of an Environmental Claim against any Loan Party or any current or former Real Estate;




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




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


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




          (j) promptly upon filing thereof, copies of any filings (including on Form 10-K, 10-Q or 8-K)
or registration statements with, and reports to, the SEC or any analogous Governmental Authority in
any relevant jurisdiction by the Parent or any Subsidiary (other than amendments to any
registration statement (to the extent such registration statement, in the form it becomes
effective, is delivered to the Lenders and the Agent), exhibits to any registration statement and,
if applicable, any registration statements on Form S-8) and copies of all financial statements,
proxy statements, notices and reports that the Parent or any Subsidiary shall send to the holders
of any publicly issued debt of the Parent and/or any Subsidiary in their capacity as such holders
(in each case to the extent not theretofore delivered to the Lenders and the Agent pursuant to this
Agreement) and, with reasonable promptness, such other information (financial or otherwise) as the
Agent on its own behalf or on behalf of any Lender (acting through the Agent) may reasonably
request in writing from time to time;




          (k) not later than any date on which financial statements are delivered with respect to any
Test Period in which a Pro Forma Adjustment is made as a result of the consummation of the
acquisition of any Acquired Entity or Business by any Borrower or any Restricted Subsidiary for
which there shall be a Pro Forma Adjustment, a Pro Forma Adjustment Certificate;




          (l) reasonably promptly but not later than sixty (60) days following the occurrence of any
change referred to in subclauses (i) through (iv) below, written notice of any change (i) in the
legal name of any Loan Party, (ii) in the jurisdiction of organization or location of any Loan
Party for purposes of the Uniform Commercial Code or PPSA, (iii) in the identity or type of
organization of any Loan Party or (iv) in the Federal Taxpayer Identification Number or
organizational identification number of any Loan Party. The applicable Borrower or Borrowers






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shall also promptly provide the Agent with certified Organic Documents reflecting any of the
changes described in the first sentence of this clause (l).




          (m) promptly after the sending or filing thereof, copies of any annual information report
(including all actuarial reports and other schedules and attachments thereto) required to be filed
with a Governmental Authority in connection with each Plan, any Foreign Plan that is required by
Requirements of Laws to be funded or any Canadian Pension Plan; promptly upon receipt, copies of
any notice, demand, inquiry or subpoena received in connection with any Plan or Canadian Pension
Plan from a Governmental Authority (other than routine inquiries in the course of application for a
favorable IRS determination letter); and at Agent’s request, copies of any annual report required
to be filed with a Governmental Authority in connection with any other Plan or Canadian Pension
Plan.




     Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this Section
10.1.1 may be satisfied with respect to financial information of the Parent and the Subsidiaries by
furnishing (A) the applicable financial statements of any direct or indirect parent of the Parent
or (B) the Parent’s (or any direct or indirect parent thereof’s), as applicable, Form 10-K or 10-Q,
as applicable, filed with the SEC (provided that, to the extent such information relates to a
parent of the Parent, such information is accompanied by consolidating information that explains in
reasonable detail the differences between the information relating to such parent, on the one hand,
and the information relating to the Parent and the Restricted Subsidiaries, taken together on a
standalone basis, on the other hand); and any documentation required to be delivered pursuant to
this Section 10.1.1 may be delivered electronically and if so delivered, shall be deemed to be
delivered on the date (i) on which the Loan Party Agent posts the materials containing such
documents or information, or provides a link thereto, on the Loan Part Agent’s website on the
Internet, or (ii) on which such documents are posted on an Internet or intranet website, if any, to
which each Lender and Agent have access (including www.sec.gov (or other website of the SEC), a
commercial third-party website or a website sponsored by Agent), provided that, in any case, the
Loan Party Agent shall provide written notice to Agent of any documents being delivered in
accordance with clauses (i) or (ii) above on the date such documents are posted, and paper copies
of such documents shall be delivered to Agent upon its written request.



          10.1.2 Books, Records and Inspections. The Borrowers will, and will cause each of
their respective Subsidiaries to, permit officers and designated representatives of the Agent or
the Required Lenders to visit and inspect any of their properties or assets in whomsoever’s
possession to the extent that it is within such party’s control to permit such inspection, and to
examine their books and records and discuss their affairs, finances and accounts with, and be
advised as to the same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the Agent or the Required Lenders
may desire; provided that, excluding any such visits and inspections during the continuation of an
Event of Default, only the Agent (or any of its representatives or independent contractors) on
behalf of the Required Lenders may exercise rights of the Agent and the Lenders under this Section
10.1.2 and the Agent shall not exercise such rights more often than two times during any calendar
year absent the existence of an Event of Default and only one such time shall be at the Borrowers’
expense unless a Cash Dominion Event has occurred and is continuing, in which case the second time
shall also be at the Borrowers’ expense; provided






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further that when an Event of Default exists, the Agent (or any of its representatives or
independent contractors) or any representative of the Required Lenders may do any of the
foregoing at the expense of the Borrowers at any time during normal business hours and upon
reasonable advance notice. The Agent and the Required Lenders shall give any Borrower the
opportunity to participate in any discussions with such Borrower’s independent public accountants.




          10.1.3 Collateral Access Agreements. Each Borrower and each Guarantor shall use
commercially reasonable efforts to obtain a Collateral Access Agreement with respect to Inventory
which is located in any location leased by such Loan Party, located in any third-party warehouse or
otherwise in the possession of a bailee or other third-party, in each case, to the extent the Cost
of Inventory at such location, or held by such bailee or third person exceeds $1,000,000 in the
aggregate. For purposes of determining Canadian Eligible Inventory and U.S. Eligible Inventory
under the Borrowing Base, until the expiration of the Temporary Eligibility Period, the Borrowers
shall be deemed to have obtained such Collateral Access Agreements at all such locations.




          10.1.4 Payment of Taxes. Each Loan Party will pay and discharge, and will cause each
Subsidiary to pay and discharge, all material taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the
date on which material penalties attach thereto, and all lawful material claims that, if unpaid,
could reasonably be expected to become a material Lien upon any properties of such Loan Party or
any Restricted Subsidiary, provided that no Loan Party, nor any Subsidiary shall be required to pay
any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment of the management of
such Loan Party) with respect thereto in accordance with GAAP and the failure to pay could not
reasonably be expected to result in a Material Adverse Effect.




          10.1.5 Maintenance of Insurance. The Borrowers will, and will cause each Material
Subsidiary to, at all times maintain in full force and effect, with insurance companies that each
Borrower believes (in the good faith judgment of the management of such Borrower) are financially
sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least
such amounts (after giving effect to any self-insurance which such Borrower believes (in the good
faith judgment of management of such Borrower) is reasonable and prudent in light of the size and
nature of its business) and against at least such risks (and with such risk retentions) as such
Borrower believes (in the good faith judgment of management of such Borrower) is reasonable and
prudent in light of the size and nature of its business; and will furnish to the Agent (for
delivery to the Lenders), upon written request from the Agent, information presented in reasonable
detail as to the insurance so carried.




          10.1.6 Consolidated Corporate Franchises. Each Borrower will do, and will cause each
Material Subsidiary to do, or cause to be done, all things necessary to preserve and keep in full
force and effect its existence, corporate rights and authority, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse Effect; provided,
however, that any Borrower and its Subsidiaries may consummate any transaction permitted under
Section 10.2.3, 10.2.4 or 10.2.5.







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          10.1.7 Compliance with Statutes, Regulations, etc. Each Borrower will, and will cause
each Subsidiary to, comply with all applicable laws, rules, regulations and orders applicable to it
or its property, including all governmental approvals or authorizations required to conduct its
business, and to maintain all such governmental approvals or authorizations in full force and
effect, in each case except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.




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




          10.1.9 Canadian Pension Plans.





     (a) Promptly after any Canadian Domiciled Loan Party or any Subsidiary or any Affiliate
knows or has reason to know of the occurrence of any of the following events, the applicable
Canadian Domiciled Loan Party will deliver to the Agent a certificate of a Senior Officer of
the applicable Canadian Domiciled Loan Party setting forth details as to such occurrence and
the action, if any, that such Canadian Domiciled Loan Party, such Subsidiary or such
Affiliate is required or proposes to take, together with any notices (required, proposed or
otherwise) given to or filed with or by such Canadian Domiciled Loan Party, such Subsidiary,
such Affiliate, the FSCO, a Canadian



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Employee Plan participant (other than notices relating to an individual participant’s
benefits) or the Canadian Employee Plan administrator with respect thereto: any violation or
asserted violation of any Requirements of Law (including PBA), for which there is a
reasonable likelihood that there will be an adverse determination, and such adverse
determination would have or could reasonably be expected to have a Material Adverse Effect;
the occurrence of any Termination Event.




     (b) Each Canadian Domiciled Loan Party’s and its Subsidiaries’ Canadian Pension Plans
shall be duly registered and administered in all respects in material compliance with, as
applicable, the PBA, the Income Tax Act (Canada) and all other Requirements of Law
(including regulations, orders and directives), and the terms of the Canadian Pension Plans
and any agreements relating thereto. Each Canadian Domiciled Loan Party shall ensure that
it and its Subsidiaries: (a) has no Unfunded Current Liability in respect of any Canadian
Pension Plan, including any Canadian Pension Plan to be established and administered by it
or them; (b) pay all amounts required to be paid by it or them in respect of such Canadian
Pension Plan when due; (c) has no Lien on any of its or their property that arises or exists
in respect of any Canadian Pension Plan except as disclosed in Schedule 10.2.2; (d) do not
engage in a prohibited transaction or breach any applicable laws with respect to any
Canadian Pension Plan that could reasonably be expected to result in a Material Adverse
Effect in respect of such Canadian Pension Plan; (e) do not permit to occur or continue any
Termination Event; and (f) not maintain, contribute or have any liability in respect of a
Canadian Pension Plan which provides benefits on a defined benefit basis during the term of
this Agreement.



          10.1.10 Maintenance of Properties. Each Borrower will, and will cause each Restricted
Subsidiary to, keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except to the extent that the failure
to do so could reasonably be expected to have a Material Adverse Effect.




          10.1.11 Transactions with Affiliates. Each Borrower will conduct, and cause each
Restricted Subsidiary to conduct, all transactions with any of its Affiliates (other than the
Borrowers or the Restricted Subsidiaries) on terms that are substantially as favorable to such
Borrower or such Restricted Subsidiary as it would obtain in a comparable arm’s-length transaction
with a Person that is not an Affiliate, provided that the foregoing restrictions shall not apply to
(a) the payment of customary investment banking fees paid to the Sponsor for services rendered to
the Borrowers and the Subsidiaries in connection with divestitures, acquisitions, financings and
other transactions, (b) transactions permitted by Section 10.2.6, (c) Transaction Expenses, (d) the
issuance of Stock or Stock Equivalents of any Borrower to the management of such Borrower (or any
direct or indirect parent thereof) or any of its Subsidiaries pursuant to arrangements described in
clause (f) of this Section 10.1.11, (e) loans and other transactions by the Borrowers and the
Restricted Subsidiaries to the extent permitted under Section 10.2, (f) employment and severance
arrangements between the Borrowers and the Restricted Subsidiaries and their respective officers
and employees in the Ordinary Course of Business, (g) payments by any Borrower (and any direct or
indirect parent thereof) and the Restricted Subsidiaries pursuant to the tax sharing agreements
among such Borrower (and any such parent) and the Restricted Subsidiaries on customary terms to the
extent attributable to the ownership or operation of such Borrower and the Restricted Subsidiaries,
(h) the payment of customary fees






127









 







and reasonable out
of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants,
officers and employees of the Borrowers and the Restricted Subsidiaries in the Ordinary Course of
Business to the extent attributable to the ownership or operation of the Borrowers and the
Restricted Subsidiaries, (i) transactions pursuant to permitted agreements in existence on the
Closing Date and set forth on Schedule 10.1.11 or any amendment thereto to the extent such an
amendment is not adverse, taken as a whole, to the Lenders in any material respect, and (j)
customary payments by any Borrower and any Restricted Subsidiary to the Sponsor made for any
financial advisory, financing, underwriting or placement services or in respect of other investment
banking activities (including in connection with acquisitions or divestitures), which payments are
approved by the majority of the members of the board of directors or a majority of the
disinterested members of the board of directors of such Borrower (or any direct or indirect parent
thereof), in good faith.




          10.1.12 End of Fiscal Years; Fiscal Quarters. Each Borrower will, for financial
reporting purposes, cause (a) each of Parent’s, its, and each of its Subsidiaries’, fiscal years to
end on December 31 of each year and (b) each of Parent’s, its, and each of its Subsidiaries’,
fiscal quarters to end on dates consistent with such fiscal year-end and such Borrower’s past
practice; provided, however, that such Borrower may, upon written notice to the Agent, change the
financial reporting convention specified above to any other financial reporting convention
reasonably acceptable to the Agent, in which case such Borrower and the Agent will, and are hereby
authorized by the Lenders to, make any adjustments to this Agreement that are necessary in order to
reflect such change in financial reporting.




          10.1.13 Additional Canadian Domiciled Loan Parties and U.S. Domiciled Loan Parties.




          (a) Within 30 days of the date on which the book value of Inventory and Accounts of any direct
or indirect Canadian Subsidiary exceeds $20,000,000, (i) the Initial Canadian Borrower will cause
such Canadian Subsidiary to execute and deliver to Agent a supplement or joinder to this Agreement,
substantially in the form of Exhibit I, in order for such Canadian Subsidiary to become a Canadian
Borrower hereunder and (ii) a Senior Officer of the Loan Party Agent will execute and deliver to
Agent a (A) Borrowing Base Certificate for such Canadian Subsidiary effective as of not more than
25 days preceding the date on which such Canadian Subsidiary becomes a Canadian Borrower and (B)
written notice of such Canadian Subsidiary’s Applicable Canadian Borrower Commitment; provided
that, prior to permitting such Canadian Subsidiary to borrow any Canadian Revolver Loans or obtain
the issuance of any Canadian Letters of Credit hereunder, the Agent, in its discretion, shall have
the right to conduct an appraisal and field examinations with respect to such Canadian Subsidiary,
including, without limitation, of (x) such Canadian Subsidiary’s practices in the computation of
its Canadian Borrowing Base and (y) the assets included in such Canadian Subsidiary’s Canadian
Borrowing Base and related financial information such as, but not limited to, sales, gross margins,
payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to Agent
and at the sole expense of such Canadian Subsidiary.




          (b) Any Canadian Subsidiary may become a Canadian Borrower hereunder upon the execution and
delivery to Agent (i) by such Canadian Subsidiary of a supplement or joinder to this Agreement,
substantially in the form of Exhibit I, and (ii) by a Senior Officer of






128









 







the Loan Party Agent, of a (A) Borrowing Base Certificate for such Canadian Subsidiary
effective as of not more than 25 days preceding the date on which such Canadian Subsidiary becomes
a Canadian Borrower and (B) written notice of such Canadian Subsidiary’s Applicable Canadian
Borrower Commitment; provided that, prior to permitting such Canadian Subsidiary to borrow any
Canadian Revolver Loans or obtain the issuance of any Canadian Letters of Credit hereunder, the
Agent, in its discretion, shall have the right to conduct an appraisal and field examination with
respect to such Canadian Subsidiary, including, without limitation, of (x) such Canadian
Subsidiary’s practices in the computation of its Canadian Borrowing Base and (y) the assets
included in such Canadian Subsidiary’s Canadian Borrowing Base and related financial information
such as, but not limited to, sales, gross margins, payables, accruals and reserves, in each case,
prepared on a basis reasonably satisfactory to Agent and at the sole expense of such Canadian
Subsidiary.




          (c) Except as set forth in Section 10.2.1(b)(ix) and 10.2.1(b)(x) and subject to any
applicable limitations set forth in the Security Documents, each Borrower will cause each direct or
indirect U.S. Subsidiary of MRC (other than any Excluded Subsidiary) formed or otherwise purchased
or acquired after the date hereof (including pursuant to a Permitted Acquisition) or that has
ceased to be an Excluded Subsidiary pursuant to clause (e), (f) or (h) of the definition of
Excluded Subsidiary, in each case within 30 days of such date, to execute a supplement or joinder
to this Agreement, substantially in the form of Exhibit I, in order for such Subsidiary to become a
U.S. Borrower and/or a U.S. Facility Guarantor under Section 5.10 and a grantor under Section 7.1
or, to the extent reasonably requested by the Agent, enter into a new Security Document in form and
substance reasonably satisfactory to the Agent and Loan Party Agent.




          10.1.14 Use of Proceeds.




          (a) The Borrowers will use the proceeds of all Revolver Loans made on the Closing Date to (a)
refinance MRC’s Indebtedness under the Existing U.S. Credit Agreement, (b) to refinance the Initial
Canadian Borrower’s Indebtedness under the Existing Canadian Credit Agreement and the ATB Financial
Debt and (c) to pay Transaction Expenses.




