Document:

Exhibit 10.1

 

 

CREDIT AGREEMENT

 

Dated as of December 21, 2005

 

among

 

LOUISIANA-PACIFIC LIMITED
PARTNERSHIP, 

BY ITS GENERAL PARTNER 

3047525 NOVA SCOTIA COMPANY,

(“LP-LP”)

 

-
and -

 

LOUSIANA-PACIFIC CANADA LTD.

(“LP Canada”)

 

LP-LP
and LP Canada collectively as the “Borrowers”,

 

-
and -

 

LOUISIANA-PACIFIC CORPORATION

(the “Parent Guarantor”)

 

BANK
OF AMERICA, N.A., acting through its Canada branch

 

as Administrative Agent

 

- and -

 

THE BANK OF NOVA SCOTIA
as Syndication Agent

 

- and -

 

The Other Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC

 

-
and -

 

SCOTIA CAPITAL
as Joint Lead Arrangers

 

-
and -

 

BANK
OF AMERICA SECURITIES LLC

as Sole Book Manager

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  
	
  Article I.
  DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
  1.01

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
  Other Interpretive Provisions

  	
  19

  
	
  1.03

  	
  Accounting Terms

  	
  19

  
	
  1.04

  	
  Rounding

  	
  20

  
	
  1.05

  	
  Times of Day

  	
   

  
	
   

  	
   

  	
   

  
	
  Article II.
  Term loan

  	
  20

  
	
  2.01

  	
  Availability
  of Term Loan

  	
  20

  
	
  2.02

  	
  Conversion Options

  	
  21

  
	
  2.03

  	
  Execution
  of Bankers’ Acceptances

  	
  22

  
	
  2.04

  	
  Sale
  of Bankers’ Acceptances

  	
  23

  
	
  2.05

  	
  Size
  and Maturity Of Bankers’ Acceptances and Rollovers

  	
  23

  
	
  2.06

  	
  Co-ordination
  of BA Advances

  	
  24

  
	
  2.07

  	
  Payment
  of Bankers’ Acceptances

  	
  25

  
	
  2.08

  	
  Deemed
  Advance - Bankers’ Acceptances

  	
  25

  
	
  2.09

  	
  Waiver

  	
  25

  
	
  2.10

  	
  Degree
  of Care

  	
  26

  
	
  2.11

  	
  Indemnity

  	
  26

  
	
  2.12

  	
  Obligations
  Absolute

  	
  26

  
	
  2.13

  	
  Shortfall
  on Drawdowns, Rollovers and Conversions

  	
  26

  
	
  2.14

  	
  Prohibited
  Use of Bankers’ Acceptances

  	
  27

  
	
  2.15

  	
  Prepayments

  	
  27

  
	
  2.16

  	
  Repayment of Loans

  	
  27

  
	
  2.17

  	
  Interest

  	
  27

  
	
  2.18

  	
  Fees

  	
  28

  
	
  2.19

  	
  Computation of Interest and Fees

  	
  28

  
	
  2.20

  	
  Evidence of Debt

  	
  29

  
	
  2.21

  	
  Payments Generally; Administrative Agent’s
  Clawback

  	
  29

  
	
  2.22

  	
  Sharing of Payments by Lenders

  	
  31

  
	
   

  	
   

  	
   

  
	
  Article III.
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
  31

  
	
  3.01

  	
  Taxes

  	
  31

  
	
  3.02

  	
  Illegality

  	
  33

  
	
  3.03

  	
  Inability
  to Determine Rates

  	
  34

  
	
  3.04

  	
  Increased
  Costs

  	
  34

  
	
  3.05

  	
  Compensation
  for Losses

  	
  35

  
	
  3.06

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
  36

  
	
  3.07

  	
  Survival

  	
  36

  
	
   

  	
   

  	
   

  
	
  Article IV.
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
  36

  
	
  4.01

  	
  Conditions
  of Initial Loan

  	
  36

  
				

 

(i)

 

	
  Article V.
  REPRESENTATIONS AND WARRANTIES

  	
  38

  
	
  5.01

  	
  Existence,
  Qualification and Power; Compliance with Laws

  	
  38

  
	
  5.02

  	
  Authorization;
  No Contravention

  	
  39

  
	
  5.03

  	
  Governmental
  Authorization; Other Consents

  	
  39

  
	
  5.04

  	
  Binding
  Effect

  	
  39

  
	
  5.05

  	
  Financial
  Statements; No Material Adverse Effect; No Internal Control Event

  	
  39

  
	
  5.06

  	
  Litigation

  	
  40

  
	
  5.07

  	
  No
  Default

  	
  41

  
	
  5.08

  	
  Ownership
  of Property; Liens

  	
  41

  
	
  5.09

  	
  Environmental
  Compliance

  	
  41

  
	
  5.10

  	
  Insurance

  	
  41

  
	
  5.11

  	
  Taxes

  	
  41

  
	
  5.12

  	
  ERISA
  Compliance

  	
  42

  
	
  5.13

  	
  Subsidiaries;
  Equity Interests

  	
  42

  
	
  5.14

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

  	
  43

  
	
  5.15

  	
  Disclosure

  	
  43

  
	
  5.16

  	
  Compliance
  with Laws

  	
  43

  
	
  5.17

  	
  Intellectual
  Property; Licenses, Etc.

  	
  43

  
	
   

  	
   

  	
   

  
	
  Article VI.
  AFFIRMATIVE COVENANTS

  	
  44

  
	
  6.01

  	
  Financial
  Statements

  	
  44

  
	
  6.02

  	
  Certificates;
  Other Information

  	
  45

  
	
  6.03

  	
  Notices

  	
  47

  
	
  6.04

  	
  Payment
  of Obligations

  	
  48

  
	
  6.05

  	
  Preservation
  of Existence, Etc.

  	
  48

  
	
  6.06

  	
  Maintenance
  of Properties

  	
  48

  
	
  6.07

  	
  Maintenance
  of Insurance

  	
  49

  
	
  6.08

  	
  Compliance
  with Laws

  	
  49

  
	
  6.09

  	
  Books
  and Records

  	
  49

  
	
  6.10

  	
  Inspection
  Rights

  	
  49

  
	
  6.11

  	
  Use
  of Proceeds

  	
  49

  
	
  6.12

  	
  Additional
  Guarantors

  	
  49

  
	
  6.13

  	
  Environmental
  Laws

  	
  50

  
	
   

  	
   

  	
   

  
	
  Article VII.
  NEGATIVE COVENANTS

  	
  50

  
	
  7.01

  	
  Liens

  	
  50

  
	
  7.02

  	
  Investments

  	
  52

  
	
  7.03

  	
  Indebtedness

  	
  53

  
	
  7.04

  	
  Fundamental
  Changes

  	
  54

  
	
  7.05

  	
  Dispositions

  	
  54

  
	
  7.06

  	
  Restricted
  Payments

  	
  55

  
	
  7.07

  	
  Change
  in Nature of Business

  	
  55

  
	
  7.08

  	
  Transactions
  with Affiliates

  	
  55

  
	
  7.09

  	
  Burdensome
  Agreements

  	
  56

  
	
  7.10

  	
  Use
  of Proceeds

  	
  56

  
	
  7.11

  	
  Financial
  Covenants

  	
  56

  

 

(ii)

 

	
  Article VIII.
  EVENTS OF DEFAULT AND REMEDIES

  	
  57

  
	
  8.01

  	
  Events
  of Default

  	
  57

  
	
  8.02

  	
  Remedies
  Upon Event of Default

  	
  59

  
	
  8.03

  	
  Application
  of Funds

  	
  59

  
	
   

  	
   

  	
   

  
	
  Article IX.
  ADMINISTRATIVE AGENT

  	
  60

  
	
  9.01

  	
  Appointment
  and Authority

  	
  60

  
	
  9.02

  	
  Rights
  as a Lender

  	
  60

  
	
  9.03

  	
  Exculpatory
  Provisions

  	
  60

  
	
  9.04

  	
  Reliance
  by Administrative Agent

  	
  61

  
	
  9.05

  	
  Delegation
  of Duties

  	
  62

  
	
  9.06

  	
  Resignation
  of Administrative Agent

  	
  62

  
	
  9.07

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
  63

  
	
  9.08

  	
  No
  Other Duties, Etc.

  	
  63

  
	
  9.09

  	
  Guarantee
  Matters

  	
  63

  
	
   

  	
   

  	
   

  
	
  Article X.
  MISCELLANEOUS

  	
  63

  
	
  10.01

  	
  Amendments,
  Etc.

  	
  63

  
	
  10.02

  	
  Notices;
  Effectiveness; Electronic Communication

  	
  64

  
	
  10.03

  	
  No
  Waiver; Cumulative Remedies

  	
  66

  
	
  10.04

  	
  Expenses;
  Indemnity; Damage Waiver

  	
  67

  
	
  10.05

  	
  Payments
  Set Aside

  	
  69

  
	
  10.06

  	
  Successors
  and Assigns

  	
  69

  
	
  10.07

  	
  Treatment
  of Certain Information; Confidentiality

  	
  72

  
	
  10.08

  	
  Right
  of Setoff

  	
  73

  
	
  10.09

  	
  Interest
  Rate Limitation

  	
  73

  
	
  10.10

  	
  Counterparts;
  Integration; Effectiveness

  	
  73

  
	
  10.11

  	
  Survival
  of Representations and Warranties

  	
  74

  
	
  10.12

  	
  Severability

  	
  74

  
	
  10.13

  	
  Replacement
  of Lenders

  	
  74

  
	
  10.14

  	
  Governing
  Law; Jurisdiction; Etc.

  	
  75

  
	
  10.15

  	
  Waiver
  of Jury Trial

  	
  76

  
	
  10.16

  	
  USA
  PATRIOT Act Notice

  	
  76

  
	
  10.17

  	
  Time
  of the Essence

  	
  76

  

 

(iii)

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is
entered into as of December 21, 2005, among Louisiana-Pacific Limited
Partnership, by its general partner 3047525 Nova Scotia Company, (“LP-LP”) and Louisiana-Pacific
Canada Ltd. (“LP Canada”), (LP-LP and LP Canada each a “Borrower” and
collectively the ”Borrowers”), Louisiana-Pacific Corporation (the ”Parent Guarantor”)
each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), BANK OF AMERICA, N.A., acting through its
Canada branch, as Administrative Agent.

 

The Borrowers have requested that the Lenders
provide a term non-revolving credit facility, and the Lenders are willing to do
so on the terms and conditions set forth herein.

 

In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms.

 

As used in this Agreement, the following terms
shall have the meanings set forth below:

 

Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means
the Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.02, or such other address or account as the
Administrative Agent may from time to time notify to the Borrowers and the
Lenders.

 

“Administrative Questionnaire” means
an administrative questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, 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.

 

“Aggregate Commitments” means the
Commitments of all the Lenders.

 

“Agreement” means this Credit
Agreement.

 

“Applicable Percentage” means with
respect to any Lender at any time, the percentage (carried out to the ninth
decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time.  If the
commitments of each Lender to make Loans has been terminated pursuant to Section 8.02
or if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent
assignments.  The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on

 

 

Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

 

“Applicable Rate” means, from time to
time, the following percentages per annum, based upon the Debt Rating as set
forth below:

 

	
  Level

  	
   

  	
  Debt Rating

  	
   

  	
  Applicable

  Margin

  for B/A Advances

  	
   

  	
  Applicable Margin

  for Prime Rate

  Loans

  	
   

  
	
  I

  	
   

  	
  >Baa1/BBB+

  	
   

  	
  0.625

  	
  %

  	
  0.00

  	
  %

  
	
  II

  	
   

  	
  Baa2/BBB

  	
   

  	
  0.750

  	
  %

  	
  0.00

  	
  %

  
	
  III

  	
   

  	
  Baa3/BBB-

  	
   

  	
  0.875

  	
  %

  	
  0.00

  	
  %

  
	
  IV

  	
   

  	
  Ba1/BB+

  	
   

  	
  1.125

  	
  %

  	
  0.125

  	
  %

  
	
  V

  	
   

  	
  Ba2/BB

  	
   

  	
  1.375

  	
  %

  	
  0.375

  	
  %

  
	
  VI

  	
   

  	
  <Ba3/BB-

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  

 

“Debt Rating” means, as of any date of
determination, the rating as determined by either S&P or Moody’s
(collectively, the “Debt Ratings”) of the Parent Guarantor’s non-credit-enhanced,
senior unsecured long-term debt; provided that if a Debt Rating is issued by
each of the foregoing rating agencies, then the higher of such Debt Ratings
shall apply (with the Debt Rating for Pricing Level 1 being the highest
and the Debt Rating for Pricing Level 6 being the lowest), unless there is a
split in Debt Ratings of more than one level, in which case the Pricing Level
that is one level higher than the Pricing Level of the lower Debt Rating shall apply.

 

Initially, the Applicable Rate shall be
determined based upon the Debt Rating specified in the certificate delivered
pursuant to Section 4.01(a)(vii). 
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrowers
to the Administrative Agent of notice thereof pursuant to Section 6.03(f) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the
date of the public announcement thereof and ending on the date immediately
preceding the effective date of the next such change.

 

“Approved Fund” means any Fund that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

“Arrangers” means Banc of America
Securities LLC and Scotia Capital, acting jointly in their capacity as joint
lead arrangers, and Banc of America Securities LLC acting as sole book manager.

 

“Assignee Group” means two or more
Eligible Assignees that are Affiliates of one another or two or more Approved
Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an
assignment and assumption entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by Section 10.06(b),
and accepted by the Administrative Agent, in substantially the form of Exhibit E
or any other form approved by the Administrative Agent.

 

2

 

“Attributable Indebtedness” means, on
any date, (a) in respect of any capital lease of any Person, the
capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of
any Synthetic Lease Obligation, the capitalized amount of the remaining lease
payments under the relevant lease that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.

 

“Audited Financial Statements” means
the audited consolidated balance sheet of the Parent Guarantor and its
Subsidiaries for the fiscal year ended December 31, 2004, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year of the Parent Guarantor and its Subsidiaries,
including the notes thereto.

 

“Bank of America” means Bank of
America, N.A., acting through its Canada branch and its successors.

 

“BA Discount Proceeds” means, in
respect of any Bankers’ Acceptance, an amount calculated on the applicable
Drawdown Date which is (rounded to the nearest full cent, with one half of one
cent being rounded up) equal to the face amount of such Bankers’ Acceptance
multiplied by the price, where the price is calculated by dividing one by the
sum of one plus the product of (i) the BA Discount Rate applicable thereto
expressed as a decimal fraction multiplied by (ii) a fraction, the
numerator of which is the term of such Bankers’ Acceptance and the denominator
of which is 365, which calculated price will be rounded to the nearest multiple
of 0.001%.

 

“BA Discount Rate” means, (a) with
respect to any Bankers’ Acceptance accepted by a Lender named on Schedule I
to the Bank Act (Canada), the
rate determined by the Agent as being the arithmetic average (rounded upward to
the nearest multiple of 0.01%) of the discount rates, calculated on the basis
of a year of 365 days that appears on the Reuters Screen CDOR Page at or
about 10:00 a.m. (Toronto time) on the applicable Drawdown Date, for
Bankers’ Acceptances of those Lenders having a comparable face amount and
identical maturity date to the face amount and maturity date of such Bankers’
Acceptance, and (b) with respect to any Bankers’ Acceptance accepted by a
Lender named on Schedule II or III to the Bank Act (Canada), the rate
determined by the Administrative Agent in accordance with (a) above plus
0.10% per annum.

 

“Bankers’ Acceptance” means a
depository bill as defined in the Depository
Bills and Notes Act (Canada) in Canadian Dollars that is in the form
of an order signed by a Borrower and accepted by a Lender pursuant to this
Agreement or, for Lenders not participating in clearing services contemplated
in that Act, a draft or bill of exchange in Canadian Dollars that is drawn by a
Borrower and accepted by a Lender pursuant to this Agreement.  Orders that become depository bills, drafts
and bills of exchange are sometimes collectively referred to in this Agreement
as “orders.”

 

“Bankers’ Acceptance Advance” or “B/A
Advance” means the advance of funds to a Borrower by way of purchase of
Bankers’ Acceptances in accordance with Section 2.04.

 

“Bankers’ Acceptance Fee” means the
amount calculated by multiplying the face amount of each Bankers’ Acceptance by
the Applicable Rate for Bankers’ Acceptance Advances, and then multiplying the
result by a fraction, the numerator of which is the duration of its term on the

 

3

 

basis of the actual number of days to elapse
from and including the date of acceptance of a Bankers’ Acceptance by the
Lender up to but excluding the maturity date of the Bankers’ Acceptance and the
denominator of which is the number of days in the calendar year in question.

 

“Borrower” or “Borrowers” has
the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning
specified in Section 6.02.

 

“Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks are authorized
to close under the Laws of, or are in fact closed in, Toronto, Ontario.

 

“Capital Lease” shall mean any lease
of property, real or personal, the obligations with respect to which are
required to be capitalized on a balance sheet of the lessee in accordance with
GAAP.

 

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

 

“Cash Collateralize” has the meaning
specified in Section 2.02(e).

 

“Change in Law” means the occurrence,
after the date of this Agreement, of any of the following: (a) the
adoption or taking effect 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 by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not
having the force of law) by any Governmental Authority.

