Document:

exv10w1

 

Exhibit 10.1

EXECUTION COPY

$375,000,000

CREDIT AGREEMENT

among

STANDARD AERO HOLDINGS, INC.

as Borrower,

The Several Lenders from Time to Time Parties Hereto,

LEHMAN COMMERCIAL PAPER INC. and CREDIT SUISSE FIRST BOSTON,

as Co-Syndication Agents

and 

JPMORGAN CHASE BANK,

as Administrative Agent 

Dated as of August 24, 2004

J.P. MORGAN SECURITIES INC. and LEHMAN BROTHERS INC., as Joint Lead Arrangers and Joint

Bookrunners

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	SECTION 1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Other Definitional Provisions
	 	 	22	 
	 
	 	 	 	 
	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
	 	 	23	 
	 
	 	 	 	 
	2.1 Term Commitments
	 	 	23	 
	2.2 Procedure for Term Loan Borrowing
	 	 	23	 
	2.3 Repayment of Term Loans
	 	 	23	 
	2.4 Revolving Commitments
	 	 	24	 
	2.5 Procedure for Revolving Loan Borrowing
	 	 	24	 
	2.6 Swingline Commitment
	 	 	25	 
	2.7
Procedure for Swingline Borrowing; Refunding of Swingline Loans
	 	 	25	 
	2.8 Repayment of Loans
	 	 	26	 
	2.9 Commitment Fees, etc
	 	 	27	 
	2.10 Termination or Reduction of Revolving Commitments
	 	 	27	 
	2.11 Optional Prepayments
	 	 	27	 
	2.12 Mandatory Prepayments
	 	 	27	 
	2.13 Conversion and Continuation Options
	 	 	28	 
	2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches
	 	 	28	 
	2.15 Interest Rates and Payment Dates
	 	 	29	 
	2.16 Computation of Interest and Fees
	 	 	29	 
	2.17 Inability to Determine Interest Rate
	 	 	29	 
	2.18 Pro Rata Treatment and Payments
	 	 	30	 
	2.19 Requirements of Law
	 	 	31	 
	2.20 Taxes
	 	 	32	 
	2.21 Indemnity
	 	 	34	 
	2.22 Illegality
	 	 	34	 
	2.23 Change of Lending Office
	 	 	34	 
	2.24 Replacement of Lenders
	 	 	34	 
	 
	 	 	 	 
	SECTION 3. LETTERS OF CREDIT
	 	 	35	 
	 
	 	 	 	 
	3.1 L/C Commitment
	 	 	35	 
	3.2 Procedure for Issuance of Letter of Credit
	 	 	35	 
	3.3 Fees and Other Charges
	 	 	36	 
	3.4 L/C Participations
	 	 	36	 
	3.5 Reimbursement Obligation of the Borrower
	 	 	37	 
	3.6 Obligations Absolute
	 	 	37	 
	3.7 Letter of Credit Payments
	 	 	37	 
	3.8 Applications
	 	 	38	 
	 
	 	 	 	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES
	 	 	38	 
	 
	 	 	 	 
	4.1 Financial Condition
	 	 	38	 
	4.2 No Change
	 	 	38	 

i

 

	 	 	 	 	 
	 	 	Page	 
	4.3 Existence; Compliance with Law
	 	 	38	 
	4.4 Corporate Power; Authorization; Enforceable Obligations
	 	 	38	 
	4.5 No Legal Bar
	 	 	39	 
	4.6 No Material Litigation
	 	 	39	 
	4.7 No Default
	 	 	39	 
	4.8 Ownership of Property; Liens
	 	 	39	 
	4.9 Intellectual Property
	 	 	39	 
	4.10 Taxes
	 	 	40	 
	4.11 Federal Regulations
	 	 	40	 
	4.12 Labor Matters
	 	 	40	 
	4.13 ERISA
	 	 	40	 
	4.14 Canadian Benefit and Pension Plans
	 	 	41	 
	4.15 Investment Company Act
	 	 	41	 
	4.16 Subsidiaries
	 	 	41	 
	4.17 Environmental Matters
	 	 	42	 
	4.18 Accuracy of Information, etc
	 	 	42	 
	4.19 Security Documents
	 	 	43	 
	4.20 Solvency
	 	 	43	 
	4.21 Regulation H
	 	 	43	 
	4.22 Senior Indebtedness
	 	 	43	 
	 
	 	 	 	 
	SECTION 5. CONDITIONS PRECEDENT
	 	 	44	 
	 
	 	 	 	 
	5.1 Conditions to Initial Extension of Credit
	 	 	44	 
	5.2 Conditions to Each Extension of Credit
	 	 	46	 
	 
	 	 	 	 
	SECTION 6. AFFIRMATIVE COVENANTS
	 	 	47	 
	 
	 	 	 	 
	6.1 Financial Statements
	 	 	47	 
	6.2 Certificates; Other Information
	 	 	47	 
	6.3 Payment of Obligations
	 	 	48	 
	6.4 Conduct
of Business and Maintenance of Existence, etc; Compliance
	 	 	48	 
	6.5 Maintenance of Property; Insurance
	 	 	49	 
	6.6 Inspection of Property; Books and Records; Discussions
	 	 	49	 
	6.7 Notices
	 	 	49	 
	6.8 Environmental Laws
	 	 	50	 
	6.9 Interest Rate Protection
	 	 	50	 
	6.10 Additional Collateral, etc
	 	 	50	 
	6.11 Further Assurances
	 	 	52	 
	6.12 Use of Proceeds
	 	 	53	 
	6.13 Post
Closing Real Property Matters. Within 60 days after the Closing
Date:
	 	 	53	 
	 
	 	 	 	 
	SECTION 7. NEGATIVE COVENANTS
	 	 	53	 
	 
	 	 	 	 
	7.1 Financial Condition Covenants
	 	 	54	 
	7.2 Indebtedness
	 	 	54	 
	7.3 Liens
	 	 	56	 
	7.4 Fundamental Changes
	 	 	57	 
	7.5 Disposition of Property
	 	 	58	 
	7.6 Restricted Payments
	 	 	59	 
	7.7 Capital Expenditures
	 	 	60	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	.	 
	7.8 Investments
	 	 	60	 
	7.9 Optional Payments and Modifications of Certain Debt Instruments
	 	 	61	 
	7.10 Transactions with Affiliates
	 	 	62	 
	7.11 Sales and Leasebacks
	 	 	62	 
	7.12 Changes in Fiscal Periods
	 	 	62	 
	7.13 Negative Pledge Clauses
	 	 	62	 
	7.14 Clauses Restricting Subsidiary Distributions
	 	 	63	 
	7.15 Lines of Business
	 	 	63	 
	7.16 Limitation on Hedge Agreements
	 	 	63	 
	7.17 Changes in Jurisdictions of Organization; Name
	 	 	63	 
	 
	 	 	 	 
	SECTION 8. EVENTS OF DEFAULT
	 	 	63	 
	 
	 	 	 	 
	SECTION 9. THE AGENTS
	 	 	67	 
	 
	 	 	 	 
	9.1 Appointment
	 	 	67	 
	9.2 Delegation of Duties
	 	 	67	 
	9.3 Exculpatory Provisions
	 	 	67	 
	9.4 Reliance by Administrative Agent
	 	 	67	 
	9.5 Notice of Default
	 	 	68	 
	9.6 Non-Reliance on Agents and Other Lenders
	 	 	68	 
	9.7 Indemnification
	 	 	68	 
	9.8 Agent in Its Individual Capacity
	 	 	69	 
	9.9 Successor Administrative Agent
	 	 	69	 
	9.10 Authorization to Release Liens and Guarantees
	 	 	69	 
	9.11 Quebec
	 	 	69	 
	9.12 Co-Syndication Agents
	 	 	70	 
	 
	 	 	 	 
	SECTION 10. MISCELLANEOUS
	 	 	71	 
	 
	 	 	 	 
	10.1 Amendments and Waivers
	 	 	71	 
	10.2 Notices
	 	 	72	 
	10.3 No Waiver; Cumulative Remedies
	 	 	73	 
	10.4 Survival of Representations and Warranties
	 	 	73	 
	10.5 Payment of Expenses; Indemnification
	 	 	73	 
	10.6 Successors and Assigns; Participations and Assignments
	 	 	74	 
	10.7 Adjustments; Set-off
	 	 	76	 
	10.8 Counterparts
	 	 	77	 
	10.9 Severability
	 	 	77	 
	10.10 Integration
	 	 	77	 
	10.11
GOVERNING LAW
	 	 	77	 
	10.12 Submission To Jurisdiction; Waivers
	 	 	77	 
	10.13 Judgment Currency
	 	 	78	 
	10.14 Acknowledgments
	 	 	78	 
	10.15 Confidentiality
	 	 	79	 
	10.16 Release of Collateral and Guarantee Obligations
	 	 	79	 
	10.17 Accounting Changes
	 	 	80	 
	10.18 WAIVERS OF JURY TRIAL
	 	 	80	 
	10.19 USA PATRIOT ACT
	 	 	80	 
	10.20 Parallel Debt
	 	 	80	 

iii

 

	 	 	 
	SCHEDULES:
	 
	 	 
	1.1A
	 	Commitments
	1.1B
	 	Real Property
	1.1C
	 	Non-Subsidiary Guarantors
	4.4
	 	Consents, Authorizations, Filings and Notices
	4.15
	 	Subsidiaries
	4.19(a)
	 	UCC Filing Jurisdictions
	4.19(b)
	 	Mortgage Filing Jurisdictions
	7.2(d)
	 	Existing Indebtedness
	7.3(f)
	 	Existing Liens
	7.8
	 	Existing Investments
	 
	 	 
	EXHIBITS:
	 
	 	 
	A-l
	 	Form of Guarantee and Collateral Agreement
	A-2
	 	Form of CDN Guarantee and Collateral Agreement
	B
	 	Form of Compliance Certificate
	C
	 	Form of Closing Certificate
	D
	 	Form of Mortgage
	E
	 	Form of Assignment and Assumption
	F
	 	Form of Legal Opinion of Latham & Watkins LLP
	G
	 	Form of Exemption Certificate
	H
	 	Form of Solvency Certificate

iv

 

     CREDIT
AGREEMENT (this “Agreement”), dated as of August 24, 2004, among STANDARD AERO
HOLDINGS, INC., a Delaware corporation (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the “Lenders”). Lehman
Commercial Paper Inc. and Credit Suisse First Boston, as co-syndication agents (in such capacity,
the “Co-Syndication Agents”), and JPMorgan Chase Bank, as Administrative Agent.

     The parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

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

     “ABR”:
for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean
the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its
prime rate in effect at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by JPMorgan Chase Bank in connection with extensions of
credit to debtors). Any change in the ABR due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.

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

     “Accounting
Changes”: as defined in Section 10.17.

     “Acquisition
Agreement”: that certain Agreement Relating to the Sale and Purchase of
the Entire Issued and Outstanding Capital Stock of Dunlop Standard Aerospace Group (U.S.), Inc.,
Standard Aero Limited, Standard Aero (Asia) PTE Limited, Standard Aero (Australia) PTY Limited and
Dunlop Standard Aerospace (Nederland) BV, dated as of July 5, 2004, by and among the Borrower, the
Vendors (as listed therein), and Meggitt Acquisition Limited.