          (b) The Borrowers will use Letters of Credit and the proceeds of all other Revolver Loans and
Swingline Loans (a) to finance ongoing working capital needs, (b) for other general corporate
purposes of any Borrower, including to fund permitted distributions and Permitted Acquisitions and
(c) to pay Transaction Expenses.




          10.1.15 Appraisals; Field Examinations. At any time that the Agent reasonably
requests, each Borrower will, and will cause each Guarantor to, permit the Agent or professionals
(including consultants, accountants, lawyers and appraisers) retained by the Agent, on reasonable
prior notice and during normal business hours and with reasonable frequency, to conduct appraisals
and commercial finance examinations or updates thereof including, without limitation, of (a) such
Borrower’s practices in the computation of the Borrowing Base and (b) the assets included in the
Borrowing Base and related financial information such as, but not limited to, sales, gross margins,
payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to the
Agent and at the sole expense of the Borrowers; provided, however, if no Default or Event of
Default shall have occurred and be continuing, only one (1)






129









 







such appraisal and one (1) such examination or update per fiscal year shall be conducted at
the Borrowers’ expense (exclusive of any appraisals and field examinations conducted pursuant to
Section 10.1.13); provided, further, however, that if a Cash Dominion Event has occurred and is
continuing, one (1) additional appraisal and one (1) additional examination or update per fiscal
year may be conducted at the Borrowers’ expense (exclusive of any appraisals and field examinations
conducted pursuant to Section 10.1.13). The foregoing shall not limit the Agent’s ability to
perform additional appraisals, examinations and updates at the sole expense of the Borrowers upon
the occurrence and continuance of a Default or Event of Default.




          10.1.16 Further Assurances.




          (a) Each Borrower will, and will cause each other Loan Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements and other documents), which may be
required under any applicable law, or which the Agent or the Required Lenders may reasonably
request, in order to grant, preserve, protect and perfect the validity and priority of the Liens
created or intended to be created by the Security Documents, all at the expense of the Loan
Parties.




          (b) If any assets are acquired by any Loan Party after the Closing Date (other than assets
constituting Collateral under the Security Documents that become subject to the perfected Lien of
the Security Documents upon acquisition thereof) that are of the nature secured by the Security
Documents, the Loan Party Agent will notify the Agent, and, if requested by the Agent, such Loan
Party will cause such assets to be subjected to a Lien securing the applicable Secured Obligations
and will take, and cause the other Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Agent to grant and perfect such Liens consistent with the applicable
requirements of the Security Documents, including actions described in clause (a) of this Section
10.1.16, all at the expense of the Loan Parties.




          (c) Each Borrower agrees that it will, or will cause its relevant Subsidiaries to, complete
each of the actions described on Schedule 10.1.16(c) as soon as commercially reasonable and by no
later than the date set forth in Schedule 10.1.16(c) with respect to such action or such later date
as the Agent may reasonably agree.




     10.2 Negative Covenants. The Borrowers (for themselves and each of their respective
Restricted Subsidiaries), jointly and severally, hereby covenant and agree that on the Closing Date
and thereafter, until the Commitments, the Swingline Commitment and each Letter of Credit have
terminated and the Loans, together with interest, fees and all other Obligations, are paid in full:



          10.2.1 Limitation on Indebtedness.




          (a) The Borrowers will not, and will not permit any of the Restricted Subsidiaries to, incur,
create, assume or permit to exist, directly or indirectly (collectively, “incur” and
collectively, an “incurrence”), any Indebtedness; provided, however, that the Borrowers and
the Restricted Subsidiaries will be entitled to incur Indebtedness if the Consolidated Total Debt
to Consolidated EBITDA Ratio at the time such additional Indebtedness






130









 







is incurred would have been no greater than 5.50 to 1.0 determined on a Pro Forma Basis
(including a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred and the application of proceeds therefrom had occurred at the
beginning of the most recent Test Period for which financial statements have been delivered
pursuant to Section 10.1.1; provided, that such additional Indebtedness shall not be secured
Indebtedness unless (i) the Secured Leverage Ratio at the time such additional Indebtedness is
incurred would have been no greater than 5.0 to 1.0, determined on a Pro Forma Basis in the manner
set forth above, (ii) such secured Indebtedness has a final maturity date no earlier than the date
that is 180 days following the Facility Termination Date, (iii) the Liens securing such
Indebtedness shall constitute Notes Priority Liens for purposes of the Intercreditor Agreement.




          (b) The limitation set forth in clause (a) of this Section 10.2.1 will not prohibit any of the
following:





          (i) (A) Indebtedness arising under the Loan Documents and (B) Indebtedness arising
under the Senior Secured Notes Indenture; provided, however, that with respect to any such
Indebtedness specified in this subclause (i)(B) that is incurred after the Closing Date,
such Indebtedness satisfies the terms set forth in the proviso at the end of Section
10.2.1(a);




          (ii) Indebtedness of (A) any Loan Party owing to any Borrower or any Restricted
Subsidiary, (B) any Subsidiary who is not a Loan Party owing to any other Subsidiary who is
not a Loan Party and (C) subject to compliance with Section 10.2.5 at the time of the
incurrence thereof, any Subsidiary who is not a Loan Party owing to any Loan Party;




          (iii) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of
credit, warehouse receipt or similar facilities entered into in the Ordinary Course of
Business (including in respect of workers compensation claims, health, disability or other
employee benefits or property, casualty or liability insurance or self-insurance or other
Indebtedness with respect to reimbursement-type obligations regarding workers compensation
claims);




          (iv) subject to compliance with Section 10.2.5, Guarantee Obligations incurred by (A)
Restricted Subsidiaries in respect of Indebtedness of any Borrower or other Restricted
Subsidiaries that is permitted to be incurred under this Agreement and (B) any Borrower in
respect of Indebtedness of Restricted Subsidiaries that is permitted to be incurred under
this Agreement, provided that, except as provided in clauses (ix) and (x) below, there shall
be no Guarantee (1) by a Restricted Subsidiary that is not a Guarantor of any Indebtedness
of any Borrower and (2) in respect of any Permitted Additional Debt, unless such Guarantee
is made by a Guarantor and, in the case of Permitted Additional Debt that is subordinated,
is subordinated;




          (v) Guarantee Obligations (A) incurred in the Ordinary Course of Business in respect of
obligations of (or to) suppliers, customers, franchisees, lessors and licensees or (B)
otherwise constituting Investments permitted by Section 10.2.5;



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          (vi) (A) Indebtedness (including Indebtedness arising under Capital Leases existing on
the date hereof) incurred within 270 days of the acquisition, construction or improvement of
fixed or capital assets to finance the acquisition, construction or improvement of such
fixed or capital assets, (B) Indebtedness arising under Capital Leases entered into in
connection with Permitted Sale Leasebacks and (C) Indebtedness arising under Capital Leases,
other than Capital Leases in effect on the date hereof and Capital Leases entered into
pursuant to subclauses (A) and (B) above, provided, that the aggregate amount of
Indebtedness incurred pursuant to this subclause (C) shall not exceed $20,000,000 at any
time outstanding, and (D) any modification, replacement, refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (A), (B) or (C) above, provided that,
except to the extent otherwise expressly permitted hereunder, the principal amount thereof
(including pursuant to clause (C)) does not exceed the principal amount thereof outstanding
immediately prior to such modification, replacement, refinancing, refunding, renewal or
extension, except by an amount equal to the unpaid accrued interest and premium thereon plus
other reasonable amounts paid and fees and expenses incurred in connection with such
modification, replacement, refinancing, refunding, renewal or extension;




          (vii) Indebtedness outstanding on the date hereof (A) listed on Schedule 10.2.1 and any
modification, replacement, refinancing, refunding, renewal or extension thereof, provided
that, except to the extent otherwise expressly permitted hereunder, (1) the principal amount
thereof does not exceed the principal amount thereof outstanding immediately prior to such
modification, replacement, refinancing, refunding, renewal or extension, except by an amount
equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid
and fees and expenses incurred in connection with such modification, replacement,
refinancing, refunding, renewal or extension plus an amount equal to any existing commitment
unutilized and letters of credit undrawn thereunder and (2) the direct and contingent
obligors with respect to such Indebtedness are not changed and (B) owing by any Borrower to
any Restricted Subsidiary or by any Restricted Subsidiary to any Borrower or any other
Restricted Subsidiary;




          (viii) Indebtedness in respect of Hedge Agreements;




          (ix) (A) Indebtedness of a Person or Indebtedness attaching to assets of a Person that,
in either case, becomes a Restricted Subsidiary (or is a Restricted Subsidiary that survives
a merger with such Person) or Indebtedness attaching to assets that are acquired by any
Borrower or any Restricted Subsidiary, in each case, after the Closing Date as the result of
a Permitted Acquisition, provided, that (1) such Indebtedness existed at the time such
Person became a Restricted Subsidiary or at the time such assets were acquired and, in each
case, was not created in anticipation thereof, (2) such Indebtedness is not guaranteed in
any respect by any Borrower or any Restricted Subsidiary (other than by any such Person that
so becomes a Restricted Subsidiary or is the survivor of a merger with such Person and any
of its Subsidiaries) and (3) to the extent required under Section 10.1.13, such Person
executes a supplement or joinder to this Agreement, substantially in the form of Exhibit I,
in order to become a Loan Party, a Guarantor under Section 5.10 (if applicable) and a
grantor under Section 7.1 or, to the



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extent reasonably requested by the Agent, enters into a new Security Document in form
and substance reasonably satisfactory to the Agent and the Loan Party Agent, provided
that the requirements of this subclause (3) shall not apply to (I) an aggregate amount at
any time outstanding of up to the greater of (A) $300,000,000 or (B) 10% of Consolidated
Total Assets at the time of the incurrence of such Indebtedness (less all Indebtedness as to
which the proviso to clause (x)(A)(2) below then applies) at such time of such Indebtedness
(and modifications, replacements, refinancings, refundings, renewals and extensions thereof
pursuant to subclause (B) below) and (II) any Indebtedness of the type that could have been
incurred under Section 10.2.1(b)(vi), and (B) any modification, replacement, refinancing,
refunding, renewal or extension of any Indebtedness specified in subclause (A) above,
provided that, except to the extent otherwise expressly permitted hereunder, (X) the
principal amount of any such Indebtedness does not exceed the principal amount thereof
outstanding immediately prior to such modification, replacement, refinancing, refunding,
renewal or extension except by an amount equal to the unpaid accrued interest and premium
thereon plus other reasonable amounts paid and fees and expenses incurred in connection with
such modification, replacement, refinancing, refunding, renewal or extension plus an amount
equal to any existing commitment unutilized and letters of credit undrawn thereunder and (Y)
the direct and contingent obligors with respect to such Indebtedness are not changed;




          (x) (A) Permitted Additional Debt of MRC or any Restricted Subsidiary incurred to
finance a Permitted Acquisition, provided that (1) if such Indebtedness is incurred by a
Restricted Subsidiary that is not a Guarantor, such Indebtedness is not guaranteed by any
Loan Party unless such Guarantee would be permitted at such time under Section 10.2.5(g) and
(2) to the extent required under Section 10.1.13, such acquired Person executes a supplement
or joinder to this Agreement, substantially in the form of Exhibit I, in order to become a
Loan Party, a Guarantor under Section 5.10 (if applicable) and a grantor under Section 7.1
or, to the extent reasonably requested by the Agent, enters into a new Security Document in
form and substance reasonably satisfactory to the Agent and the Loan Party Agent, provided
that the requirements of this subclause (2) shall not apply to an aggregate amount at any
time outstanding of up to the greater of (A) $300,000,000 or (B) 10% of Consolidated Total
Assets at the time of the incurrence of such Indebtedness (less all Indebtedness as to which
clause (I) of the proviso to clause (ix)(A)(3) above then applies) at such time of the
aggregate of such Indebtedness (and modifications, replacements, refinancings, refundings,
renewals and extensions thereof pursuant to subclause (B) below), and (B) any modification,
replacement, refinancing, refunding, renewal or extension of any Indebtedness specified in
subclause (A) above, provided that, except to the extent otherwise expressly permitted
hereunder, (1) the principal amount of any such Indebtedness does not exceed the principal
amount thereof outstanding immediately prior to such modification, replacement, refinancing,
refunding, renewal or extension except by an amount equal to the unpaid accrued interest and
premium thereon plus other reasonable amounts paid and fees and expenses incurred in
connection with such modification, replacement, refinancing, refunding, renewal or extension
plus an amount equal to any existing commitment unutilized and letters of credit undrawn
thereunder and (2) the direct and contingent obligors with respect to such Indebtedness are
not changed;



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          (xi) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety
bonds and completion guarantees and similar obligations not in connection with money
borrowed, in each case, provided in the Ordinary Course of Business, including those
incurred to secure health, safety and environmental obligations in the Ordinary Course of
Business;




          (xii) (A) Indebtedness incurred in connection with any Permitted Sale Leaseback,
provided that the Net Cash Proceeds thereof are promptly applied to the prepayment of the
Senior Secured Notes to the extent required by the Senior Secured Notes Indenture; and (B)
any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause
(A) above, provided that, except to the extent otherwise permitted hereunder, (1) the
principal amount of any such Indebtedness is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal or extension
and (2) the direct and contingent obligors with respect to such Indebtedness are not
changed;




          (xiii) (A) additional Indebtedness of MRC and its Restricted Subsidiaries and (B) any
refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (A)
above; provided that the aggregate amount of Indebtedness incurred and remaining outstanding
pursuant to this clause (xiii) shall not at any time exceed the greater of (1) $300,000,000
and (2) 10% of Consolidated Total Assets at the time of the incurrence of such Indebtedness;
provided, however, not more than the greater of (X) $50,000,000 and (Y) 1.5% of Consolidated
Total Assets at the time of the incurrence of such Indebtedness in aggregate principal
amount of Indebtedness of any Borrower or any Guarantor incurred under this clause (xiii)
shall be secured;




          (xiv) Indebtedness in respect of Permitted Additional Debt to the extent that the Net
Cash Proceeds therefrom are, immediately after the receipt thereof, applied to the
prepayment of the Senior Secured Notes in accordance with the Senior Secured Notes
Indenture;




          (xv) Indebtedness in respect of overdraft facilities, employee credit card programs and
other cash management arrangements in the Ordinary Course of Business;




          (xvi) unsecured Indebtedness in respect of obligations of any Borrower or any
Restricted Subsidiary to pay the deferred purchase price of goods or services or progress
payments in connection with such goods and services, provided that such obligations are
incurred in connection with open accounts extended by suppliers on customary trade terms
(which require that all such payments be made within 60 days after the incurrence of the
related obligation) in the Ordinary Course of Business and not in connection with the
borrowing of money or Hedge Agreements;




          (xvii) Indebtedness arising from agreements of any Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or similar
obligations, in each case, entered into in connection with Permitted Acquisitions, other
Investments and the disposition of any business, assets or capital stock permitted



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hereunder, other than Guarantee Obligations incurred by any Person acquiring all or any
portion of such business, assets or capital stock for the purpose of financing such
acquisition, provided that (A) such Indebtedness is not reflected on the balance sheet of
any Borrower or any Restricted Subsidiary (contingent obligations referred to in a footnote
to financial statements and not otherwise reflected on the balance sheet will not be deemed
to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum
assumable liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds, including non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any subsequent changes in value),
actually received by the Borrowers and the Restricted Subsidiaries in connection with such
disposition;




          (xviii) Indebtedness of any Borrower or any Restricted Subsidiary consisting of (A)
obligations to pay insurance premiums or (B) take or pay obligations contained in supply
agreements, in each case, arising in the Ordinary Course of Business and not in connection
with the borrowing of money or Hedge Agreements;




          (xix) Indebtedness representing deferred compensation to employees of the Borrowers (or
any direct or indirect parent thereof) and the Restricted Subsidiaries incurred in the
Ordinary Course of Business;




          (xx) unsecured, Subordinated Indebtedness consisting of promissory notes in an
aggregate principal amount of not more than $10,000,000 issued by any Borrower or any
Guarantor to current or former officers, managers, consultants, directors and employees (or
their respective spouses, former spouses, successors, executors, administrators, heirs,
legatees or distributees) to finance the purchase or redemption of Stock or Stock
Equivalents of such Borrower (or any direct or indirect parent thereof) permitted by Section
10.2.6;




          (xxi) Indebtedness consisting of obligations of the Borrowers or the Restricted
Subsidiaries under deferred compensation or other similar arrangements incurred by such
Person in connection with Permitted Acquisitions or any other Investment expressly permitted
hereunder;




          (xxii) cash management obligations and other Indebtedness in respect of netting
services, automatic clearinghouse arrangements, overdraft protections and similar
arrangements in each case in connection with deposit accounts; and




          (xxiii) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges and additional or contingent interest on obligations described in clauses
(i) through (xxii) above.