 

“Change of Control” means an event or
series of events by which:

 

(a)           any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent Guarantor, or control over the equity
securities of the Parent Guarantor entitled to vote for members of the board of
directors or equivalent governing body of the Parent Guarantor on a fully-diluted
basis (and taking into account all such securities that such Person or group
has the right to acquire pursuant to any option right) representing 35% or more
of the combined voting power of such securities; or

 

(b)           during any period of 24 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Parent Guarantor cease to be composed of individuals (i) who were members
of that board or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of
such election

 

4

 

or
nomination at least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body; or

 

(c)           except as specifically provided in this Agreement, either Borrower
ceases to be a wholly-owned Subsidiary of the Parent Guarantor, directly or
indirectly.

 

“Closing Date” means the first date
all the conditions precedent in Section 4.01 are satisfied or
waived in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code
of 1986.

 

“Commitment” means, as to each Lender,
its obligation to make Loans to the Borrowers pursuant to Section 2.01
in an aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

 

“Conversion/Extension Notice” means a
notice of (a) a conversion of Loans from one Type to the other, or (c) a
continuation of a Bankers’ Acceptance Advance, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A-2.

 

“Compliance Certificate” means a
certificate substantially in the form of Exhibit C.

 

“Consolidated EBITDA” means, for any
period, for the Parent Guarantor and its Subsidiaries on a consolidated basis,
an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Expenses for such period, (ii) the provision for federal,
provincial, state, local and foreign income and similar taxes payable by the
Parent Guarantor and its Subsidiaries for such period, (iii) depreciation
and amortization expense and (iv) other non-cash items (excluding any such
non-cash item to the extent that it represents an accrual or reserve for
potential cash items in any future period or amortization of a prepaid cash
item that was paid in a prior period), and minus (b) all non-cash
items increasing Consolidated Net Income for such period (excluding any such
non-cash item to the extent it represents the reversal of an accrual or reserve
for potential cash item in any prior period or will result in the receipt of
cash payments in a future period), all as determined in accordance with GAAP.  Unless expressly indicated otherwise, the
applicable period shall be the four consecutive quarters ending on the date of
completion.

 

“Consolidated Interest Coverage Ratio”
means, as of the end of any fiscal quarter of the Parent Guarantor for the four
fiscal quarter period ending on such date with respect to the Parent Guarantor
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
EBITDA for such period to (b) the difference (to the extent the difference
between the following is negative, for purposes of calculating the Consolidated
Interest Coverage Ratio, this clause (b) shall be set at $1) of (i) Consolidated
Interest Expenses for such period minus (ii) Consolidated Interest
Income for such period.

 

5

 

“Consolidated Interest Expenses”
means, for any period, all interest expense (including, without limitation, the
interest component under Capital Leases) of the Parent Guarantor and its
Subsidiaries on a consolidated basis, including all commissions, discounts and other
fees and charges owed with respect to letters of credit and net costs under
Hedging Agreements, as determined in accordance with GAAP. Unless expressly
indicated otherwise, the applicable period shall be for the four consecutive
quarters ending on the date of computation.

 

“Consolidated Interest Income” shall
mean, for any period, all interest income of the Parent Guarantor and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
Unless expressly indicated otherwise, the applicable period shall be for the
four consecutive quarters ending on the date of computation.

 

“Consolidated Leverage Ratio” means,
as of any date of determination, the ratio of (a) Funded Indebtedness of
the Parent Guarantor and its Subsidiaries on a consolidated basis as of such
date to (b) Consolidated EBITDA for the period of the four fiscal quarters
most recently ended.

 

“Consolidated Net Income” means, for
any period, the net income of the Parent Guarantor and its Subsidiaries on a
consolidated basis for that period, as determined in accordance with GAAP.  Unless otherwise expressly indicated, the
applicable period shall be the four consecutive quarters ending on the date of
computation.

 

“Consolidated Net Worth” means, as of
any date of determination, for the Parent Guarantor and its Subsidiaries on a
consolidated basis, (a) Consolidated Total Assets minus (b) the
total liabilities of the Parent Guarantor and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.

 

“Consolidated Total Assets” means, as
of the date of determination, the amount of total assets of the Parent
Guarantor and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.

 

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

 

“Control” means the possession,
directly or indirectly, of the power 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 meanings correlative thereto.

 

“Debt Rating” has the meaning
specified in the definition of “Applicable Rate.”

 

“Debtor Relief Laws” means the Bankruptcy and Insolvency Act (Canada),
the Companies’ Creditors Arrangement Act (Canada),
the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of Canada or the United States or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

 

6

 

“Default” means any event or condition
that constitutes an Event of Default or that, with the giving of any notice,
the passage of time, or both, would be an Event of Default.

 

“Default Rate” means when used with
respect to Obligations, an interest rate equal to (i) the Prime Rate plus
(ii) the Applicable Rate, if any, applicable to Prime Rate Loans plus (iii) 2%
per annum; provided, however, that with respect to a Bankers’
Acceptance Advances, the Default Rate shall be an interest rate equal to the
interest rate (including any Applicable Rate) otherwise applicable to such Loan
plus 2% per annum.

 

“Defaulting Lender” means any Lender
that (a) has failed to fund any portion of the Loans, required to be
funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid
by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.

 

“Disposition” or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith.

 

“Dollar” and “$” mean lawful
money of Canada.

 

“Domestic Subsidiary” means any
Subsidiary that is organized under the laws of any political subdivision of
Canada.

 

“Drawdown Date” means the date, which
shall be a Business Day, of any Loan by way of a Bankers’ Acceptance Advance.

 

“Eligible Assignee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any
other Person (other than a natural person) approved by (i) the
Administrative Agent, and (ii) unless an Event of Default has occurred and
is continuing, the Borrowers (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrowers or any of the Borrowers’ Affiliates
or Subsidiaries.

 

“Environmental Laws” means any and all
federal, provincial, state, local, municipal and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of a Borrower,
the Parent Guarantor, any other Loan Party or any of their respective
Subsidiaries directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous

 

7

 

Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

“Equity Interests” means, with respect
to any Person, all of the shares of capital stock of (or other ownership or
profit interests in) such Person, all of the warrants, options or other rights
for the purchase or acquisition from such Person of shares of capital stock of
(or other ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or options
for the purchase or acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of
1974.

 

“ERISA Affiliate” means any trade or
business (whether or not incorporated) under common control with the Parent
Guarantor within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

“ERISA Event” means (a) a
Reportable Event with respect to a Pension Plan; (b) a withdrawal by the
Parent Guarantor or any ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Parent Guarantor or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Parent Guarantor or any ERISA Affiliate.

 

“Event of Default” has the meaning
specified in Section 8.01.

 

“Excluded Taxes” means, with respect
to the Administrative Agent, any Lender or any other recipient of any payment
to be made by or on account of any obligation of a Borrower hereunder, (a) taxes
imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), 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, (b) any
branch profits taxes imposed by Canada or any similar tax imposed by any other
jurisdiction in which a Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 10.13), any withholding tax that is

 

8

 

imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a
new Lending Office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 3.01(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office
(or assignment), to receive additional amounts from a Borrower with
respect to such withholding tax pursuant to Section 3.01(a).

 

“Fee Letters” means the letter
agreements, dated December 14, 2005, among the Borrowers, the Guarantor,
the Administrative Agent, the The Bank of Nova Scotia and the Arrangers.

 

“Foreign Lender” means any Lender that
is organized under the laws of a jurisdiction other than that in which a
Borrower is resident for tax purposes. 
For purposes of this definition, Canada, each province and territory
thereof shall be deemed to constitute a single jurisdiction.

 

“FRB” means the Board of Governors of
the Federal Reserve System of the United States.

 

“Fund” means any Person (other than a
natural person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.

 

“Funded Indebtedness” means, as of any
date of determination, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations (including, without
limitation, earnout obligations) of such Person incurred, issued or assumed as
the deferred purchase price of property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and due
within nine months of the incurrence thereof) that would appear as liabilities
on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) all obligations of
such Person under Hedging Agreements, excluding any portion thereof that would
be accounted for as interest expense under GAAP, (g) the maximum amount of
all letters of credit issued or bankers’ acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn and unreimbursed
thereunder, (h) all preferred Capital Stock or other equity interests
issued by such Person and which by the terms thereof could be (at the request
of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration on or prior to the Maturity Date, (i) any
Synthetic Lease Obligation, (j) all Indebtedness of others of the type
described in clauses (a) through (i) hereof secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (k) all Guarantee Obligations of such
Person with respect to Indebtedness of another Person of the type described m
clauses (a) through (i) hereof, and (l) all Indebtedness of the type
described in clauses (a) through (i) hereof of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer; provided, that Funded Indebtedness shall not include any
Indebtedness of the Parent Guarantor

 

9

 

or its Subsidiaries that is non-recourse to
the Parent Guarantor or its Subsidiaries or their respective assets.

 

“GAAP” means generally accepted
accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental Authority” means the
government of Canada or any other nation, or of any political subdivision
thereof, whether provincial, state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

 

“Guarantee” means the guarantee made
by the Guarantors in favour of the Administrative Agent and the Lenders,
substantially in the form of Exhibit F.

 

“Guarantee Obligation” means as to any
Person, (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). 
The amount of any Guarantee Obligation shall be deemed to be an amount equal
to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith.

 

“Guarantors” means, collectively, the
Parent Guarantor and each Subsidiary of either Borrower that provides a
Guarantee pursuant to the terms hereof.

 

“Hazardous Materials” means all
explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or

 

10

 

medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreements” shall mean, with
respect to any Person, any agreement entered into to protect such Person
against fluctuations in interest rates, or currency or raw materials values,
including, without limitation, any interest rate swap, cap or collar agreement
or similar arrangement between such Person and one or more counterparties, any
foreign currency exchange agreement, currency protection agreements, commodity
purchase or option agreements or other interest or exchange rate or commodity
price hedging agreements.

 

“Indebtedness” shall mean, with
respect to any Person, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest
payments are customarily made, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations (including, without limitation, earnout
obligations) of such Person incurred, issued or assumed as the deferred
purchase price of property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and due
within nine months of the incurrence thereof) that would appear as liabilities
on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) all obligations of
such Person under Hedging Agreements, excluding any portion thereof that would
be accounted for as interest expense under GAAP, (g) the maximum amount of
all letters of credit issued or bankers’ acceptances outstanding created for
the account of such Person and, without duplication, all drafts drawn and
unreimbursed thereunder (excluding performance based letters of credit issued
to the Parent Guarantor’s customers in connection with certain long-term
contracts), (h) all preferred Capital Stock or other equity interests
issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration, (i) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, (j) all
obligations of such Person under take-or-pay or similar arrangements or under
commodities agreements, (k) all Indebtedness of others of the type described in
clauses (a) through (j) hereof secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (l) all Guarantee Obligations of such Person with respect to
Indebtedness of another Person of the type described in clauses (a) through
(j) hereof; and (m) all Indebtedness of the type described in clauses
(a) through (j) hereof of any partnership or unincorporated joint venture
in which such Person is a general partner or a joint venturer in proportion to
such Person’s ownership percentage in such partnership or joint venture.

 

“Indemnitee” has the meaning specified
in Section 10.04(b).

 

“Indemnified Taxes” means Taxes other
than Excluded Taxes.

 

“Information” has the meaning
specified in Section 10.07.

 

11

 

“Interest Payment Date” means, (a) as
to any Loan by way of Bankers’ Acceptance Advance, the Drawdown Date applicable
to such Loan; and (b) as to any Prime Rate Loan, the last Business Day of
each March, June, September and December and the Maturity Date.

 

“Interest Period” means, as to each
Bankers’ Acceptance Advance, the period commencing on the date such Bankers’
Acceptance Advance is disbursed or converted to or continued as a Bankers’
Acceptance Advance and ending on the date one, two, three or six months
thereafter, as selected by a Borrower in its Conversion/Extension Notice; provided
that:

 

(i)            any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day;

 

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

 

(iii)          no Interest Period shall extend beyond the Maturity Date.

 

“Interbank Reference Rate” means, in
respect of any currency, the interest rate expressed as a percentage per annum
which is customarily used by the Administrative Agent when calculating interest
due by it or owing to it arising from correction of errors in transactions in
that currency between it and other chartered banks.

 

“Internal Control Event” means a
material weakness in, or fraud that involves management or other employees who
have a significant role in, the Parent Guarantor’s internal controls over
financial reporting, in each case as described in the Securities Laws.

 

“Investment” means, as to any Person,
any direct or indirect acquisition or investment by such Person, whether by
means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution
to, Guarantee Obligation or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor guarantees
Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. 
For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“Investment Grade Debt Rating” shall
mean a Debt Rating of BBB- or higher by S&P and Baa3 or higher by Moody’s; provided,
however, if (a) only one of S&P and Moody’s at any time of
determination shall have in effect a Debt Rating, the available rating shall
apply, (b) neither S&P nor Moody’s at any time of determination shall
have in effect a Debt Rating, the Parent Guarantor shall not have an Investment
Grade Rating, (c) the ratings established by S&P and Moody’s shall
fall within different levels, the higher rating shall apply; provided,
that if there exists a multiple level split in the ratings, the rating that is
one level higher than the lower level

 

12

 

shall apply, (d) any rating established
by S&P or Moody’s shall be changed, such change shall be effective as of
the date on which such change is first announced publicly by the rating agency
making such change, and (e) S&P or Moody’s shall change the basis on
which ratings are established, each reference to the Debt Rating announced by
S&P or Moody’s, as the case may be, shall refer to the then equivalent
rating by S&P or Moody’s, as the case may be.

 

“IRS” means the United States Internal
Revenue Service.

 

“Laws” means, collectively, all
international, foreign, federal, provincial, state, municipal and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“LP Group” means, collectively, the
Borrowers and the Parent Guarantor.

 

“Lender” has the meaning specified in
the introductory paragraph hereto.

 

“Lending Office” means, as to any
Lender, the office or offices of such Lender described as such in such Lender’s
Administrative Questionnaire, or such other office or offices as a Lender may
from time to time notify the Borrowers and the Administrative Agent.

 

“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any Capital Lease having substantially the same economic effect
as any of the foregoing).

 

“Loan” means an extension of credit by
a Lender to the Borrowers under Article II as a Prime Rate Loan or
Bankers’ Acceptance Advance.

 

“Loan Documents” means this Agreement,
each Note, the Fee Letters, the Guarantees, and the Subordination Agreement.

 

“Loan Parties” means, collectively,
the Borrowers and the Guarantors.

 

“Material Adverse Effect” means (a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, liabilities (actual or contingent), condition (financial
or otherwise) or prospects of (i) the Borrowers or the Borrowers and their
Subsidiaries taken as a whole; (ii) the Parent Guarantor or the Parent
Guarantor and its Subsidiaries as a whole; (b) a material impairment of
the ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.

 

13

 

“Maturity Date” means December 21,
2008.

 

“Moody’s” means Moody’s Investors
Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means any
employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Parent Guarantor or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

 

“Note” means a promissory note made by
a Borrower in favor of a Lender evidencing the Term Loan made by such Lender,
substantially in the form of Exhibit B.

 

“Obligations” means all advances to,
and debts, liabilities, obligations, covenants and duties of, any Loan Party arising
under any Loan Document or otherwise with respect to any Loan, whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising and including interest
and fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest
and fees are allowed claims in such proceeding.

 

“Off-Balance Sheet Liabilities” shall
mean, with respect to any Person as of any date of determination thereof,
without duplication and to the extent not included as a liability on the
consolidated balance sheet of such Person and its Subsidiaries in accordance
with GAAP:  (a) with respect to any
asset securitization transaction (including any accounts receivable purchase
facility) (i) the unrecovered investment of purchasers or transferees of
assets so transferred, and (ii) any other payment, recourse, repurchase,
hold harmless, indemnity or similar obligation of such Person or any of its
Subsidiaries in respect of assets transferred or payments made in respect
thereof, other than limited recourse provisions that are customary for
transactions of such type and that neither (x) have the effect of limiting the
loss or credit risk of such purchasers or transferees with respect to payment
or performance by the obligors of the assets so transferred nor (y) impair the
characterization of the transaction as a true sale under applicable laws
(including Debtor Relief Laws); (b) the monetary obligations under any
financing lease or so-called “synthetic”, tax retention or off-balance sheet
lease transaction which, upon the application of any Debtor Relief Law to such
Person or any of its Subsidiaries, would be characterized as indebtedness;
(b)the monetary obligations under any sale and leaseback transaction which does
not create a liability on the consolidated balance sheet of such Person and its
Subsidiaries; or (c) any other monetary obligation arising with respect to
any other transaction which (i) upon the application of any Debtor Relief
Law to such Person or any of its Subsidiaries, would be characterized as
indebtedness or (ii) is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheet of such Person and its Subsidiaries (for purposes of this clause (d), any
transaction structured to provide tax deductibility as interest expense of any
dividend, coupon or other periodic payment will be deemed to be the functional
equivalent of a borrowing).