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

     “Administrative
Agent”: JPMorgan Chase Bank, as the administrative agent for the Lenders under
this Agreement and the other Loan Documents, together with any of its successors and, for purposes
of Section 9, shall include affiliates of JPMorgan Chase Bank as the arranger of the Commitments.

     “Affiliate”:
as to any Person, any other Person that, directly or indirectly, is in control
of, is controlled by, or is under common control with, such Person. For purposes of this
definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 20%
or more of the securities having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.

     “Agents”:
the collective reference to the Co-Syndication Agents and the Administrative Agent.

 

 

2

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

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

     “Agreed
Purposes”: as defined in Section 10.15.

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

     “Annual
Operating Budget”: as defined in Section 6.2(c).

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

	 	 	 	 	 	 	 	 	 
	 	 	ABR Loans	 	 	Eurodollar Loans	 
	Revolving Loans and
Swingline Loans
	 	 	1.50	%	 	 	2.50	%
	Term Loans
	 	 	1.50	%	 	 	2.50	%

     provided, that on and after the first Adjustment Date occurring after the completion
of the fiscal quarter of the Borrower ending March 31, 2005, the Applicable Margins with respect to
Term Loans, Revolving Loans and Swingline Loans will be determined pursuant to the Pricing Grid.

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

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

     “Asset
Sale”: any Disposition of Property or series of related Dispositions of Property
(excluding (i) any such Disposition permitted by clause (a), (b), (c), (d), (g), (h), (i), (j) or
(k) of Section 7.5 and (ii) any such Disposition which is a Recovery Event) which yields Net Cash
Proceeds to the Borrower or any of its Subsidiaries (valued at the initial principal amount thereof
in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair
market value in the case of other non-cash proceeds) in excess of $5,000,000.

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

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

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

 

 

3

Available Revolving Commitments pursuant to Section 2.9(a), the aggregate principal
amount of Swingline Loans then outstanding shall be deemed to be zero.

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

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

     “Borrower”: as defined in the preamble hereto.

     “Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower
requests the relevant Lenders to make Loans hereunder.

     “Business”: the provision of aircraft repair and/or aircraft engine repair, overhaul,
maintenance, modification and parts and fueling services, maintenance, repair and overhaul
facility redesign services, and the repair and overhaul of engines in industrial services.

     “Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close,
provided, that with respect to
notices and determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the
interbank eurodollar market.

     “Canadian
Benefit Plans”: all material employee benefit plans maintained or
contributed to by the Borrower or any of its Subsidiaries that are not Canadian Pension Plans
including, without limitation, all profit sharing, savings, post-retirement, supplemental
retirement, retiring allowance, severance, pension, deferred compensation, welfare, bonus,
incentive compensation, phantom stock, legal services, supplementary unemployment benefit plans or
arrangements and all life, health, dental and disability plans and arrangements in which the
employees or former employees of the Borrower or its Subsidiaries employed in Canada participate or
are eligible to participate.

     “Canadian
Pension Plans”: a “registered pension plan” as defined in the Income Tax Act
(Canada) established, maintained or contributed to by the Borrower or any of its Subsidiaries for
its employees or former employees employed in Canada.

     “Canadian
Security Documents”: collectively, the CDN Guarantee and Collateral
Agreement, the Quebec Security Documents, any Mortgages executed by any Canadian Subsidiary
Guarantor and all other security documents hereafter delivered to the Administrative Agent granting
a Lien on any Property located in Canada or on any Property of any Canadian Subsidiary Guarantor to
secure the obligations and liabilities of any Canadian Subsidiary Guarantor under any Loan
Document, as the same may be amended, supplemented or otherwise modified from time to time.

     “Canadian
Subsidiary Guarantor”: each Subsidiary Guarantor organized, incorporated or
formed under the laws of Canada or one of the provinces thereof.

     “Capital Expenditures”: for any period, with respect to any Person, the aggregate of all cash
expenditures by such Person for the acquisition or leasing (pursuant to a capital lease but
excluding any amount representing capitalized interest) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during such period) which
are required to be capitalized under GAAP on a balance sheet of such
Person, provided, that
in any event the term “Capital Expenditures” shall exclude (i) any Permitted Acquisition, (ii) any
expenditures to the extent financed with the proceeds of an Equity Issuance or Indebtedness (other
than Loans) or any Reinvestment

 

 

4

Deferred Amount (iii) any expenditures for the purchase of Engine Pool Assets, and (iv) any
expenditures on the GE CF34 Series Engine Platform Program, not to exceed an aggregate amount of
$10,000,000 per fiscal year for each of the Borrower’s 2005, 2006, 2007, 2008 and 2009 fiscal years
on a net of sales basis; provided, however, that all such expenditures under this clause (iv) shall
not exceed $30,000,000 in the aggregate.

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

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

     “Cash
Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed
by, the United States government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of one year or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least
A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within one year from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of one year or
less from the date of acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition; and (g) shares of
money market mutual or similar funds which invest exclusively in assets satisfying the requirements
of clauses (a) through (f) of this definition; or (h) money market funds that (i) purport to comply
generally with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P or Aaa by Moody’s or carrying an equivalent rating by a
nationally recognized rating agency, and (iii) have portfolio assets of at least $5,000,000,000.

     “CDN
Guarantee and Collateral Agreement”: the CDN Guarantee and Collateral Agreement
to be executed and delivered by each Canadian Subsidiary Guarantor, substantially in the form of
Exhibit A-2, as the same may be amended, supplemented or otherwise modified from time to time.

     “Certificated
Security”: as defined in the Guarantee and Collateral Agreement.

     “Chattel
Paper”: as defined in the Guarantee and Collateral Agreement or the CDN
Guarantee and Collateral Agreement, as applicable.

 

 

5

     “Closing
Date”: the date on which the conditions precedent set forth in Section 5.1 shall have
been satisfied and the initial Loans hereunder shall have been funded, which date is August 24,
2004.

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

     “Co-Investors”:
any co-investors designated by the Sponsor who may own, directly or
indirectly, no more than 2.5%, individually, and 15%, in the aggregate, of the Capital Stock of
Holdings but excluding transferees who are not Private Investors.

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

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

     “Commitment
Fee Rate”: 1/2 of 1% per annum; provided, that on and after the
first Adjustment Date occurring after the completion of the fiscal quarter of the Borrower ending
March 31, 2005, the Commitment Fee Rate will be determined pursuant to the Pricing Grid.

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

     “Commonly
Controlled Plan”: as defined in Section 4.13(b).

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

     “Confidential
Information”: as defined in Section 10.15.

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

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

     “Consolidated
EBITDA”: of any Person for any period, Consolidated Net Income of such
Person and its Subsidiaries for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) Consolidated Net Interest Expense of such Person and its Subsidiaries,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including commitment and administrative fees
and charges with respect to the Facilities), (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e)
any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such

 

 

6

Consolidated Net Income for such period, losses on sales of assets outside of the ordinary course
of business), (f) any other non-cash charges, expenses or losses, (g) restructuring and integration
costs, (h) stock-option based compensation expenses, (i) transaction fees and expenses not to
exceed 10% of Consolidated EBITDA in any fiscal year, and (j) all fees and expenses paid pursuant
to the Management Agreement and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income (except to the extent
deducted in determining Consolidated Net Interest Expense), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, gains on the sales of assets outside
of the ordinary course of business) and (c) any other non-cash income, all as determined on a
consolidated basis; provided, that for purposes of calculating Consolidated EBITDA of the
Borrower and its Subsidiaries for any period, (i) the Consolidated EBITDA (determined in accordance
with GAAP) of any Person acquired by the Borrower or its Subsidiaries during such period shall be
included on a pro forma basis for such period (but assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred
on the first day of such period, and assuming any cost savings to the extent permitted under
Regulation S-X of the Exchange Act or otherwise approved by the Administrative Agent if the
consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end
of the period preceding the acquisition of such Person and the related consolidated statements of
income and stockholders’ equity and of cash flows for the period in respect of which Consolidated
EBITDA is to be calculated (x) have been previously provided to the Administrative Agent and (y)
either (1) have been reported on without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized standing or (2) have been found
acceptable by the Administrative Agent and (ii) the Consolidated EBITDA of any Person Disposed of
by the Borrower or its Subsidiaries during such period shall be excluded for such period (assuming
the consummation of such Disposition and the repayment of any Indebtedness in connection therewith
occurred on the first day of such period). For purposes of determining compliance with the
financial covenants set forth in Section 7.1, any equity contribution made to the Borrower by
Holdings after the Closing Date and prior to the day that is 10 days after the day on which
financial statements are required to be delivered for a fiscal quarter will, at the request of the
Borrower, be deemed to increase, dollar for dollar, Consolidated EBITDA for such fiscal quarter for
the purposes of determining compliance with such financial covenants at the end of such fiscal
quarter and applicable subsequent periods (any such equity contribution so included in the
calculation of Consolidated EBITDA, a “Specified Equity
Contribution”), provided that (a)
Specified Equity Contributions may be made in no more than two fiscal quarters (which may be
consecutive) in an amount not to exceed $10,000,000 for either such fiscal quarter and (b) the
amount of any Specified Equity Contribution shall be no greater than the amount required to cause
the Borrower to be in compliance with the financial covenants set forth in Section 7.1.

     “Consolidated
Net Income”: of any Person for any period, the consolidated net income
(or loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP; provided, that in calculating Consolidated Net Income of the
Borrower and its consolidated Subsidiaries for any period, there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries and (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar distributions.

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

 

 

7

     “Consolidated
Net Interest Expense”: of any Person for any period, (a) total cash
interest expense (including that attributable to Capital Lease Obligations) of such Person and its
Subsidiaries for such period with respect to all outstanding Indebtedness of such Person and its
Subsidiaries, minus (b) total cash interest income of such Person and its Subsidiaries for
such period, in each case determined in accordance with GAAP.

     “Consolidated
Total Leverage”: at any date, the aggregate principal amount of all
Funded Debt of the Borrower and its Subsidiaries at such date, minus the amount of cash and
Cash Equivalents (other than any restricted cash or Cash Equivalents) held by the Borrower and its
Subsidiaries on such date, in each case determined on a consolidated basis in accordance with GAAP.

     “Consolidated
Total Leverage Ratio”: as at the last day of any period of four
consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated Total Leverage on such
day to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for such period.

     “Consolidated
Working Capital”: at any date, the difference of (a) Consolidated
Current Assets on such date less (b) Consolidated Current Liabilities on such date.

     “Continuing
Directors”: the directors of Holdings on the Closing Date and each other director
of Holdings, if, in each case, such other director’s nomination for election to the board of
directors of Holdings is recommended by at least 51% of the then Continuing Directors or such other
director receives the vote of the Private Investors in his or her election by the shareholders of
Holdings.

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

     “Co-Syndication
Agents”: as defined in the preamble hereto.

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

     “Derivatives
Counterparty”: as defined in Section 7.6.

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

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

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

     “Engine
Pool Assets”: engines, modules and/or components held by the Borrower or any of its
Subsidiaries for sale, lease or rental in the ordinary course of business.

     “Environmental
Laws”: any and all applicable laws, rules, orders, regulations, statutes,
ordinances, codes or decrees (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, provincial, local, municipal or
other governmental authority, regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment, as has been, is now, or may at any time hereafter be, in
effect.