          10.2.2 Limitation on Liens. The Borrowers will not, and will not permit any of the
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any property or
assets of any kind (real or personal, tangible or intangible) of such Borrower or any Restricted
Subsidiary, whether now owned or hereafter acquired, except:




          (a) Liens arising under the Credit Documents;







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          (b) Permitted Liens;




          (c) (i) Liens securing Indebtedness permitted pursuant to Section 10.2.1 (b)(vi), provided
that (A) such Liens attach at all times only to the assets so financed except for accessions to
such property and the proceeds and the products thereof and (B) that individual financings of
equipment provided by one lender may be cross collateralized to other financings of equipment
provided by such lender, and (ii) Liens on the assets of Restricted Subsidiaries that are not Loan
Parties securing Indebtedness permitted pursuant to Section 10.2.1 (b)(xiii) and (xv);




          (d) Liens existing on the date hereof and listed on Schedule 10.2.2;




          (e) The replacement, extension or renewal of any Lien permitted by clauses (a) through (d)
above and clause (f) of this Section 10.2.2 upon or in the same assets (other than after acquired
property that is affixed or incorporated into the property covered by such Lien or financed by
Indebtedness permitted under Section 10.2.1(b) and proceeds and products thereof) theretofore
subject to such Lien or the replacement, extension or renewal (without increase in the amount or
change in any direct or contingent obligor except to the extent otherwise permitted hereunder) of
the Indebtedness secured thereby;




          (f) Liens existing on the assets of any Person that becomes a Restricted Subsidiary (or is a
Restricted Subsidiary that survives a merger with such Person), or existing on assets acquired,
pursuant to a Permitted Acquisition or other Investment to the extent the Liens on such assets
secure Indebtedness permitted by Section 10.2.1(b)(ix) or other obligations permitted by this
Agreement, provided that such Liens attach at all times only to the same assets that such Liens
(other than after acquired property that is affixed or incorporated into the property covered by
such Lien or financed by Indebtedness permitted under Section 10.2.1(b) and proceeds and products
thereof) attached to, and secure only the same Indebtedness or obligations (or any modifications,
refinancings, extensions, renewals, refundings or replacements of such Indebtedness permitted by
Section 10.2.1(b)) that such Liens secured, immediately prior to such Permitted Acquisition or
other Investment, as applicable;




          (g) (i) Liens placed upon the Stock and Stock Equivalents of any Restricted Subsidiary that is
not a Loan Party acquired pursuant to a Permitted Acquisition to secure Indebtedness incurred
pursuant to Section 10.2.1(x) in connection with such Permitted Acquisition and (ii) Liens placed
upon the assets of any Restricted Subsidiary that is not a Loan Party to secure a guarantee by, or
Indebtedness of, such Restricted Subsidiary of any Indebtedness of any Borrower or any other
Restricted Subsidiary incurred pursuant to Section 10.2.1(x);




          (h) Liens securing Indebtedness or other obligations of any Loan Party or a Subsidiary in
favor of any Loan Party or any Subsidiary that is a Loan Party and Liens securing Indebtedness or
other obligations of any Subsidiary that is not a Loan Party in favor of any Subsidiary that is not
a Loan Party;




          (i) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code
on items in the course of collection, (ii) attaching to commodity trading






136









 







accounts or other commodities brokerage accounts incurred in the Ordinary Course of Business;
and (iii) in favor of a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters customary in the
banking industry;




          (j) Liens (i) on cash advances in favor of the seller of any property to be acquired in an
Investment permitted pursuant to Section 10.2.5 to be applied against the purchase price for such
Investment, and (ii) consisting of an agreement to sell, transfer, lease or otherwise dispose of
any property in a transaction permitted under Section 10.2.4, in each case, solely to the extent
such Investment or sale, disposition, transfer or lease, as the case may be, would have been
permitted on the date of the creation of such Lien;




          (k) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for sale of goods entered into by any Borrower or any Restricted Subsidiary in the
Ordinary Course of Business permitted by this Agreement;




          (l) Liens deemed to exist in connection with Investments in repurchase agreements permitted
under Section 10.2.5;




          (m) Liens encumbering reasonable customary initial deposits and margin deposits and similar
Liens attaching to commodity trading accounts or other brokerage accounts incurred in the Ordinary
Course of Business and not for speculative purposes;




          (n) Liens that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of Indebtedness, (ii)
relating to pooled deposit or sweep accounts of any Borrower or any Restricted Subsidiary to permit
satisfaction of overdraft or similar obligations incurred in the Ordinary Course of Business of
such Borrower and the Restricted Subsidiaries or (iii) relating to purchase orders and other
agreements entered into with customers of any Borrower or any Restricted Subsidiary in the Ordinary
Course of Business;




          (o) Liens solely on any cash earnest money deposits made by any Borrower or any Restricted
Subsidiary in connection with any letter of intent or purchase agreement permitted hereunder;




          (p) Liens on insurance policies and the proceeds thereof securing the financing of the
premiums with respect thereto;




          (q) Liens securing the Senior Secured Notes; provided, that with respect to any such Senior
Secured Notes issued after December 21, 2009, such Indebtedness is permitted to be secured in
accordance with the proviso at the end of Section 10.2.1(a);




          (r) Liens securing Indebtedness permitted under Section 10.2.1(a), to the extent permitted in
accordance with the proviso at the end of such Section 10.2.1(a);




          (s) Liens securing obligations under Hedge Agreements that are not Secured Bank Product
Obligations; provided, that such Liens constitute Notes Priority Liens for purposes of the
Intercreditor Agreement;







137









 








          (t) additional Liens so long as (i) the aggregate principal amount of the obligations so
secured does not exceed the greater of (y) $50,000,000 at any time outstanding and (z) 1.5% of
Consolidated Total Assets at the time of the incurrence of such obligations and (ii) to the extent
such additional Liens attach to any Accounts or Inventory of any Borrower, such Liens are
subordinated to the Lien of Agent, for the benefit of the Secured Parties, pursuant to an
intercreditor agreement in form and substance reasonably satisfactory to Agent and Loan Party
Agent; and




          (u) Liens on Stock in joint ventures held by any Borrower provided such joint venture is not a
Guarantor.




          10.2.3 Limitation on Fundamental Changes. Except as expressly permitted by Section
10.2.4 or 10.2.5, each Borrower will not, and will not permit any of the Restricted Subsidiaries
to, enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise
dispose of, all or substantially all its business units, assets or other properties, except that:




          (a) so long as no Default or Event of Default would result therefrom, any Subsidiary of any
Borrower or any other Person may be merged or consolidated with or into a Borrower, provided that
(i) a Borrower shall be the continuing or surviving entity or (ii) if the Person formed by or
surviving any such merger or consolidation is not a Borrower (such Person, the “Successor
Borrower”), (A) in the case of a merger or consolidation by a U.S. Person, the Successor
Borrower shall be an entity organized or existing under the laws of the United States, any state
thereof or the District of Columbia and, in the case of a merger or consolidation by a Canadian
Person, the Successor Borrower shall be an entity organized or existing under the laws of Canada or
any province thereof, (B) the Successor Borrower shall expressly assume all the obligations of a
U.S. Borrower or a Canadian Borrower, as applicable, under this Agreement and the other Loan
Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Agent,
(C) each applicable Guarantor, unless it is the other party to such merger or consolidation, shall
have by a supplement hereto confirmed that its Guarantee shall apply to the Successor Borrower’s
obligations under this Agreement, (D) each U.S. Domiciled Loan Party and each Canadian Domiciled
Loan Party, as applicable, unless it is the other party to such merger or consolidation, shall have
by a supplement to this Agreement confirmed that its obligations thereunder shall apply to the
Successor Borrower’s obligations under this Agreement, and (E) the Borrower shall have delivered to
the Agent (1) an officer’s certificate stating that such merger or consolidation and such
supplements to this Agreement preserve the enforceability of the Guarantee and the perfection and
priority of the Liens under the Security Documents and (2) if reasonably requested by the Agent, an
opinion of counsel to the effect that such merger or consolidation does not violate this Agreement
or any other Loan Document, and provided further that if the foregoing are satisfied, the Successor
Borrower will succeed to, and be substituted for, such Borrower under this Agreement;




          (b) any Subsidiary of a Borrower (other than another Borrower) or any other Person may be
merged, amalgamated or consolidated with or into any one or more Subsidiaries of such Borrower,
provided that (i) in the case of any merger, amalgamation or consolidation involving one or more
Restricted Subsidiaries, (A) a Restricted Subsidiary shall be the






138









 







continuing or surviving entity or (B) such Borrower shall take all steps necessary to cause
the Person formed by or surviving any such merger, amalgamation or consolidation (if other than a
Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in the case of any merger,
amalgamation or consolidation involving one or more Guarantors, a Guarantor shall be the continuing
or surviving entity or the Person formed by or surviving any such merger, amalgamation or
consolidation (if other than a Guarantor) shall execute a supplement or joinder to this Agreement,
substantially in the form of Exhibit I, in order to become a Guarantor under Section 5.10 and a
grantor under Section 7.1 to the extent required under Section 10.1.13, (iii) no Default or Event
of Default would result from the consummation of such merger, amalgamation or consolidation, (iv)
any Indebtedness incurred to finance such merger, amalgamation or consolidation is permitted to be
incurred by the Senior Secured Notes Indenture, and (v) such Borrower shall have delivered to the
Agent an officer’s certificate stating that such merger, amalgamation or consolidation and such
supplements and/or joinders to any Security Document preserve the enforceability of the Guarantee
and the perfection and priority of the Liens under the Security Documents;




          (c) any Restricted Subsidiary that is not a Guarantor may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to any Borrower, a
Guarantor or any other Restricted Subsidiary;




          (d) any Guarantor may sell, lease, transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to any Borrower or any other Guarantor; and




          (e) any Restricted Subsidiary may liquidate or dissolve if (i) the Loan Party Agent determines
in good faith that such liquidation or dissolution is in the best interests of the Borrowers and is
not materially disadvantageous to the Lenders and (ii) to the extent such Restricted Subsidiary is
a Loan Party, any assets or business not otherwise disposed of or transferred in accordance with
Section 10.2.4 or 10.2.5, or, in the case of any such business, discontinued, shall be transferred
to, or otherwise owned or conducted by, another Loan Party after giving effect to such liquidation
or dissolution.




          10.2.4 Limitation on Sale of Assets. Each Borrower will not, and will not permit any
of the Restricted Subsidiaries to, (x) convey, sell, lease, assign, transfer or otherwise dispose
of any of its property, business or assets (including receivables and leasehold interests), whether
now owned or hereafter acquired (other than any such sale, transfer, assignment or other
disposition resulting from any casualty or condemnation, of any assets of such Borrower or the
Restricted Subsidiaries) or (y) sell to any Person (other than a Borrower or a Guarantor) any
shares owned by it of any Restricted Subsidiary’s Stock and Stock Equivalents, except that:




          (a) any Borrower and the Restricted Subsidiaries may sell, transfer or otherwise dispose of
(i) inventory in the Ordinary Course of Business, (ii) used or surplus equipment, vehicles and
other assets in the Ordinary Course of Business and (iii) Permitted Investments;







139









 








          (b) any Borrower and the Restricted Subsidiaries may sell, transfer or otherwise dispose of
other assets (other than accounts receivable) (each a “Disposition”) for fair value,
provided that:





          (i) with respect to any Disposition pursuant to this clause (b) for a purchase price in
excess of $10,000,000, such Borrower or a Restricted Subsidiary shall receive not less than
75% of such consideration in the form of cash or Permitted Investments; provided that for
the purposes of this clause (i):




          (A) any liabilities (as shown on such Borrower’s or such Restricted
Subsidiary’s most recent balance sheet provided hereunder or in the footnotes
thereto) of such Borrower or such Restricted Subsidiary, other than liabilities that
are by their terms subordinated to the payment in cash of the Obligations, that are
assumed by the transferee with respect to the applicable Disposition and for which
such Borrower and all of the Restricted Subsidiaries shall have been validly
released by all applicable creditors in writing,




          (B) any securities received by such Borrower or such Restricted Subsidiary from
such transferee that are converted by such Borrower or such Restricted Subsidiary
into cash (to the extent of the cash received) within 180 days following the closing
of the applicable Disposition, and




          (C) any Designated Non-Cash Consideration received by such Borrower or such
Restricted Subsidiary in respect of such Disposition having an aggregate fair market
value, taken together with all other Designated Non-Cash Consideration received
pursuant to this Section 10.2.4(b) and Section 10.2.4(c) that is at that time
outstanding, not in excess of 6% of Consolidated Total Assets at the time of the
receipt of such Designated Non-Cash Consideration, with the fair market value of
each item of Designated Non-Cash Consideration being measured at the time received
and without giving effect to subsequent changes in value,



     shall in each case under this clause (i) be deemed to be cash; and




          (ii) after giving effect to any such sale, transfer or disposition, no Default or Event
of Default shall have occurred and be continuing;



          (c) each Borrower and the Restricted Subsidiaries may make sales of assets to any Borrower or
to any Restricted Subsidiary, provided that with respect to any such sales to Restricted
Subsidiaries that are not Guarantors:





          (i) such sale, transfer or disposition shall be for fair value;




          (ii) with respect to any Disposition pursuant to this clause (c) for a purchase price
in excess of $10,000,000, such Borrower or a Restricted Subsidiary shall receive not less
than 75% of such consideration in the form of cash or Permitted Investments; provided that
for the purposes of this clause (ii):



140









 






          (A) any liabilities (as shown on such Borrower’s or such Restricted
Subsidiary’s most recent balance sheet provided hereunder or in the footnotes
thereto) of such Borrower or such Restricted Subsidiary, other than liabilities that
are by their terms subordinated to the payment in cash of the Obligations, that are
assumed by the transferee with respect to the applicable Disposition and for which
such Borrower and all of the Restricted Subsidiaries shall have been validly
released by all applicable creditors in writing,




          (B) any securities received by such Borrower or such Restricted Subsidiary from
such transferee that are converted by such Borrower or such Restricted Subsidiary
into cash (to the extent of the cash received) within 180 days following the closing
of the applicable Disposition,




          (C) any Designated Non-Cash Consideration received by such Borrower or such
Restricted Subsidiary in respect of such Disposition having an aggregate fair market
value, taken together with all other Designated Non-Cash Consideration received
pursuant to this Section 10.2.4(c) and Section 10.2.4(b) that is at that time
outstanding, not in excess of 6% of Consolidated Total Assets at the time of the
receipt of such Designated Non-Cash Consideration, with the fair market value of
each item of Designated Non-Cash Consideration being measured at the time received
and without giving effect to subsequent changes in value,



     shall in each case under this clause (ii) be deemed to be cash.



          (d) any Borrower and any Restricted Subsidiary may effect any transaction permitted by Section
10.2.3, 10.2.5 or 10.2.6;





     (e) in addition to selling or transferring accounts receivable pursuant to the other
provisions hereof, MRC and the Restricted Subsidiaries may sell or discount without recourse
accounts receivable arising in the Ordinary Course of Business in connection with the
compromise or collection thereof consistent with such Person’s current credit and collection
practices;



          (f) any Borrower and any Restricted Subsidiary may lease, sublease, license or sublicense (on
a non-exclusive basis with respect to any intellectual property) real, personal or intellectual
property in the Ordinary Course of Business;




          (g) any Borrower and any Restricted Subsidiary may make sales, transfers and other
dispositions of property to the extent that (i) such property is exchanged for credit against the
purchase price of similar replacement property or (ii) the proceeds of such Disposition are
promptly applied to the purchase price of such replacement property;




          (h) any Borrower and any Restricted Subsidiary may make sales, transfers and other
dispositions of property pursuant to Permitted Sale Leaseback transactions;




          (i) any Borrower and any Restricted Subsidiary may make Dispositions of Non-Core Assets; and







141









 








          (j) any Borrower and any Restricted Subsidiary may make sales, transfers and other
dispositions of Investments in joint ventures to the extent required by, or made pursuant to
customary buy/sell arrangements between, the joint venture parties set forth in joint venture
arrangements and similar binding arrangements.