 

“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws (or equivalent or comparable constitutive documents with respect to
any non-Canadian jurisdiction); (b) with respect to any limited liability
company, the

 

14

 

certificate or articles of formation or
organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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

 

“Outstanding Amount” means on any
date, the aggregate outstanding principal amount of the Term Loan after giving
effect to any prepayments occurring on such date.

 

“Parent Guarantor” has the meaning
specified in the introductory paragraph hereto.

 

“Participant” has the meaning
specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit
Guarantee Corporation.

 

“Pension Plan” means (a) with
respect to the Parent Guarantor, any “employee pension benefit plan” (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by
the Parent Guarantor or any ERISA Affiliate or to which the Parent Guarantor or
any ERISA Affiliate contributes or has an obligation to contribute, or in the
case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the immediately preceding five
plan years; and (b) with respect to the Borrowers, any Superannuation
or other plan organized and administered to provide pension benefits to
employees and/or former employees, and to which a Borrower is required to
contribute.

 

“Permitted Acquisition” shall mean an
acquisition or any series of related acquisitions by a Loan Party of the assets
or all of the Capital Stock of a Person that is incorporated, formed or
organized in the United States, Canada or any division thereof, line of
business or other business unit of a Person that is incorporated, formed or
organized in the United States or Canada (such Person or such division,
line of business or other business unit of such Person referred to herein as
the “Target”), in each case that is in the same line of business (or
assets used in the same line of business) as the Loan Parties and their
Subsidiaries, so long as (a) no Default or Event of Default shall then
exist or would exist after giving effect thereto, (b) the Loan Parties
shall demonstrate to the reasonable satisfaction of the Administrative Agent
and the Required Lenders that the Loan Parties will be in compliance on a pro
forma basis with all of the terms and provisions of the financial covenants set
forth in Section 7.11, (d) the Target, if a Person, shall have
executed a Guarantee in accordance ‘with the terms of Section 6.12,
and (e) such acquisition has been approved by the Board of Directors
and/or shareholders of the applicable Loan Party.

 

“Permitted Cash Collateral” has the
meaning as defined in the US Credit Agreement.

 

15

 

“Person” means any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.

 

“Plan” means any “employee benefit
plan” (as such term is defined in Section 3(3) of ERISA) established
by the Parent Guarantor or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“Platform” has the meaning specified
in Section 6.02.

 

“Prime Rate” means, on any day, a
fluctuating rate of interest per annum, which is equal to the greater of:

 

(a)           the reference rate of interest announced by the Administrative Agent
as its reference rate for commercial loans made by it in Canada in Canadian
Dollars; and

 

(b)           the average rate for 30 day Canadian Dollar Bankers’ Acceptances
that appears on the Reuters Screen CDOR Page at 10:00 a.m. Toronto
time on that day, plus 0.75% per annum.

 

“Prime Rate Loan” means an advance of
funds to a Borrower bearing interest based on the Prime Rate.

 

“Register” has the meaning specified
in Section 10.06(c).

 

“Related Parties” means, with respect
to any Person, such Person’s Affiliates and the partners, directors, officers,
employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“Reportable Event” means any of the
events set forth in Section 4043(c) of ERISA, other than events for
which the 30 day notice period has been waived.

 

“Required Lenders” means, as of any
date of determination, Lenders having more than 50% of the Aggregate
Commitments or, if the commitment of each Lender to make Loans have been
terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Outstanding Amount (with the aggregate amount of
each Lender’s risk participation being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the
portion of the Outstanding Amount held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief
executive officer, president, chief financial officer, treasurer or assistant
treasurer of a Loan Party.  Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

16

 

“Restricted Payment” means any
dividend or other distribution (whether in cash, securities or other property)
with respect to any capital stock or other Equity Interest of the Borrowers or
any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
capital stock or other Equity Interest, or on account of any return of capital
to the Borrowers’ stockholders, partners or members (or the equivalent Person
thereof).

 

“S&P” means Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and
any successor thereto.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“SEC” means the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of its
principal functions.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley
and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the Public
Company Accounting Oversight Board, as each of the foregoing may be amended and
in effect on any applicable date hereunder.

 

“Securitization Vehicle” shall mean a
special purpose vehicle that is a wholly-owned Subsidiary of the Parent
Guarantor and is a corporation, limited liability company, trust or other
person organized for the limited purpose of entering into securitization
transactions by purchasing, or receiving by way of capital contributions,
assets from the Parent Guarantor and obtaining financing for such assets from
third parties, and whose structure is designed to insulate such vehicle from
the credit risk of the Parent Guarantor.

 

“Shareholders’ Equity” means, as of
any date of determination, consolidated shareholders’ equity of the Parent
Guarantor and its Subsidiaries as of that date determined in accordance with
GAAP.

 

“Subordination Agreement” means the
agreement dated as of the Closing Date by which the Borrowers and
Guarantors subordinate all inter-company indebtedness to the Lenders.

 

“Subsidiary” of a Person means a
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of a Borrower or Guarantor.

 

“Swap Contract” means (a) any and
all rate swap transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond
price or bond index

 

17

 

swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swap Termination Value” means, in
respect of any one or more Swap Contracts, after taking into account the effect
of any legally enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a),
the amount(s) determined as the mark-to-market value(s) for such Swap
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Lease Obligation” means the
monetary obligation of a Person under (a) a so-called synthetic, off-balance
sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance
sheet of such Person but which, upon the insolvency or bankruptcy of such
Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment).

 

“Taxes” means all present or future
taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

“Threshold Amount” means
US$20,000,000.00.

 

“Type” means, with respect to a Loan,
its character as a Prime Rate Loan or a Bankers’ Acceptance Advance.

 

“Unfunded Pension Liability” means the
excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.

 

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

 

“US Credit Agreement” means the credit
agreement dated as of September 1, 2004 made between, inter alia, the Parent Guarantor, Wachovia
Bank, National Association, as Administrative agent, various financial
institutions as lenders thereunder, as the same may be amended, restated,
supplemented, renewed or replaced from time to time.

 

18

 

1.02        Other Interpretive Provisions.

 

With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a)           The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. 
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used
in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
the Loan Document in which such references appear, (v) any reference to
any law shall include all statutory and regulatory provisions consolidating,
amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation
as amended, modified or supplemented from time to time, and (vi) the words
“asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;”
the words “to” and “until” each mean “to but excluding;” and the word “through”
means “to and including.”

 

(c)           Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.

 

(a)           Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations) required
to be submitted pursuant to this Agreement shall be prepared in conformity
with, GAAP applied on a consistent basis, as in effect from time to time,
applied in a manner consistent with that used

 

19

 

in
preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

 

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrowers or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrowers shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.

 

1.04        Rounding.

 

Any financial ratios required to be
maintained by the Borrowers pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

1.05        Times of Day.

 

Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

 

ARTICLE II.

TERM LOAN

 

2.01        Availability
of Term Loan.

 

(a)           Term Loan Commitment.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make available to the Borrowers on the
Closing Date such Lender’s Applicable Percentage of a non-revolving term loan
in Dollars in the aggregate principal Dollar Amount of TWO HUNDRED THIRTY-FIVE MILLION DOLLARS
($235,000,000) (the “Term Loan”) for the
purposes hereinafter set forth.  The Term
Loan may consist of Prime Rate Loans or Bankers’ Acceptances Advances, or a
combination thereof, as the Borrowers may request; provided that on the
Closing Date and on the three Business Days following the Closing Date the Term
Loan shall bear interest at the Prime Rate unless the Borrowers execute a
funding indemnity letter in form and substance satisfactory to the
Administrative Agent.  Amounts repaid or
prepaid on the Term Loan may not be reborrowed.

 

20

 

(b)           Advance of Term Loan.  Each Lender shall advance its Applicable
Percentage of the Term Loan in accordance with the following provisions:  (i) the Administrative Agent shall
advise each Lender of its receipt of a notice (in the form of “Exhibit A-1”
attached hereto) from each Borrower three (3) days prior to the Closing
Date of the amount of the Term Loan to be advanced to each Borrower and of
Lender’s Applicable Percentage thereof; and (ii) each Lender shall deliver
its Applicable Percentage of the Term Loan to the Administrative Agent not
later than 10:00 a.m. (Toronto time) on the Closing Date.  If the Agent determines that all the
conditions precedent to Term Loan specified in this Agreement have been met, it
shall promptly advance to the relevant Borrower the amount delivered by each
Lender by (i) crediting the account of the applicable Borrower on the
books of Bank of America with the amount of such funds, or (ii) wire
transfer of such funds, in each case in accordance with instructions provided
to (and reasonably accepted) the Administrative Agent by the applicable
Borrower.  If the conditions precedent to
the Term Loan are not met by noon (Toronto time) on the Closing Date, the Agent
shall return the funds to the Lenders or invest them in an overnight investment
as orally instructed by each Lender until such time as the Term Loan is made.

 

(c)           Maturity.  The principal amount of the Term Loan shall
be payable in full on the Maturity Date.

 

(d)           Interest.  The Term Loan shall bear interest as follows:

 

(i)            During such periods as the Term Loan shall be comprised of Prime
Rate Loans, each such Prime Rate Loan shall bear interest at a per annum rate
equal to the sum of the Prime Rate plus the Applicable Rate; and

 

(ii)           During such periods as the Term Loan shall be comprised of Bankers’
Acceptance Advances, each such Loan shall bear interest at a per annum rate
equal to the sum of the Bankers’ Acceptance Fee.

 

(e)           Notes Issued.  A Borrower’s obligation to pay each Lender’s
Applicable Percentage of the Term Loan shall be evidenced, upon such Lender’s
request, by a Note made payable to such Lender.

 

2.02        Conversion Options.

 

(a)           Interest Conversion.  Either Borrower may elect from time to time
to convert Prime Rate Loans to Bankers’ Acceptances Advances, or to convert
Bankers’ Acceptances Advances to Prime Rate Loans, or to continue Bankers’
Acceptance Advances, by giving the Administrative Agent at least three (3) Business
Days’ prior irrevocable notice of such election.  Each conversion to a Prime Rate Loan shall be
in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  A form of Conversion/Extension
Notice is attached as Schedule 2.02.  If a Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be
made as, or converted to,

 

21

 

Prime
Rate Loans.  Any such automatic
conversion to Prime Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Bankers’
Acceptance Advance.  If the Borrower
requests a conversion to, or continuation of Bankers’ Acceptance Advance in any
such Conversion Notice, but fails to specify an Interest Period, it will be deemed
to have specified an Interest Period of one month.

 

(b)           If no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Prime Rate Loans described in the preceding
subsection.

 

(c)           Except as otherwise provided herein, a Bankers’ Acceptance Advance
may be continued or converted only on the last day of an Interest Period for
such Bankers’ Acceptance Advance.  During
the existence of a Default, no Loans may be, converted to or continued as
Bankers’ Acceptance Advances without the consent of the Required Lenders.

 

(d)           The Administrative Agent shall promptly notify the Borrowers and the
Lenders of the interest rate applicable to any Interest Period for Bankers’
Acceptance Advances upon determination of such interest rate.  At any time that Prime Rate Loans are
outstanding, the Administrative Agent shall notify the Borrowers and the
Lenders of any change in Bank of America’s prime rate used in determining the
Prime Rate promptly following the public announcement of such change.

 

(e)           Cash Collateral.  Upon the request of the Administrative Agent
and in accordance with this Agreement, the Borrowers shall immediately Cash
Collateralize the then Outstanding Amount of all Bankers’ Acceptance
Advances.  Section 2.07, Section 2.15
and Section 8.02(b) sets forth certain requirements to deliver
Cash Collateral hereunder. 
For purposes of this Section 2.02(e), Section 2.07,
Section 2.15 and Section 8.02(b), “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the Lenders, as collateral for the Bankers’ Acceptance Advances,
cash or deposit account balances pursuant to documentation in form and
substance satisfactory to the Administrative Agent (which documents are hereby
consented to by the Lenders). 
Derivatives of such term have corresponding meanings.  The Borrowers hereby grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing.  Cash Collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

 

2.03        Execution
of Bankers’ Acceptances.

 

(a)           To facilitate the acceptance of Bankers’ Acceptances hereunder, each
Borrower hereby appoints each Lender as its attorney to sign and endorse on its
behalf, as and when considered necessary by the Lender, an appropriate number
of orders in the form prescribed by that Lender.

 

22

 

(b)                                 Each Lender may, at its option, execute any order in handwriting or
by the facsimile or mechanical signature of any of its authorized officers, and
the Lenders are hereby authorized to accept or pay, as the case may be, any
order of a Borrower which purports to bear such a signature notwithstanding
that any such individual has ceased to be an authorized officer of the
Lender.  Any such order or Bankers’
Acceptance shall be as valid as if he or she were an authorized officer at the
date of issue of the order or Bankers’ Acceptance.

 

(c)                                  Any order or Bankers’ Acceptance signed by a Lender as attorney for
a Borrower, whether signed in handwriting or by the facsimile or mechanical
signature of an authorized officer of a Lender may be dealt with by the Administrative
Agent or any Lender to all intents and purposes and shall bind the Borrower as
if duly signed and issued by such Borrower.

 

(d)                                 The receipt by the Administrative Agent of a request for a Bankers’
Acceptances Advance shall be each Lender’s sufficient authority to execute, and
each Lender shall, subject to the terms and conditions of this Agreement,
execute orders in accordance with such request and the advice of the Agent
given pursuant to Section 2.06, and the orders so executed shall thereupon
be deemed to have been presented for acceptance.

 

2.04        Sale
of Bankers’ Acceptances.

 

(a)                                  It shall be the responsibility of each Lender to arrange, in
accordance with normal market practice, for the sale on each Drawdown Date of
the Bankers’ Acceptances issued by a Borrower and to be accepted by that
Lender, failing which the Lender shall purchase its Bankers’ Acceptances at the
discount determined in accordance with normal market practice at or about 10:00 a.m.
(Toronto time) on the applicable Drawdown Date for Bankers’ Acceptances of the
Lender having comparable face amounts and identical maturity dates to the face
amounts and maturity dates of such Bankers’ Acceptances.

 

(b)                                 Notwithstanding the foregoing, if in the determination of the
Majority Lenders acting reasonably a market for Bankers’ Acceptances does not
exist at any time, or the Lenders cannot for other reasons, after reasonable
efforts, readily sell Bankers’ Acceptances or perform their other obligations
under this Agreement with respect to Bankers’ Acceptances, then upon at least
four days’ written notice by the Agent to the Borrowers, the Borrowers’ right
to request Bankers’ Acceptances Advances shall be and remain suspended until
the Administrative Agent notifies the Borrowers that any condition causing such
determination no longer exists.

 

2.05        Size
and Maturity Of Bankers’ Acceptances and Rollovers.

 

Each Bankers’ Acceptance Advance shall be in
a minimum amount of $10,000,000 and each Bankers’ Acceptance shall be in the
amount of $1,000,000 or whole multiples thereof.  Each Bankers’ Acceptance shall have a term of
one, two, three or six months after the date of

 

23

 

acceptance of the order by a Lender, but no
Bankers’ Acceptance may mature on a date which is not a Business Day or after
the Maturity Date.  The face amount at
maturity of a Bankers’ Acceptance may be renewed as a Bankers’ Acceptance or
converted into a Prime Rate Loan.

 

2.06        Co-ordination
of BA Advances.

 

Each Lender shall advance its proportionate
share of each Bankers’ Acceptance Advance in accordance with the provisions set
forth below.

 

(a)                                  The Administrative Agent, promptly following receipt of a notice
from a Borrower pursuant to Section 2.02(a) requesting a Bankers’
Acceptance Advance, shall advise each Lender of the aggregate face amount and
term(s) of the Bankers’ Acceptances to be accepted by it, which term(s) shall
be identical for all Lenders.  The
aggregate face amount of Bankers’ Acceptances to be accepted by a Lender shall
be determined by the Administrative Agent by reference to the respective
Commitments of the Lenders, except that, if the face amount of a Bankers’
Acceptance would not be Cdn. $500,000 or a whole multiple thereof, the face
amount shall be increased or reduced by the Administrative Agent in its sole
discretion to the nearest whole multiple of Cdn. $500,000.

 

(b)                                 Each Lender shall transfer to the Administrative Agent at the Branch
of Account for value on each Drawdown Date immediately available Cdn. Dollars
in an aggregate amount equal to the BA Discount Proceeds of all Bankers’
Acceptances accepted and sold or purchased by the Lender on such Drawdown Date
net of the applicable Bankers’ Acceptance Fee and net of the amount required to
pay any of its previously accepted Bankers’ Acceptances that are maturing on
the Drawdown Date or any of its other Loans that are being converted to Bankers’
Acceptances on the Drawdown Date.

 

(c)                                  Notwithstanding any other provision hereof, for the purpose of
determining the amount to be transferred by a Lender to the Administrative
Agent for the account of the Borrowers in respect of the sale of any Bankers’
Acceptance issued by a Borrower and accepted by such Lender, the proceeds of
sale thereof shall be deemed to be an amount equal to the BA Discount Proceeds
calculated with respect thereto. 
Accordingly, in respect of any particular Bankers’ Acceptance accepted
by it, a Lender in addition to its entitlement to retain the applicable Bankers’
Acceptance Fee for its own account (i) shall be entitled to retain for its
own account the amount, if any, by which the actual proceeds of sale thereof
exceed the BA Discount Proceeds calculated with respect thereto, and (ii) shall
be required to pay out of its own funds the amount, if any, by which the actual
proceeds of sale thereof are less than the BA Discount Proceeds calculated with
respect thereto.