 

 

8

     “Environmental
Permits”: any and all permits, licenses, approvals, registrations,
exemptions and other authorizations required under any Environmental Law.

     “Equity
Issuance”: any issuance by any Group Member of its Capital Stock in a public offering.

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

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

     “Eurodollar
Base Rate”: with respect to each day during each Interest Period pertaining to a
Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for
a period equal to such Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does not appear on Page
3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Base Rate” shall
be determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits
at or about 11:00 A.M., local time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such Interest Period for the
number of days comprised therein.

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

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

	 	 	 
	

	 	Eurodollar Base Rate
	

	 	 
	

	 	1.00 - Eurocurrency Reserve Requirements

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

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

     “Excess
Cash Flow”: for any fiscal year of the Borrower, the difference, if any, of (a)
the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the amount
of all non-cash charges (including depreciation, amortization and deferred tax expense) deducted in
arriving at such Consolidated Net Income, (iii) the amount of the decrease, if any, in Consolidated
Working Capital for

 

 

9

such fiscal year and (iv) the aggregate net amount of non-cash loss on the Disposition of Property
by the Borrower and its Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income
minus, (b) the sum, without duplication, of (i) the amount of all non-cash credits included
in arriving at such Consolidated Net Income (including, without limitation, deferred tax credits),
(ii) the aggregate amount actually paid by the Borrower and its Subsidiaries in cash during such
fiscal year on account of Capital Expenditures permitted under this Agreement and Permitted
Acquisitions (other than to the extent any such Capital Expenditure or Permitted Acquisition is
made with the proceeds of Indebtedness or an Equity Issuance or with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments of Revolving Loans and
Swingline Loans during such fiscal year to the extent accompanying permanent optional reductions of
the Revolving Commitments and all optional prepayments of the Term Loans during such fiscal year,
(iv) the aggregate amount of all regularly scheduled principal payments of Indebtedness (including,
without limitation, the Term Loans) of the Borrower and its Subsidiaries made during such fiscal
year (other than in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) the amount of the increase, if any,
in Consolidated Working Capital for such fiscal year, (vi) the aggregate net amount of non-cash
gain on the Disposition of Property by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, (vii) fees and expenses incurred in connection with the
closing of the Acquisition, the Senior Subordinated Notes or the Loan Documents, (viii) purchase
price adjustments paid or received in connection with the Acquisition or any Permitted Acquisition,
(ix) the net amount of Investments made during such period pursuant to Section 7.8 and (x) cash
expenditures excluded from the definition of Capital Expenditures pursuant to the proviso thereto
in connection with Engine Pool Assets and the GE CF34 Series Engine Platform Program.

     “Excess
Cash Flow Application Date”: as defined in Section 2.12(c).

     “Excess
Cash Flow Percentage”: 50%; provided, that, with respect to each
fiscal year of the Borrower ending on or after December 31, 2005, the Excess Cash Flow Percentage
shall be reduced to 25% if the Consolidated Total Leverage Ratio as of the last day of such fiscal
year is not greater than 4.5 to 1.0 and reduced further to 0% if the Consolidated Total Leverage as
of the last day of such fiscal year is not greater than 3.5 to 1.0.

     “Excluded
Foreign Subsidiaries”: (a) any Foreign Subsidiary in respect of which the
guaranteeing by such Subsidiary of (or the granting by such Subsidiary of a Lien on any of its
assets to secure) the Obligations would result in a violation or breach of any Requirement of Law,
(b) the Subsidiaries listed on Schedule 1.1C and (c) any Foreign Subsidiary that is not, directly
or indirectly, owned by Standard Aero Canada, Inc.

     “Existing
Credit Agreement”: that certain Credit Agreement dated July 31, 1998, by
and among Dunlop Standard Aerospace Group Limited and certain of its subsidiaries, as amended,
providing for senior secured facilities in an initial aggregate principal amount of £262,000,000,

     “Existing
Notes”: the collective reference to (i) those certain 11 7/8% Senior
Notes due 2009 issued by Dunlop Standard Aerospace Holdings plc on May 13, 1999 in the aggregate
principal amount of $225,000,000, and (ii) those certain 11 7/8% Senior Notes due 2009
issued by Dunlop Standard Aerospace Holdings plc on February 4, 2004 in the aggregate principal
amount of $120,000,000.

     “Facility”:
each of (a) the Term Commitments and the Term Loans made thereunder (the “Term
Facility”) and (b) the Revolving Commitments and the extensions of credit made thereunder (the
“Revolving Facility”).

 

 

10

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

     “Fee
Payment Date”: (a) the third Business Day following the last day of each March, June,
September and December and (b) the last day of the Revolving Commitment Period.

     “Foreign
Cash Equivalents”: (a) certificates of deposit or bankers acceptances of, and
bank deposits with, any bank organized under the laws of any country that is a member of the
European Economic Community or Canada or any subdivision thereof, whose short-term commercial paper
rating from S&P is at least A-l or the equivalent thereof or from Moody’s is at least P-l or the
equivalent thereof, in each case with maturities of not more than six months from the date of
acquisition, (b) commercial paper maturing not more than one year from the date of creation thereof
and, at the time of acquisition, having the highest rating obtainable from either S&P’s or Moody’s
and (c) shares of any money market mutual fund that has its assets invested continuously in the
types of investments referred to in clauses (a) and (b) above.

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

     “Funded
Debt”: with respect to any Person, all Indebtedness of such Person of the types
described in clauses (a), (c) and (e) of the definition of “Indebtedness” in this Section.

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

     “GAAP”:
generally accepted accounting principles in the United States as in effect from time
to time, except that for purposes of Section 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the preparation of the
most recent audited financial statements referred to in Section 4.1(b).

     “GE
CF34 Series Engine Platform Program”: the implementation of a program to support
the maintenance, repairs and overhaul of GE CF34 series engines.

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

     “Group
Members”: the collective reference to Holdings, the Borrower and their respective
Subsidiaries.

     “Guarantee
and Collateral Agreement”: the Guarantee and Collateral Agreement to be
executed and delivered by Holdings, the Borrower and each non-Canadian Subsidiary Guarantor,
substantially in the form of Exhibit A-l, as the same may be amended, supplemented or otherwise
modified from time to time.

 

 

11

     
“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation of (a)
the guaranteeing person or (b) another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing person has issued a guarantee,
reimbursement, counterindemnity or similar obligation, in either case guaranteeing or by which such
Person becomes contingently liable for any Indebtedness, net worth, working capital earnings,
leases, dividends or other distributions upon the stock or equity interests (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing person, whether or
not contingent, (i) to purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be such
guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by
the Borrower in good faith.

     “Guarantors”:
the collective reference to Holdings and the Subsidiary Guarantors.

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

     “Holdings”:
Standard Aero Acquisition Holdings, Inc., a Delaware corporation.

     “Immaterial
Subsidiary”: on any date, any subsidiary of the Borrower that has less than
$10,000,000 in book value of net assets as reflected on the most recent financial statements
delivered pursuant to Section 6.1 prior to such date.

         “Indebtedness”:    of any Person at any date, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of
Property or services (other than (i) trade payables and similar obligations incurred in the
ordinary course of such Person’s business and (ii) earn-outs and other contingent payments in
respect of acquisitions except to the extent that the liability on account of any such earn-out or
contingent payment becomes fixed), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property acquired by such
Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property, in which case only the
lesser of the amount of such obligation and the fair market value of such Property shall constitute
Indebtedness), (e) all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under acceptance, letter of
credit or similar facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, except
for agreements with directors, officers and employees to acquire such Capital Stock upon the death
or termination of employment of such director, officer or employee, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a) through (f) above,
and (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for
which the holder of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including, without

 

 

12

limitation, accounts and contract rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such obligation (and in the event such Person has not
assumed or become liable for payment of such obligation, only the lesser of the amount of such
obligation and the fair market value of such Property shall constitute Indebtedness).

     “Indebtedness
for Borrowed Money”: to the extent the following would be reflected on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP,
the principal amount of all Indebtedness of the Borrower and its Subsidiaries with respect to (i)
borrowed money, evidenced by debt securities, debentures, acceptances, notes or other similar
instruments, (ii) obligations under Capital Leases, (iii) reimbursement obligations for letters of
credit and financial guarantees (without duplication), (other than ordinary course of business
contingent reimbursement obligations) and (iv) the deferred purchase price of property or services
(except for accounts payable, deferred compensation arrangements and accrued expenses and receipt
of progress and advance payments related to such purchase price, in each case arising in the
ordinary course of business).

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

     “Insolvent”:
pertaining to a condition of Insolvency.

     “Instrument”:
as defined in the Guarantee and Collateral Agreement or the CDN Guarantee
and Collateral Agreement, as applicable.

     “Intellectual
Property”: the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States, multinational or foreign
laws or otherwise, including, without limitation, copyrights, copyright licenses, domain names,
patents, patent licenses, trademarks, trademark licenses, trade names, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

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

     “Interest
Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending
one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve
months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion,
as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six or (with the consent of each affected Lender under the relevant Facility) nine or
twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative
Agent not later than 1:00 P.M., New York City time, on the date that is three Business Days prior
to the last day of the then current Interest Period with respect thereto; provided that,
all of the foregoing provisions relating to Interest Periods are subject to the following:

 

 

13

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

     (ii) any Interest Period that would otherwise extend beyond the scheduled
Revolving Termination Date or beyond the date final payment is due on the Term Loans shall
end on the Revolving Termination Date or such due date, as applicable; and

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

          “Investments”:
as defined in Section 7.8.

          “Issuing
Lender”: (a) JPMorgan Chase Bank or (b) any other Revolving Lender from time to time
designated by the Borrower as an Issuing Lender with the consent of such other Revolving Lender and
the Administrative Agent (such consent of the Administrative Agent not to be unreasonably withheld,
conditioned or delayed).

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

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

          “L/C
Commitment”: $15,000,000.

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

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

          “Lead
Arranger”: J.P. Morgan Securities Inc.

          “Lenders”:
as defined in the preamble hereto.

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

          “Lien”:
any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien
(statutory or other), charge or other security interest or any other security agreement of any kind
or nature whatsoever (including any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the foregoing). For the
avoidance of doubt, it is understood and agreed that any Loan Party may, as part of its business,
grant licenses to third parties to use Intellectual Property owned or developed by a Loan Party.
For purposes of this Agreement and the other Loan Documents, such licensing activity shall not
constitute a “Lien” on such Intellectual Property. Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees, and such
exclusivity provisions may limit the ability of the Administrative Agent to utilize, sell, lease or
transfer the related Intellectual Property or otherwise realize value from such Intellectual
Property pursuant hereto.

 

 

14

     
“Loan”: any loan made by any Lender pursuant to this Agreement.

     “Loan Documents”:    this Agreement, the Security Documents, the Applications and the Notes and
any amendment, waiver, supplement or other modification to any of the foregoing.

     “Loan
Parties”: Holdings, the Borrower and each Subsidiary Guarantor.

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

     “Majority
Revolving Facility Lenders”: the Majority Facility Lenders in respect of the
Revolving Facility.

     “Management
Agreement”: the Management Agreement, dated as of the date hereof, by and
among Holdings, the Borrower and the Sponsor, as in effect on the Closing Date and as modified from
time to time with the consent of the Administrative Agent.