          10.2.5 Limitation on Investments. Each Borrower will not, and will not permit any of
the Restricted Subsidiaries to, make any advance, loan, extensions of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any
assets of, or make any other Investment in, any Person, except:




          (a) extensions of trade credit and asset purchases in the Ordinary Course of Business;




          (b) Permitted Investments;




          (c) loans and advances to officers, directors and employees of any Borrower (or any direct or
indirect parent thereof) or any of its Subsidiaries (i) for reasonable and customary
business-related travel, entertainment, relocation and analogous ordinary business purposes
(including employee payroll advances), (ii) in connection with such Person’s purchase of Stock or
Stock Equivalents of such Borrower (or any direct or indirect parent thereof) to the extent that
the amount of such loans and advances are contributed to such Borrower in cash and (iii) for
purposes not described in the foregoing clauses (i) and (ii), in an aggregate principal amount
outstanding not to exceed $5,000,000;




          (d) Investments existing on, or contemplated as of, the date hereof and listed on Schedule
10.2.5 and any extensions, renewals or reinvestments thereof, so long as the aggregate amount of
all Investments pursuant to this clause (d) is not increased at any time above the amount of such
Investments existing on the date hereof;




          (e) Investments received in connection with the bankruptcy or reorganization of suppliers or
customers and in settlement of delinquent obligations of, and other disputes with, customers
arising in the Ordinary Course of Business or upon foreclosure with respect to any secured
Investment or other transfer of title with respect to any secured Investment;




          (f) Investments to the extent that payment for such Investments is made solely with Stock or
Stock Equivalents of any Borrower;




          (g) Investments in any Persons provided that after giving effect to such Investments, either
(i) both (A) Excess Availability is greater than the higher of (1) 10% of the Commitments and (2)
$75,000,000 and (B) the Consolidated Fixed Charge Coverage Ratio for the most recent Test Period
for which financial statements have been delivered pursuant to Section 10.1.1 is greater than 1.0
to 1.0 or (ii) Excess Availability is greater than the higher of (A) 15% of the Commitments and (B)
$125,000,000; provided that if the test set forth in clause (g)(i) or (g)(ii) above is not
satisfied, then any Borrower shall be permitted to make Investments in an amount not to exceed
$50,000,000 in the aggregate (net of repayments) since the last calculation date on which the
Borrowers most recently met the test in clause (g)(i) or (g)(ii) above if, after giving effect to
such Investments, either (1) the Consolidated Fixed Charge Coverage Ratio for the most recent Test
Period for which financial statements have been






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delivered pursuant to Section 10.1.1 is greater than 1.0 to 1.0 or (2) Excess Availability is
greater than the higher of (x) 10% of the Commitments and (y) $75,000,000;




          (h) Investments constituting Permitted Acquisitions;




          (i) Investments constituting non-cash proceeds of sales, transfers and other dispositions of
assets to the extent permitted by Section 10.2.4;




          (j) Investments made to repurchase or retire Stock of any Borrower or any direct or indirect
parent thereof owned by any employee stock ownership plan or key employee stock ownership plan of
such Borrower (or any direct or indirect parent thereof);




          (k) Investments permitted under Section 10.2.6;




          (l) loans and advances to any direct or indirect parent of any Borrower in lieu of, and not in
excess of the amount of, dividends to the extent permitted to be made to such parent in accordance
with Section 10.2.6;




          (m) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the Ordinary Course of Business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors and other credits to suppliers in the Ordinary Course of Business;




          (n) Investments in the Ordinary Course of Business consisting of Article 3 endorsements for
collection or deposit and Article 4 customary trade arrangements with customers consistent with
past practices;




          (o) advances of payroll payments to employees in the Ordinary Course of Business;




          (p) Guarantee Obligations of any Borrower or any Restricted Subsidiary of leases (other than
Capital Leases) or of other obligations that do not constitute Indebtedness, in each case entered
into in the Ordinary Course of Business;




          (q) Investments made to repurchase or retire equity interests of any Borrower (or any direct
or indirect parent thereof) owned by any employee stock ownership plan or key employee stock
ownership plan of any Borrower (or any direct or indirect parent thereof);




          (r) Investments of a Restricted Subsidiary acquired after the Closing Date or of any Person
merged into any Borrower or merged or consolidated with a Restricted Subsidiary in accordance with
Section 10.2.3 after the Closing Date to the extent that such Investments were not made in
contemplation of or in connection with such acquisition, merger or consolidation and were in
existence on the date of such acquisition, merger or consolidation; and




          (s) Investments constituting Guarantee Obligations of Indebtedness permitted under Section
10.2.1.







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          10.2.6 Limitation on Dividends. MRC will not declare or pay any dividends (other than
dividends payable solely in its Stock) or return any capital to its stockholders or make any other
distribution, payment or delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for consideration, any shares of any
class of its Stock or Stock Equivalents or the Stock or Stock Equivalents of any direct or indirect
parent now or hereafter outstanding, or set aside any funds for any of the foregoing purposes, or
permit any of its Restricted Subsidiaries to purchase or otherwise acquire for consideration (other
than in connection with an Investment permitted by Section 10.2.5) any Stock or Stock Equivalents
of MRC, now or hereafter outstanding (all of the foregoing “dividends”), provided that, (x)
to the extent that a dividend, distribution or any other return of capital pursuant to clause (c)
below is funded with a Borrowing hereunder, Excess Availability is not less than $100,000,000 after
giving effect to such dividend, distribution or other return of capital and (y) so long as no
Default or Event of Default exists or would exist after giving effect thereto:




          (a) MRC may redeem in whole or in part any of its Stock or Stock Equivalents for another class
of its Stock or Stock Equivalents or with proceeds from substantially concurrent equity
contributions or issuances of new Stock or Stock Equivalents, provided that such new Stock or Stock
Equivalents contain terms and provisions at least as advantageous to the Lenders in all respects
material to their interests as those contained in the Stock or Stock Equivalents redeemed thereby;




          (b) MRC may (or may make dividends to permit any direct or indirect parent thereof to)
repurchase shares of its (or such parent’s) Stock or Stock Equivalents held by officers, directors
and employees of MRC and its Subsidiaries, so long as such repurchase is pursuant to, and in
accordance with the terms of, management and/or employee stock plans, stock subscription agreements
or shareholder agreements; provided, that the aggregate amount of all cash paid in respect of all
such shares so repurchased in any calendar year does not exceed the sum of (i) $10,000,000 plus
(ii) all amounts obtained by MRC during such calendar year from the sale of such Stock or Stock
Equivalents to other officers, directors and employees of MRC and its Subsidiaries in connection
with any permitted compensation and incentive arrangements plus (iii) all amounts obtained from any
key-man life insurance policies received during such calendar year; provided further that the
aggregate amount permitted by the foregoing proviso with respect to any calendar year commencing
with 2012 shall be increased by 100% of the amount of unused share repurchases for the immediately
preceding year (such amount, a “carry-over amount”) without giving effect to any carryover
amount that was added in such preceding calendar year and assuming any such carry-over amount is
utilized first and so long as the aggregate amount of cash paid in respect of all such shares so
repurchased in any calendar year does not exceed $20,000,000; and provided still further the
aggregate amount of all cash paid in respect of all such shares so repurchased in any calendar year
may exceed the aggregate amount permitted by the foregoing provisos if Excess Availability is not
less than $100,000,000 after giving effect to such dividend, distribution or other return of
capital;




          (c) MRC may pay dividends on its Stock or Stock Equivalents, provided that after giving effect
to such payment, either (i) both (A) Excess Availability is greater than the higher of (1) 15% of
the Commitments and (2) $125,000,000 and (B) the Pro Forma Consolidated Fixed Charge Coverage Ratio
is greater than 1.0 to 1.0 or (ii) Excess Availability is





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greater than the higher of (A) 20% of the Commitments and (B) $175,000,000, and provided
further that the foregoing test shall not apply to any dividends paid with proceeds arising from a
Qualified IPO; and




          (d) MRC may pay dividends:





          (i) to its direct or indirect parent in amounts sufficient for any such parent to pay
its income tax obligations for so long as MRC or any Restricted Subsidiary is a member of a
group filing a consolidated, combined, unitary, affiliated or other similar tax return with
such parent; provided the amount of dividends paid under this clause (i) in respect of
income tax obligations is limited to the extent such tax liability is directly attributable
to the taxable income of MRC or its Subsidiaries (that are included in such consolidated,
combined, unitary, affiliated or other similar tax return), determined as if MRC and such
Subsidiaries filed a separate consolidated, combined, unitary, affiliated or other similar
tax return as a stand-alone group and will be used to pay (or to make dividends to allow any
direct or indirect parent to pay), within 30 days of the receipt thereof, the tax liability
to each relevant jurisdiction in respect of such consolidated, combined, unitary, affiliated
or other similar returns;




          (ii) the proceeds of which shall be used to allow any direct or indirect parent of MRC
to pay (A) its operating expenses incurred in the Ordinary Course of Business and other
corporate overhead costs and expenses (including administrative, legal, accounting and
similar expenses provided by third parties), which are reasonable and customary and incurred
in the Ordinary Course of Business, in an aggregate amount not to exceed $2,000,000 in any
fiscal year of MRC plus any reasonable and customary indemnification claims made by
directors or officers of MRC (or any parent thereof) attributable to the ownership or
operations of MRC and its Subsidiaries or (B) fees and expenses otherwise (1) due and
payable by MRC or any of its Subsidiaries and (2) permitted to be paid by MRC or such
Subsidiary under this Agreement;




          (iii) without duplication of clause (i), above, the proceeds of which shall be used to
pay franchise taxes and other fees, taxes and expenses required to maintain the corporate
existence of any direct or indirect parent of MRC or its Restricted Subsidiaries, within
thirty (30) days of the receipt thereof;




          (iv) to any direct or indirect parent of MRC to finance any Investment permitted to be
made pursuant to Section 10.2.5; provided that (A) such dividend shall be made substantially
concurrently with the closing of such Investment and (B) such parent shall, immediately
following the closing thereof, cause (1) all property acquired (whether assets, Stock or
Stock Equivalents) to be contributed to MRC or its Restricted Subsidiaries or (2) the merger
(to the extent permitted in Section 10.2.5) of the Person formed or acquired into MRC or its
Restricted Subsidiaries in order to consummate such Permitted Acquisition.



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          10.2.7 Limitations on Debt Payments and Amendments.




          (a) Each Borrower will not, and will not permit any Restricted Subsidiary to, prepay,
repurchase or redeem or otherwise defease any Subordinated Indebtedness; provided, however, that so
long as no Default or Event of Default shall have occurred and be continuing at the date of such
prepayment, repurchase, redemption or other defeasance or would result after giving effect thereto,
any Borrower or any Restricted Subsidiary may prepay, repurchase or redeem Subordinated
Indebtedness if either (A) both (1) Excess Availability is greater than the higher of (x) 15% of
the Commitments and (y) $125,000,000 and (2) the Pro Forma Consolidated Fixed Charge Coverage Ratio
is greater than 1.0 to 1.0 or (B) Excess Availability is greater than the higher of (1) 20% of the
Commitments and (2) $175,000,000, in each case after giving effect to such prepayment, repurchase,
redemption or other defeasance, with the proceeds of Subordinated Indebtedness that (A) is
permitted by Section 10.2.1(b) (other than Section 10.2.1(b)(xiv)) and (B) has terms not materially
less advantageous to the Lenders than those of such Subordinated Indebtedness being refinanced.




          (b) Each Borrower will not waive, amend, modify, terminate or release any Subordinated
Indebtedness to the extent that any such waiver, amendment, modification, termination or release
would be adverse to the Lenders in any material respect.




          (c) The Initial Canadian Borrower will not, and will not permit any Restricted Subsidiary to,
make any payment with respect to the Subordinated Indebtedness covered by the Subordination
Agreement except for the discharge of such Subordinated Indebtedness as permitted under the
Subordination Agreement.




          10.2.8 Limitations on Sale Leasebacks. Each Borrower will not, and will not permit
any Restricted Subsidiary to, enter into or effect any Sale Leasebacks, other than Permitted Sale
Leasebacks.




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




          10.2.10 Burdensome Agreements. Each Borrower will not, and will not permit any
Restricted Subsidiary to, enter into or permit to exist any contractual obligation (other than this
Agreement or any other Loan Document) that limits the ability of (a) any Restricted Subsidiary that
is not a Borrower or Guarantor to make dividends to any Borrower or any Guarantor or (b) such
Borrower or any Guarantor to create, incur, assume or suffer to exist Liens on property of such
Person for the benefit of the Lenders with respect to the Secured Obligations; provided that the
foregoing clauses (a) and (b) shall not apply to contractual obligations which (i)(A) exist on the
date hereof and (to the extent not otherwise permitted by this Section 10.2.10) are listed on
Schedule 10.2.10 and (B) to the extent contractual obligations permitted by clause (A) are set
forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any
permitted renewal, extension or refinancing of such Indebtedness so long as such renewal, extension
or refinancing does not expand the scope of such contractual obligation, (ii) are binding on a
Restricted Subsidiary at the time such Restricted Subsidiary first becomes a




146









 




Restricted Subsidiary of such Borrower, so long as such contractual obligations were not
entered into solely in contemplation of such Person becoming a Restricted Subsidiary of such
Borrower; (iii) represent Indebtedness of a Restricted Subsidiary of such Borrower which is not a
Loan Party which is permitted by Section 10.2.1, (iv) arise in connection with any Disposition
permitted by Section 10.2.4, (v) are customary provisions in joint venture agreements and other
similar agreements applicable to joint ventures permitted under Section 10.2.5 and applicable
solely to such joint venture entered into in the Ordinary Course of Business, (vi) are negative
pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section
10.2.1 but solely to the extent any negative pledge relates to the property financed by or the
subject of such Indebtedness, (vii) are customary restrictions on leases, subleases, licenses or
asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets
subject thereto, (viii) comprise restrictions imposed by any agreement relating to secured
Indebtedness permitted pursuant to Section 10.2.1 to the extent that such restrictions apply only
to the property or assets securing such Indebtedness or, in the case of secured Indebtedness
incurred pursuant to Section 10.2.1(b)(ix) or Section 10.1.(b)(x) only, to the Restricted
Subsidiaries incurring or guaranteeing such Indebtedness, (ix) are customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of such Borrower or any
Restricted Subsidiary, (x) are customary provisions restricting assignment of any agreement entered
into in the Ordinary Course of Business, (xi) are restrictions on cash or other deposits imposed by
customers under contracts entered into in the Ordinary Course of Business, and (xii) exist under
the Senior Secured Notes Indenture or any documentation relating to such debt.




     10.3 Financial Covenants. As long as any Commitments or Obligations are outstanding:



          10.3.1 Consolidated Fixed Charge Coverage Ratio. The Parent and its Subsidiaries
shall maintain, as of the last day of each fiscal quarter during the occurrence and continuance of
a FCCR Test Event, a Consolidated Fixed Charge Coverage Ratio of at least 1.0 to 1.0 for the Test
Period ending on the last day of such fiscal quarter.




SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT




     11.1 Events of Default. Upon the occurrence of any of the following specified events
(each, an “Event of Default”), if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:



          11.1.1 Payments. Any Borrower shall (a) default in the payment when due of any
principal of the Loans or (b) default in the payment when due of any interest on the Loans or any
Fees or any other amounts owing hereunder or under any other Loan Document and, so long as no Cash
Dominion Event exists, such default shall continue for five or more days; or




          11.1.2 Representations, etc. Any representation, warranty or statement made or deemed
made by any Loan Party herein or in any Security Document or any certificate, statement, report or
other document delivered or required to be delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed made; or







147









 








          11.1.3 Covenants. Any Loan Party shall:




          (a) default in the due performance or observance by it of any term, covenant or agreement
contained in Section 10.1.1(h), Section 10.1.14, Section 10.2 or Section 10.3;




          (b) default in the due performance or observance by it of any term, covenant or agreement
contained in Section 10.1.1(f) and such default shall continue unremedied for a period of at least
ten (10) Business Days (which period is shortened to four (4) Business Days if an FCCR Test Event
is continuing) after the earlier of the date on which a Senior Officer of such Loan Party has
knowledge of such default and the date of receipt of written notice by such Loan Party from the
Agent or the Required Lenders; or




          (c) default in the due performance or observance by it of any term, covenant or agreement
(other than those referred to in Section 11.1.1 or 11.1.2 or clauses (a) or (b) of this Section
11.1.3) contained in this Agreement, any Security Document or the Fee Letter and such default shall
continue unremedied for a period of at least thirty (30) days after receipt of written notice by
such Loan Party from the Agent or the Required Lenders; or




          11.1.4 Default Under Other Agreements. (a) Any of the Borrowers or any of the
Restricted Subsidiaries shall (i) default in any payment with respect to any Indebtedness (other
than the Obligations) in excess of $30,000,000 in the aggregate, for such Borrowers and such
Restricted Subsidiaries, beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or
condition exist (other than, with respect to Indebtedness consisting of any Hedge Agreements,
termination events or equivalent events pursuant to the terms of such Hedge Agreements), the effect
of which default or other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, any such
Indebtedness to become due prior to its stated maturity; or (b) without limiting the provisions of
clause (a) above, any such Indebtedness shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (and,
with respect to Indebtedness consisting of any Hedge Agreements, other than due to a termination
event or equivalent event pursuant to the terms of such Hedge Agreements), prior to the stated
maturity thereof; or




          11.1.5 Bankruptcy, etc. (a) Any Borrower or any Specified Subsidiary shall commence a
voluntary Insolvency Proceeding (b) any Foreign Subsidiary that is a Specified Subsidiary, shall
commence a voluntary case, proceeding or action under domestic or foreign law relating to
bankruptcy, judicial management, insolvency reorganization or relief of debtors legislation of its
jurisdiction of incorporation, in each case as now or hereafter in effect, or any successor
thereto, (c) an involuntary Insolvency Proceeding is commenced against any Borrower or any
Specified Subsidiary and the petition is not controverted within 10 days after commencement
thereof; (d) an involuntary Insolvency Proceeding is commenced against any Borrower or any
Specified Subsidiary and the petition is not dismissed within 60 days after commencement thereof;
(e) a Creditor Representative or similar Person is appointed for, or takes charge of, all or
substantially all of the property of any Borrower or any Specified Subsidiary; (f)