 

(d)                                 Whenever a Borrower requests a Bankers’ Acceptance Advance, each
Lender that is not permitted by any Requirement of Law or by customary market
practice to accept a Bankers’ Acceptance (a “Non BA Lender”) shall, in lieu of
accepting its pro rata amount of such Bankers’ Acceptances, make available to
the Borrowers

 

24

 

on
the Drawdown Date a loan (a “BA Equivalent Loan”) in Canadian Dollars and in an
amount equal to the BA Discount Proceeds of the Bankers’ Acceptances that the
Non BA Lender would have been required to accept on the Drawdown Date if it
were able to accept Bankers’ Acceptances. 
Each Non BA Lender shall also be entitled to deduct from the BA
Equivalent Loan an amount equal to the Bankers’ Acceptance Fee that would have
been applicable had it been able to accept Bankers’ Acceptances.  The BA Equivalent Loan shall have a term equal
to the term of the Bankers’ Acceptances that the Non BA Lender would otherwise
have accepted and the Borrowers shall, at the end of that term, be obligated to
pay the Non BA Lender an amount equal to the aggregate face amount of the
Bankers’ Acceptances that it would otherwise have accepted.  All provisions of this Agreement applicable
to Bankers’ Acceptances and Lenders that accept Bankers’ Acceptances shall
apply mutatis mutandis to BA Equivalent Loans and Non BA Lenders and, without
limiting the foregoing, Loans shall include BA Equivalent Loans.

 

2.07        Payment
of Bankers’ Acceptances.

 

The Borrowers shall provide for the payment
to the Administrative Agent’s Office for the account of the applicable Lenders
of the full face amount of each Bankers’ Acceptance accepted for its account on
the earlier of (i) the date of maturity of a Bankers’ Acceptance and (ii) the
date on which any Obligations become due and payable pursuant to Section 8.02,
in which case all outstanding Bankers’ Acceptances Advances shall be
Cash Collateralized.  The Lenders
shall be entitled to recover interest from the Borrowers at a rate of interest
per annum equal to the rate applicable to Prime Rate Advances, compounded
monthly, upon any amount payment of which has not been provided for by the
Borrowers in accordance with this Section. 
Interest shall be calculated from and including the date of maturity of
each Bankers’ Acceptance up to but excluding the date such payment, and all
interest thereon, both before and after demand, default and judgment, is
provided for by the Borrowers.

 

2.08        Deemed
Advance - Bankers’ Acceptances.

 

Except for amounts which are paid from the
proceeds of a rollover of a Bankers’ Acceptance or for which payment has
otherwise been funded by the Borrowers, any amount which a Lender pays to any
third party on or after the date of maturity of a Bankers’ Acceptance in
satisfaction thereof or which is owing to the Lender in respect of such a
Bankers’ Acceptance on or after the date of maturity of such a Bankers’ Acceptance,
shall be deemed to be a Prime Rate Loan to the applicable Borrower under this
Agreement.  Each Lender shall forthwith
give notice of the making of such a Prime Rate Loan to the Borrower and the
Administrative Agent (which shall promptly give similar notice to the other
Lenders).  Interest shall be payable on
such Prime Rate Loans in accordance with the terms applicable to Prime Rate
Loans.

 

2.09        Waiver.

 

The Borrowers shall not claim from a Lender
any days of grace for the payment at maturity of any Bankers’ Acceptances
presented and accepted by the Lender pursuant to this Agreement.  The Borrowers waive any defence to payment
which might otherwise exist if for any reason a

 

25

 

Bankers’ Acceptance shall be held by a Lender
in its own right at the maturity thereof, and the doctrine of merger shall not
apply to any Bankers’ Acceptance that is at any time held by a Lender in its
own right.

 

2.10        Degree
of Care.

 

Any executed orders to be used as Bankers’ Acceptances
shall be held in safekeeping with the same degree of care as if they were the
Lender’s own property, and shall be kept at the place at which such orders are
ordinarily held by such Lender.

 

2.11        Indemnity.

 

The Borrowers shall indemnify and hold the
Lenders, and each of them, harmless from any loss, cost, damage or expense with
respect to any Bankers’ Acceptance dealt with by the Lenders for The Borrowers’
account, but shall not be obliged to indemnify a Lender for any loss, cost,
damage or expense caused by the gross negligence or wilful misconduct of that
Lender.

 

2.12        Obligations
Absolute

 

The obligations of the Borrowers with respect
to Bankers’ Acceptances under this Agreement shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:

 

(a)                                  any lack of validity or enforceability of any order accepted by a
Lender as a Bankers’ Acceptance; or

 

(b)                                 the existence of any claim, set off, defence or other right which
the Borrowers may have at any time against the holder of a Bankers’ Acceptance,
a Lender or any other person or entity, whether in connection with this
Agreement or otherwise.

 

2.13        Shortfall
on Drawdowns, Rollovers and Conversions.

 

The Borrower agrees that:

 

(a)                                  the difference between the amount of a Loan requested by the
Borrowers by way of Bankers’ Acceptances and the actual proceeds of the Bankers’
Acceptances;

 

(b)                                 the difference between the actual proceeds of a Bankers’ Acceptance
and the amount required to pay a maturing Bankers’ Acceptance, if a Bankers’
Acceptance is being rolled over; and

 

(c)                                  the difference between the actual proceeds of a Bankers’ Acceptance
and the amount required to repay any Loan which is being converted to a Bankers’
Acceptance Advance;

 

26

 

shall be funded and paid by the Borrowers
from its own resources, by 12:00 noon on the day of the Loan or may be advanced
as a Prime Rate Loan.

 

2.14        Prohibited
Use of Bankers’ Acceptances.

 

The Borrowers shall not enter into any
agreement or arrangement of any kind with any person to whom Bankers’
Acceptances have been delivered whereby the Borrowers undertake to replace such
Bankers’ Acceptances on a continuing basis with other Bankers’ Acceptances, nor
shall the Borrowers directly or indirectly take, use or provide Bankers’
Acceptances as security for loans or advances from any other person.

 

2.15        Prepayments.

 

(a)                                  The Borrowers may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay the Term Loan in whole or in part
without premium or penalty; provided that (i) such notice must be
received by the Administrative Agent not later than 12:00 noon (A) three
Business Days prior to any date of prepayment of Bankers’ Acceptance Advances
and (B) on the date of prepayment of Prime Rate Loans; (ii) any
prepayment of Bankers’ Acceptance Advances shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Prime Rate Loans shall be in a principal amount of $5,000,000 or
a whole multiple of $1,000,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding.  Each such notice shall specify the date and
amount of such prepayment.  The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Applicable Percentage of such
prepayment.  If such notice is given by
the Borrowers, the Borrowers shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any request to prepay a Bankers’
Acceptance Advance shall require the Borrowers to Cash Collateralize such
Bankers’ Acceptance Advances.  Each such
prepayment shall be applied to the Commitments of the Lenders in accordance
with their respective Applicable Percentages.

 

(b)                                 Any amounts prepaid in accordance with (a) above cannot be
reborrowed.

 

2.16        Repayment of Loans

 

The Borrowers shall repay to the Lenders on
the Maturity Date the aggregate principal amount of the Term Loan outstanding
on such date, and all accrued interest outstanding.

 

2.17        Interest

 

(a)                                  Subject to the provisions of subsection (b) below, (i) each
Bankers’ Acceptance Advance shall bear interest, at a rate equal to the Bankers’
Acceptance Fee for such Interest Period, which Bankers’ Acceptance Fee is
payable on the Drawdown Date; and (ii) each Prime Rate Loan shall bear
interest on the

 

27

 

outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Prime Rate plus the Applicable Rate.

 

(b)                              (i)             If
any amount of principal of any Loan is not paid when due (without regard
to any applicable grace periods), whether at stated maturity, by acceleration
or otherwise, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

(ii)                                  If any amount (other than principal of any Loan) payable by the
Borrowers under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iii)                               Upon the request of the Required Lenders, while any Event of Default
exists, the Borrowers shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(iv)                              Accrued and unpaid interest on past due amounts (including interest
on past due interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Prime Rate Loan shall be due and payable in arrears
on each Interest Payment Date applicable thereto and at such other times as may
be specified herein.  Interest hereunder
shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.

 

2.18        Fees.

 

The Borrowers shall pay to the Arrangers and
the Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Fee Letters.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

2.19        Computation of Interest and Fees.

 

All computations of interest for Prime Rate
Loans and Bankers’ Acceptance Advances shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed.  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, bear
interest for one day.  Each determination
by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.  For purposes of the Interest Act (Canada), if interest
computed on the basis of a 360 day year is payable for any part of the

 

28

 

calendar year, the equivalent yearly rate of
interest may be determined by multiplying the specified rate of interest by the
number of days (365 or 366) in such calendar year and dividing such product by
360.

 

2.20        Evidence of Debt.

 

The Loans made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to the Borrowers and the
interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error. 
Upon the request of any Lender made through the Administrative Agent,
the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records. 
Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

2.21        Payments Generally; Administrative Agent’s Clawback.

 

(a)                                  General. 
All payments to be made by the Borrowers shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided
herein, all payments by the Borrowers hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrowers
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)                              (i)             Funding
by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Loan that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Loan, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.02
and may, in reliance upon such assumption, make available to the Borrowers a
corresponding

 

29

 

amount. 
In such event, if a Lender has not in fact made its share of the
applicable Loan available to the Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is
made available to the Borrowers to but excluding the date of payment to the
Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Interbank Reference Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on
interbank compensation and (B) in the case of a payment to be made by the
Borrowers, the interest rate applicable to Prime Rate Loans.  If the Borrowers and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping
period, the Administrative Agent shall promptly remit to the Borrowers the
amount of such interest paid by the Borrowers for such period.

 

(ii)                                  Payments by Borrowers; Presumptions by Administrative Agent.  Unless the Administrative
Agent shall have received notice from the Borrowers prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
hereunder that the Borrowers will not make such payment, the Administrative Agent
may assume that the Borrowers has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders
the amount due.  In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the rate of interest applicable to Prime Rate Loans.

 

A
notice of the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent.  If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided
in the foregoing provisions of this Article II, and such funds are
not made available to the Borrowers by the Administrative Agent because the
conditions to the Term Loan set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

 

(d)                                 Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required

 

30

 

hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its
payment under Section 10.04(c).

 

(e)                                  Funding Source.  Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.

 

2.22        Sharing of Payments by Lenders.

 

If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such
Loans or participations and accrued interest thereon greater than its pro
rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact,
and (b) purchase (for cash at face value) participations in the Loans of
the other Lenders, or make such other adjustments as shall be equitable, so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such participations
or subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

(ii)                                  the provisions of this Section shall not be construed to apply
to (x) any payment made by the Borrowers pursuant to and in accordance
with the express terms of this Agreement or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to the Borrowers or any
Subsidiary thereof (as to which the provisions of this Section shall
apply).

 

Each
Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)                                  Payments Free of Taxes.  Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be

 

31

 

made
free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrowers shall be required
by applicable law to deduct any Indemnified Taxes (including any Other Taxes)
from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)                                 Payment of Other Taxes by the Borrowers.  Without limiting the provisions of subsection (a) above,
the Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  Indemnification by the Borrowers.  The Borrowers shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent, or such Lender, as the
case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as
to the amount of such payment or liability delivered to the Borrowers by a
Lender (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error; provided, however that a Lender or the Administrative
Agent shall challenge the imposition of any Indemnified Taxes or Other Taxes if
requested to do so by a Borrower.  In the
event a Borrower makes a request to a Lender or the Administrative Agent to
challenge such Indemnified Taxes or Other Taxes, the Lender or Administrative
Agent may require the Borrower to provide security for all costs of the Lender
and/or Administrative Agent, in such amounts and on such terms as determined by
such Lender and/or Administrative Agent.

 

(d)                                 Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the
Borrowers shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which a Borrower is resident for tax purposes, or any treaty to
which such jurisdiction is a party, with respect to payments hereunder or under
any other Loan Document shall deliver to a Borrower (with a copy to the
Administrative Agent), at the time or

 

32

 

times
prescribed by applicable law or reasonably requested by a Borrower or the
Administrative 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 a
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by a Borrower or the
Administrative Agent as will enable a Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 

(f)                                    Treatment of Certain Refunds.  If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by a Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to said Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrowers under this Section with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender, 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 such Borrower, upon the request
of the Administrative Agent or such Lender, agrees to repay the amount paid
over to the Borrowers (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Administrative Agent or such Lender
in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. 
This subsection shall not be construed to require the
Administrative Agent and any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrowers or any other Person.

 

3.02        Illegality.

 

If any Lender determines that any 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 Bankers’ Acceptance Advances, or to determine or charge interest rates
based upon the B/A Discount Rate, then, on notice thereof by such Lender to the
Borrowers through the Administrative Agent, any obligation of such Lender to
make or continue Bankers’ Acceptance Advances or to convert Prime Rate Loans to
Bankers’ Acceptance Advances shall be suspended until such Lender notifies the
Administrative Agent and the Borrowers that the circumstances giving rise to
such determination no longer exist.  Upon
receipt of such notice, the Borrowers shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all
Bankers’ Acceptance Advances of such Lender to Prime Rate Loans, either on the
last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Bankers’ Acceptance Advances to such day, or immediately, if
such Lender may not lawfully continue to maintain such Bankers’ Acceptance
Advances.  Upon any such prepayment or
conversion, the Borrowers shall also pay accrued interest on the amount so
prepaid or converted.

 

33

 

3.03        Inability
to Determine Rates.

 

If the Required Lenders determine that for
any reason in connection with any request for a Bankers’ Acceptance Advance or
a conversion to or continuation thereof that (a) adequate and reasonable
means do not exist for determining the B/A Discount Rate for any requested
Interest Period with respect to a proposed Bankers’ Acceptance Advance, or (b) the
B/A Discount Rate for any requested Interest Period with respect to a proposed
Bankers’ Acceptance Advance does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrowers and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Bankers’
Acceptance Advances shall be suspended until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrowers
may revoke any pending request for a Loan of, conversion to or continuation of
Bankers’ Acceptance Advances or, failing that, will be deemed to have converted
such request into a request for a Loan of Prime Rate Loans in the amount
specified therein.

 

3.04        Increased
Costs.

 

(a)                                  Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     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;

 

(ii)                                  subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any Bankers’ Acceptance Advance made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender); or

 

(iii)                               impose on any Lender any other condition, cost or expense affecting
this Agreement or Bankers’ Acceptance Advances made by such Lender;

 

and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any Bankers’
Acceptance Advance (or of maintaining its obligation to make any such Loan), or
to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender, the Borrowers will pay to such Lender, as the case may be, such
additional amount or amounts as will compensate such Lender, as the case may
be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements. If any Lender
determines that any Change in Law affecting such Lender or any Lending Office
of such Lender or such Lender’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s capital or on the capital of such Lender’s holding company, if
any, as a consequence of this Agreement, the

 

34

 

Commitments
of such Lender or the Loans made by such Lender, to a level below that which
such Lender or such Lender’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy),
then from time to time the Borrowers will pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement. A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in subsection (a) or (b) of this Section and delivered to
the Borrowers shall be conclusive absent manifest error. The Borrowers shall
pay such Lender, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests. Failure or delay on
the part of any Lender to demand compensation pursuant to the foregoing
provisions of this Section shall not constitute a waiver of such Lender’s
right to demand such compensation, provided that the Borrowers shall not
be required to compensate a Lender pursuant to the foregoing provisions of this
Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender notifies the Borrowers of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’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 nine-month period referred to above shall be extended to include the period
of retroactive effect thereof).

 

3.05        Compensation
for Losses.

 

Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

 

(a)                                  any continuation, conversion, payment or prepayment of any Loan
other than a Prime Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

 

(b)                                 any failure by the Borrowers (for a reason other than the failure of
such Lender to make a Loan) to prepay, continue or convert any Loan other than
a Prime Rate Loan on the date or in the amount notified by the Borrowers; or

 

(c)                                  any assignment of a Bankers’ Acceptance Advance on a day other than
the last day of the Interest Period therefor as a result of a request by the
Borrowers pursuant to Section 10.13;

 

including any loss of anticipated profits and
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate

 

35

 

the deposits from which such funds were
obtained.  The Borrowers shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.

 

3.06        Mitigation
Obligations; Replacement of Lenders.

 

(a)                                  Designation of a Different Lending Office.  If any Lender requests
compensation under Section 3.04, or the Borrowers are required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, or if any Lender
gives a notice pursuant to Section 3.02, then such Lender shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder 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 (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the
case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02,
as applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrowers hereby agree to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender requests compensation under Section 3.04,
or if the Borrowers are required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 3.01,
the Borrowers may replace such Lender in accordance with Section 10.13.

 

3.07        Survival.

 

All of the Borrowers’ obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions
of Initial Loan.