     “Material
Adverse Effect”: a material adverse effect on (a) the business, operations,
property or financial condition of the Borrower and its subsidiaries taken as a whole, or (b) the
validity or enforceability of the Loan Documents or the material rights and remedies of the
Administrative Agent and the Lenders thereunder, in each case, taken as a whole.

     “Material
Environmental Amount”: an amount or amounts payable by the Borrower and/or
any of its Subsidiaries, in the aggregate in excess of $5,000,000, for (a) costs to cure any
violation of any Environmental Law, (b) costs of any investigation, and any remediation, of any
contamination caused by Material of Environmental Concern, and (c) compensatory damages (including,
without limitation, damages to natural resources), fines and penalties pursuant to any
Environmental Law.

     “Material
Subsidiary” any Subsidiary that is not an Immaterial Subsidiary.

     “Materials
of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde
insulation, asbestos, pollutants, contaminants, radioactivity and any other substances that is
defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to, or that
could give rise to liability under, any Environmental Law.

     “Moody’s”:
Moody’s Investors Service.

     “Mortgaged
Properties”: the owned real properties listed on Schedule 1 .1B, as to which the
Administrative Agent for the benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.

     “Mortgages”:
each of the mortgages and deeds of trust made by any Loan Party in favor of, or
for the benefit of, the Administrative Agent for the benefit of the Lenders, substantially in the
form of Exhibit D (with such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.

 

 

15

     “Multiemployer
Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3)of ERISA.

     “Net
Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the proceeds
thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset Sale or Recovery
Event, net of attorneys’ fees, accountants’ fees, investment banking fees, consulting fees, amounts
required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than any
Lien pursuant to a Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable as a result
thereof (after taking into account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of debt securities or instruments or
the incurrence of Funded Debt, the cash proceeds received from such issuance or incurrence, net of
attorneys’ fees, investment banking fees, accountants’ fees, consulting fees, underwriting
discounts and commissions and other customary fees and expenses actually incurred in connection
therewith.

     “Netherlands
Security Documents”: the Deed of Pledge on Registered Shares of Standard
Aero BV, the Deed of Pledge on Registered Shares of Dunlop Standard Aerospace (Nederland) B.V., the
Deed of Undisclosed Pledge of Receivables, the Deed of Non-Possessory Pledge of Movables, in each
case as executed by the applicable Netherlands Subsidiary Guarantor or other Loan Party, any
Mortgages executed by any Netherlands Subsidiary Guarantor and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any Property located in the
Netherlands or on any Property of any Netherlands Subsidiary Guarantor to secure the obligations
and liabilities of such Netherlands Subsidiary Guarantor under any Loan Document, as the same may
be amended, supplemented or otherwise modified from time to time.

     “Netherlands
Subsidiary Guarantors”: each Subsidiary Guarantor organized,
incorporated or formed under the laws of Netherlands.

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

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

     “Note”:
any promissory note evidencing any
Loan.

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

     “Obligations”:
the unpaid principal of and interest on (including, without limitation,
interest accruing after the maturity of the Loans and Reimbursement Obligations and interest
accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations
and all other obligations and liabilities of the Borrower to the Administrative Agent or to any
Lender (or, in the case of Specified Hedge Agreements, any affiliate of any Lender), whether direct
or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Specified Hedge Agreement or (to the extent the Borrower so agrees in the
applicable agreements therefor) cash management arrangements with Lenders or any other document
made, delivered or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,

 

 

16

expenses (including, without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto)
or otherwise; provided, that (a) obligations of the Borrower or any Subsidiary under any
Specified Hedge Agreement or cash management agreement (if applicable) shall be secured and
guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the
other Obligations are so secured and guaranteed and (b) any release of Collateral or Guarantors
effected in the manner permitted by this Agreement shall not require the consent of holders of
obligations under Specified Hedge Agreements or cash management agreement (if applicable).

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

     “Payment
Amount”: as defined in Section 3.5.

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

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

     “Permitted
Acquisition”: (i) any acquisition approved by the Required Lenders or (ii) any
acquisition by the Borrower or any of its Subsidiaries of all or substantially all of the Capital
Stock, or substantially all of the assets, of any Person, or of all or substantially all of the
assets constituting a division, product line or business line of any Person, if such acquisition
described in this clause (ii) complies with the following criteria:

     (a) No Default or Event of Default shall be in effect after giving effect to such
acquisition.

     (b) After giving effect to the consummation of such acquisition and to the incurrence
of any Indebtedness associated therewith, the Borrower shall be in
pro forma
compliance with
Section 7.1 (calculated as of the last day of the fiscal quarter immediately preceding
the fiscal
quarter in which such acquisition is consummated, giving pro
forma effect to
such acquisition and
the issuance of the related Indebtedness).

     (c) The Person, division, product line or line of business acquired in such
acquisition
(the “Target”) shall be in the Business or a line of business reasonably related
thereto.

     (d) At least five Business Days prior to the consummation of such acquisition (i) the
Administrative Agent shall have received (A) financial projections in respect of the
Target for the
one-year period following the consummation of such acquisition and (B) such financial
information as it shall reasonably request to demonstrate pro
forma compliance
with the financial
criteria set forth in paragraph (b) above, (ii) the Administrative Agent shall have
received final
copies of the documentation to be executed in connection with such acquisition,
including all
schedules and exhibits thereto and (iii) the Administrative Agent shall have received
notice of the
closing date for such acquisition; provided, that, such notice shall be given
unless doing so would
materially interfere with, or would cause materially adverse economic consequences
with respect
to, the consummation of such acquisition.

 

 

17

     (e) After giving effect to any such acquisition, the aggregate Available Revolving
Commitments shall be at least $15,000,000.

     “
Permitted Seller Note”: a promissory note containing subordination and other
provisions reasonably acceptable to the Administrative Agent, representing Indebtedness of the
Borrower or any Subsidiary incurred in connection with any acquisition permitted under Section
7.8(f) and payable to the seller in connection therewith.

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

     “Plan”:
at a particular time, any employee benefit plan as defined in Section 3(3) of ERISA
and in respect of which the Borrower or any of its Subsidiaries is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.

     “Pledged
Securities”: as defined in the Guarantee and Collateral Agreement or the CDN
Guarantee and Collateral Agreement, as applicable.

     “Pledged
Stock”: as defined in the Guarantee and Collateral Agreement or the CDN
Guarantee and Collateral Agreement, as applicable.

     “Pricing
Grid”: the table set forth below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Applicable	 	 	 	 	 	 
	 	 	 	 	Applicable	 	 	 	 	 	 	 	 	 	 	 	 	 	Margin for	 	 	 	 	 	 
	 	 	 	 	Margin for	 	 	 	Applicable	 	 	 	Applicable	 	 	 	Revolving	 	 	 	 	 	 
	 	 	 	 	Term Loans	 	 	 	Margin for	 	 	 	Margin for	 	 	 	Loans and	 	 	 	 	 	 
	 	 	 	 	that are	 	 	 	Term Loans	 	 	 	Revolving Loans	 	 	 	Swingline	 	 	 	 	 	 
	 	Consolidated Total	 	 	Eurodollar	 	 	 	that are	 	 	 	that are Eurodollar	 	 	 	Loans that are	 	 	 	Commitment	 	 
	 	Leverage Ratio	 	 	Loans	 	 	 	ABR Loans	 	 	 	Loans	 	 	 	ABR Loans	 	 	 	Fee Rate	 	 
	 	X3 5.00 : 1.00
	 	 	 	2.50	%	 	 	 	1.50	%	 	 	 	2.50	%	 	 	 	1.50	%	 	 	 	0.50	%	 
	 	4.50:
1.00£X<5.00 : 1.00
	 	 	 	2.25	%	 	 	 	1.25	%	 	 	 	2.25	%	 	 	 	1.25	%	 	 	 	0.50	%	 
	 	4.00: 1.00 £X< 4.50 : 1.00
	 	 	 	2.25	%	 	 	 	1.25	%	 	 	 	2.00	%	 	 	 	1.00	%	 	 	 	0.50	%	 
	 	X<4.00 : 1.00
	 	 	 	2.25	%	 	 	 	1.25	%	 	 	 	1.75	%	 	 	 	0.75	%	 	 	 	0.375	%	 
	 

     Changes in the Applicable Margin with respect to Term Loans, Revolving Loans and
Swingline Loans resulting from changes in the Consolidated Total Leverage Ratio shall become
effective on the date (the “Adjustment Date”) on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day after the end of
each of the first three quarterly periods of each fiscal year or the 90th day after the end of
each fiscal year, as the case may be) and shall remain in effect until the next change to be
effected pursuant to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial statements are
delivered, Consolidated Total Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be deemed to be greater than 5.00
to 1. In addition, at all times while an Event of Default set forth in Section 8(a) or 8(f) shall
have occurred and be continuing, the Consolidated Total Leverage Ratio shall for the purposes of
this Pricing Grid be deemed to be greater than 5.00 to 1. Each determination of the Consolidated
Total

 

 

18

Leverage Ratio pursuant to this Pricing Grid shall be made for the periods and in the
manner contemplated by Section 7.1 (a).

     “Private
Investors”: the collective reference to the Sponsor, any Co-Investors and their
respective Affiliates and the directors, officers and other employees of Holdings and its
Subsidiaries.

     “Pro
Forma Balance Sheet”: as defined in Section 4.1 (a).

     “Property”:
any right or interest in or to property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

     “Purchase
Card Arrangements”: any arrangements by a Loan Party to provide company-paid
credit cards that permit certain employees to make purchases in respect of inventory associated
with the T-56 Engine and Accessories Support Sub-Contract from the Defense Logistics Agency on
behalf of such Loan Party.

     “Quebec
Security Documents”: the Quebec hypothecs (together with all bonds and pledge
agreements related thereto) to be executed and delivered by Standard Aero Limited/Standardaero
Limitée and any other Loan Party as reasonably required by the Administrative Agent, as applicable,
as the same may be amended, supplemented or otherwise modified from time to time.

     “Recovery
Event”: any settlement of or payment in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of the Borrower or any
Subsidiary, in an amount for each such event exceeding $10,000,000.

     “Refunded
Swingline Loans”: as defined in Section 2.7.

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

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

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

     “Reimbursement
Obligation”: the obligation of the Borrower to reimburse each Issuing
Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing
Lender.

     “Reinvestment
Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Loan Party for its own account in connection therewith
that are not applied to prepay the Term Loans pursuant to Section 2.12 as a result of the delivery
of a Reinvestment Notice.

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

     “Reinvestment
Notice”: a written notice signed on behalf of the Borrower by a Responsible
Officer stating that the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets useful in its business.

 

 

19

     “Reinvestment
Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to the
relevant Reinvestment Prepayment Date to acquire assets useful in the Borrower’s business.

     “Reinvestment
Prepayment Date”: with respect to any Reinvestment Event, the earlier of
(i) the date occurring one year after such Reinvestment Event and (ii) with respect to any portion
of a Reinvestment Deferred Amount, the date on which the Borrower shall have determined not to
acquire assets useful in the Borrower’s business with such portion of such Reinvestment Deferred
Amount.

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

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

     “Representatives”:
as defined in Section 10.15.

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

     “Required
Prepayment Lenders”: the Majority Facility Lenders in respect of the Term
Facility.