148









 




any Borrower or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any
Borrower or any Specified Subsidiary; (g) there is commenced against any Borrower or any Specified
Subsidiary any such proceeding or action that remains undismissed for a period of 60 days; (h) any
Borrower or any Specified Subsidiary is adjudicated insolvent or bankrupt; (i) any order of relief
or other order approving any such case or proceeding or action is entered; (j) any Borrower or any
Specified Subsidiary suffers any appointment of any Creditor Representative or the like for it or
any substantial part of its Property to continue undischarged or unstayed for a period of 60 days;
(k) any Borrower or any Specified Subsidiary makes a general assignment for the benefit of
creditors; (l) any corporate action is taken by any Borrower or any Specified Subsidiary for the
purpose of effecting any of the foregoing; or




          11.1.6 ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA (including the giving of
written notice thereof); an event shall have occurred or a condition shall exist in either case
entitling the PBGC to terminate any Plan or to appoint a trustee to administer any Plan (including
the giving of written notice thereof); any Plan shall have an accumulated funding deficiency
(whether or not waived); any Borrower or any Subsidiary or any ERISA Affiliate has incurred or is
likely to incur a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code (including the
giving of written notice thereof); (b) there could result from any event or events set forth in
clause (a) of this Section 11.1.6 the imposition of a lien, the granting of a security interest, or
a liability, or the reasonable likelihood of incurring a lien, security interest or liability; and
(c) such lien, security interest or liability will or would be reasonably likely to have a Material
Adverse Effect; or




          11.1.7 Canadian Pension Plan. (a) A Termination Event shall occur or any Canadian
Multi-Employer Plan shall be terminated, in each case, in circumstances which would result or could
reasonably be expected to result in a Canadian Facility Loan Party being required to make a
contribution to or in respect of a Canadian Pension Plan or a Canadian Multi-Employer Plan or
results in the appointment, by FSCO, of an administrator to wind up a Canadian Pension Plan, (b)
any Canadian Domiciled Loan Party is in default with respect to any required contributions to a
Canadian Pension Plan; or (c) any Lien arises (save for contribution amounts not yet due) in
connection with any Canadian Pension Plan, provided the events set forth in clauses (a), (b) and
(c), individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect (it being acknowledged that, for purposes of this Section, funding deficiencies and other
benefit liabilities existing as of the Closing Date shall be included in the determination of
whether a Material Adverse Effect has occurred or exists); or




          11.1.8 Guarantee. Any Guarantee provided by any Material Subsidiary or any material
provision thereof shall cease to be in full force or effect or any such Guarantor thereunder or any
Loan Party shall deny or disaffirm in writing any such Guarantor’s obligations under the Guarantee
(or any of the foregoing shall occur with respect to a Guarantee provided by a Subsidiary that is
not a Material Subsidiary and shall continue unremedied for a period of at






149









 







least 5 Business Days after receipt of written notice to the Loan Party Agent from the Agent
or the Required Lenders); or




          11.1.9 Security Documents. Any Security Document pursuant to which the assets of any
Borrower or any Material Subsidiary are pledged as Collateral or any material provision thereof
shall cease to be in full force or effect (other than pursuant to the terms hereof or thereof or as
a result of acts or omissions of the Agent or any Lender) or any grantor thereunder or any Loan
Party shall deny or disaffirm in writing any grantor’s obligations under such Security Document (or
any of the foregoing shall occur with respect to Collateral provided by a Subsidiary that is not a
Material Subsidiary and shall continue unremedied for a period of at least 5 Business Days after
receipt of written notice to the Loan Party Agent from the Agent or the Required Lenders); or




          11.1.10 Judgments. One or more judgments or decrees shall be entered against any
Borrower or any of the Restricted Subsidiaries involving a liability of $30,000,000 or more in the
aggregate for all such judgments and decrees for the Borrowers and the Restricted Subsidiaries (to
the extent not paid or fully covered by insurance provided by a carrier not disputing coverage) and
any such judgments or decrees shall not have been satisfied, vacated, discharged or stayed or
bonded pending appeal within 60 days from the entry thereof; or




          11.1.11 Change of Control. A Change of Control shall occur; or




          11.1.12 Intercreditor; Subordination. The Intercreditor Agreement shall be
invalidated or otherwise cease to constitute the legal, valid and binding obligations of the Senior
Secured Notes Secured Parties (as defined therein) and the Subordinated Lien Secured Parties (as
defined therein), enforceable in accordance with its terms or the subordination provisions of any
document or instrument evidencing any Permitted Additional Debt or other Subordinated Indebtedness
having a principal amount in excess of $15,000,000 that are subordinated shall be invalidated or
otherwise cease to be legal, valid and binding obligations of the holders of such Permitted
Additional Debt or other Subordinated Indebtedness, enforceable in accordance with their terms;



then, (1) upon the occurrence of any Event of Default described in Section 11.1.5, automatically,
and (2) upon the occurrence of any other Event of Default, at the request of (or with the consent
of) Required Lenders, upon notice to the Borrowers by the Agent, (A) the Commitment of each Lender
and the obligation of any Fronting Bank to issue any Letter of Credit shall immediately terminate;
(B) each of the following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which are hereby expressly
waived by each Loan Party: (I) the unpaid principal amount of and accrued interest on the Loans,
(II) an amount equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding (regardless of whether any beneficiary under any such Letter of Credit
shall have presented, or shall be entitled at such time to present, the drafts or other documents
or certificates required to draw under such Letters of Credit), and (III) all other Obligations;
provided, the foregoing shall not affect in any way the obligations of Lenders under Section 2.2.2
or 2.2.5; (C) the Agent may enforce any and all Liens and security interests created pursuant to
Security Documents; and (D) the Agent shall direct the Borrowers to pay (and each Borrower hereby
agrees upon receipt of such notice, or upon the occurrence of any Event of






150









 







Default specified in Section 11.1.5 to pay) to the Agent such additional amounts of cash as
reasonably requested by any Fronting Bank, to be held as security for the Borrowers’ reimbursement
Obligations in respect of Letters of Credit then outstanding.




     11.2 License. Agent is hereby granted an irrevocable (during the continuance of an
Event of Default), non-exclusive license or other right to use, license or sub-license (without
payment of royalty or other compensation to any Loan Party) any or all intellectual property of
Loan Parties, computer hardware and software, trade secrets, brochures, customer lists, promotional
and advertising materials, labels, packaging materials and other Property, in advertising for sale,
marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or
remedies with respect to, any Collateral. Each Loan Party’s rights and interests under
intellectual property shall inure to Agent’s benefit.



     11.3 Setoff. At any time during the continuation of an Event of Default, each of the
Agent, any Fronting Bank, any Lender, and any of their Affiliates is authorized, to the fullest
extent permitted by Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and other obligations
(in whatever currency) at any time owing by the Agent, Fronting Bank, such Lender or such Affiliate
to or for the credit or the account of a Loan Party against any Obligations, irrespective of
whether or not the Agent, such Fronting Bank, such Lender or such Affiliate shall have made any
demand under this Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or are owed to a branch or office of the Agent, such Fronting Bank, such
Lender or such Affiliate different from the branch or office holding such deposit or obligated on
such indebtedness. The rights of the Agent, each Fronting Bank, each Lender and each such
Affiliate under this Section 11.3 are in addition to other rights and remedies (including other
rights of setoff) that such Person may have.



     11.4 Remedies Cumulative; No Waiver.



          11.4.1 Cumulative Rights. All agreements, warranties, guaranties, indemnities and
other undertakings of Loan Parties under the Credit Documents are cumulative and not in derogation
of each other. The rights and remedies of the Agent and Lenders are cumulative, may be exercised
at any time and from time to time, concurrently or in any order, and are not exclusive of any other
rights or remedies available by agreement, by law, at equity or otherwise. All such rights and
remedies shall continue in full force and effect until Full Payment of all Obligations.




          11.4.2 Waivers. No waiver or course of dealing shall be established by (a) the
failure or delay of the Agent or any Lender to require strict performance by Loan Parties with any
terms of the Loan Documents, or to exercise any rights or remedies with respect to Collateral or
otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event
of Default or other failure to satisfy any conditions precedent; or (c) acceptance by the Agent or
any Lender of any payment or performance by a Loan Party under any Loan Documents in a manner other
than that specified therein. It is expressly acknowledged by Loan Parties that any failure to
satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction
of such covenant on a subsequent date.







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     11.5 Judgment Currency. If, for the purpose of obtaining judgment in any court or
obtaining an order enforcing a judgment, it becomes necessary to convert any amount due under this
Agreement in Dollars or in any other currency (hereinafter in this Section 11.5 called the
“first currency”) into any other currency (hereinafter in this Section 11.5 called the
“second currency”), then the conversion shall be made at the Agent’s spot rate of exchange
for buying the first currency with the second currency prevailing at the Agent’s close of business
on the Business Day next preceding the day on which the judgment is given or (as the case may be)
the order is made. Any payment made by an Loan Party to any Credit Party pursuant to this
Agreement in the second currency shall constitute a discharge of the obligations of any applicable
Loan Parties to pay to such Credit Party any amount originally due to the Credit Party in the first
currency under this Agreement only to the extent of the amount of the first currency which such
Credit Party is able, on the date of the receipt by it of such payment in any second currency, to
purchase, in accordance with such Credit Party’s normal banking procedures, with the amount of such
second currency so received. If the amount of the first currency falls short of the amount
originally due to such Credit Party in the first currency under this Agreement, Loan Parties agree
that they will indemnify each Credit Party against and save such Credit Party harmless from any
shortfall so arising. This indemnity shall constitute an obligation of each such Loan Party
separate and independent from the other obligations contained in this Agreement, shall give rise to
a separate and independent cause of action and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum or sums in respect of amounts due to any
Credit Party under any Loan Documents or under any such judgment or order. Any such shortfall
shall be deemed to constitute a loss suffered by such Credit Party and Loan Parties shall not be
entitled to require any proof or evidence of any actual loss. If the amount of the first currency
exceeds the amount originally due to a Credit Party in the first currency under this Agreement,
such Credit Party shall promptly remit such excess to Loan Parties. The covenants contained in
this Section 11.5 shall survive the Full Payment of the Obligations under this Agreement.



SECTION 12. AGENT




     12.1 Appointment, Authority and Duties of Agent.



          12.1.1 Appointment and Authority.




          (a) Each Secured Party appoints and designates Bank of America as the Agent under all Loan
Documents. The Agent may, and each Secured Party authorizes the Agent to, enter into all Loan
Documents to which the Agent is intended to be a party and accept all Security Documents, for the
Agent’s benefit and the Pro Rata benefit of the Secured Parties. Each Secured Party agrees that
any action taken by the Agent, Required Borrower Group Lenders or Required Lenders in accordance
with the provisions of the Loan Documents, and the exercise by the Agent or Required Lenders of any
rights or remedies set forth therein, together with all other powers reasonably incidental thereto,
shall be authorized by and binding upon all Secured Parties. Without limiting the generality of
the foregoing, the Agent shall have the sole and exclusive authority to (i) act as the disbursing
and collecting agent for Lenders with respect to all payments and collections arising in connection
with the Loan Documents; (ii) execute and deliver as the Agent each Loan Document, including any
intercreditor or subordination agreement (or joinder thereto), and accept delivery of each Loan
Document from any Loan Party






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or other Person; (iii) act as collateral agent for Secured Parties for purposes of perfecting
and administering Liens under the Loan Documents, and for all other purposes stated therein; (iv)
manage, supervise or otherwise deal with Collateral; and (v) take any Enforcement Action or
otherwise exercise any rights or remedies with respect to any Collateral under the Loan Documents,
Applicable Law or otherwise. The duties of the Agent shall be ministerial and administrative in
nature, and the Agent shall not have a fiduciary relationship with any Secured Party, Participant
or other Person, by reason of any Loan Document or any transaction relating thereto. The Agent
alone shall be authorized to determine whether any Accounts or Inventory constitute Eligible
Accounts or Eligible Inventory, whether to impose or release any reserve, or whether any conditions
to funding or to issuance of a Letter of Credit have been satisfied, which determinations and
judgments, if exercised in good faith, shall exonerate the Agent from liability to any Lender or
other Person for any error in judgment.




          (b) For the purposes of creating a solidarité active in accordance with Article 1541 of the
Civil Code of Québec between each Secured Party, taken individually, on the one hand, and the
Agent, on the other hand, each Loan Party and each such Secured Party acknowledge and agree with
the Agent that such Secured Party and the Agent are hereby conferred the legal status of solidary
creditors of each such Loan Party in respect of all Obligations owed by each such Loan Party to the
Agent and such Secured Party hereunder and under the other Loan Documents (collectively, the
“Solidary Claim”) and that, accordingly, but subject (for the avoidance of doubt) to
Article 1542 of the Civil Code of Québec, each such Loan Party is irrevocably bound towards the
Agent and each Secured Party in respect of the entire Solidary Claim of the Agent and such Secured
Party. As a result of the foregoing, the parties hereto acknowledge that the Agent and each
Secured Party shall at all times have a valid and effective right of action for the entire Solidary
Claim of the Agent and such Secured Party and the right to give full acquittance for it.
Accordingly, and without limiting the generality of the foregoing, the Agent, as solidary creditor
with each Secured Party, shall at all times have a valid and effective right of action in respect
of the Solidary Claim and the right to give a full acquittance for same. By its execution of the
Loan Documents to which it is a party, each such Loan Party not a party hereto shall also be deemed
to have accepted the stipulations hereinabove provided. The parties further agree and acknowledge
that such Liens (hypothecs) under the Security Documents and the other Loan Documents shall be
granted to the Agent, for its own benefit and for the benefit of the Secured Parties, as solidary
creditor as hereinabove set forth.




          12.1.2 Duties. The Agent shall not have any duties except those expressly set forth
in the Loan Documents. The conferral upon the Agent of any right shall not imply a duty to
exercise such right, unless instructed to do so by Lenders in accordance with this Agreement.




          12.1.3 Agent Professionals. The Agent may perform its duties through agents and
employees. The Agent may consult with and employ Agent Professionals, and shall be entitled to act
upon, and shall be fully protected in any action taken in good faith reliance upon, any advice
given by an Agent Professional. The Agent shall not be responsible for the negligence or
misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.




          12.1.4 Instructions of Required Lenders. The rights and remedies conferred upon the
Agent under the Loan Documents may be exercised without the necessity of joinder of




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any other party, unless required by Applicable Law. The Agent may request instructions from
Required Lenders, Required Borrower Group Lenders or other Secured Parties with respect to any act
(including the failure to act) in connection with any Loan Documents, and may seek assurances to
its satisfaction from the Secured Parties of their indemnification obligations against all Claims
that could be incurred by the Agent in connection with any act. The Agent shall be entitled to
refrain from any act until it has received such instructions or assurances, and the Agent shall not
incur liability to any Person by reason of so refraining. Instructions of Required Lenders or
Required Borrower Group Lenders shall be binding upon all Secured Parties, and no Secured Party
shall have any right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting in accordance with the instructions of Required Lenders or Required Borrower
Group Lenders. Notwithstanding the foregoing, instructions by and consent of specific parties
shall be required to the extent provided in Section 14.1.1. In no event shall the Agent be
required to take any action that, in its opinion, is contrary to Applicable Law or any Loan
Documents or could subject any Agent Indemnitee to personal liability.




     12.2 Agreements Regarding Collateral and Field Examination Reports.



          12.2.1 Lien Releases; Care of Collateral.




          (a) Canadian Facility Secured Parties authorize the Agent to release any Lien with respect to
any Canadian Facility Collateral (i) upon Full Payment of the Canadian Facility Obligations; (ii)
that the Loan Party Agent certifies in writing to the Agent is permitted under Section 10.2.4 or a
Lien which Loan Party Agent certifies is permitted under Section 10.2.2 and entitled to priority
over the Agent’s Liens (and the Agent may rely conclusively on any such certificate without further
inquiry); (iii) that does not constitute a material part of the Canadian Facility Collateral; or
(iv) with the written consent of all Canadian Lenders.




          (b) U.S. Facility Secured Parties authorize the Agent to release any Lien with respect to any
U.S. Facility Collateral (i) upon Full Payment of the U.S. Facility Obligations; (ii) that the Loan
Party Agent certifies in writing to the Agent is permitted under Section 10.2.4 or a Lien which
Loan Party Agent certifies is permitted to be sold under Section 10.2.2 and entitled to priority
over the Agent’s Liens (and the Agent may rely conclusively on any such certificate without further
inquiry); (iii) that does not constitute a material part of the U.S. Facility Collateral; or (iv)
with the written consent of all U.S. Lenders.




          (c) The Agent shall have no obligation to assure that any Collateral exists or is owned by a
Loan Party, or is cared for, protected or insured, nor to assure that the Agent’s Liens have been
properly created, perfected or enforced, or are entitled to any particular priority, nor to
exercise any duty of care with respect to any Collateral.