 

The obligation of each Lender to make its
initial Loan hereunder is subject to satisfaction of the following conditions
precedent:

 

(a)                                  The Administrative Agent’s receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and
each of the Lenders:

 

36

 

(i)                                     executed counterparts of this Agreement, the Subordination Agreement
and the Guarantees, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrowers;

 

(ii)                                  a Note executed by the Borrowers in favor of each Lender requesting
a Note;

 

(iii)                               such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party. 
With respect to the authorizing resolution of the Parent Guarantor, the
Parent Guarantor shall deliver to the Administrative Agent a resolution in form
and substance satisfactory to the Administrative Agent;

 

(iv)                              such documents, including Organization Documents, and certifications
as the Administrative Agent may reasonably require to evidence that each Loan
Party is duly organized or formed, and that each Borrower and each of the
Guarantors is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(v)                                 a favorable opinion of Fasken Martineau DuMoulin LLP, counsel to the
Loan Parties, and such other local counsel opinions requested by the
Administrative Agent, addressed to the Administrative Agent and each Lender, as
to the matters set forth in Exhibit G and such other matters
concerning the Loan Parties and the Loan Documents as the Required Lenders may
reasonably request and such other
local counsel opinions requested by the Administrative Agent;

 

(vi)                              a certificate of a Responsible Officer of each Loan Party either (a) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such 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 (b) stating
that no such consents, licenses or approvals are so required;

 

(vii)                           a certificate signed by a Responsible Officer of each Borrower
certifying (a) that the conditions specified in Sections 4.01 have
been satisfied, and (b) that
there has been no event or circumstance since the date of the Audited Financial
Statements that has had or could be reasonably expected

 

37

 

to
have, either individually or in the aggregate, a Material Adverse Effect; and (c) the
current Debt Ratings;

 

(viii)                        a duly completed Compliance Certificate as of the last day of the
fiscal quarter of the Parent Guarantor ended on September 30, 2005, signed
by a Responsible Officer of the Parent Guarantor;

 

(ix)                                a certificate signed by a Responsible Officer of a Borrower
confirming that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect;

 

(x)                                   such other assurances, certificates, documents, consents or opinions
as the Administrative Agent or the Required Lenders reasonably may require; and

 

(xi)                                the statements required to be delivered pursuant to Section 5.05
hereunder.

 

(b)                                 Any fees required to be paid on or before the Closing Date shall
have been paid.

 

(c)                                  Unless waived by the Administrative Agent, the Borrowers shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the
Borrowers and the Administrative Agent).

 

(d)                                 The Closing Date shall have occurred on or before December 31,
2005.

 

Without limiting the generality of the
provisions of Section 9.04, for purposes of determining compliance with
the conditions specified in this Section 4.01, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

Each Borrower and the Parent Guarantor each
represents and warrants to the Administrative Agent and the Lenders that:

 

5.01        Existence,
Qualification and Power; Compliance with Laws.

 

Each Loan Party and each Subsidiary thereof (a) is
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and
carry on its business and (ii) execute,

 

38

 

deliver and perform its obligations under the
Loan Documents to which it is a party, (c) is duly qualified and is
licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license, and (d) is in compliance with all
Laws; except in each case referred to in clause (b)(i), (c) or (d), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

5.02        Authorization;
No Contravention.

 

The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a
party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law.  Each Loan Party and each Subsidiary thereof
is in compliance with all Contractual Obligations referred to in clause (b)(i),
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

5.03        Governmental
Authorization; Other Consents.

 

No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.

 

5.04        Binding
Effect.

 

This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms.

 

5.05        Financial
Statements; No Material Adverse Effect; No Internal Control Event.

 

(a)                                  The Parent Guarantor has heretofore delivered to the Administrative
Agent and the Lenders, at their request, the following financial statements and
information: (a) audited consolidated financial statements of the Parent
Guarantor and its Subsidiaries for the fiscal years ended December 31,
2001, 2002, 2003, and 2004 consisting of consolidated balance sheets and the
related consolidated statements of income, stockholders’ equity and cash flows
for such period, all of which statements were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except as
otherwise described therein; (b) company-prepared unaudited consolidated
financial statements of the Parent Guarantor and its Subsidiaries for the
fiscal quarter ended September 30, 2004,

 

39

 

consisting
of consolidated balance sheets and the related consolidated statements of
income, stockholders’ equity and cash flows for such period, all of which
statements were prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, except as otherwise described therein;
and (c) five-year projections for the Parent Guarantor and its
Subsidiaries, all in form and substance reasonably satisfactory to the
Administrative Agent and certified by the chief financial officer of the Parent
Guarantor that such consolidated financial statements fairly present the
financial condition of the Parent Guarantor and its Subsidiaries as of the
dates indicated, and (i) with respect to the audited and unaudited
financial statements, the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments, and (ii) with respect to the projections, were
prepared in good faith based upon reasonable assumptions.

 

(b)                                 Since December 31, 2004, there has been no change in the
business, assets, liabilities, condition (financial or otherwise) or prospects
of the Parent Guarantor and its Subsidiaries taken as a whole which could have
a Material Adverse Effect (other than as disclosed in the Parent Guarantor’s
Form 10-K for the fiscal year ending December 31, 2004, as
supplemented by the Parent Guarantor’s Form l0-Qs for the fiscal quarter
ending respectively on March 31, 2005, June 30, 2005 and September 30, 2005).

 

(c)                                  Schedule 7.03 sets forth all
material indebtedness and other liabilities, of the Parent Guarantor and its
consolidated Subsidiaries as of the date of such financial statements,
including liabilities for taxes and Indebtedness.

 

(d)                                 The unaudited consolidated balance sheets of each of LP Canada and
LP-LP and their respective Subsidiaries dated September 30, 2005, and the
related consolidated statements of income, shareholders’ equity and cash flows
for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of LP Canada and LP-LP and their respective Subsidiaries as of
the date thereof and their results of operations for the period covered
thereby, subject, in the case of clauses (i) and (ii), to the absence
of footnotes and to normal year-end audit adjustments.  Schedule 7.03 sets forth all
material indebtedness and other liabilities, of the Borrowers and their
consolidated Subsidiaries as of the date of such financial statements,
including liabilities for taxes, material commitments and Indebtedness.

 

(e)                                  To the best of the Borrowers’ and Parent Guarantor’s knowledge,
since the date of the Audited Financial Statements, no Internal Control Event
has occurred.

 

5.06        Litigation.

 

Other than set out in Schedule 5.06,
there are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrowers or the Parent Guarantor after due and diligent

 

40

 

investigation, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against either Borrower or any of their Subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.

 

5.07        No
Default.

 

Neither Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred
and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

5.08        Ownership
of Property; Liens.

 

Each of the Borrowers and each respective
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  The property of each
Borrower and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 7.01.

 

5.09        Environmental
Compliance.

 

Each Borrower and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility
for violation of any Environmental Law on their respective businesses,
operations and properties, and as a result thereof each Borrower has reasonably
concluded that such Environmental
Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 
Other than set out in Schedule 5.09, there is no material
outstanding Environmental Liability.

 

5.10        Insurance.

 

The properties of the Borrowers and their
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrowers, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrowers or the applicable Subsidiary operates.

 

5.11        Taxes.

 

The Borrowers and their Subsidiaries have
filed all federal, provincial, state and other material tax returns and reports
required to be filed, and have paid all federal, state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP.  There is no tax
assessment against either

 

41

 

Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect. 
Neither any Loan Party nor any Subsidiary thereof is party to any tax
sharing agreement.

 

5.12        ERISA
Compliance.

 

(a)                                  Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Parent Guarantor, nothing has
occurred which would prevent, or cause the loss of, such qualification.  The Parent Guarantor and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412
of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

 

(b)                                 There are no pending or, to the best knowledge of the Parent
Guarantor, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. 
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Parent Guarantor nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) neither the Parent Guarantor nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Parent Guarantor nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

 

5.13        Subsidiaries;
Equity Interests.

 

As of the Closing Date, the Loan Parties have
no Subsidiaries other than those specifically disclosed in Part (a) of
Schedule 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13
free and clear of all Liens.  No Loan
Party has any equity investments in any other corporation or entity other than
those specifically disclosed in Part(b) of Schedule 5.13.  All of the outstanding Equity Interests in a
Loan Party have been validly issued and are fully paid and nonassessable.  The Loan Parties shall update and supplement,
as necessary, Schedule 5.13 and deliver the same to the
Administrative Agent no later than January 13, 2006, in form satisfactory
to the Administrative Agent.

 

42

 

5.14                        Margin
Regulations; Investment Company Act; Public Utility Holding Company Act.

 

(a)                                  No Loan Party is engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.

 

(b)                                 No Loan Party, any Person Controlling a Loan Party, or any
Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is
or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

5.15        Disclosure.

 

The Borrowers and the Parent Guarantor have
disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.  No report, financial
statement, certificate or other information furnished (whether in writing or
orally) by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrowers represent only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

5.16        Compliance
with Laws.

 

To the best of the knowledge of the Borrowers
and the Parent Guarantor, each Borrower, the Parent Guarantor and each
Subsidiary is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.17        Intellectual
Property; Licenses, Etc.

 

The Borrowers, the Parent Guarantor and their
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses
and other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. 
To the best knowledge of the Borrowers and Parent Guarantor, no slogan
or other

 

43

 

advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrowers, the Parent Guarantor or any Subsidiary infringes
upon any rights held by any other Person.

 

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain
unpaid or unsatisfied, each Loan Party shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, and 6.03)
cause each Subsidiary to:

 

6.01        Financial
Statements.

 

Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)                                  as soon as available, but in any event within 90 days after the end
of each fiscal year of the Parent Guarantor (commencing with the fiscal year
ended December 31, 2005), a consolidated balance sheet of the Parent
Guarantor and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, such consolidated statements to be audited
and accompanied by (i) a report and opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and applicable Securities Laws and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and (ii) an
attestation report of such Registered Public Accounting Firm as to the
Borrowers’ internal controls pursuant to Section 404 of Sarbanes-Oxley
expressing a conclusion to which the Required Lenders do not object;

 

(b)                                 as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the Parent
Guarantor (commencing with the fiscal quarter ended March 31, 2006), a
consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at
the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal
quarter and for the portion of the Parent Guarantor’s fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, such consolidated
statements to be certified by a Responsible Officer of the Parent Guarantor’s
as fairly presenting the financial condition, shareholders’ equity and cash
flows of the Parent Guarantor and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes;

 

44

 

(c)                                  as soon as available, but in any event within 90 days after the end
of each fiscal year of each of LP Canada and LP-LP (commencing with the fiscal
year ended December 31, 2005), an unaudited consolidated balance sheet of
each of LP Canada and LP-LP and their respective Subsidiaries as at the
end of such fiscal year, and the related consolidated statements of income,
shareholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, subject only to normal
year-end audit adjustments and absences of footnotes; and

 

(d)                                 as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of LP Canada and
LP-LP (commencing with the fiscal quarter ended March 31, 2006), a
consolidated balance sheet of each of LP Canada and LP-LP and their
respective Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income, shareholders’ equity and cash flows for such
fiscal quarter and for the portion of LP Canada’s or LP-LP’s, as applicable,
fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable
detail, such consolidated statements to be certified by a Responsible Officer
of LP Canada or LP-LP as applicable, as fairly presenting the financial
condition, shareholders’ equity and cash flows of LP Canada or LP-LP, as
applicable, and their respective Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes.

 

As to any information contained in materials
furnished pursuant to Section 6.02(d), the Parent Guarantor shall
not be separately required to furnish such information under clause (a) or
(b) above, but the foregoing shall not be in derogation of the obligation
of the Parent Guarantor to furnish the information and materials described in
clauses (a) and (b) above at the times specified therein.

 

6.02        Certificates;
Other Information.

 

Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)                                  concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified
public accountants certifying such financial statements and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or, if any such Default shall exist, stating the nature and status of
such event;

 

(b)                                 concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and (b) (commencing with the delivery of
the financial statements for the fiscal year ended December 31, 2005),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Parent Guarantor;

 

45

 

(c)                                  promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Parent Guarantor by independent accountants in
connection with the accounts or books of the Parent Guarantor or any
Subsidiary, or any audit of any of them;

 

(d)                                 within thirty (30) days after the same are sent, copies of each
annual report, proxy or financial statement or other report or communication
sent to the stockholders of the Parent Guarantor, and copies of all annual,
regular, periodic and special reports and registration statements which the
Parent Guarantor may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

 

(e)                                  promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party or any
Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Lenders
pursuant to Section 6.01 or any other clause of this Section 6.02;

 

(f)                                    promptly, and in any event within five Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in Canada or
any other applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or
other operational results of any Loan Party or any Subsidiary thereof; and

 

(g)                                 promptly, such additional information regarding the business,
financial or corporate affairs of a Loan Party or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request.

 

Documents required to be delivered pursuant
to Section 6.01(a) or (b) or Section 6.02(d) (to
the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (i) on which the Parent Guarantor posts
such documents, or provides a link thereto on the Guarantor’s website on the
Internet at the website address listed on Schedule 10.02; or (ii) on
which such documents are posted on the Parent Guarantor’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that: (i) the Parent Guarantor
shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Parent Guarantor to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative
Agent or such Lender and (ii) the Parent Guarantor shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in
every instance the Parent Guarantor shall be

 

46

 

required to provide paper copies of the
Compliance Certificates required by Section 6.02(b) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Parent Guarantor with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of
such documents.

 

The Borrowers and Parent Guarantor hereby
acknowledges that (a) the Administrative Agent and/or the Arrangers will
make available to the Lenders materials and/or information provided by or on
behalf of the Borrowers and/or Parent Guarantor hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities)
(each, a “Public Lender”).  The
Borrowers and Parent Guarantors hereby agree that [so long as the Parent
Guarantor is the issuer of any outstanding debt or equity securities that are
registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities] (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,”
the Borrowers shall be deemed to have authorized the Administrative Agent, the
Arrangers and the Lenders to treat such Borrower Materials as not containing
any material non-public information with respect to the Borrowers or their
securities for purposes of Canadian federal and provincial United States
federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
“Public Investor;” and (z) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.”  Notwithstanding the
foregoing, the Borrowers shall be under no obligation to mark any Borrower
Materials “PUBLIC.”

 

6.03        Notices.

 

Promptly notify the Administrative Agent and
each Lender:

 

(a)                                  of the occurrence of any Default;

 

(b)                                 of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance
of, or any default under, a Contractual Obligation of a Borrower, the Parent
Guarantor or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between a Borrower, the Parent Guarantor or any
Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting the
Borrower, the Parent Guarantor or any Subsidiary, including pursuant to any
applicable Environmental Laws;

 

47

 

(c)                                  of the occurrence of any ERISA Event or of any breach or alleged
breach by a Loan Party, as applicable, with respect to a Pension Plan;

 

(d)                                 of any material change in accounting policies or financial reporting
practices by a Borrower, Parent Guarantor or any Subsidiary;

 

(e)                                  of the occurrence of any Internal Control Event; and

 

(f)                                    of any announcement by Moody’s or S&P of any change or possible
change in a Debt Rating.

 

Each notice pursuant to this Section shall
be accompanied by a statement of a Responsible Officer of the applicable Loan
Party setting forth details of the occurrence referred to therein and stating
what action a Loan Party has taken and proposes to take with respect
thereto.  Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

6.04        Payment
of Obligations.

 

Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by a Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, which if not paid
would have a Material Adverse Effect.

 

6.05        Preservation
of Existence, Etc.

 

(a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section 7.04
or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

 

6.06        Maintenance
of Properties.

 

(a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (c) use the standard of care typical in
the industry in the operation and maintenance of its facilities.

 

48

 

6.07        Maintenance
of Insurance.

 

Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrowers or Parent Guarantor,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and providing for not less than 30
days’ prior notice to the Administrative Agent of termination, lapse or
cancellation of such insurance; provided, however, that the Loan
Parties may maintain self insurance plans to the extent companies of similar
size and in similar business do so.

 

6.08        Compliance
with Laws.

 

Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted;
or (b) the failure to comply therewith could not reasonably be expected to
have a Material Adverse Effect.

 

6.09        Books
and Records.

 

Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Loan Parties or their Subsidiaries, as the case
may be.

 

6.10        Inspection
Rights.

 

Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrowers and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrowers; provided, however,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrowers at any time during normal
business hours and without advance notice.

 

6.11        Use
of Proceeds.

 

Use the proceeds of the Term Loan for working
capital, capital expenditures, and general corporate purposes not in
contravention of any Law or of any Loan Document.

 

6.12        Additional
Guarantors.

 

Notify the Administrative Agent at the time
that any Person becomes a [Domestic Subsidiary,] and promptly thereafter (and
in any event within 30 days), cause such Person to (a) become a guarantor
by executing and delivering to the Administrative Agent a counterpart of the

 

49

 

Guarantee or such other document as the
Administrative Agent shall deem appropriate for such purpose, and (b) deliver
to the Administrative Agent documents of the types referred to in clauses (iii) and
(iv) of Section 4.01(a) and favorable opinions of counsel
to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(a)), all in form, content and scope reasonably satisfactory to the
Administrative Agent.

 

6.13        Environmental
Laws.

 

Defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of a Loan Party or,
any of its Subsidiaries, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable attorney’s
and consultant’s fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall survive
repayment of the Obligations and termination of the Commitments and the Loan
Documents.