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

     “Responsible
Officer”: the chief executive officer, president, senior vice
president – finance
or chief financial officer (or similar title) of Holdings or the Borrower, and, with respect to
financial matters, the chief financial officer, senior vice president
– finance, or Treasurer (or
similar title) of Holdings or the Borrower.

     “Restricted
Payments”: as defined in Section 7.6.

     “Revolving
Commitment”: as to any Lender, the obligation of such Lender, if any, to
make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate
principal and/or face amount not to exceed the amount set forth under the heading “Revolving
Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption
pursuant to which such Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving Commitments is
$50,000,000.

     “Revolving
Commitment Period”: the period from and including the Closing Date to the
Revolving Termination Date.

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

 

 

20

such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans
then outstanding.

     “Revolving
Lender”: each Lender that has a Revolving Commitment or that holds Revolving
Loans.

     “Revolving
Loans”: as defined in Section 2.4(a).

     “Revolving
Percentage”: as to any Revolving Lender at any time, the percentage which such
Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time
after the Revolving Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding,
provided, that, in the
event that the Revolving Loans are paid in full prior to the reduction to zero of the Total
Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed
to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving
Lenders on a comparable basis.

     “Revolving
Termination Date”: August 24,
2010.

     “S&P”:
Standard & Poor’s Ratings Group.

     “SEC”:
the Securities and Exchange Commission (or successors thereto or an analogous
Governmental Authority).

     “Securities”:
as defined in the CDN Guarantee and Collateral Agreement.

     “Security
Documents”: the collective reference to the Guarantee and Collateral Agreement, the
Canadian Security Documents, the Netherlands Security Documents, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent granting a Lien on any Property
of any Loan Party to secure the obligations and liabilities of any Loan Party under any Loan
Document.

     “Senior
Subordinated Note Indenture”: the Indenture entered into by the Borrower
and certain of its Subsidiaries in connection with the issuance of the Senior Subordinated Notes
as the same may be amended, supplemented or otherwise modified from time to time.

     “Senior
Subordinated Notes”: the subordinated notes of the Borrower issued on the
Closing Date and any exchange notes issued in replacement thereof, in each case pursuant to the
Senior Subordinated Note Indenture.

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

     “Solvent”:
with respect to any Person, as of any date of determination, (a) the amount of the
“present fair saleable value” of the assets of such Person will, as of such date, exceed the amount
of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the liability of such Person on
its debts as such debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small

 

 

21

amount of capital with which to conduct its business and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.

     “Specified
Cash Management Arrangement”: as defined in the Guarantee and Collateral
Agreement or the CDN Guarantee and Collateral Agreement, as applicable.

     “Specified
Change of Control”: a “Change of Control” (or any other defined term having
the same purpose) as defined in the Senior Subordinated Note Indenture.

     “Specified
Hedge Agreement”: any Hedge Agreement (a) entered into by (i) the Borrower
or any of its Subsidiaries and (ii) any Lender or any affiliate thereof at the time such Hedge
Agreement was entered into, as counterparty and (b) that has been designated by such Lender and the
Borrower, by notice to the Administrative Agent, as a Specified Hedge Agreement. The designation of
any Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the Lender or
affiliate thereof that is a party thereto any rights in connection with the management or release
of any Collateral or of the obligations of any Guarantor under the Guarantee and Collateral
Agreement or the CDN Guarantee and Collateral Agreement, as the case may be. For the avoidance of
doubt, all Hedge Agreements in existence on the Closing Date between the Borrower or any of its
Subsidiaries and any Lender shall constitute Specified Hedge Agreements.

     “Sponsor”:
TC Group L.L.C., a Delaware limited liability company, and any Affiliates thereof.

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

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

     “Swingline
Commitment”: the obligation of the Swingline Lender to make Swingline Loans
pursuant to Section 2.6 in an aggregate principal amount at any one time outstanding not to exceed
$5,000,000.

     “Swingline
Lender”: JPMorgan Chase Bank, in its capacity as the lender of Swingline Loans.

     “Swingline
Loans”: as defined in Section 2.6.

     “Swingline
Participation Amount”: as defined in Section 2.7.

 

 

22

     “T-56
Engine and Accessories Support Sub-Contract”: the agreement, dated as of
September 23, 1998, between Standard Aero (San Antonio), Inc. and Kelly Aviation Center.

     “Term
Commitment”: as to any Lender, the obligation of such Lender, if any, to make a Term
Loan to the Borrower in a principal amount not to exceed the amount set forth under the heading
“Term Commitment” opposite such Lender’s name on Schedule 1.1A. The original aggregate amount of
the Term Commitments is $325,000,000.

     “Term
Lender”: each Lender that has a Term Commitment or that holds a Term Loan.

     “Term
Loan”: as defined in Section 2.1.

     “Term
Percentage”: as to any Term Lender at any time, the percentage which such Lender’s Term
Commitment then constitutes of the aggregate Term Commitments (or, at any time after the Closing
Date, the percentage which the aggregate principal amount of such Lender’s Term Loans then
outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).

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

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

     “Transaction”:
as defined in Section 5.1 (b).

     “Transferee”:
any Assignee or Participant.

     “Type”:
as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

     “United
States”: the United States of America.

     “Vehicles”:
all cars, trucks, trailers, construction and earth moving equipment and other
vehicles covered by a certificate of title law of any state or province.

     1.2
Other Definitional Provisions. (a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used in the other Loan Documents or
any certificate or other document made or delivered pursuant hereto or thereto.

     (b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms relating to the
Borrower and
its Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section
1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii) the words
“include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”,
and (iii)
references to agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to
refer to such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise
modified from time to time.

     (c) The words “hereof, “herein” and “hereunder” and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this
Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.

 

 

23

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

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

     2.1 Term Commitments. Subject to the terms and conditions hereof, each Term Lender
severally agrees to make a term loan (a “Term Loan”) to the Borrower on the Closing Date in an
amount
not to exceed the amount of the Term Commitment of such Lender. The Term Loans may from time
to
time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.13.

     2.2 Procedure for Term Loan Borrowing. The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative Agent prior to
12:00
Noon, New York City time, on the day of the anticipated Closing Date) requesting that the Term
Lenders
make the Term Loans on the Closing Date and specifying the amount to be borrowed. The Term
Loans
made on the Closing Date shall initially be ABR Loans. Upon receipt of such notice the
Administrative
Agent shall promptly notify each Term Lender thereof. Not later than 1:00 P.M., New York City
time, on
the Closing Date each Term Lender shall make available to the Administrative Agent at the
Funding
Office an amount in immediately available funds equal to the Term Loan or Term Loans to be
made by
such Lender. The Administrative Agent shall credit the account of the Borrower on the books of
such
office of the Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders in immediately available funds.

     2.3 Repayment of Term Loans. The Term Loan of each Term Lender shall mature in
consecutive quarterly installments, commencing on December 31, 2004, each of which shall be in
an
amount equal to such Lender’s Term Percentage multiplied by the amount set forth below
opposite such installment:

	 	 	 	 	 
	Installment	 	Principal Amount	 
	December 31, 2004
	 	$	812,500	 
	March 31, 2005
	 	$	812,500	 
	June 30, 2005
	 	$	812,500	 
	September 30, 2005
	 	$	812,500	 
	December 31, 2005
	 	$	812,500	 
	March 31, 2006
	 	$	812,500	 
	June 30, 2006
	 	$	812,500	 
	September 30, 2006
	 	$	812,500	 
	December 31, 2006
	 	$	812,500	 
	March 31, 2007
	 	$	812,500	 
	June 30, 2007
	 	$	812,500	 
	September 30, 2007
	 	$	812,500	 
	December 31, 2007
	 	$	812,500	 
	March 31, 2008
	 	$	812,500	 
	June 30, 2008
	 	$	812,500	 
	September 30, 2008
	 	$	812,500	 
	December 31, 2008
	 	$	812,500	 
	March 31, 2009
	 	$	812,500	 
	June 30, 2009
	 	$	812,500	 
	September 30, 2009
	 	$	812,500	 
	December 31, 2009
	 	$	812,500	 

 

 

24

	 	 	 	 	 
	Installment	 	Principal Amount	 
	March 31, 2010
	 	$	812,500	 
	June 30, 2010
	 	$	812,500	 
	September 30, 2010
	 	$	812,500	 
	December 31, 2010
	 	$	812,500	 
	March 31, 2011
	 	$	812,500	 
	June 30, 2011
	 	$	812,500	 
	September 30, 2011
	 	$	812,500	 
	December 31, 2011
	 	$	75,562,500	 
	March 31, 2012
	 	$	75,562,500	 
	June 30, 2012
	 	$	75,562,500	 
	August 24, 2012
	 	$	75,562,500	 

     2.4
Revolving Commitments. (a) Subject to the terms and conditions hereof, each
Revolving Lender severally agrees to make revolving credit loans (“Revolving Loans”) to the
Borrower
from time to time during the Revolving Commitment Period in an aggregate principal amount at
any one
time outstanding which, when added to such Lender’s Revolving Percentage of the sum of (i) the
L/C
Obligations then outstanding and (ii) the aggregate principal amount of the Swingline Loans
then
outstanding, does not exceed the amount of such Lender’s Revolving Commitment. During the
Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing,
prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the
terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans,
as
determined by the Borrower and notified to the Administrative Agent in accordance with
Sections 2.5 and
2.13.

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

     2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Revolving Commitments during the Revolving Commitment Period on any Business Day,
provided that
the Borrower shall give the Administrative Agent irrevocable notice (which notice must be
received by
the Administrative Agent prior to 1:00 P.M., New York City time, (a) three Business Days prior
to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) on the requested Borrowing
Date, in
the case of ABR Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of
each such
Type of Loan and the respective lengths of the initial Interest Period therefor. Any Revolving
Loans
made on the Closing Date shall initially be ABR Loans; provided that no more than
$10,000,000 of
Revolving Loans may be made on the Closing Date. Each borrowing under the Revolving
Commitments
shall be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of
$100,000
in excess thereof (or, if the then aggregate Available Revolving Commitments are less than
$1,000,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $3,000,000 or a whole multiple of
$500,000
in excess thereof; provided, that the Swingline Lender may request, on behalf of the
Borrower,
borrowings under the Revolving Commitments that are ABR Loans in other amounts pursuant to
Section
2.7. Upon receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify
each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro
rata share of
each borrowing available to the Administrative Agent for the account of the Borrower at the
Funding
Office prior to 2:00 P.M., New York City time (or 3:30 P.M., New York City time in the case of
same-day borrowings of ABR Loans) on the Borrowing Date requested by the Borrower in funds
immediately
available to the Administrative Agent. Such borrowing will then be made available to the
Borrower by
the Administrative Agent crediting the account of the Borrower on the books of such office
with the

 

 

25

aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in
like funds as received by the Administrative Agent.

     2.6
Swingline Commitment. (a) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under
the Revolving Commitments from time to time during the Revolving Commitment Period by making swing
line loans (“Swingline Loans”) to the Borrower; provided that (i) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the
Swingline Lender’s other outstanding Revolving Loans, may exceed the Swingline Commitment then in
effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount
of the Available Revolving Commitments would be less than zero. During the Revolving Commitment
Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all
in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.