          12.2.2 Possession of Collateral.




          (a) The Agent and Canadian Facility Secured Parties appoint each Canadian Lender as agent (for
the benefit of Canadian Facility Secured Parties) for the purpose of perfecting Liens in any
Canadian Facility Collateral held or controlled by such Canadian Lender, to the extent such Liens
are perfected by possession or control.







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          (b) The Agent and U.S. Facility Secured Parties appoint each U.S. Lender as agent (for the
benefit of U.S. Facility Secured Parties) for the purpose of perfecting Liens in any U.S. Facility
Collateral held or controlled by such U.S. Lender, to the extent such Liens are perfected by
possession or control.




          (c) If any Lender obtains possession or control of any Collateral, it shall notify the Agent
thereof and, promptly upon the Agent’s request, deliver such Collateral to the Agent or otherwise
deal with it in accordance with the Agent’s instructions.




          12.2.3 Reports. The Agent shall promptly forward to each Applicable Lender, when
complete, copies of any field audit, examination or appraisal report prepared by or for the Agent
with respect to any Loan Party or Collateral (“Report”). Each Lender agrees (a) that
neither Bank of America nor the Agent makes any representation or warranty as to the accuracy or
completeness of any Report, and shall not be liable for any information contained in or omitted
from any Report; (b) that the Reports are not intended to be comprehensive audits or examinations,
and that the Agent or any other Person performing any audit or examination will inspect only
specific information regarding Obligations or the Collateral and will rely significantly upon the
applicable Loan Parties’ books and records as well as upon representations of the applicable Loan
Parties’ officers and employees; and (c) to keep all Reports confidential and strictly for such
Lender’s internal use, and not to distribute any Report (or the contents thereof) to any Person
(except to such Lender’s Participants, attorneys and accountants) or use any Report in any manner
other than administration of the Loans and other Obligations. Each Lender shall indemnify and hold
harmless the Agent and any other Person preparing a Report from any action such Lender may take as
a result of or any conclusion it may draw from any Report, as well as from any Claims arising as a
direct or indirect result of the Agent furnishing a Report to such Lender.




     12.3 Reliance By Agent. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any certification, notice or other communication (including those by
telephone, telex, telegram, telecopy or e-mail) believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person, and upon the advice and
statements of Agent Professionals. The Agent shall have a reasonable and practicable amount of
time to act upon any instruction, notice or other communication under any Loan Document, and shall
not be liable for any delay in acting.



     12.4 Action Upon Default. The Agent shall not be deemed to have knowledge of any
Default or Event of Default, or of any failure to satisfy any conditions in Section 6, unless it
has received written notice from a the Loan Party Agent, Required Lenders or Required Borrower
Group Lenders specifying the occurrence and nature thereof. If any Lender acquires knowledge of a
Default, Event of Default or of such conditions, it shall promptly notify the Agent and the other
Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any
Credit Documents or with the written consent of the Agent and Required Lenders, it will not take
any Enforcement Action, accelerate Obligations (other than Secured Bank Product Obligations), or
exercise any right that it might otherwise have under Applicable Law to credit bid at foreclosure
sales, UCC or PPSA sales or other similar dispositions of Collateral or to assert any rights
relating to any Collateral.



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     12.5 Ratable Sharing. If any Lender shall obtain any payment or reduction of any
Obligation, whether through set-off or otherwise, in excess of its share of such Obligation,
determined on a Pro Rata basis or in accordance with Section 5.5.1, as applicable, such Lender
shall forthwith purchase from the Agent, any Fronting Bank and the other Applicable Lenders such
participations in the affected Obligation as are necessary to cause the purchasing Lender to share
the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.5.1, as
applicable. If any of such payment or reduction is thereafter recovered from the purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the extent of such
recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a
payment or reduction of any Obligation, it shall immediately turn over the amount thereof to the
Agent for application under Section 4.2 and it shall provide a written statement to the Agent
describing the Obligation affected by such payment or reduction. No Lender shall setoff against
any Dominion Account without the prior consent of the Agent.



     12.6 Indemnification of Agent Indemnitees. EACH LENDER SHALL INDEMNIFY AND HOLD
HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY LOAN PARTIES (BUT WITHOUT LIMITING THE
INDEMNIFICATION OBLIGATIONS OF LOAN PARTIES UNDER ANY CREDIT DOCUMENTS), ON A PRO RATA BASIS,
AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH AGENT INDEMNITEE, PROVIDED
THE ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR THE AGENT
(IN THE CAPACITY OF THE AGENT). In no event shall any Lender have any obligation hereunder to
indemnify or hold harmless an Agent Indemnitee with respect to a Claim that is determined in a
final, non-appealable judgment by a court of competent jurisdiction to result from the gross
negligence or willful misconduct of such Agent Indemnitee. In the Agent’s discretion, it may
reserve for any Claims made against an Agent Indemnitee, and may satisfy any judgment, order or
settlement relating thereto, from proceeds of Collateral prior to making any distribution of
Collateral proceeds to the Secured Parties. If the Agent is sued by any Creditor Representative,
debtor-in-possession or other Person for any alleged preference or fraudulent transfer, then any
monies paid by the Agent in settlement or satisfaction of such proceeding, together with all
interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be
promptly reimbursed to the Agent by each Lender to the extent of its Pro Rata share.



     12.7 Limitation on Responsibilities of Agent. The Agent shall not be liable to any
Secured Party for any action taken or omitted to be taken under the Credit Documents, except for
losses directly and solely caused by the Agent’s gross negligence or willful misconduct. The Agent
does not assume any responsibility for any failure or delay in performance or any breach by any
Loan Party, Lender or other Secured Party of any obligations under the Credit Documents. The Agent
does not make any express or implied warranty, representation or guarantee to the Secured Parties
with respect to any Obligations, Collateral, Credit Documents or Loan Party. No Agent Indemnitee
shall be responsible to the Secured Parties for any recitals, statements, information,
representations or warranties contained in any Credit Documents; the execution, validity,
genuineness, effectiveness or enforceability of any Credit Documents; the genuineness,
enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the
validity, extent, perfection or priority of any Lien therein; the validity, enforceability or
collectability of any Obligations; or the assets, liabilities, financial condition,



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results of operations, business, creditworthiness or legal status of any Loan Party or Account
Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire
into the existence of any Default or Event of Default, the observance or performance by any Loan
Party of any terms of the Credit Documents, or the satisfaction of any conditions precedent
contained in any Credit Documents.




     12.8 Successor Agent and Co-Agents.



          12.8.1 Resignation; Successor Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at least 30 days written
notice thereof to Lenders and Loan Party Agent Upon receipt of such notice, Required Lenders shall
have the right to appoint a successor Agent which shall be (a) a U.S. Lender or an Affiliate of a
U.S. Lender; or (b) a commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least $200,000,000 and (provided no
Event of Default exists) is reasonably acceptable to Loan Party Agent. Upon acceptance by a
successor Agent of an appointment to serve as the Agent hereunder, or upon appointment of Required
Lenders as successor Agent, such successor Agent shall thereupon succeed to and become vested with
all the powers and duties of the retiring Agent without further act, and the retiring Agent shall
be discharged from its duties and obligations hereunder but shall continue to have the benefits of
the indemnification set forth in Sections 12.6 and 14.2. Notwithstanding any Agent’s resignation,
the provisions of this Section 12 shall continue in effect for its benefit with respect to any
actions taken or omitted to be taken by it while the Agent. Any successor to Bank of America by
merger or acquisition of stock or this loan shall continue to be the Agent hereunder without
further act on the part of the parties hereto, unless such successor resigns as provided above.




          12.8.2 Separate Collateral Agent. It is the intent of the parties that there shall be
no violation of any Applicable Law denying or restricting the right of financial institutions to
transact business in any jurisdiction. If the Agent believes that it may be limited in the
exercise of any rights or remedies under the Credit Documents due to any Applicable Law, the Agent
may appoint an additional Person who is not so limited, as a separate collateral agent or
co-collateral agent. If the Agent so appoints a collateral agent or co-collateral agent, each
right and remedy intended to be available to the Agent under the Credit Documents shall also be
vested in such separate agent. The Secured Parties shall execute and deliver such documents as the
Agent deems appropriate to vest any rights or remedies in such agent. If any collateral agent or
co-collateral agent shall die or dissolve, become incapable of acting, resign or be removed, then
all the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by the Agent until appointment of a new agent.




     12.9 Due Diligence and Non-Reliance. Each Lender acknowledges and agrees that it has,
independently and without reliance upon the Agent or any other Lenders, and based upon such
documents, information and analyses as it has deemed appropriate, made its own credit analysis of
each Loan Party and its own decision to enter into this Agreement and to fund Loans and participate
in LC Obligations hereunder. Each Secured Party has made such inquiries as it deems necessary
concerning the Credit Documents, the Collateral and each Loan Party. Each Secured Party further
acknowledges and agrees that the other Secured Parties and the Agent have made no representations
or warranties concerning any Loan Party, any Collateral or the legality,



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validity, sufficiency or enforceability of any Credit Documents or Obligations. Each Secured
Party will, independently and without reliance upon any other Secured Party or the Agent, and based
upon such financial statements, documents and information as it deems appropriate at the time,
continue to make and rely upon its own credit decisions in making Loans and participating in LC
Obligations, and in taking or refraining from any action under any Credit Documents. Except for
notices, reports and other information expressly requested by a Lender, the Agent shall have no
duty or responsibility to provide any Secured Party with any notices, reports or certificates
furnished to the Agent by any Loan Party or any credit or other information concerning the affairs,
financial condition, business or Properties of any Loan Party (or any of its Affiliates) which may
come into possession of the Agent or any of Agent’s Affiliates.




     12.10 Remittance of Payments and Collections.



          12.10.1 Remittances Generally. All payments by any Lender to the Agent shall be made
by the time and on the day set forth in this Agreement, in immediately available funds. If no time
for payment is specified or if payment is due on demand by the Agent and request for payment is
made by the Agent by 11:00 a.m. on a Business Day, payment shall be made by Lender not later than
2:00 p.m. on such day, and if request is made after 11:00 a.m., then payment shall be made by 11:00
a.m. on the next Business Day. Payment by the Agent to any Secured Party shall be made by wire
transfer, in the type of funds received by the Agent. Any such payment shall be subject to the
Agent’s right of offset for any amounts due from such payee under the Loan Documents.




          12.10.2 Failure to Pay. If any Secured Party fails to pay any amount when due by it
to the Agent pursuant to the terms hereof, such amount shall bear interest from the due date until
paid at the rate determined by the Agent as customary in the banking industry for interbank
compensation. In no event shall Loan Parties be entitled to receive credit for any interest paid
by a Secured Party to the Agent, nor shall any Defaulting Lender be entitled to interest on any
amounts held by Agent pursuant to Section 4.2.




          12.10.3 Recovery of Payments. If the Agent pays any amount to a Secured Party in the
expectation that a related payment will be received by the Agent from a Loan Party and such related
payment is not received, then Agent may recover such amount from each Secured Party that received
it. If the Agent determines at any time that an amount received under any Loan Document must be
returned to a Loan Party or paid to any other Person pursuant to Applicable Law or otherwise, then,
notwithstanding any other term of any Loan Document, the Agent shall not be required to distribute
such amount to any Lender. If any amounts received and applied by the Agent to any Obligations are
later required to be returned by the Agent pursuant to Applicable Law, each Lender shall pay to the
Agent, on demand, such Lender’s Pro Rata share of the amounts required to be returned.




     12.11 Agent in its Individual Capacity. As a Lender, Bank of America shall have the
same rights and remedies under the other Credit Documents as any other Lender, and the terms
“Lenders,” “Required Lenders”, “Required Borrower Group Lenders” or any
similar term shall include Bank of America in its capacity as a Lender. Each of Bank of America
and its Affiliates may accept deposits from, lend money to, provide Bank Products to, act as
financial or other advisor to, and generally engage in any kind of business with, the Loan Parties
and their



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Affiliates, as if Bank of America was not Agent hereunder, without any duty to account
therefor to Lenders. In their individual capacities, Bank of America and its Affiliates may
receive information regarding the Loan Parties, their Affiliates and their Account Debtors
(including information subject to confidentiality obligations), and each Secured Party agrees that
Bank of America and its Affiliates shall be under no obligation to provide such information to any
Secured Party, if acquired in such individual capacity.




     12.12 Agent Titles. Each Lender, other than Bank of America, that is designated (on
the cover page of this Agreement or otherwise) by Bank of America as an “Agent” or
“Arranger” of any type shall not have any right, power, responsibility or duty under any
Loan Documents other than those applicable to all Lenders, and shall in no event be deemed to have
any fiduciary relationship with any other Lender.



     12.13 Bank Product Providers. Each Secured Bank Product Provider that is not a
Lender, by delivery of a joinder agreement in form and substance reasonably satisfactory to Agent
and Loan Party Agent, or as otherwise agreed by Agent and Loan Party Agent, shall agree to be bound
by Section 5.5 and this Section 12. Each Secured Bank Product Provider shall indemnify and hold
harmless Agent Indemnitees, to the extent not reimbursed by Loan Parties, against all Claims that
may be incurred by or asserted against any Agent Indemnitee in connection with such provider’s
Secured Bank Product Obligations (except those Claims determined in a final, non-appealable
judgment by a court of competent jurisdiction to result from the gross negligence or willful
misconduct of such Agent Indemnitee).



     12.14 No Third Party Beneficiaries. This Section 12 is an agreement solely among the
Secured Parties and the Agent, and shall survive Full Payment of the Obligations. This Section 12
does not confer any rights or benefits upon Loan Parties or any other Person. As between Loan
Parties and the Agent, any action that the Agent may take under any Credit Documents or with
respect to any Obligations shall be conclusively presumed to have been authorized and directed by
the Secured Parties.



SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS




     13.1 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of Loan Parties, the Agent, Secured Parties, and their respective successors and assigns,
except that (a) no Loan Party shall have the right to assign its rights or delegate its obligations
under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with
Section 13.3. The Agent may treat the Person which made any Loan as the owner thereof for all
purposes until such Person makes an assignment in accordance with Section 13.3. Any authorization
or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of
such Lender. The Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers,
shall maintain a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and Fronting Banks, and the Commitments of,
and principal amounts (and stated interest) of the Loans, Letters of Credit and other obligations
owing to, each Lender or Fronting Bank pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest error
(provided, that a failure to make any such recordation, or any



159









 




error in such recordation, shall not affect the Borrowers’ obligations in respect of such
Loans, Letters of Credit or other obligations), and the Borrowers, the Agent, the Lenders and the
Fronting Banks shall treat each Person whose name is recorded in the Register pursuant to the terms
hereof as the owner of the Commitments, Loans, Letters of Credit and other obligations recorded in
the Register as owing to such Person, for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers and any Lender or Fronting Bank, at any reasonable time
and from time to time upon reasonable prior notice.




     13.2 Participations.



          13.2.1 Permitted Participants; Effect. Any Lender may, in the ordinary course of its
business and in accordance with Applicable Law, at any time sell to a financial institution
(“Participant”) a participating interest in the rights and obligations of such Lender under
any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such
Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for performance of such obligations, such Lender
shall remain the holder of its Loans and Borrower Group Commitments for all purposes, all amounts
payable by Loan Parties within the applicable Loan Party Group shall be determined as if such
Lender had not sold such participating interests, and Loan Parties within the applicable Loan Party
Group and the Agent shall continue to deal solely and directly with such Lender in connection with
the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any
matters under the Loan Documents, and the Agent and the other Lenders shall not have any obligation
or liability to any such Participant. A Participant of U.S. Facility Obligations or Canadian
Facility Obligations that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 5.8 unless Loan Party Agent agrees otherwise in writing. Each Lender that
sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the
applicable Borrower, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each Participant’s interest in the
Loans, Letters of Credit or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or any portion of
the Participant Register to any Person (including the identity of any Participant or any
information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or
its other obligations under any Loan Document) except to the extent that such disclosure is
necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.




          13.2.2 Voting Rights. Each Lender shall retain the sole right to approve, without the
consent of any Participant, any amendment, waiver or other modification of any Loan Documents other
than that which forgives principal, interest or fees, reduces the stated interest rate or fees
payable with respect to any Loan or Borrower Group Commitment in which such Participant has an
interest, postpones the Canadian Revolver Commitment Termination Date, the U.S. Facility Revolver
Commitment Termination Date or the Swingline Commitment Termination Date, as applicable, or any
date fixed for any regularly scheduled payment of






160









 







principal, interest or fees on such Loan or Commitment, or releases any Loan Party, Guarantor
or substantial portion of the Collateral.




          13.2.3 Benefit of Set-Off. Loan Parties agree that each Participant shall have a
right of set-off in respect of its participating interest to the same extent as if such interest
were owing directly to a Lender, and each Lender shall also retain the right of set-off with
respect to any participating interests sold by it. By exercising any right of set-off, a
Participant agrees to share with Lenders all amounts received through its set-off, in accordance
with Section 12.5 as if such Participant were a Lender.