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain
unpaid or unsatisfied, the LP Group shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

 

7.01        Liens.

 

Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:

 

(a)                                  Liens pursuant to any Loan Document;

 

(b)                                 Liens existing on the date hereof and listed on Schedule 7.01
(such Schedule delivered in accordance herewith) and any renewals or
extensions thereof, provided that (i) the property covered thereby is not
changed, (ii) the amount secured or benefited thereby is not increased, (iii) the
direct or any contingent obligor with respect thereto is not changed, and (iv) any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.03(b). 
Schedule 7.01 shall be delivered to the Administrative Agent
no later than January 13, 2006 and shall list (A) only those Liens
that existed as at the Closing Date, and (B) only those Liens as permitted
pursuant to the US Credit Agreement;

 

(c)                                  Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect

 

50

 

thereto
are maintained on the books of the applicable Person in accordance with GAAP;

 

(d)                                 carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;

 

(e)                                  pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

 

(f)                                    deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(g)                                 easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

 

(h)                                 Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h);

 

(i)                                     Liens securing purchase money Indebtedness and Indebtedness
permitted under Section 7.03(b); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition; and

 

(j)                                     Liens on the property of a Person existing at the time such Person
becomes a Subsidiary of the Loan Party in a transaction permitted hereunder
securing Indebtedness permitted to be incurred under Section 7.03; provided,
however, that any such Lien may not extend to any other property of the
Loan Party or any other Subsidiary that is not a Subsidiary of such Person; provided,
further, that any such Lien was not created in anticipation of or in
connection with the transaction or series of transactions pursuant to which
such Person became a Subsidiary of the Loan Party;

 

(k)                                  other Liens in addition to those permitted by the foregoing clauses
securing Indebtedness in an aggregate amount not to exceed the following
(measured at the time of incurrence): (i) if the Parent Guarantor has an
Investment Grade Debt Rating, 15% of Consolidated Net Worth at any time
outstanding or (ii) if the Parent Guarantor does not have an Investment
Grade Debt Rating, 8% of Consolidated Net Worth at any time outstanding.

 

51

 

7.02        Investments.

 

Make any Investments, except:

 

(a)                                  cash and cash equivalents;

 

(b)                                 receivables owing to a Loan Party or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created, acquired or
made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;

 

(c)                                  Investments in and loans to any Loan Parties or any Subsidiary of
either the Parent Guarantor or a Borrower, and in the joint ventures with
Abitibi-Consolidated Company of Canada and Canfor Corporation;

 

(d)                                 (i) loans and advances to employees (other than any officer or
director) of the Parent Guarantor or its Subsidiaries in an aggregate amount
not to exceed $5,000,000 at any time outstanding and (ii) in addition to
the loans and advances made pursuant to the immediately preceding clause (i),
advances to employees of the Parent Guarantor or its Subsidiaries made in
accordance with the Parent Guarantor’s relocation policy in connection with the
relocation of the Parent Guarantor’s headquarters from Portland, Oregon to
Nashville, Tennessee;

 

(e)                                  Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

 

(f)                                    Investments, acquisitions or transactions permitted under Section 7.04(c);

 

(g)                                 Hedging Agreements entered into by a Loan Party to the extent
permitted pursuant to Section 7.03;

 

(h)                                 Permitted Acquisitions;

 

(i)                                     Permitted Cash Collateral;

 

(j)                                     Investments in and loans by the Parent Guarantor to the Borrowers
not to exceed (i) the amount of such investments and loans outstanding on
the Closing Date (the ”Closing Date Investment Amount”) plus
(ii) on a cumulative basis as of the end of each fiscal year of the Parent
Guarantor, commencing with the fiscal year ending December 31, 2005, 15%
of the aggregate Investments in and loans to the Borrowers as of the end of the
immediately preceding fiscal year;

 

(k)                                  Investments existing (or committed to made, but not yet funded) on
the Closing Date and listed on Schedule 7.02;

 

52

 

(l)                                     Investments in Securitization Vehicles; provided, however,
that both immediately before and after giving effect to such Investment no
Default or Event of Default shall have occurred and be continuing, and
Investments of any Securitization Vehicle in the Parent Guarantor or in another
Securitization Vehicle; and

 

(m)                               other Investments in addition to those permitted by the foregoing
clauses in an aggregate amount not to exceed 20% of Consolidated Net Worth at
any time outstanding.

 

7.03        Indebtedness.

 

Create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)                                  Indebtedness arising or existing under this Agreement and the other
Loan Documents;

 

(b)                                 Indebtedness of the Parent Guarantor and its Subsidiaries existing
as of the Closing Date as referenced in the financial statements referenced in Section 5.05
(and set out more specifically in Schedule 7.03) hereto and
renewals, extensions and refinancings thereof incurred at any time during the
term of this Agreement, in a principal amount not in excess of that outstanding
as of the date of such renewal, refinancing or extension;

 

(c)                                  (i) Indebtedness of the Parent Guarantor and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or Indebtedness
incurred to provide all or a portion of the purchase price or cost of
construction of an asset and (ii) Off-Balance Sheet Liabilities and/or
indebtedness, liabilities and obligations incurred in connection with a trade
receivables securitization transaction involving the Parent Guarantor or any of
its Subsidiaries and a Securitization Vehicle (regardless of whether such
indebtedness, liabilities and obligations constitute Off-Balance Sheet
Liabilities); provided, that in each case (A) such Indebtedness
when incurred shall not exceed the purchase price or cost of construction of
such asset and (B) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing;

 

(d)                                 unsecured intercompany Indebtedness among the Loan Parties and their
respective Subsidiaries, provided that any such Indebtedness shall be fully
subordinated to the Obligations hereunder on terms reasonably satisfactory to
the Administrative Agent;

 

(e)                                  Indebtedness and obligations owing under Hedging Agreements entered
into in order to manage existing or anticipated interest rate, exchange rate or
commodity risks and not for speculative purposes;

 

(f)                                    Indebtedness and obligations of Loan Parties and their respective
Subsidiaries, owing under trade letters of credit for the purchase of goods or
other merchandise (but not under standby, direct pay or other letters of
credit) generally;

 

53

 

(g)                                 Guarantee Obligations in respect of Indebtedness of a Loan Party to
the extent such Indebtedness is permitted to exist or be incurred pursuant to
this Section 7.03;

 

(h)                                 Indebtedness that is non-recourse to any of the Loan Parties or its
Subsidiaries or any of their respective assets;

 

(i)                                     Indebtedness incurred under take-or-pay arrangements entered into in
the ordinary course of business; and

 

(j)                                     other Indebtedness of the Parent Guarantor and its Subsidiaries in
an aggregate amount not to exceed the following (measured at the time of
incurrence): (i) if the Parent Guarantor has an Investment Grade Debt
Rating, 30% of Consolidated Net Worth at any time outstanding and (ii) if
the Parent Guarantor does not have an Investment Grade Debt Rating, 15% of
Consolidated Net Worth at any time outstanding.

 

7.04        Fundamental
Changes.

 

Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

 

(a)                                  any Subsidiary may merge with (i) a Borrower, or (ii) the
Parent Guarantor, or (iii) any one or more other Subsidiaries, provided
that, as applicable, when any wholly-owned Subsidiary is merging with another
Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving Person;

 

(b)                                 the Borrowers may merge, provided that Louisiana-Pacific Canada Ltd.
shall be the surviving or continuing Person; and

 

(c)                                  any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to a Borrower, the Parent Guarantor
or to another Subsidiary; provided that if the transferor in such a transaction
is a wholly-owned Subsidiary, then the transferee must either be such Borrower
or the Parent Guarantor.

 

7.05        Dispositions.

 

Make any Disposition or enter into any
agreement to make any Disposition, except:

 

(a)                                  Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

 

(b)                                 Dispositions of inventory in the ordinary course of business;

 

54

 

(c)                                  Dispositions of equipment or real 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
reasonably promptly applied to the purchase price of such replacement property;

 

(d)                                 Dispositions of property by any Subsidiary to a Borrower or to a
wholly-owned Subsidiary;

 

(e)                                  Dispositions permitted by Section 7.04; and

 

(f)                                    Dispositions by a Loan Party and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that (i) at
the time of such Disposition, no Default shall exist or would result from such
Disposition and (ii) the aggregate book value of all property Disposed of
in reliance on this clause (h) in any fiscal year shall not exceed 10% of
Consolidated Total Assets in the aggregate.

 

7.06        Restricted
Payments.

 

Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:

 

(a)                                  a Subsidiary may make Restricted Payments to the applicable
Borrower, the Guarantors and any other Person that owns an Equity Interest in
such Subsidiary, ratably according to their respective holdings of the type of
Equity Interest in respect of which such Restricted Payment is being made; and

 

(b)                                 the applicable Borrower and its Subsidiary may declare and make
dividend payments or other distributions payable solely in the common stock or
other common Equity Interests of such Person; and

 

(c)                                  the applicable Loan Party may make other Restrictive Payments as may
be approved by its board of directors.

 

7.07        Change
in Nature of Business.

 

Engage in any material line of business
substantially different from those lines of business conducted by the LP Group
and their Subsidiaries on the date hereof or any business substantially related
or incidental thereto.

 

7.08        Transactions
with Affiliates.

 

Enter into any transaction of any kind with
any Affiliate of the LP Group, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the LP Group or such Subsidiary as would be obtainable by the LP Group or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.

 

55

 

7.09        Burdensome
Agreements.

 

Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrowers
or any Guarantor or to otherwise transfer property to the Borrowers or any
Guarantor, (ii) of any Subsidiary to guarantee the Indebtedness of the
Borrowers or (iii) of the Borrowers or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person; provided, however,
that this clause (iii) shall not prohibit any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section 7.03(c) solely
to the extent any such negative pledge relates to the property financed by or
the subject of such Indebtedness; or (b) requires the grant of a Lien to
secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person.

 

7.10        Use
of Proceeds.

 

Use the proceeds of the Term Loan, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.

 

7.11        Financial
Covenants.

 

(a)                                  Consolidated Net Worth.  Permit Consolidated Net Worth at any time to
be less than the sum of US (i) $1,150,000,000, plus ii) on a
cumulative basis as of the end of each full fiscal quarter ending after December 31, 2005
an amount equal to 25% of the Consolidated Net Income for the fiscal quarter
then ended, as of giving effect to the payment of dividends for such period; provided,
that Consolidated Net Worth shall not at any time be less than
US $1,150,000,000.

 

(b)                                 Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage
Ratio as of the end of any fiscal quarter of the Parent Guarantor to be less
than 4.00 to 1.00.

 

(c)                                  Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio at any
time during any period of four fiscal quarters of the Parent Guarantor to be
greater than 3.00 to 1.00.

 

56

 

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events
of Default.

 

Any of the following shall constitute an
Event of Default:

 

(a)                                  Non-Payment.  A Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan, or (ii) within three days after the same becomes due, any
interest on any Loan, or any fee due hereunder, or (iii) within five days
after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or

 

(b)                                 Specific Covenants.  A Borrower or the Parent Guarantor fails to
perform or observe any term, covenant or agreement contained in any of Section 6.01,
6.02, 6.03, 6.05, 6.10, 6.11 or 6.12
or Article VII, or any Guarantor fails to perform or observe any
term, covenant or agreement of the Guarantee and such failure continues for 30
days after the applicable Loan Party becomes aware of such failure to perform;
or

 

(c)                                  Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the applicable Loan Party becomes
aware of such failure to perform or observe; or

 

(d)                                 Representations and Warranties.  Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrowers or
any other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect, false or
misleading when made or deemed made; or

 

(e)                                  Cross-Default.  (i) A Borrower, the Parent Guarantor or
any Subsidiary (a) fails to make any payment when due or otherwise cures
the failure within an allowable grace period (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Guarantee Obligation (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than the Threshold Amount, or (b) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such guarantee obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness

 

57

 

to
be demanded or to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise), or an offer to repurchase, prepay,
defease or redeem such Indebtedness to be made, prior to its stated maturity,
or such Guarantee Obligation to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from (a) any
event of default under such Swap Contract as to which the Borrowers or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (b) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrowers or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Borrowers or such Subsidiary as a
result thereof is greater than the Threshold Amount or (iii) an event of
default occurs under the US Credit Agreement; or

 

(f)                                    Insolvency Proceedings, Etc.  Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g)                                 Inability to Pay Debts; Attachment.  (i) A Borrower, the Parent Guarantor or
any Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against all
or any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or

 

(h)                                 Judgments.  There is entered against a Borrower, the
Parent Guarantor or any Subsidiary (i) a final judgment or order for the
payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and, in either case, (a) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (b) there
is a period of 30 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)                                     ERISA. 
(i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result

 

58

 

in
liability of the Parent Guarantor under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) the Parent Guarantor or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold
Amount; or

 

(j)                                     Invalidity of Loan Documents.  Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

 

(k)                                  Change of Control.  There occurs any Change of Control.

 

8.02        Remedies
Upon Event of Default.

 

If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

 

(a)                                  declare the Commitments terminated and declare the unpaid principal
amount of the Term Loan, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(b)                                 require that the Borrowers Cash Collateralize the outstanding
Bankers’ Acceptances (in an amount equal to the then Outstanding Amount
thereof); and

 

(c)                                  exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents.

 

8.03        Application
of Funds.

 

After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become
immediately due and payable and any Bankers’ Acceptances have been required to
be Cash Collateralized as set forth in the proviso to Section 8.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;

 

59

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to
the Lenders (including fees, charges and disbursements of counsel to the
respective Lenders) and amounts payable under Article III), ratably
among them in proportion to the respective amounts described in this clause Second
payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued
and interest on the Loans and other Obligations, ratably among the Lenders in
proportion to the respective amounts described in this clause Third
payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;

 

Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrowers or as otherwise required by Law.

 

ARTICLE IX.

ADMINISTRATIVE AGENT

 

9.01        Appointment
and Authority.

 

Each of the Lenders hereby irrevocably
appoints Bank of America to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent and the Lenders, and neither
the Borrowers nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.

 

9.02        Rights
as a Lender.

 

The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrowers or any Subsidiary or other Affiliate thereof as if such Person
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.

 

9.03        Exculpatory
Provisions.

 

The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, the Administrative Agent:

 

60

 

(a)                                  shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(c)                                  shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrowers or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable
for any action taken or not taken by it (i) with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections
10.01 and 8.02) or (ii) in the absence of its own gross
negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default
unless and until notice describing such Default is given to the Administrative
Agent by the Borrowers, a Lender or the Parent Guarantor.

 

The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.

 

9.04        Reliance
by Administrative Agent.

 

The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition

 

61

 

hereunder to the making of a Loan, that by
its terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such
Lender prior to the making of such Loan. 
The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrowers), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

9.05        Delegation
of Duties.

 

The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent, including but not limited to Bank of America N.A.,
San Francisco Agency.  The
Administrative Agent and any such sub agent may perform any and all of its
duties and exercise its rights and powers by or through their respective
Related Parties.  The exculpatory
provisions of this Article shall apply to any such sub agent and to the
Related Parties of the Administrative Agent and any such sub agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.

 

9.06        Resignation
of Administrative Agent.

 

The Administrative Agent may at any time give
notice of its resignation to the Lenders and the Borrowers.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrowers, to appoint a successor, which shall be a bank with an office in
Canada, or an Affiliate of any such bank with an office in the Canada.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications
set forth above; provided that if the Administrative Agent shall notify
the Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section.  Upon the acceptance of
a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this Section). 
The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. 
After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub agents and their respective Related Parties in respect of

 

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any actions taken or omitted to be taken by
any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

9.07        Non-Reliance
on Administrative Agent and Other Lenders.

 

Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

 

9.08        No
Other Duties, Etc.

 

Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers or [other titles as
necessary] listed on the cover page hereof shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent or a Lender
hereunder.

 

9.09        Guarantee
Matters.

 

The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guarantee if such Person ceases to be
a Subsidiary as a result of a transaction permitted hereunder.

 

Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing the Administrative Agent’s
authority to release any Guarantor from its obligations under the Guarantee
pursuant to this Section 9.09.

 

ARTICLE X.

MISCELLANEOUS

 

10.01      Amendments,
Etc.

 

No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrowers or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrowers or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:

 

(a)                                  waive any condition set forth in Section 4.01 without
the written consent of each Lender;

 

63

 

(b)                                 extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written
consent of such Lender;

 

(c)                                  postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby;

 

(d)                                 reduce the principal of, or the rate of interest specified herein
on, any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of “Default Rate” or to
waive any obligation of the Borrowers to pay interest at the Default Rate;

 

(e)                                  change Section 2.23 or Section 8.03 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;

 

(f)                                    change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder without the written consent
of each Lender;

 

(g)                                 release the Parent Guarantor from the Guarantee without the written
consent of each Lender;

 

and, provided further, that; (i) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (ii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such Lender
may not be increased or extended without the consent of such Lender.

 

10.02      Notices;
Effectiveness; Electronic Communication.

 

(a)                                  Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

64

 

(i)                                     if to the Borrowers or, the Administrative Agent, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 10.02; and

 

(ii)                                  if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.

 

Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have
been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient).  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).