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

     2.7
Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the
Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender
irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be
received by the Swingline Lender not later than 12:00 Noon, New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date
(which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the
Swingline Commitment shall be in an amount equal to $100,000 or a whole multiple of $50,000 in
excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in a
notice in respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available funds equal to the
amount of the Swingline Loan to be made by the Swingline Lender. The Administrative Agent shall
make the proceeds of such Swingline Loan available to the Borrower on such Borrowing Date by
depositing such proceeds in the account of the Borrower with the Administrative Agent or as
otherwise directed by the Borrower on such Borrowing Date in immediately available funds.

     (b) The Swingline Lender, at any time and from time to time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to
act on its behalf), on one Business Day’s notice given by the Swingline Lender no later than 12:00
Noon, New York City time, request each Revolving Lender to make, and each Revolving Lender hereby
agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s Revolving
Percentage of the aggregate amount of the Swingline Loans (the “Refunded Swingline Loans”)
outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall
make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office
in immediately available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be immediately made
available by the Administrative Agent to the Swingline Lender for application by the Swingline
Lender to the repayment of the Refunded Swingline Loans.

     (c) If prior to the time a Revolving Loan would have otherwise been made pursuant to Section
2.7(b), one of the events described in Section 8(f) shall have occurred and be continuing with
respect to the Borrower or if for any other reason, as determined by the Swingline Lender in its
sole discretion, Revolving Loans may not be made as contemplated by Section 2.7(b), each Revolving
Lender

 

 

26

shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in
Section 2.7(b), purchase for cash an undivided participating interest in the then outstanding
Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation
Amount”) equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.

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

     (e) Each Revolving Lender’s obligation to make the Loans referred to in Section 2.7(b) and to
purchase participating interests pursuant to Section 2.7(c) shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment,
defense or other right that such Revolving Lender or the Borrower may have against the Swingline
Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse change in the condition (financial or
otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the
Borrower, any other Loan Party or any other Revolving Lender or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

     2.8
Repayment of Loans. (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the appropriate Revolving Lender or Term Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Loan of such Revolving Lender
outstanding on the Revolving Termination Date (or on such earlier date on which the Loans become
due and payable pursuant to Section 8) and (ii) the principal amount of each outstanding Term Loan
of such Term Loan Lender in installments according to the relevant amortization schedule set forth
in Section 2.3 (or on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.15.

     (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.

     (c) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant
to Section 10.6(b)(iv), and a subaccount therein for each Lender, in which shall be recorded (i)
the amount of each Loan made hereunder and any Note evidencing such Loan, the Type of such Loan and
each Interest Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.

 

 

27

     (d) The entries made in the Register and the accounts of each Lender maintained pursuant to
Section 2.8(b) shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.

     2.9
Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent
for the account of each Revolving Lender a commitment fee for the period from and including the
Closing Date to the last day of the Revolving Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing
on the first such date to occur after the date hereof.

     (b) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the
dates as set forth in any fee agreements with the Administrative Agent.

     2.10 Termination or Reduction of Revolving Commitments. The Borrower shall have the
right, upon not less than two Business Days’ notice to the Administrative Agent, to terminate the
Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments;
provided that no such termination or reduction of Revolving Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans
made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the Revolving Commitments then in effect.

     2.11 Optional Prepayments. The Borrower may at any time and from time to time prepay
the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to
the Administrative Agent no later than 1:00 P.M., New York City time, three Business Days prior
thereto, in the case of Eurodollar Loans, and no later than 1:00 P.M., New York City time, one
Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to
Section 2.21. Upon receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein, together with (except in the case of Revolving Loans
that are ABR Loans and Swingline Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Term Loans shall be in an aggregate principal amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof (in the case of prepayments of ABR Loans) or
$1,000,000 or a whole multiple of $500,000 in excess thereof (in the case of prepayments of
Eurodollar Loans) and shall be subject to the provisions of Section 2.18. Partial prepayments of
Swingline Loans shall be in an aggregate principal amount of $50,000 or a whole multiple of $50,000
in excess thereof.

     2.12
Mandatory Prepayments. (a) Unless the Required Prepayment Lenders shall otherwise
agree, if any Indebtedness shall be incurred by the Borrower or any of its Subsidiaries (excluding
any Indebtedness incurred in accordance with Section 7.2), an amount equal to 100% of the Net Cash
Proceeds thereof shall be applied on the date of the receipt of such Net Cash Proceeds toward the
prepayment of the Term Loans as set forth in Section 2.12(d).

 

 

28

     (b) Unless the Required Prepayment Lenders shall otherwise agree, if on any date the Borrower
or any of its Subsidiaries shall for its own account receive Net Cash Proceeds from any Asset Sale
or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such
Net Cash Proceeds shall be applied on such date toward the prepayment of the Term Loans as set
forth in Section 2.12(d); provided, that, notwithstanding the foregoing, on each
Reinvestment Prepayment Date the Term Loans shall be prepaid by an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event, as set forth in Section 2.12(d).

     (c) Unless the Required Prepayment Lenders shall otherwise agree, if, for any fiscal year of
the Borrower commencing with the fiscal year ending December 31, 2005, there shall be Excess Cash
Flow, the Borrower shall, on the relevant Excess Cash Flow Application Date, apply the Excess Cash
Flow Percentage of such Excess Cash Flow toward the prepayment of the Term Loans as set forth in
Section 2.12(d). Each such prepayment shall be made on a date (an “Excess Cash Flow Application
Date”) no later than five days after the date on which the financial statements of the Borrower
referred to in Section 6.1 (a), for the fiscal year with respect to which such prepayment is made,
are required to be delivered to the Lenders.

     (d) Amounts to be applied in connection with prepayments and made pursuant to Section 2.12
above shall be applied to the prepayment of the Term Loans in accordance with Section 2.18(b) until
paid in full. The application of any prepayment pursuant to Section 2.12 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Loans
under Section 2.12 shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid.

     2.13
Conversion and Continuation Options. (a) The Borrower may elect from time to time
to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable
notice of such election no later than 1:00 P.M., New York City time, on the Business Day preceding
the proposed conversion date, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The Borrower may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 1:00 P.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan under a particular Facility
may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing
and the Administrative Agent or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender thereof.

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

     2.14
Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions, continuations

 

 

29

and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be
in such amounts and be made pursuant to such elections so that (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $3,000,000 or a whole multiple of $500,000 in excess thereof and (b)
no more than ten Eurodollar Tranches shall be outstanding at any one time.

     2.15
Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.

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

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

     (d) Interest shall be payable in arrears on each Interest Payment Date, provided that
interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on
demand.

     2.16
Computation of Interest and Fees. (a) Interest and fees payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with
respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate,
the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in interest rate.

     (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be presumptively correct in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any interest rate pursuant
to Section 2.15(a).

     2.17
Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

     (a) the Administrative Agent shall have determined (which determination shall be
presumptively correct absent manifest error) that, by reason of circumstances
affecting the

 

 

30

relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period, or

     (b) the Administrative Agent shall have received notice from the Majority Facility
Lenders in respect of the relevant Facility that by reason of any changes arising after the
date of this Agreement the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as certified by such
Lenders) of making or maintaining their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans under the relevant Facility requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR
Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on
the last day of the then-current Interest Period with respect thereto, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent (which action the Administrative Agent will
take promptly after the conditions giving rise to such notice no longer exist), no further
Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the
Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

     2.18
Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the
Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction
of the Commitments of the Lenders shall be made pro rata according to the respective Term
Percentages or Revolving Percentages, as the case may be, of the relevant Lenders. Each payment
(including prepayments) in respect of principal or interest in respect of the Term Loans and each
payment in respect of fees payable hereunder shall be applied to the amounts of such obligations
owing to the Term Lenders pro rata according to the respective amounts then due and owing
to such Lenders.

     (b) Each optional prepayment of the Term Loans shall be applied as specified by the Borrower.
Each mandatory prepayment by the Borrower on account of principal of and interest on the Term Loans
shall be applied first, to any installments coming due within 12 months of the date of such
prepayment in direct order of maturity and, second, ratably to the respective remaining
installments thereof. Amounts repaid or prepaid on account of the Term Loans may not be reborrowed.

     (c) Each payment (including each prepayment) by the Borrower on account of principal of and
interest on the Revolving Loans shall be made pro rata according to the respective
outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders. Each
payment in respect of Reimbursement Obligations in respect of any Letter of Credit shall be made to
the Issuing Lender that issued such Letter of Credit.

     (d) All payments (including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 2:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend such payment into
another calendar month, in which event

 

 

31

such payment shall be made on the immediately preceding Business Day. In the case of any
extension of any payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.

     (e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, for the period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest
error. If such Lender’s share of such borrowing is not made available to the Administrative Agent
by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall
give notice of such fact to the Borrower and the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the
relevant Facility, on demand, from the Borrower. Nothing herein shall be deemed to limit the rights
of the Administrative Agent or the Borrower against any defaulting Lender.

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

     2.19
   Requirements of Law. (a) If the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or other Governmental
Authority first made, in each case, subsequent to the date hereof:

     (i) shall subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax on the overall
net income of such Lender);

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

 

 

32

     (iii) shall impose on such Lender any other condition not otherwise contemplated
hereunder;

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender reasonably deems to be material, of making, converting into, continuing or maintaining
Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay
such Lender, within ten Business Days after the Borrower’s receipt of a reasonably detailed invoice
therefor (showing with reasonable detail the calculations thereof), any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount receivable. If any
Lender becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it
has become so entitled.

     (b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental Authority first
made, in each case, subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a reasonably detailed written
request therefor (consistent with the detail provided by such Lender to similarly situated
borrowers), the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.

     (c) A certificate as to any additional amounts payable pursuant to this Section submitted by
any Lender to the Borrower (with a copy to the Administrative Agent) shall be presumptively correct
in the absence of manifest error. Notwithstanding anything to the contrary in this Section, the
Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts
incurred more than nine months prior to the date that such Lender notifies the Borrower of such
Lender’s intention to claim compensation therefor; provided that, if the circumstances
giving rise to such claim have a retroactive effect, then such nine-month period shall be extended
to include the period of such retroactive effect. The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the Obligations.

     2.20
Taxes. (a) All payments made by the Borrower under this Agreement shall be made
free and clear of, and without deduction or withholding for or on account of, any present or future
income taxes, levies, imposts, duties, charges, fees, deductions, withholdings or Other Taxes, now
or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this Agreement or any other
Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded

 

 

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Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes
(i) that are attributable to such Lender’s failure to comply with the requirements of paragraph (d)
of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts
from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

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

     (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for the account of the
Administrative Agent or Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that become payable by the Administrative Agent or any Lender as a result of any such
failure.

     (d) Each Lender (or Transferee) that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) (a “Non-US Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Borrower and to the Lender from
which the related participation shall have been purchased) (i) two accurate and complete copies of
IRS Form W-8ECI or W-8BEN, or, (ii) in the case of a Non-U.S. Lender claiming exemption from United
States federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments
of “portfolio interest” a statement substantially in the form of Exhibit G and two accurate and
complete copies of IRS Form W-8BEN, or any subsequent versions or successors to such forms, in each
case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from,
or a reduced rate of, United States federal withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on
or before the date such Participant purchases the related participation). In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
Borrower at any time it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification adopted by the United
States taxing authorities for such purpose). Notwithstanding any other provision of this paragraph,
a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.