     13.3 Assignments.



          13.3.1 Permitted Assignments. Subject to Section 13.3.3 below, a Lender may assign to
an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a)
each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights
and obligations under the Loan Documents (unless otherwise agreed by the Agent) and, in the case of
a partial assignment, is in a minimum principal amount of $5,000,000 or Cdn$5,000,000, as
applicable (unless otherwise agreed by the Agent in its discretion), and integral multiples of
$1,000,000 or Cdn$1,000,000, as applicable, in excess of that amount; (b) except in the case of an
assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments
retained by the transferor Lender is at least $5,000,000 or Cdn$5,000,000, as applicable (unless
otherwise agreed by the Agent in its discretion); and (c) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording, an Assignment and Acceptance.
Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan
Documents to (i) any Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular issued by such
Federal Reserve Bank, or (ii) counterparties to swap agreements relating to any Loans; provided,
however, (i) such Lender shall remain the holder of its Loans and owner of its interest in any
Letter of Credit for all purposes hereunder, (ii) Borrowers, the Agent, the other Lenders and
Fronting Bank shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, (iii) any payment by Loan Parties to the
assigning Lender in respect of any Obligations assigned as described in this sentence shall satisfy
Loan Parties’ obligations hereunder to the extent of such payment, and no such assignment shall
release the assigning Lender from its obligations hereunder.




          13.3.2 Effect; Effective Date. Upon delivery to the Agent of an assignment notice in
the form of Exhibit A-2 and a processing fee of $3,500 (unless otherwise agreed by the Agent in its
discretion), the assignment shall become effective as specified in the notice, if it complies with
this Section 13.3.2. From such effective date, the Eligible Assignee shall for all purposes be a
Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder.
Upon consummation of an assignment, the transferor Lender, the Agent and Loan Parties shall make
appropriate arrangements for issuance of replacement and/or new Notes, as applicable. The
transferee Lender shall comply with Section 5.9 and deliver, upon request, an administrative
questionnaire satisfactory to Agent.







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          13.3.3 Certain Assignees. No assignment or participation may be made to any Borrower,
Affiliate of any Borrower, Defaulting Lender or natural person except as described in Schedule
13.3.3. In connection with any assignment by a Defaulting Lender, such assignment shall be
effective only upon payment by the Eligible Assignee or Defaulting Lender to the Agent of an
aggregate amount sufficient, upon distribution (through direct payment, purchases of participations
or other compensating actions as the Agent deems appropriate), (a) to satisfy all funding and
payment liabilities then owing by the Defaulting Lender hereunder, and (b) to acquire its Pro Rata
share of all Loans and LC Obligations. If an assignment by a Defaulting Lender shall become
effective under Applicable Law for any reason without compliance with the foregoing sentence, then
the assignee shall be deemed a Defaulting Lender for all purposes until such compliance occurs.




          13.3.4 Replacement of Certain Lenders. If (x) a Lender (a) fails to give its consent
to any amendment, waiver or action for which consent of all Lenders was required and Required
Lenders consented, (b) is a Defaulting Lender, or (c) gives a notice under Section 3.5 or requests
compensation under Section 3.7, or (y) if any Borrower is required to pay additional amounts with
respect to a Lender under Section 5.8, then, in addition to any other rights and remedies that any
Person may have, the Agent or Loan Party Agent may, by notice to such Lender within 120 days after
such event, require such Lender to assign all of its rights and obligations under the Loan
Documents to one or more Eligible Assignees, pursuant to appropriate Assignment and Acceptances,
within 20 days after the notice. The Agent is irrevocably appointed as attorney-in-fact to execute
any such Assignment and Acceptance if the Lender fails to execute it. Such Lender shall be
entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the
Loan Documents at par, including all principal, interest and fees through the date of assignment
(but excluding any prepayment charge).




SECTION 14. MISCELLANEOUS




     14.1 Consents, Amendments and Waivers.



          14.1.1 Amendment. No modification of any Loan Document, including any extension or
amendment of a Loan Document or any waiver of a Default or Event of Default, shall be effective
without the prior written agreement of the Agent (with the consent of Required Lenders) and each
Loan Party party to such Loan Document; provided, however, that:




          (a) without the prior written consent of the Agent, no modification shall be effective with
respect to any provision in a Loan Document that relates to any rights, duties or discretion of the
Agent;




          (b) (i) without the prior written consent of each U.S. Fronting Bank, no modification shall be
effective with respect to any U.S. LC Obligations or Sections 2.2.1, 2.2.2 or 2.2.3 or any other
provision in a Loan Document that relates to any rights, duties or discretion of any U.S. Fronting
Bank and (ii) without the prior written consent of Canadian Fronting Bank, no modification shall be
effective with respect to any Canadian LC Obligations or Sections 2.2.4, 2.2.5 or 2.2.6 or any
other provision in a Loan Document that relates to any rights, duties or discretion of Canadian
Fronting Bank;







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          (c) without the prior written consent of each affected Lender, including a Defaulting Lender,
no modification shall be effective that would (i) increase the Borrower Group Commitment of such
Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees
payable to such Lender (except as provided in Section 4.2); or (iii) increase the aggregate amount
of all Commitments other than as provided in Section 2.1.7;




          (d) without the prior written consent of all Lenders (except any Defaulting Lender as provided
in Section 4.2), no modification shall be effective that would (i) extend the U.S. Revolver
Commitment Termination Date, the Canadian Revolver Commitment Termination Date, the Swingline
Commitment Termination Date or Facility Termination Date; (ii) alter Section 5.5 or 7.1 (except to
add Collateral); (iii) amend the definitions of Pro Rata, Required Lenders, Required Borrower Group
Lenders, Super-Majority Borrower Group Lenders or Super-Majority Lenders; (iv) amend this Section
14.1.1; or (v) increase the Maximum Facility Amount;




          (e) without the prior written consent of the Super-Majority Borrower Group Lenders having
commitments to a Borrower Group, no amendment or waiver shall be effective that would (i) with
respect to Lenders having Borrower Group Commitments to the Canadian Borrowers, (A) amend the
definitions of Canadian Borrowing Base or Total Canadian Borrowing Base (and the defined terms used
in such definition) if the effect of such amendment is to increase the advance rates contained
therein, to make more credit available or to add new types of Collateral thereunder, (B) increase
the advance rates applicable to the Canadian Borrowers, (C) release a material portion (but less
than all or substantially all) of the Canadian Facility Collateral, except as currently
contemplated by Section 12.2.1(a), provided that a release of all or substantially all of the
Canadian Facility Collateral requires the prior written consent of all Canadian Lenders, (D)
release any Canadian Facility Loan Party from liability for any Canadian Facility Obligations
except as otherwise provided in this Agreement, (E) except as permitted under Section 10.2.2,
subordinate Agent’s Lien on any Canadian Facility Collateral or subordinate any Canadian Facility
Obligations in right of payment to any other Indebtedness or (F) amend the definition of Canadian
Availability; or (ii) with respect to Lenders having Borrower Group Commitments to the U.S.
Borrowers, (A) amend the definition of U.S. Borrowing Base (and the defined terms used in such
definition) if the effect of such amendment is to increase the advance rates contained therein, to
make more credit available or to add new types of Collateral thereunder, (B) increase the advance
rates applicable to the U.S. Borrowers, (C) release any material portion (but less than all or
substantially all) of the U.S. Facility Collateral, except as currently contemplated by Section
12.2.1(b), provided that a release of all or substantially all of the U.S. Facility Collateral
requires the prior written consent of all U.S. Lenders, (D) release any U.S. Facility Loan Party
from liability for any U.S. Facility Obligations except as otherwise provided in this Agreement,
(E) except as permitted under Section 10.2.2, subordinate Agent’s Lien on any U.S. Facility
Collateral or subordinate any U.S. Facility Obligations in right of payment to any other
Indebtedness or (F) amend the definition of U.S. Availability;




          (f) without the prior written consent of the Super-Majority Lenders, no amendment or waiver
shall be effective that would amend the definition of Excess Availability; and







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          (g) notwithstanding anything in this Section 14.1.1 to the contrary, if the Agent and the Loan
Party Agent shall have jointly identified an obvious error or any error or omission of a technical
nature, in each case, in any provision of the Loan Documents, then the Agent and the Loan Party
Agent shall be permitted to amend such provision, and, in each case, such amendment shall become
effective without any further action or consent of any other party to any Loan Document if the same
is not objected to in writing by the Required Lenders to the Agent within ten Business Days
following receipt of notice thereof.




          14.1.2 Limitations. The agreement of Loan Parties shall not be necessary to the
effectiveness of any modification of a Loan Document that deals solely with the rights and duties
of Lenders, the Agent and/or any Fronting Bank as among themselves. Only the consent of the
parties to the Fee Letter or any agreement relating to a Bank Product shall be required for any
modification of such agreement, and any non-Lender that is a party to a Bank Product agreement
shall have no right to participate in any manner in modification of any other Loan Document. The
making of any Loans during the existence of a Default or Event of Default shall not be deemed to
constitute a waiver of such Default or Event of Default, nor to establish a course of dealing. Any
waiver or consent granted by the Agent or Lenders hereunder shall be effective only if in writing
and only for the matter specified.




          14.1.3 Payment for Consents. After the Closing Date, no Loan Party will, directly or
indirectly, pay any remuneration or other thing of value, whether by way of additional interest,
fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for
agreement by such Lender with any modification of any Loan Documents, unless such remuneration or
value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their
consent.




     14.2 Indemnity. IN ADDITION TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION
5.8.2, EACH LOAN PARTY SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT
MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY LOAN PARTY
OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a
Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with
respect to a Claim that is determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from the gross negligence, willful misconduct or bad faith of such
Indemnitee, and no Loan Party shall have any obligation to indemnify or hold harmless an Indemnitee
for disputes solely among Indemnitees and not relating to any act or omission of any Loan Party or
its Affiliates (other than any action involving the Agent, any Fronting Bank or any Swingline
Lender, in each case in its capacity as such, in which case this indemnity shall apply with respect
to each such Person, as applicable, to the extent otherwise available).



     14.3 Notices and Communications.



          14.3.1 Notice Address. Subject to Section 4.4, all notices and other communications
by or to a party hereto shall be in writing and shall be given to any Loan Party, at Loan Party
Agent’s address shown on the signature pages hereof, and to any other Person at its address shown
on the signature pages hereof (or, in the case of a Person who becomes a Lender






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after the Closing Date, at the address shown on its Assignment and Acceptance), or at such
other address as a party may hereafter specify by notice in accordance with this Section 14.3.
Each such notice or other communication shall be effective only (a) if given by facsimile
transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is
received; (b) if given by mail, three Business Days after deposit in the U.S. mail (or, in the case
of a Canadian Domiciled Loan Party, the Canadian mail system), with first-class postage pre-paid,
addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to
the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent
pursuant to Section 2.1.4, 2.2, 3.1.1, 3.1.2 or 4.1.1 shall be effective until actually received by
the individual to whose attention at Agent such notice is required to be sent. Any written notice
or other communication that is not sent in conformity with the foregoing provisions shall
nevertheless be effective on the date actually received by the noticed party. Any notice received
by Loan Party Agent shall be deemed received by all Loan Parties.




          14.3.2 Electronic Communications; Voice Mail. Electronic mail and internet websites
may be used only for routine communications, such as financial statements, Borrowing Base
Certificates and other information required by Section 10.1.1, administrative matters, distribution
of Loan Documents for execution, and matters permitted under Section 4.1.3. The Agent and Lenders
make no assurances as to the privacy and security of electronic communications. Electronic mail
and voice mail may not be used as effective notice under the Loan Documents.




          14.3.3 Non-Conforming Communications. The Agent and Lenders may rely upon any notices
purportedly given by or on behalf of any Loan Party even if such notices were not made in a manner
specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by
the recipient, varied from a later confirmation. Each Loan Party shall indemnify and hold harmless
each Indemnitee from any liabilities, losses, costs and expenses arising from any telephonic
communication purportedly given by or on behalf of a Loan Party.




     14.4 Performance of Loan Parties’ Obligations. The Agent may, in its discretion at
any time and from time to time, at the expense of the Loan Parties of the applicable Loan Party
Group, pay any amount or do any act required of a Loan Party under any Loan Documents or otherwise
lawfully requested by the Agent to (a) enforce any Loan Documents or collect any Obligations; (b)
protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or
priority of the Agent’s Liens in any Collateral, including any payment of a judgment, insurance
premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a
Lien. All payments, costs and expenses (including Extraordinary Expenses) of the Agent under this
Section 14.4 shall be reimbursed to the Agent by Loan Parties, on demand, with interest from the
date incurred to the date of payment thereof at the Default Rate applicable to U.S. Base Rate
Loans. Any payment made or action taken by Agent under this Section 14.4 shall be without
prejudice to any right to assert an Event of Default or to exercise any other rights or remedies
under the Loan Documents.



     14.5 Credit Inquiries. Each Loan Party hereby authorizes the Agent and Lenders (but
they shall have no obligation) to respond to usual and customary credit inquiries from third
parties concerning any Loan Party or Subsidiary.



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     14.6 Severability. Wherever possible, each provision of the Loan Documents shall be
interpreted in such manner as to be valid under Applicable Law. If any provision is found to be
invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the
remaining provisions of the Loan Documents shall remain in full force and effect.



     14.7 Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents are
cumulative. The parties acknowledge that the Loan Documents may use several limitations, tests or
measurements to regulate similar matters, and they agree that these are cumulative and that each
must be performed as provided. Except as otherwise provided in another Loan Document (by specific
reference to the applicable provision of this Agreement), if any provision contained herein is in
direct conflict with any provision in another Loan Document, the provision herein shall govern and
control.



     14.8 Counterparts. Any Loan Document may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement shall become effective when the Agent has received counterparts bearing
the signatures of all parties hereto. Delivery of a signature page of any Loan Document by
telecopy or other electronic means shall be effective as delivery of a manually executed
counterpart of such agreement.



     14.9 Entire Agreement. Time is of the essence of the Loan Documents. The Loan
Documents constitute the entire contract among the parties relating to the subject matter hereof,
and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof.



     14.10 Relationship with Lenders. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Commitments of any other Lender.
Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall not
be necessary for the Agent or any other Lender to be joined as an additional party in any
proceeding for such purposes. Nothing in this Agreement and no action of the Agent, Lenders or any
other Secured Party pursuant to the Credit Documents shall be deemed to constitute the Agent and
any Secured Party to be a partnership, association, joint venture or any other kind of entity, nor
to constitute control of any Loan Party.



     14.11 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated by any Credit Document, Loan Parties acknowledge and agree that (a)(i)
this credit facility and any related arranging or other services by the Agent, any Lender, any of
their Affiliates or any arranger are arm’s-length commercial transactions between Loan Parties and
such Person; (ii) Loan Parties have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Loan Parties are capable of
evaluating, and understand and accept, the terms, risks and conditions of the transactions
contemplated by the Credit Documents; (b) each of the Agent, Lenders, their Affiliates and any
arranger is and has been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, an will not be acting as an advisor, agent or fiduciary
for Loan Parties, any of their Affiliates or any other Person, and has no obligation with respect
to the transactions contemplated by the Credit Documents except as expressly set forth therein; and
(c) the Agent, Lenders, their Affiliates and any arranger may be



166









 




engaged in a broad range of transactions that involve interests that differ from those of Loan
Parties and their Affiliates, and have no obligation to disclose any of such interests to Loan
Parties or their Affiliates. To the fullest extent permitted by Applicable Law, each Loan Party
hereby waives and releases any claims that it may have against the Agent, Lenders, their Affiliates
and any arranger with respect to any breach of agency or fiduciary duty in connection with any
transaction contemplated by a Loan Document.




     14.12 Confidentiality. Each of the Agent, Lenders and each Fronting Bank shall
maintain the confidentiality of all Information (as defined below), except that Information may be
disclosed (a) to its Affiliates, and to its and their partners, members, directors, officers,
employees, agents, advisors and representatives (provided such Persons are informed of the
confidential nature of the Information and instructed to keep it confidential); (b) to the extent
requested by any governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any
subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action
or proceeding, or other exercise of rights or remedies, relating to any Loan Documents or
Obligations; (f) subject to an agreement containing provisions substantially the same (or at least
as restrictive) as this Section 14.12, to any Transferee or any actual or prospective party (or its
advisors) to any Bank Product; (g) with the consent of Loan Party Agent; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of this Section 14.12
or (ii) is available to the Agent, any Lender, Fronting Bank or any of their Affiliates on a
nonconfidential basis from a source other than Loan Parties or (i) on a confidential basis to any
rating agency in connection with rating any Borrower or its Subsidiaries. Notwithstanding the
foregoing, the Agent and Lenders may publish or disseminate general information describing this
credit facility, including the names and addresses of Loan Parties and a general description of
Loan Parties’ businesses, and may use Loan Parties’ logos, trademarks or product photographs in
advertising materials. As used herein, “Information” means all information received from a
Loan Party or Subsidiary relating to it or its business that is identified as confidential when
delivered. Any Person required to maintain the confidentiality of Information pursuant to this
Section 14.12 shall be deemed to have complied if it exercises the same degree of care that it
accords its own confidential information. Each of the Agent, Lenders and each Fronting Bank
acknowledges that (A) Information may include material non-public information concerning a Loan
Party or Subsidiary; (B) it has developed compliance procedures regarding the use of material
non-public information; and (C) it will handle such material non-public information in accordance
with Applicable Law, including federal, state, provincial and territorial securities laws.