 

(b)                                 Electronic Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II
if such Lender has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrowers
may, in their discretion, agree to accept notices and other communications to
it hereunder by electronic communications pursuant to procedures approved by
it, provided that approval of such procedures may be limited to particular
notices or communications.

 

Unless the Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.

 

(c)                                  The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY

 

65

 

IN
CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or
any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrowers, any Lender, or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of the Borrowers’ or the Administrative Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to
the Borrowers, any Lender, or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).

 

(d)                                 Change of Address, Etc.  Each of the Borrowers, and the Administrative
Agent, may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the Borrowers and the Administrative Agent.  In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such
Lender.

 

(e)                                  Reliance by Administrative Agent and Lenders.  The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Conversion/Extension Notices) given by or on behalf of the Borrowers
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrowers shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.  All telephonic notices shall
require immediate written confirmation.

 

10.03      No
Waiver; Cumulative Remedies.

 

No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right,

 

66

 

remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

 

10.04      Expenses;
Indemnity; Damage Waiver.

 

(a)                                  Costs and Expenses.  The Borrowers shall pay (i) all
reasonable out of pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out of pocket expenses incurred by the
Administrative Agent or any Lender (including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender), and
shall pay all fees and time charges for attorneys who may be employees of the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights (a) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (b) in
connection with the Loans made or issued hereunder, including all such out of
pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans.

 

(b)                                 Indemnification by the Borrowers.  The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees
and time charges and disbursements for attorneys who may be employees of any
Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrowers or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent
(and any sub-agent thereof) and its Related Parties only, the administration of
this Agreement and the other Loan Documents, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrowers or any of their Subsidiaries, or any Environmental
Liability related in any way to the Borrowers or any of their Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrowers or any other Loan Party,
and regardless of whether any Indemnitee is a party thereto, provided

 

67

 

that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrowers or any
other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrowers or
such Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.

 

(c)                                  Reimbursement by Lenders.  To the extent that the Borrowers for any
reason fail to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or
any sub-agent thereof), any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), or
such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) in connection with such capacity.  The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).

 

(d)                                 Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable
law, the Borrowers shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby.

 

(e)                                  Payments.  All amounts due under this Section shall
be payable not later than ten Business Days after demand therefor.

 

(f)                                    Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

 

68

 

10.05      Payments
Set Aside.

 

To the extent that any payment by or on
behalf of the Borrowers is made to the Administrative Agent, or any Lender, or
the Administrative Agent, or any Lender exercises its 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 the Administrative Agent,
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Interbank Reference Rate from time to time in
effect.  The obligations of the Lenders
under clause (b) of the preceding sentence shall survive the payment in
full of the Obligations and the termination of this Agreement.

 

10.06      Successors
and Assigns.

 

(a)                                  Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrowers nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f) of
this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that

 

(i)                                     except in the case of an assignment of the entire remaining amount
of the assigning Lender’s Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an

 

69

 

Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) or, if the Commitment
is not then in effect, the principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each
of the Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Borrowers otherwise consent (each such consent not to be
unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;

 

(ii)                                  each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned;

 

(iii)                               any assignment of a Commitment must be approved by the
Administrative Agent, unless the Person that is the proposed assignee is itself
a Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and

 

(iv)                              the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in Schedule 10.06,
and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

Subject to acceptance and recording thereof
by the Administrative Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request, the
Borrowers (at their expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

70

 

(c)                                  Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by each of the Borrowers
at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is pending,
any Lender may request and receive from the Administrative Agent a copy of the
Register.

 

(d)                                 Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrowers or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrowers or
any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans; provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent, and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement.

 

Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any  provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that affects such Participant.  Subject to subsection (e) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.

 

(e)                                  Limitations upon Participant Rights.  A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the applicable Borrowers’ prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the applicable Borrower is notified of the participation sold to

 

71

 

such
Participant and such Participant agrees, for the benefit of the applicable
Borrower, to comply with Section 3.01(e) as though it were a
Lender.

 

(f)                                    Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)                                 Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to
include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law.

 

10.07      Treatment
of Certain Information; Confidentiality.

 

Each of the Administrative Agent and, the
Lenders agree to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority), (c) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (d) to any other party hereto, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to the Borrowers and their
obligations, (g) with the consent of the Borrowers or (h) to the
extent such Information (x) becomes publicly available other than as a result
of a breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, or any of their respective Affiliates on a nonconfidential
basis from a source other than the Borrowers.

 

For purposes of this Section, “Information”
means all information received from the Borrowers or any Subsidiary relating to
the Borrowers or any Subsidiary or any of their respective businesses, other
than any such information that is available to the Administrative Agent, any
Lender on a nonconfidential basis prior to disclosure by the Borrowers or any
Subsidiary, provided that, in the case of information received from the
Borrowers or any Subsidiary after the date hereof, such information is clearly
identified at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same

 

72

 

degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

Each of the Administrative Agent and, the
Lenders acknowledge that (a) the Information may include material non-public
information concerning the Borrowers or a Subsidiary, as the case may be, (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 and provincial securities
laws.

 

10.08      Right
of Setoff.

 

If an Event of Default shall have occurred
and be continuing, each Lender and each of their respective Affiliates is
hereby authorized at any time and from time to time, 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 such Lender, or any such Affiliate to or for the credit or the account of
the Borrowers against any and all of the obligations of the Borrowers or such
Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrowers or such Loan Party may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, and their
respective Affiliates under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the L/C
Issuer or their respective Affiliates may have. 
Each Lender agrees to notify the Borrowers and the Administrative Agent
promptly after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application.

 

10.09      Interest
Rate Limitation.

 

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 (the “Maximum Rate”).  If the Administrative 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 Loans or, if it exceeds such
unpaid principal, refunded to the applicable Borrower.  In determining whether the interest
contracted for, charged, or received by the Administrative 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.

 

10.10      Counterparts;
Integration; Effectiveness.

 

This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the

 

73

 

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.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

10.11      Survival
of Representations and Warranties.

 

All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied.

 

10.12      Severability.

 

If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

10.13      Replacement
of Lenders.

 

If any Lender
requests compensation under Section 3.04, or if the applicable
Borrowers is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
if any Lender is a Defaulting Lender, then the Borrowers may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

(a)                                  the Borrowers shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);

 

(b)                                 such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the
extent of such outstanding

 

74

 

principal
and accrued interest and fees) or the Borrowers (in the case of all other
amounts);

 

(c)                                  in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made
pursuant to Section 3.01, such assignment will result in a
reduction in such compensation or payments thereafter; and

 

(d)                                 such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.

 

10.14      Governing
Law; Jurisdiction; Etc.

 

(a)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

(b)                                 SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF ONTARIO, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH ONTARIO COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT

 

75

 

OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (b) OF THIS SECTION. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

10.15      Waiver
of Jury Trial.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (a) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

10.16      USA
PATRIOT Act Notice.

 

Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify the Borrowers in
accordance with the Act.

 

10.17      Time
of the Essence.

 

Time is of the essence of the
Loan Documents.

 

76

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the date first above written.

 

	
   

  	
  LOUISIANA-PACIFIC LIMITED

  PARTNERSHIP, by its General Partner

  3047525 Nova Scotia Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUISIANA-PACIFIC CANADA LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUISIANA-PACIFIC CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Curtis M. Stevens

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  EVP Administration, CFO

  	
   

  
						

 

S-1

 

	
   

  	
  BANK OF AMERICA, N.A. acting
  through

  its Canada branch, as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Medina Sales De Andrade

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Medina Sales De Andrade

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
						

 

S-2

 

	
   

  	
  BANK OF AMERICA, N.A. acting
  through

  its Canada branch, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Medina Sales De Andrade

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Medina Sales De Andrade

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA, as a

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kurt R. Foellmer

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Kurt R. Foellmer

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Director, Corporate Banking

  	
   

  
						

 

S-3

 

[OTHER LENDERS]

 

S-4

 

SCHEDULE 2.01

 

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable

  Percentage

  	
   

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

  	
   

  	
  $

  	
  117,500,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of Nova Scotia

  	
   

  	
  $

  	
  117,500,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  235,000,000

  	
   

  	
  100.000000000

  	
  %

  

 

 

SCHEDULE 5.06

 

LITIGATION

 

 

SCHEDULE 5.09

 

ENVIRONMENTAL MATTERS

 

NIL

 

 

SCHEDULE 5.13

 

SUBSIDIARIES[,][AND]

OTHER EQUITY INVESTMENTS

[AND EQUITY INTERESTS IN THE BORROWER]

 

	
  Part (a).

  	
   

  	
  Subsidiaries.

  
	
   

  	
   

  	
   

  
	
  Part (b).

  	
   

  	
  Other Equity Investments.

  
	
   

  	
   

  	
   

  
	
  [Part (c).

  	
   

  	
  Owners of Equity Interests in
  the Borrowers.]

  

 

 

SCHEDULE 7.01

 

EXISTING LIENS

 

 

SCHEDULE 7.03

 

EXISTING INDEBTEDNESS

 

 

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

 

[BORROWER]:

 

 

 

 

Attention:

Telephone:

Telecopier:

Electronic
Mail:                @          

Website Address:  www.                                            

 

ADMINISTRATIVE AGENT:

 

Administrative Agent’s Office

 

(a) (for
advances/payments, billings, notices, etc.):

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

200 Front
Street West, Suite 2700

Toronto,
ON  M5V 3L2

Attention:  Ms. Clara McGibbon

Telephone:  416-349-5484

Telecopier:  416-349-4282

Electronic
Mail:  clara.mcgibbon@bankofamerica.com

 

(b) (for
all other notices):

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

200 Front
Street West, Suite 2700

Toronto,
ON  M5V 3L2

Attention:  Ms. Medina Sales de Andrade

Telephone:  416-349-5433

Telecopier:  416-349-4283

Electronic Mail:  medina.sales_de_andrade@bankofamerica.com

 

With a Copy to:

Bank of
America, N.A.

Anthea Del
Bianco, VP

1455 Market
Street, 5th Floor

Mail
Code:  CA5-701-05-19

San Francisco,
CA  94103

Telephone:  415-436-2776

Telecopier:  415-503-5101

Electronic Mail:  anthea.del_bianco@bankofamerica.com

 

 

SCHEDULE 10.06

 

PROCESSING AND RECORDATION FEES

 

The Administrative Agent will charge a
processing and recordation fee (an “Assignment Fee”) in the amount of
$2,500 for each assignment; provided, however, that in the event
of two or more concurrent assignments to members of the same Assignee Group
(which may be effected by a suballocation of an assigned amount among members
of such Assignee Group) or two or more concurrent assignments by members of the
same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee
and members of its Assignee Group), the Assignment Fee will be $2,500 plus the
amount set forth below:

 

	
  Transaction

  	
   

  	
  Assignment Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First four concurrent assignments or
  suballocations to members of an Assignee Group (or from members of an
  Assignee Group, as applicable)

  	
   

  	
  -0-

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each additional concurrent assignment or
  suballocation to a member of such Assignee Group (or from a member of such
  Assignee Group, as applicable)

  	
   

  	
  $

  	
  500

  	
   

  
					

 

 

EXHIBIT A-2

 

FORM OF CONVERSION/EXTENSION
NOTICE

 

Date:                        ,
          

 

To:          Bank of America, N.A., acting through its Canada branch as
Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit
Agreement, dated as of December 21, 2005 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among
Louisiana-Pacific Limited Partnership and Louisiana-Pacific Canada Ltd. (the “Borrowers”),
the Lenders from time to time party thereto, and Bank of America, N.A., acting
through its Canada branch as Administrative Agent.

 

The undersigned hereby requests a conversion
or continuation of Loans

 

1.             On                                                                                 
(a Business Day).

 

2.             In the amount of
$                                                              .

 

3.             Comprised of
                                                                     .

[Type of Loan requested]

 

4.             For Bankers’ Acceptance Advances: 
with an Interest Period of
         months.

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-111

 

EXHIBIT A-1

 

FORM OF LOAN NOTICE

 

Date:                        ,
          

 

To:          Bank of America, N.A., acting through its Canada branch as
Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit
Agreement, dated as of December 21, 2005 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among
Louisiana-Pacific Limited Partnership and Louisiana-Pacific Canada Ltd. (the “Borrowers”),
Louisiana-Pacific Corporation, as Parent Guarantor the Lenders from time to
time party thereto, and Bank of America, N.A., acting through its Canada branch
as Administrative Agent.

 

The undersigned hereby requests the Term Loan
be advanced

 

(a)           On
                                                                                
(a Business Day).

 

5.             In the amount of
$                                                              .

 

6.             Comprised of
                                                                     .

[Type of Loan requested]

 

7.             For Bankers’ Acceptance Advances: 
with an Interest Period of
         months.

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-111

 

EXHIBIT B

 

FORM OF NOTE

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”)
hereby promises to pay to                                           
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of the Term
Loan from time to time made by the Lender to the Borrowers under that certain
Credit Agreement, dated as of December 21, 2005 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as
therein defined), among the Borrowers, the Lenders from time to time party
thereto, and Bank of America, N.A., acting through its Canada branch as
Administrative Agent.

 

The Borrowers promises to pay interest on the
unpaid principal amount of the Term Loan from December 21, 2005 until
such principal amount is paid in full, at such interest rates and at such times
as provided in the Agreement.  All
payments of principal and interest shall be made to the Administrative Agent
for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office.  If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.

 

This Note is one of the Notes referred to in
the Agreement, is entitled to the benefits thereof and may be prepaid in whole
or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of
the Guarantee.  Upon the occurrence and
continuation of one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable all as provided in the
Agreement.  Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. The Lender may also attach schedules
to this Note and endorse thereon the date, amount and maturity of its Loans and
payments with respect thereto.

 

The Borrowers, for itself, its successors and
assigns, hereby waives diligence, presentment, protest and demand and notice of
protest, demand, dishonor and non-payment of this Note.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO.

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

C-122

 

LOANS AND PAYMENTS WITH RESPECT
THERETO

 

	
  Date

  	
   

  	
  Type of

  Loan

  Made

  	
   

  	
  Amount of

  Loan

  Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal

  or Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

C-222

 

EXHIBIT C

 

FORM OF COMPLIANCE
CERTIFICATE

 

Financial Statement
Date:                      ,

 

To:          Bank of America, N.A., acting through its Canada Branch as
Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit
Agreement, dated as of December 21, 2005 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among
Louisiana-Pacific Limited Partnership and Louisiana-Pacific Canada Ltd. (the “Borrowers”),
the Lenders from time to time party thereto, and Bank of America, N.A., acting
through its Canada branch as Administrative Agent.

 

The undersigned Responsible Officer hereby
certifies as of the date hereof that he/she is the                                                      
of the Borrowers, and that, as such, he/she is authorized to execute and
deliver this Certificate to the Administrative Agent on the behalf of the
Borrowers, and that:

 

[Use following paragraph 1 for
fiscal year-end financial statements]

 

1.             Attached hereto as Schedule 1 are the year-end audited
financial statements required by Section 6.01(a) of the Agreement for
the fiscal year of the Borrowers ended as of the above date, together with the
report and opinion of an independent certified public accountant required by
such section.

 

[Use following paragraph 1 for
fiscal quarter-end financial statements]

 

1.             Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the
fiscal quarter of the Borrowers ended as of the above date.  Such financial statements fairly present the
financial condition, results of operations and cash flows of the Borrowers and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.             The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrowers during the accounting period covered by the attached financial
statements.

 

3.             A review of the activities of the Borrowers during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrowers performed and
observed all its Obligations under the Loan Documents, and

 

[select one:]

 

D-111

 

[to the best knowledge of the
undersigned during such fiscal period, the Borrowers performed and observed
each covenant and condition of the Loan Documents applicable to it, and no
Default has occurred and is continuing.]

 

—or—

 

[the following covenants or
conditions have not been performed or observed and the following is a list of
each such Default and its nature and status:]

 

4.             The representations and warranties of the Borrowers contained in Article V
of the Agreement, and any representations and warranties of [the Borrowers][any Loan Party] that are
contained in any document furnished at any time under or in connection with the
Loan Documents, are true and correct on and as of the date hereof, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Compliance Certificate, the
representations and warranties contained in subsections (a) and (b) of
Section 5.05 of the Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01
of the Agreement, including the statements in connection with which this
Compliance Certificate is delivered.

 

5.             The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this
Certificate.

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                                      ,.                                .

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

D-211

 

For the
Quarter/Year ended
                                                         
(“Statement Date”)

 

SCHEDULE 2

to the
Compliance Certificate

($ in 000’s)

 

	
  I.

  	
   

  	
  Section 7.11(a) –
  Consolidated Net Worth.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Actual Consolidated Tangible Net Worth at
  Statement Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  Shareholders’ Equity:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  Intangible Assets:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  3.

  	
  Consolidated Tangible Net Worth (Line I.A1 less
  Line I.A.2):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  [50%] of Consolidated Net Income for each full fiscal quarter ending
  after
                                    
  (no reduction for losses):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  50% of increases in Shareholders’ Equity
  after date of Agreement from issuance and sale of Equity Interests (including
  from conversion of debt securities):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
  Minimum required Consolidated Tangible Net
  Worth (Lines I.B + I.C plus $                            ):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
  Excess (deficient) for covenant compliance
  (Line I.A – I.D):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Section 7.11 (b) – Consolidated
  Interest Coverage Ratio.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Consolidated EBITDA for four consecutive
  fiscal quarters ending on above date (“Subject Period”):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  Consolidated Net Income for Subject Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  Consolidated Interest Charges for Subject
  Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  3.