     (e) If the Administrative Agent or any Lender determines, in its sole discretion, that it has
received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 2.20, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.20 with respect to
the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such
refund); provided, that
the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in

 

 

34

the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information relating to its taxes
which it deems confidential) to the Borrower or any other Person.

     (f) The agreements in this Section shall survive the termination of this Agreement and the
payment of the Obligations.

     2.21
Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense (other than lost profits) that such Lender may actually
sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has
given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a
prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. A reasonably detailed certificate as to (showing in reasonable detail
the calculation of) any amounts payable pursuant to this Section submitted to the Borrower by any
Lender shall be presumptively correct in the absence of manifest error. This covenant shall survive
the termination of this Agreement and the payment of the Obligations.

     2.22
Illegality. Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof, in each case,
first made after the date hereof, shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, such Lender shall promptly give notice thereof
to the Administrative Agent and the Borrower, and (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans
shall be suspended during the period of such illegality and (b) such Lender’s Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect thereto, the Borrower
shall pay to such Lender such amounts, if any, as may be required pursuant to Section 2.21.

     2.23
Change of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.19, 2.20(a) or 2.22 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event;
provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no material economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender pursuant to Section 2.19, 2.20(a) or 2.22.

     2.24
Replacement of Lenders. The Borrower shall be permitted to replace with a
financial institution any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.19, 2.20 or 2.21 (to the extent a request made by a Lender pursuant to the operation of
this section is materially greater than requests made by other Lenders) or gives a notice of
illegality pursuant to Section 2.22, (b) defaults in its obligation to make Loans hereunder, or (c)
that has refused to consent to any waiver or amendment with respect to any Loan Document that has
been consented to by the Required Lenders, provided, that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such

 

 

35

replacement, such Lender shall not have taken action under Section 2.23, within the requirements of
Section 2.23, necessary to eliminate the continued need for payment of amounts owing pursuant to
Section 2.19, 2.20 or 2.21 or to eliminate such illegality pursuant to Section 2.22, (iv) the
replacement financial institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender shall be obligated
to make such replacement in accordance with the provisions of
Section 10.6 (provided, that the
Borrower shall be obligated to pay (or cause to be paid) the registration and processing fee
referred to therein), (viii) the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.19 or 2.20, as the case may be, in respect of any period prior to the date on
which such replacement shall be consummated, and (ix) any such replacement shall not be deemed to
be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

SECTION 3. LETTERS OF CREDIT

     3.1
L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.4(a),
agrees to issue letters of credit (“Letters of Credit”) for the account of the Borrower or any of
its Subsidiary Guarantors on any Business Day during the Revolving Commitment Period in such form
as may be approved from time to time by the Issuing Lender; provided that the Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of
the Available Revolving Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of
its date of issuance and (y) the date that is three Business Days prior to the Revolving
Termination Date, provided that any Letter of Credit with a one-year term may provide for
the renewal thereof for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).

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

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

 

 

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     3.3
Fees and Other Charges. (a) The Borrower will pay a fee on all outstanding Letters
of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility (minus the fronting fee referred to below), on the
face amount of such Letter of Credit shared ratably among the Revolving Lenders and payable
quarterly in arrears on each Fee Payment Date after the issuance
date. In addition, the Borrower
shall pay to each Issuing Lender for its own account a fronting fee on the aggregate face amount of
all outstanding Letters of Credit issued by it of (i) 0.25% per annum, in the case of Letters of
Credit issued by JPMorgan Chase Bank and (ii) a rate per annum to be agreed, in the case of Letters
of Credit issued by any other Issuing Lender, payable quarterly in arrears on each Fee Payment Date
after the issuance date.

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

     3.4
L/C Participations. (a) The Issuing Lender irrevocably agrees to grant and hereby
grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit, each
L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the
Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account
and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in the Issuing
Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of
each draft paid by the Issuing Lender thereunder. Each L/C Participant agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices
specified herein an amount equal to such L/C Participant’s Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to
pay such amount shall be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C
Participant may have against the Issuing Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure
to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the
financial condition of the Borrower, (iv) any breach of this Agreement or any other Loan Document
by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing

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

 

 

37

          (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of
Credit and has received from any L/C Participant its pro rata share of such payment in
accordance with Section 3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing
Lender the portion thereof previously distributed by the Issuing Lender to it.

          3.5
Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse each
Issuing Lender on the Business Day following the date on which the Issuing Lender notifies the Borrower
of the date and amount of a draft presented under any Letter of Credit and paid by such Issuing Lender for
the amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by
such Issuing Lender in connection with such payment (the amounts described in the foregoing clauses (a)
and (b) in respect of any drawing, collectively, the
“Payment Amount”). Each such payment shall be
made to the Issuing Lender at its address for notices referred to herein in Dollars and in immediately
available funds. Interest shall be payable on any such amounts from the date on which the relevant draft
is paid until payment in full at the rate set forth in, (i) until the second Business Day next succeeding the
date of the relevant notice, Section 2.15(b) and (ii) thereafter, Section 2.15(c).

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

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

 

 

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

SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender, which representations and warranties shall be
deemed made on the Closing Date (immediately before and immediately after giving effect to the
Transaction) and on the date of each borrowing of Loans or issuance of a Letter of Credit hereunder
that:

          4.1
Financial Condition. (a) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at March 31, 2004 (the “Pro Forma Balance
Sheet”), copies of which have heretofore been furnished to each Lender, has been prepared giving effect (as if
such events had occurred on such date) to (i) the consummation of the Transaction, (ii) the Loans
to be made on the Closing Date and the use of proceeds thereof and (iii) the payment of fees and expenses
in connection with the foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and presents fairly
on a pro forma basis the estimated financial position of the Borrower and its consolidated Subsidiaries as at
March 31, 2004, assuming that the events specified in the preceding sentence had actually occurred at
such date subject to normal year-end adjustments and the absence of footnotes.

          (b) The
audited consolidated balance sheets of the Business as at December 31, 2001, December
31, 2002 and December 31, 2003, and the related consolidated statements of income and of cash flows
for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report
from PricewaterhouseCoopers LLP, present fairly in all material respects the consolidated financial
condition of the Business, respectively, as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the Business as at March 31, 2004, and the related
unaudited consolidated statements of income and cash flows for the three-month period ended on such
date, present fairly in all material respects the consolidated financial condition of the Business,
respectively, as at such date, and the consolidated results of its operations and its consolidated
cash flows for the three-month period then ended (subject to normal year-end audit adjustments and
the absence of notes). All such financial statements have been prepared in accordance with GAAP.

          4.2
No Change. Since December 31, 2003, there has been no event, development or
circumstance that has had or will have a Material Adverse Effect.

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

          4.4
Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has the
corporate power and authority, and the legal right, to make, deliver and perform the Loan
Documents to

 

 

39

which it is a party and, in the case of the Borrower, to borrow or have Letters of Credit issued
hereunder. Each Loan Party has taken all necessary corporate or other action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the extensions of credit on the terms and conditions of this
Agreement. Except as would not have a Material Adverse Effect, no consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Transaction, the extensions of credit hereunder or the
execution, delivery, performance, validity or enforceability of this Agreement or any of the other
Loan Documents, except (i) consents, authorizations, filings and notices described in Schedule 4.4,
which consents, authorizations, filings and notices have been obtained or made and are in full
force and effect or the failure to obtain which could not reasonably be expected to have a Material
Adverse Effect and (ii) the filings referred to in Section 4.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).

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

     4.6
No Material Litigation. No litigation, investigation or proceeding of or before
any
arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower,
reasonably likely
to be commenced within a reasonable time period against the Borrower or any of its
Subsidiaries or
against any of their Properties or revenues which, taken as a whole, are material (a) with
respect to any of
the Loan Documents, or (b) that would reasonably be expected to have a Material Adverse
Effect.

     4.7
No Default. No Default or Event of Default has occurred and is
continuing.

     4.8
Ownership of Property; Liens. Except as set forth in Schedule 4.8, each of the
Borrower and its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property,
and good title to, or a valid leasehold interest in, all its other Property, in each case,
except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect, and none
of such
Property is subject to any Lien except as permitted by the Loan
Documents. Schedule 1.1B
lists all real
property which is owned or leased by any Loan Party as of the Closing Date.

     4.9
Intellectual Property. Each of the Borrower and its Subsidiaries owns, or has a
valid
license to use, all Intellectual Property necessary for the conduct of its business as
currently conducted
free and clear of all Liens, except where the failure to do so could not reasonably be
expected to have a
Material Adverse Effect. No holding, injunction, decision or judgment has been rendered by any
Governmental Authority and none of the Borrower or its Subsidiaries has entered into any
settlement
stipulation or other agreement (except license agreements in the ordinary course of business)
which would
limit, cancel or question the validity of, or any Loan Party’s rights in, any Intellectual
Property in any
respect that could reasonably be expected to have a Material Adverse Effect. No claim has been
asserted
or threatened or is pending by any Person challenging or questioning the use of any
Intellectual Property
or the validity or effectiveness of any Intellectual Property, nor does the Borrower know of
any valid

 

 

40

basis for any such claim, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. The use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person in a manner that could reasonably be
expected to have a Material Adverse Effect. The Borrower and its Subsidiaries take all reasonable
actions to protect their Intellectual Property, including Intellectual Property that is
confidential in nature, except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.

          4.10 Taxes. Each of Holdings, the Borrower and its Subsidiaries has filed or caused to
be filed all federal, state, provincial and other material tax returns that are required to be
filed and has
paid all taxes shown to be due and payable on said returns and all other taxes, fees or other
charges
imposed on it or any of its Property by any Governmental Authority (other than any the amount
or
validity of which are currently being contested in good faith by appropriate proceedings and
with respect
to which any reserves required in conformity with GAAP have been provided on the books of
Holdings,
the Borrower or its Subsidiaries, as the case may be), except where the failure to do so could
not
reasonably be expected to have a Material Adverse Effect; no tax Lien has been filed, and to
the
knowledge of the Borrower, no claim is being asserted, with respect to such tax, fee or other
charge.

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

          4.12 Labor Matters. There are no strikes or other labor disputes against the Borrower
or any of its Subsidiaries pending that could reasonably be expected to have a Material
Adverse Effect.
Hours worked by and payment made to employees of the Borrower and its Subsidiaries have not
been in
violation of the Fair Labor Standards Act, The Employment Standards Code (Manitoba), the
Canada
Labour Code or any other applicable Requirement of Law dealing with such matters that could
reasonably
be expected to have a Material Adverse Effect. All payments due from the Borrower or any of
its
Subsidiaries on account of employee health and welfare insurance that could reasonably be
expected to
have a Material Adverse Effect if not paid have been paid or accrued as a liability on the
books of the
Borrower or the relevant Subsidiary.

          4.13 ERISA. (a) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: neither a Reportable Event nor an “accumulated
funding
deficiency” (within the meaning of Section 412(a) of the Code or Section 302(a)(2) of ERISA)
has
occurred during the five-year period prior to the date on which this representation is made
with respect to
any Plan, and each Plan has complied with the applicable provisions of ERISA and the Code; no
termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has
arisen, during such five-year period; the present value of all accrued benefits under each
Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the last annual
valuation date
prior to the date on which this representation is made or deemed made, exceed the value of the
assets of
such Plan allocable to such accrued benefits; neither the Borrower nor any of its Subsidiaries
has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or would
reasonably be
expected to result in a liability under ERISA; neither the Borrower nor any of its
Subsidiaries would
become subject to any liability under ERISA if the Borrower or such Subsidiary were to
withdraw
completely from all Multiemployer Plans as of the valuation date most closely preceding the
date on
which this representation is made; and no Multiemployer Plan is in Reorganization or
Insolvent.