     14.13 Certifications Regarding Indentures. Borrowers certify to the Agent and Lenders
that neither the execution or performance of the Loan Documents nor the incurrence of any
Obligations by Borrowers violates the Senior Secured Notes Indenture. Borrowers further certify
that the Commitments and Obligations constitute Permitted Debt under the Senior Secured Notes
Indenture. Agent may condition Borrowings, Letters of Credit and other credit accommodations under
the Loan Documents from time to time upon Agent’s receipt of evidence that the Commitments and
Obligations continue to constitute Permitted Debt at such time.



     14.14 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE
SPECIFIED, SHALL BE GOVERNED BY THE



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LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT
GIVING EFFECT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW AND FEDERAL LAWS RELATING TO
NATIONAL BANKS).




     14.15 Consent to Forum.



          14.15.1 Forum. EACH PARTY HERETO HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN ANY
PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH
PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH PARTY IRREVOCABLY WAIVES ALL
CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER
JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. Nothing herein shall limit the right
of the Agent or any Lender to bring proceedings against any Loan Party in any other court, nor
limit the right of any party to serve process in any other manner permitted by Applicable Law.
Nothing in this Agreement shall be deemed to preclude enforcement by the Agent of any judgment or
order obtained in any forum or jurisdiction.




     14.16 Waivers by Loan Parties. To the fullest extent permitted by Applicable Law,
each Loan Party waives (a) the right to trial by jury (which the Agent and each Lender hereby also
waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents,
Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default,
non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial
paper, accounts, documents, instruments, chattel paper and guaranties at any time held by the Agent
on which a Loan Party may in any way be liable, and hereby ratifies anything the Agent may do in
this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or
security that might be required by a court prior to allowing the Agent to exercise any rights or
remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential, exemplary or
punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement
Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance
hereof. Each Loan Party acknowledges that the foregoing waivers are a material inducement to the
Agent, each Fronting Bank and Lenders entering into this Agreement and that the Agent, each
Fronting Bank and Lenders are relying upon the foregoing in their dealings with Loan Parties. Each
Loan Party has reviewed the foregoing waivers with its legal counsel and has knowingly and
voluntarily waived its jury trial and other rights following consultation with legal counsel. In
the event of litigation, this Agreement may be filed as a written consent to a trial by the court.



     14.17 Patriot Act Notice. The Agent and Lenders hereby notify Loan Parties that
pursuant to the requirements of the Patriot Act, the Proceeds of Crime Act and other applicable
anti-money laundering, anti-terrorist financing, government sanction and “know your client”



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policies, regulations, laws or rules (the Proceeds of Crime Act and such other applicable
policies, regulations, laws or rules, collectively, including any guidelines or orders thereunder,
“AML Legislation”), the Agent and Lenders are required to obtain, verify and record
information that identifies each Loan Party, including its legal name, address, tax ID number and
other information that will allow the Agent and Lenders to identify it in accordance with the
Patriot Act and the AML Legislation. The Agent and Lenders may require information regarding Loan
Parties’ management and owners, such as legal name, address, social security number and date of
birth. Each Loan Party shall promptly provide all such information, including supporting
documentation and other evidence, as may be reasonably requested by any Lender or any prospective
assignee or participant of a Lender, in order to comply with the Patriot Act and/or the AML
Legislation.




     14.18 Canadian Anti-Money Laundering Legislation. If the Agent has ascertained the
identity of any Canadian Facility Loan Party or any authorized signatories of any Canadian Facility
Loan Party for the purposes of applicable AML Legislation, then the Agent:



          (a) shall be deemed to have done so as an agent for each Canadian Lender, and this Agreement
shall constitute a “written agreement” in such regard between each Canadian Lender and the Agent
within the meaning of the applicable AML Legislation; and




          (b) shall provide to each Canadian Lender copies of all information obtained in such regard
without any representation or warranty as to its accuracy or completeness.




     Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of
the Canadian Lenders agrees that the Agent has no obligation to ascertain the identity of the
Canadian Loan Parties or any authorized signatories of the Canadian Loan Parties on behalf of any
Canadian Lender, or to confirm the completeness or accuracy of any information it obtains from any
Canadian Facility Loan Party or any such authorized signatory in doing so.



     14.19 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Loan Party for liquidation
or reorganization, should any Loan Party become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any significant part of such Loan
Party’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is, pursuant to Applicable
Law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as
though such payment or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.



     14.20 Nonliability of Lenders. Neither the Agent, any Fronting Bank nor any Lender
undertakes any responsibility to any Loan Party to review or inform any Loan Party of any matter in
connection with any phase of any Loan Party’s business or operations. Each Loan Party agrees, on
behalf of itself and each other Loan Party, that neither the Agent, any Fronting Bank nor any
Lender shall have liability to any Loan Party (whether sounding in tort, contract or



169









 




otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any
way related to the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith, unless it is determined
in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted
from the gross negligence, willful misconduct or bad faith of the party from which recovery is
sought. NO LENDER SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION
TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT.




[Remainder of page intentionally left blank; signatures begin on following page]





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     IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set
forth above.



	 	 	 	 	 

	 	 	MCJUNKIN RED MAN CORPORATION, as a U.S. Borrower and Canadian
Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer






2 Houston Center

909 Fannin, Suite 3100

Houston, TX 77010-1011

Attn: James F. Underhill

Telecopy: (304) 348-1816




	 	 	 	 	 

	 	 	GREENBRIER PETROLEUM CORPORATION as a U.S. Borrower and Canadian
Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MCJUNKIN NIGERIA LIMITED, as a U.S. Borrower and Canadian Facility
Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MCJUNKIN — PUERTO RICO CORPORATION, as a U.S. Borrower and Canadian
Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MCJUNKIN RED MAN DEVELOPMENT CORPORATION, 
as a U.S. Borrower and
Canadian Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	MCJUNKIN — WEST AFRICA CORPORATION, as a U.S. Borrower and
Canadian Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MIDWAY — TRISTATE CORPORATION, as a U.S. Borrower and Canadian
Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MILTON OIL & GAS COMPANY, as a U.S. Borrower and Canadian Facility
Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MRC MANAGEMENT COMPANY, as a U.S. Borrower and Canadian Facility
Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MRM OKLAHOMA MANAGEMENT LLC, as a U.S. Borrower and Canadian Facility
Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	RUFFNER REALTY COMPANY, as a U.S. Borrower and Canadian Facility
Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer






Signature Page to Loan, Security and Guarantee Agreement












 









 








	 	 	 	 	 

	 	 	THE SOUTH TEXAS SUPPLY COMPANY, INC. as a U.S. Borrower and Canadian
Facility Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	MIDFIELD SUPPLY ULC, as a Canadian Borrower
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James F. Underhill
	 

	 	Name:
	 	James F. Underhill
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer






Signature Page to Loan, Security and Guarantee Agreement










 









 








	 	 	 	 	 

	 	 	AGENT AND LENDERS:
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Agent and U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Porter
	 

	 	Name:
	 	Mark Porter
	 

	 	Title:
	 	SVP
	 
	 	 	 	 
	 	 	Bank of America, N.A., as Agent
	 	 	901 Main Street, Floor 11
	 	 	Mail Code TX1-492-11-23
	 	 	Dallas, Texas 75202
	 
	 	 	 	 
	 	 	Attn: Mark Porter
	 	 	Telecopy: 214-209-4766






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 	 	 

	 	 	BANK OF AMERICA, N.A. (acting through its Canada Branch), 
as a
Canadian Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Medina Sales De Andrade	 	 
	 

	 	Name:
	 	Medina Sales De Andrade	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

Attn: Medina Sales De Andrade
	 	 
	 

	 	 	 	Telecopy: 416-369-7647	 	 






Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brant Murdock
	 

	 	Name:
	 	Brant Murdock
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	301 South College Street, 22nd Floor
	 

	 	 	 	Charlotte, NC 28202
	 

	 	 	 	Attn: Dave Warga
	 

	 	 	 	Telecopy: 704-715-0016






Signature Page to Loan, Security and Guarantee Agreement







 









 








	 	 	 	 	 

	 	 	WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Domenic Cosentino
	 

	 	Name:
	 	Domenic Cosentino
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	301 South College Street, 22nd Floor
	 

	 	 	 	Charlotte, NC 28202
	 

	 	 	 	Attn: Dave Warga
	 

	 	 	 	Telecopy: 704-715-0016






Signature Page to Loan, Security and Guarantee Agreement






 









 








	 	 	 	 	 

	 	 	BARCLAYS BANK PLC, as a U.S. Lender and Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Cullen
	 

	 	Name:
	 	Kevin Cullen
	 

	 	Title:
	 	Director
	 
	 	 	 	 
	 

	 	 	 	745 Seventh Avenue
	 

	 	 	 	New York, NY 10019
	 

	 	 	 	Attn: Michael Mozer
	 

	 	 	 	Telecopy: (212) 526-1456






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	GOLDMAN SACHS LENDING PARTNERS LLC, as a U.S. Lender and Canadian
Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Walton
	 

	 	Name:
	 	Mark Walton
	 

	 	Title:
	 	Authorized Signatory






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	U.S. BANK NATIONAL ASSOCIATION, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey D. Patton
	 

	 	Name:
	 	Jeffrey D. Patton
	 

	 	Title:
	 	Assistant Vice President
	 
	 	 	 	 
	 

	 	 	 	One U.S. Bank Plaza
	 

	 	 	 	St. Louis, MO 63101
	 

	 	 	 	Attn: Jeff Patton
	 

	 	 	 	Telecopy: (314) 418-8556
	 
	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as a Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Joseph Rauhala
	 

	 	Name:
	 	Joseph Rauhala
	 

	 	Title:
	 	Principal Officer






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	SUNTRUST BANK, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Holland
	 

	 	Name:
	 	David Holland
	 

	 	Title:
	 	VP, Portfolio Manager






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	TD BANK, N.A., as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Francis Garvin
	 

	 	Name:
	 	Francis Garvin
	 

	 	Title:
	 	Vice President






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 	 	 

	 	 	THE TORONTO — DOMINION BANK, as a Canadian Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/Darcy Mack
	 	/s/ Kyle Wedge
	 

	 	Name:
	 	Darcy Mack
	 	Kyle Wedge
	 

	 	Title:
	 	VP
	 	Analyst






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:
	 	Kyle Wedge	 	 
	 

	 	 	 	Telecopy:
	 	(416) 983-6522	 	 






Signature Page to Loan, Security and Guarantee Agreement







 









 








	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION,
	 	 	as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Katherine Garland
	 

	 	Name:
	 	Katherine Garland
	 

	 	Title:
	 	Account Executive
	 
	 	 	 	 
	 

	 	Attn: Katherine Garland

	 

	 	Telecopy: 212-303-0060

	 
	 	 	 	 
	 	 	PNC BANK, CANADA BRANCH,
	 	 	as a Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mike Danby
	 

	 	Name:
	 	Mike Danby
	 

	 	Title:
	 	Assistant Vice President
	 
	 	 	 	 
	 

	 	Attn: Portfolio Manager

	 

	 	Telecopy: 416-361-0085







Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	RBS CITIZENS BUSINESS CAPITAL,
	 	 	a division of RBS ASSET FINANCE, INC.,
	 	 	a subsidiary of RBS Citizens, N.A., as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Patrick Aarons
	 

	 	Name:
	 	Patrick Aarons
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 

	 	 	 	RBS/Citizens Business Capital
	 

	 	 	 	A Member of the Royal Bank of Scotland Group
	 

	 	 	 	100 Galleria Parkway, Suite 1100
	 

	 	 	 	Atlanta, Georgia 30339
	 

	 	 	 	Attn: Patrick Aarons
	 

	 	 	 	Telecopy: (770) 850-4895






Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	UNION BANK, N.A., as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Terry L. Rocha
	 

	 	Name:
	 	Terry L. Rocha
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	445 South Figueroa Street, G13-300
	 

	 	 	 	Los Angeles, CA 90071
	 

	 	 	 	Attn: Mike Richman
	 

	 	 	 	Telecopy: (213) 236-6089
	 
	 	 	 	 
	 	 	UNION BANK, N.A., as a U.S. Lender and Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Anne Collins
	 

	 	Name:
	 	Anne Collins
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	730, 440 2nd Ave. SW
	 

	 	 	 	Calgary, Alberta, T2P 5E9
	 

	 	 	 	Attn: Anne Collins
	 

	 	 	 	Telecopy: 403-264-2770






Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	JPMORGAN CHASE BANK, N.A., as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dan Bueno
	 

	 	Name:
	 	Dan Bueno
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	270 Park Avenue, 44th Floor
	 

	 	 	 	New York, NY 10017
	 

	 	 	 	Attn: Dan Bueno
	 

	 	 	 	Telecopy: 646-534-2274






Signature Page to Loan, Security and Guarantee Agreement




 









 








	 	 	 	 	 

	 	 	JPMORGAN CHASE BANK, N.A., TORONTO BRANCH as
	 	 	Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Auggie Marchetti
	 

	 	Name:
	 	Auggie Marchetti
	 

	 	Title:
	 	Senior Vice President & Regional Manager






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement







 









 








	 	 	 	 	 

	 	 	THE HUNTINGTON NATIONAL BANK, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey M. Evans
	 

	 	Name:
	 	Jeffrey M. Evans
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	917 Euclid Ave. CM64
	 

	 	 	 	Cleveland, OH 44115
	 

	 	 	 	Attn: Betty Johnson
	 

	 	 	 	Telecopy: 216.515.0179






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	CITY NATIONAL BANK, as a U.S. Lender and Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brent Phillips
	 

	 	Name:
	 	Brent Phillips
	 

	 	Title:
	 	Vice President






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement







 









 








	 	 	 	 	 

	 	 	FLAGSTAR BANK, FSB, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Willard D. Dickerson, Jr.
	 

	 	Name:
	 	Willard D. Dickerson, Jr.
	 

	 	Title:
	 	Senior Vice President






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	RAYMOND JAMES BANK, FSB, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James M. Armstrong
	 

	 	Name:
	 	James M. Armstrong
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	710 Carillon Parkway
	 

	 	 	 	St. Petersburg, FL 33716
	 

	 	 	 	Attn: James Armstrong
	 

	 	 	 	Telecopy: (866) 205-1396






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	UNITED BANK, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy A. Paxton
	 

	 	Name:
	 	Timothy A. Paxton
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 

	 	 	 	500 Virginia Street East
	 

	 	 	 	Charleston, WV 25301
	 

	 	 	 	Attn: Melanie Humphreys
	 

	 	 	 	Telecopy: (304) 348-8353






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	CITY NATIONAL BANK OF WEST VIRGINIA, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jack Cavender
	 

	 	Name:
	 	Jack Cavender
	 

	 	Title:
	 	Executive Vice President
	 
	 	 	 	 
	 

	 	 	 	10 Hale Street, Suite 100
	 

	 	 	 	Charleston, WV 25301
	 

	 	 	 	Attn: Katha J. Morris, Administrative Assistant
	 

	 	 	 	Telecopy: (304) 347-2444






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	CAPITAL ONE LEVERAGED FINANCE CORP., as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Julianne Low
	 

	 	Name:
	 	Julianne Low
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	 	 	275 Boradhollow Road
	 

	 	 	 	Melville, NY 11747
	 

	 	 	 	Attn: Julianne Low
	 

	 	 	 	Telecopy: 800-986-0323






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	CITIZENS BANK, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Couture
	 

	 	Name:
	 	Thomas Couture
	 

	 	Title:
	 	First Vice President
	 
	 	 	 	 
	 

	 	 	 	28001 Cabot Drive, Suite 250
	 

	 	 	 	Novi, MI 48377
	 

	 	 	 	Attn: Tom Couture
	 

	 	 	 	Telecopy: (248) 324-8616






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	WEBSTER BUSINESS CREDIT CORPORATION, as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Harvey Winter
	 

	 	Name:
	 	Harvey Winter
	 

	 	Title:
	 	VP
	 
	 	 	 	 
	 

	 	 	 	360 Lexington Avenue
	 

	 	 	 	New York, NY 10017
	 

	 	 	 	Attn: Harvey Winter
	 

	 	 	 	Telecopy: 212-806-4510






Signature Page to Loan, Security and Guarantee Agreement








 









 








	 	 	 	 	 

	 	 	BOKF, NA as a U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ryan L. Kirk
	 

	 	Name:
	 	Ryan L. Kirk
	 

	 	Title:
	 	Officer






	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attn:	 	 	 	 
	 

	 	 	 	Telecopy:
	 	 

(918) 280-3368
	 	 






Signature Page to Loan, Security and Guarantee Agreement