  	
  Provision for income taxes for Subject
  Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  4.

  	
  Depreciation expenses for Subject Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  5.

  	
  Amortization expenses for Subject Period:

  	
   

  	
  $

  	
   

  

 

D-311

 

	
   

  	
   

  	
   

  	
  6.

  	
  Non-recurring non-cash reductions of
  Consolidated Net Income for Subject Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  7.

  	
  Income tax credits for Subject Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  8.

  	
  Non-cash additions to Consolidated Net
  Income for Subject Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  9.

  	
  Consolidated EBITDA (Lines II.A.1 + 2 + 3 +
  4 + 5 + 6 — 7 — 8):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Consolidated Interest Charges for Subject
  Period:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Consolidated Interest Coverage Ratio (Line
  II.A.9 ) Line II.B):

  	
   

  	
  to 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Minimum required:

  	
   

  	
   

  	
   

  

 

	
  Four Fiscal Quarters
  Ending

  	
   

  	
  Minimum

  Consolidated

  Interest Coverage

  Ratio

  	
   

  
	
  Closing Date through
                ,

                ,
           through
            ,

                ,
           and each fiscal quarter
  thereafter

  	
   

  	
   

  	
   

  

 

	
  III.

  	
   

  	
  Section 7.11 (c) – Consolidated
  Leverage Ratio.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Consolidated Funded Indebtedness at
  Statement Date:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Consolidated EBITDA for Subject Period
  (Line II.A.9 above):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Consolidated Leverage Ratio (Line III.A  ̧
  Line III.B):

  	
   

  	
  $        to 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Maximum permitted:

  	
   

  	
   

  	
   

  

 

D-411

 

SCHEDULE 3

to the
Compliance Certificate

($ in 000’s)

 

Consolidated
EBITDA

(in accordance
with the definition of Consolidated EBITDA

as set forth in the Agreement)

 

	
  Consolidated

  EBITDA

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Quarter

  Ended

  	
   

  	
  Twelve

  Months

  Ended

  	
   

  
	
  Consolidated
  Net Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +

  	
  Consolidated
  Interest Charges

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +

  	
  income taxes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +

  	
  depreciation
  expense

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +

  	
  amortization
  expense

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +

  	
  non-recurring
  non-cash expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  -

  	
  income tax
  credits

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  -

  	
  non-cash
  income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  =

  	
  Consolidated
  EBITDA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment
and Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of
Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor
hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated
below (i) all of the Assignor’s rights and obligations as a Lender under
the Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
below of all of such outstanding rights and obligations of the Assignor under
the respective facilities identified below and (ii) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered
pursuant thereto or the loan transactions governed thereby or in any way based
on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

 

1.             Assignor:

 

2.             Assignee:                                                       [and
is an Affiliate/Approved Fund of [identify Lender]]

 

3.             Borrowers(s):

 

4.             Administrative Agent: Bank of America,
N.A., acting through its Canada branch as the administrative agent under the
Credit Agreement

 

5.             Credit Agreement:  Credit Agreement, dated as of December 21, 2005,
among Louisiana-Pacific Limited Partnership, Louisiana-Pacific Canada Ltd.,
Louisiana-Pacific Corporation, the Lenders from time to time party thereto, and
Bank of America, N.A., as Administrative Agent, L/C Issuer, and Swing Line
Lender

 

E-144

 

6.             Assigned Interest:

 

	
  Facility

  Assigned

  	
   

  	
  Aggregate Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loan

  Assigned*

  	
   

  	
  Percentage

  Assigned of Commitment/Loans

  	
   

  	
  CUSIP Number

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
   

  

 

7.             [Trade Date:                                              ]

 

Effective
Date:                              ,
20   [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE
DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and
Assumption are hereby agreed to:

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF
  ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF
  ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

[Consented to and] Accepted:

 

BANK OF
AMERICA, N.A., acting through its Canada branch as

Administrative Agent

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  
	
  [Consented to:]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

E-244

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1           Assignor.  The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrowers, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrowers, any of
its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

 

1.2           Assignee.  The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it meets all requirements of an Eligible
Assignee under the Credit Agreement (subject to receipt of such consents as may
be required under the Credit Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as
a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section      thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

E-344

 

2.             Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3.             General Provisions.  This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This
Assignment and Assumption may be executed in any number of counterparts, which
together shall constitute one instrument. 
Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the Province of
Ontario.

 

E-444

 

EXHIBIT F

 

FORM OF GUARANTEE

 

F-111

 

EXHIBIT G

 

OPINION MATTERS

 

The matters contained in the following
Sections of the Credit Agreement should be covered by the legal opinion:

 

•      Section 5.01(a), (b) and
(c)

 

•      Section 5.02

 

•      Section 5.03

 

•      Section 5.04

 

•      Section 5.06

 

•      Section 5.14(b)

 

[Add other matters as appropriate
to the transaction]

 

111Exhibit 10.1

 

STOCK PURCHASE
AGREEMENT

 

This STOCK PURCHASE AGREEMENT, dated as of December 21, 2005 (the “Agreement”),
by and between COMPUCREDIT CORPORATION, a Georgia corporation (“Seller”)
and ML IBK POSITIONS, INC., a
Delaware corporation (“Purchaser”). 
The Seller and the Purchaser are sometimes hereinafter referred to
collectively as the “Parties” and individually as a “Party.”

 

BACKGROUND:

 

A.                                   Seller
is the record owner of 1,000 shares of the Class A voting common stock and
250 shares of non-voting Class B common stock, $0.01 par value per share,
of Liberty Acquisition, Inc., a Georgia corporation (the “Company”).

 

B.                                     Seller
desires to sell 250 shares of Class B non-voting common stock (the “Shares”)
of the Company held by Seller, and Purchaser desires to purchase the Shares
from Seller, all in accordance with the terms and conditions of this Agreement.

 

C.                                     Contemporaneously
with the execution of this Agreement, the Parties hereto have entered into a
Shareholders Agreement by and among Purchaser, Seller and the Company.

 

NOW,
THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual promises,
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:

 

1.                                       Purchase
and Sale of Shares.  Subject to the
terms and conditions contained herein, Seller hereby sells, conveys and
delivers to Purchaser, and Purchaser hereby purchases from Seller, all of
Seller’s right, title and interest in and to the Shares.

 

2.                                       Purchase
Price.  

 

(a)                                  The
total amount to be paid by Purchaser for the Shares shall be (i) Two
Dollars Fifty Cents ($2.50) (the “Cash Amount”), and (ii) in
connection with the proposed acquisition by the Company of all of the outstanding
capital stock of CardWorks, Inc., (the “CardWorks Acquisition”),
pursuant to the terms of that certain Stock Purchase Agreement, dated as of September 25,
2005, by and between CardWorks, L.P., and the Company (the “CardWorks
Agreement”), (A) 20% of the Purchase Price (as defined in the
CardWorks Agreement, or such other amount as agreed to be paid by the Company
and CardWorks, L.P.) (net of the Cash Amount, the “Purchase Price Payment”)
and (B) 20% of all transaction costs reasonably incurred by Seller and the
Company in connection with the CardWorks Acquisition (which transaction costs
shall be an aggregate of the transaction costs incurred by Seller and
Purchaser) (the “Transaction Costs Payment”), which amounts shall be
payable in accordance with Section 2(b) below.

 

1

 

(b)                                 The
Cash Amount shall be paid in cash or by check to Seller upon the execution of
this Agreement.  The Purchase Price
Payment shall be paid, by wire transfer at the closing of the CardWorks
Acquisition, to the Company as a capital contribution only if (i) Seller
has contributed 80% of the Purchase Price in connection with the consummation
of the CardWorks Acquisition; and (ii) Purchaser shall not be deemed to “control”
the Company under the Bank Holding Company Act, the Federal Deposit Insurance
Act or the Utah Code.  The Transaction
Costs Payment shall be paid in cash or by check or wire transfer to Seller
within five business days of the delivery by Seller to Purchaser of an itemized
accounting of all transaction costs associated with the CardWorks Acquisition.

 

3.                                       Transfer
of Shares.  Contemporaneously with
the execution of this Agreement, Seller shall deliver to the Company the stock
certificate of the Company representing the Shares endorsed in blank or with an
accompanying stock transfer power, and instruct the Company to issue a
certificate in the name of the Purchaser representing the Shares.

 

4.                                       Representations
and Warranties of Seller.  Seller
hereby represents and warrants to the Purchaser that as of the date of this
Agreement:

 

(a)                                  Seller
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Georgia.  The
authorized capital stock of the Company consists of 100,000 shares of Class A voting common stock, $0.01 par
value per share, of which 1,000 shares are issued and outstanding, and 10,000
shares of Class B non-voting common stock, $0.01 par value per share, of
which 250 shares are issued and outstanding.

 

(b)                                 Seller
has the requisite power and authority to enter into this Agreement and each
other certificate, agreement or instrument to be executed and delivered by it
in connection with the transactions contemplated by this Agreement, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  The
execution and delivery of this Agreement and each other certificate, agreement
or instrument to be executed and delivered by it in connection with the
transactions contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of Seller.

 

(c)                                  This
Agreement, and each other certificate, agreement or instrument to be executed and
delivered by Seller in connection with the transactions contemplated by this
Agreement, including the CardWorks Agreement, has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable in accordance with its terms.

 

(d)                                 The
execution, delivery and performance by Seller of this Agreement, and each other
certificate, agreement or instrument to be executed and delivered by it in
connection with the transactions contemplated by this Agreement, the
consummation of the transactions contemplated hereby and thereby, and the
fulfillment of and compliance with the terms and conditions hereof and thereof
do not and will not, with or without the passing of time or the giving of
notice, or both:

 

2

 

(i)                                     violate
or conflict with any provision of the Articles of Incorporation, Bylaws or
other organizational documents of Seller;

 

(ii)                                  breach
or otherwise constitute or give rise to a default under, result in the loss of
any benefit under or permit the acceleration of any obligation under any
contract, commitment or other obligation to or by which Seller is a party or is
bound;

 

(iii)                               other
than with respect to any determination that Purchaser is deemed to “control”
the Company under the Bank Holding Company Act, the Federal Deposit Insurance
Act or the Utah Code, violate any statute, ordinance, law, rule, regulation,
judgment, order or decree of any court or other governmental or regulatory
authority to which Seller is subject; or

 

(iv)                              other
than with respect to any determination that Purchaser is deemed to “control”
the Company under the Bank Holding Company Act, the Federal Deposit Insurance
Act or the Utah Code, require Seller to make or obtain any consent, approval or
authorization of, notice to, or filing, recording, registration or
qualification with any court or governmental or regulatory authority.

 

(e)                                  Seller
has good and valid title to and beneficial ownership of the Shares and the
Shares are free and clear of all liens, validly issued, fully paid and
non-assessable.  Other than the 1,000
shares of the Company’s Class A voting common stock and the Shares, Seller
owns no other shares in the Company or any other equity interests of the
Company, or any option, warrant, right, call commitment right of any kind to
have any such equity interest issued.

 

5.                                       Representations
and Warranties of Purchaser. 
Purchaser hereby represents and warrants to the Seller that as of the
date of this Agreement:

 

(a)                                  Purchaser
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.

 

(b)                                 Purchaser
has the requisite power and authority to enter into this Agreement and each
other certificate, agreement or instrument to be executed and delivered by it
in connection with the transactions contemplated by this Agreement, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  The execution
and delivery of this Agreement and each other certificate, agreement or
instrument to be executed and delivered by it in connection with the
transactions contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of Purchaser.

 

(c)                                  This
Agreement, and each other certificate, agreement or instrument to be executed
and delivered by Purchaser in connection with the transactions contemplated by
this Agreement, has been duly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser, enforceable
in accordance with its terms.

 

3

 

(d)                                 The
execution, delivery and performance by Purchaser of this Agreement, and each
other certificate, agreement or instrument to be executed and delivered by it
in connection with the transactions contemplated by this Agreement, the
consummation of the transactions contemplated hereby and thereby, and the
fulfillment of and compliance with the terms and conditions hereof and thereof
do not and will not, with or without the passing of time or the giving of
notice, or both:

 

(i)                                     violate
or conflict with any provision of the Articles
of Incorporation, Bylaws or other organizational documents of Purchaser;

 

(ii)                                  breach
or otherwise constitute or give rise to a default under, result in the loss of
any benefit under or permit the acceleration of any obligation under any
contract, commitment or other obligation to or by which Purchaser is a party or
is bound;

 

(iii)                               other
than with respect to any determination that Purchaser is deemed to “control”
the Company under the Bank Holding Company Act, the Federal Deposit Insurance
Act or the Utah Code, violate any statute, ordinance, law, rule, regulation,
judgment, order or decree of any court or other governmental or regulatory
authority to which Purchaser is subject; or

 

(iv)                              other
than with respect to any determination that Purchaser is deemed to “control”
the Company under the Bank Holding Company Act, the Federal Deposit Insurance
Act or the Utah Code, require Purchaser to make or obtain any consent, approval
or authorization of, notice to, or filing, recording, registration or
qualification with any court or governmental or regulatory authority.

 

(e)                                  Purchaser understands
that the Shares have not been registered under the Securities Act of 1933, as
amended, or under any state securities laws and are being offered and sold in
reliance upon federal and state exemptions for transactions not involving any
public offering.  Purchaser is acquiring
the Shares for its own account for investment purposes and not with a view to
the distribution or resale thereof.  Purchaser
is a sophisticated investor with knowledge and experience in business and
financial matters.  Purchaser has
received certain information concerning the Company and has had the opportunity
to obtain additional information as desired in order to evaluate the merits and
risks inherent in holding the Shares.

 

6.                                       Post-Closing
Agreements.

 

(a)                                  The Parties agree to
negotiate in good faith and execute and deliver a mutually agreeable Tax
Sharing Agreement by and between Purchaser and Seller (the “Tax Sharing
Agreement”) as soon as practicable following the date hereof.

 

(b)                                 Each Party agrees to
use its reasonable efforts to take all actions and do all things necessary,
proper or advisable under applicable laws, as promptly as practicable so as to
enable the consummation of the transactions contemplated hereby and shall
cooperate fully with the other Party hereto to that end, including, without
limitation, the preparation and filing of 

 

4

 

applications with all regulatory authorities
having jurisdiction over the CardWorks Acquisition; provided, however, that
Purchaser shall have no obligation to make any filing with any regulatory
authority with respect to its “control,” if any, of the Company under the Bank
Holding Company Act, the Federal Deposit Insurance Act or the Utah Code.

 

(c)                                  In the event the
CardWorks Agreement is terminated prior to the closing of the CardWorks
Acquisition then (i) Purchaser’s payment obligations pursuant to Section 2(a)(ii) shall
be terminated and (ii) Seller shall purchase from Purchaser and Purchaser
shall sell to Seller the Shares for Two Dollars Fifty Cents ($2.50), payable in
cash upon the delivery of the Shares.

 

(d)                                 In the event Purchaser
does not make the Purchase Price Payment pursuant to Section 2(b)(ii),
Seller shall purchase from Purchaser and Purchaser shall sell to Seller the
Shares for Two Dollars Fifty Cents ($2.50), payable in cash upon the delivery
of the Shares.

 

7.                                       Survival
of Representations, Warranties and Covenants.  The representations, warranties and covenants
of the Parties set forth in this Agreement shall survive the transfer of the
Shares contemplated by Section 3 hereof.

 

8.                                       Miscellaneous.  This Agreement shall not be modified or
amended except through a writing signed by both of the Parties.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia and may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.  Neither Party shall, without the prior
written consent of the other Party, transfer or assign this Agreement or any
duty or obligation set forth herein, and any attempted transfer or assignment
not in accordance herewith shall be null and void and of no force or effect.  This Agreement represents the full and
complete understanding of the Parties with respect to the subject matter hereof
and shall be binding on the Parties and their respective heirs, successors and
assigns.  Upon the reasonable request of
the other Party, each Party agrees to take any and all actions necessary or
appropriate to give effect to the terms of this Agreement.

 

Each Party
hereto, in addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, will be entitled to seek
specific performance of its rights under this Agreement.  Each Party hereto hereby agrees to reimburse
the other Party for all reasonable costs and expenses incurred by it in any
proceeding commenced in connection with enforcing its rights hereunder, provided
the Party seeking reimbursement of expenses in such proceeding is successful in
establishing its entitlement to such relief under the Agreement.

 

Except in
connection with regulatory applications and approvals required in connection
with the CardWorks Agreement or as required by applicable law or the rules of
any stock exchange and other similar regulatory bodies, neither Party shall
issue any press release or other public statement regarding the transactions
contemplated by this Agreement without the prior consent of the other Party,
such consent not to be unreasonably withheld or delayed.

 

[signature page to follow]

 

5

 

IN WITNESS
WHEREOF, the Parties have caused this Agreement to be executed as of the date
and year first above written.

 

	
   

  	
  “Seller”

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPUCREDIT
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William R.
  McCamey

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “Purchaser”

  
	
   

  	
   

  	
   

  
	
   

  	
  ML IBK POSITIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Andrew J.
  Coon

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

6

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