 

 

41

          (b) The Borrower and its Subsidiaries have not incurred, and do not reasonably expect to
incur, any liability under ERISA or the Code with respect to any plan within the meaning of Section
3(3) of ERISA which is subject to Title IV of ERISA that is maintained by a Commonly Controlled
Entity (other than Borrower and its Subsidiaries) (a “Commonly Controlled Plan”) merely by
virtue of being treated as a single employer under Title IV of ERISA with the sponsor of such plan
that would reasonably be likely to have a Material Adverse Effect and result in a direct obligation
of the Borrower and its Subsidiaries to pay money.

          4.14 Canadian Benefit and Pension Plans. Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect: (i) the Canadian Pension Plans
are duly registered under all applicable provincial pension benefits legislation; (ii) all material
obligations of the Borrower and each Subsidiary (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the Canadian Pension Plans,
the Canadian Benefit Plans and the funding agreements therefor have been performed in a timely
fashion; (iii) there are no outstanding disputes concerning the assets held pursuant to any such
funding agreement; (iv) all contributions or premiums required to be made by the Borrower or any of
its Subsidiaries to the Canadian Pension Plans and the Canadian Benefit Plans have been made in a
timely fashion in accordance with the terms of such plans and applicable laws and regulations; (v)
all employee contributions to the Canadian Pension Plans and the Canadian Benefit Plans required to
be made by way of authorized payroll deduction have been properly withheld and fully paid into such
plans in a timely fashion; (vi) all reports and disclosures relating to the Canadian Pension Plans
and Canadian Benefit Plans required by any applicable laws or regulations have been filed or
distributed in a timely fashion; (vii) to the knowledge of the Borrower, there have been no
improper withdrawals, or applications of, the assets of any of the Canadian Pension Plans; (viii)
there have been no partial terminations of any Canadian Pension Plan and, to the knowledge of the
Borrower, no circumstances exist or have existed that could result, or be reasonably anticipated to
result, in the declaration of a partial termination of any Canadian Pension Plan under applicable
laws; (ix) no amount is owing by or in respect of any of the Canadian Pension Plans under the
Income Tax Act (Canada) or any provincial taxation statute; (x) each of the Canadian Pension Plans
which is a defined benefit registered pension plan is fully funded both on an ongoing basis and on
a solvency basis pursuant to actuarial assumptions and methods which are utilized in the valuation
last filed with the applicable governmental authorities for such plan and which are consistent with
generally accepted actuarial principles; and (xi) the Borrower, after diligent enquiry, has neither
any knowledge, nor any grounds for believing, that any of the Canadian Pension Plans is the subject
of an investigation, any other proceeding, an action or a claim.

          4.15 Investment Company Act. No Loan Party is an “investment company”, or a company
“controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940,
as amended. No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.

          4.16
Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all the
Subsidiaries of the Borrower at the date of this Agreement. Schedule 4.15 sets forth as of the
Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each
Subsidiary, the percentage of each class of Capital Stock owned by each Loan Party.

          (b) As of the Closing Date, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to officers, employees
or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of
Holdings, the Borrower or any other Subsidiary.

 

 

42

          4.17 Environmental Matters. Other than exceptions to any of the following that would
not reasonably be expected to have a Material Adverse Effect:

          (a) the Borrower and its Subsidiaries: (i) are, and within the period of all applicable
statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii)
hold all Environmental Permits (each of which is in full force and effect) required for any
of their current operations or for any property owned, leased, or otherwise operated by any
of them; and (iii) are, and within the period of all applicable statutes of limitation have
been, in compliance with all of their Environmental Permits.

          (b) Materials of Environmental Concern are not present at, on, under, in, or about any
real property now or formerly owned, leased or operated by the Borrower or any of its
Subsidiaries, or at any other location (including, without limitation, any location to which
Materials of Environmental Concern have been sent for re-use or recycling or for treatment,
storage or disposal) which could reasonably be expected to (i) give rise to liability of the
Borrower or any of its Subsidiaries under any applicable Environmental Law or (ii) interfere
with the Borrower’s or any of its Subsidiaries’ continued operations.

          (c) there is no judicial, administrative, or arbitral proceeding (including any notice
of violation or alleged violation) under or relating to any Environmental Law to which the
Borrower or any of its Subsidiaries is, or to the knowledge of the Borrower or any of its
Subsidiaries will be, named as a party that is pending.

          (d) neither the Borrower nor any of its Subsidiaries has received any written request
for information, or been notified that it is a potentially responsible party under or
relating to the federal Comprehensive Environmental Response, Compensation, and Liability
Act or any similar Environmental Law.

          (e) neither the Borrower nor any of its Subsidiaries has entered into or agreed to any
written consent decree, order or settlement, or is subject to any written judgment, decree
or order, in any judicial, administrative, arbitral, or other forum for dispute resolution,
relating to any past or current non-compliance with or liability under any Environmental
Law.

          (f) neither the Borrower nor any of its Subsidiaries has assumed or retained by
contract, any liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law.

          4.18 Accuracy of Information, etc. No statement or information (excluding the
projections and pro forma financial information referred to below) contained in this Agreement, any
other Loan Document or any certificate furnished to the Administrative Agent or the Lenders or any
of them, by or on behalf of any Loan Party for use in connection with the transactions contemplated
by this Agreement or the other Loan Documents when taken as a whole, contained as of the date such
statement, information, or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information contained in
the materials referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial information may differ from
the projected results set forth therein by a material amount.

 

 

43

          4.19
Security Documents. (a) Each of the Guarantee and Collateral Agreement, the
Canadian Security Documents and the Netherlands Security Documents is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral described therein (including any proceeds of any item of
Collateral). In the case of (i) the Pledged Securities described in the Guarantee and Collateral
Agreement and the CDN Guarantee and Collateral Agreement, when any stock certificates or notes, as
applicable, representing such Pledged Securities are delivered to the Administrative Agent, (ii)
the other Collateral described in the Guarantee and Collateral Agreement and the Canadian Security
Documents, as applicable, when financing statements in appropriate form are filed in the offices
specified on Schedule 4.19(a) (which financing statements have been duly completed and executed (as
applicable) and delivered to the Administrative Agent) and such other filings as are specified on
Schedule 3 to each of the Guarantee and Collateral Agreement and the CDN Guarantee and Collateral
Agreement, as applicable, are made and (iii) the Collateral described in the Netherlands Security
Documents, when registered with the relevant Governmental Authority, as applicable, the
Administrative Agent shall have a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral (including any proceeds of any item of
Collateral) (to the extent a security interest in such Collateral can be perfected through the
registrations required in connection with the Netherlands Security Documents, the filing of
financing statements in the offices specified on Schedule 4.19(a) and the filings specified on
Schedule 3 to each of the Guarantee and Collateral Agreement and the CDN Guarantee and Collateral
Agreement, as applicable, and through the delivery of the Pledged Securities required to be
delivered on the Closing Date), as security for the Obligations (as defined in each of the
Guarantee and Collateral Agreement, the Canadian Security Documents and the Netherlands Security
Documents, as applicable), in each case prior and superior in right to any other Person (except, in
the case of Collateral other than Pledged Stock, Liens permitted by Section 7.3) to the extent
required by the Guarantee and Collateral Agreement, the Canadian Security Documents and the
Netherlands Security Documents, as applicable.

                    (b) Each of the Mortgages is effective to create in favor of the Administrative Agent for the
benefit of the Lenders a legal, valid and enforceable Lien on the Mortgaged Properties described
therein and proceeds thereof; and when the Mortgages are filed in the offices specified on Schedule
4.19(b) (in the case of the Mortgages to be executed and delivered pursuant to Section 6.13(a)) or
in the recording office designated by the Borrower (in the case of any Mortgage to be executed and
delivered pursuant to Section 6.10(b)), each Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in the Mortgaged
Properties described therein and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other Person (other than
Liens permitted by Section 7.3 or other encumbrances or rights permitted by the relevant Mortgage).

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

          4.21 Regulation H. No Mortgage encumbers improved real property which is located in an
area that has been identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under the National Flood
Insurance Act of 1968 (except any Mortgaged Properties as to which such flood insurance as required
by Regulation H has been obtained and is in full force and effect as required by this Agreement).

          4.22 Senior Indebtedness. The Obligations constitute “Senior Indebtedness” of the
Borrower under and as defined in the Senior Subordinated Note Indenture. The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement and the CDN Guarantee and

 

 

44

Collateral Agreement, as applicable, constitute “Guarantor Senior Indebtedness” of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note Indenture.

SECTION 5. CONDITIONS PRECEDENT

          5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make
the initial extension of credit requested to be made by it is subject to the satisfaction (or
waiver), prior to or concurrently with the making of such extension of credit on the Closing Date,
of the following conditions precedent:

          (a)
Credit Agreement; Guarantee and Collateral Agreement. The Administrative
Agent shall have received (i) this Agreement, executed and delivered by the Administrative
Agent, the Borrower and each Person listed on Schedule 1.1 A, (ii) the Guarantee and
Collateral Agreement, executed and delivered by Holdings, the Borrower and each non-Canadian
Subsidiary Guarantor, (iii) each of the Canadian Security Documents, executed and delivered
by each Canadian Subsidiary Guarantor, Holdings and the Borrower, as applicable, (iv) each
of the Netherlands Security Documents, executed and delivered by each applicable Netherlands
Subsidiary Guarantor and (v) an Acknowledgement and Consent in the form attached to the
Guarantee and Collateral Agreement or the CDN Guarantee and Collateral Agreement, as
applicable, executed and delivered by each Issuer (as defined therein), if any, that is not
a Loan Party.

          (b) Transaction, etc. The following transactions shall concurrently be
consummated (the events described in clauses (i) through (v) below, the “Transaction”):

               (i) Holdings, directly or through its wholly-owned Subsidiaries, shall have acquired
from the Vendors (as defined in the Acquisition Agreement), pursuant to the Acquisition
Agreement, the Business, consisting of all of the issued and outstanding common stock or
other equity interests of Dunlop Standard Aerospace Group (U.S.), Inc., Standard Aero
Limited, Standard Aero (Asia) PTE Limited, Standard Aero (Australia) PTY Limited and Dunlop
Standard Aerospace (Nederland) BV (the “Acquisition”);

               (ii) Holdings shall have received $212,000,000 from the proceeds of equity issued by
Holdings to funds managed by the Sponsor, and such proceeds shall have been contributed to
the Borrower;

               (iii) the Borrower shall have received at least $200,000,000 in gross cash proceeds
from the issuance of the Senior Subordinated Notes;

               (iv) the Administrative Agent shall have received satisfactory evidence that the fees
and expenses to be incurred in connection with the Acquisition and the financing thereof
shall not exceed $50,000,000; and

               (v) The Administrative Agent shall have received satisfactory evidence that (i) the
Existing Credit Agreement shall have been terminated and all amounts thereunder shall have
been paid in full and satisfactory arrangements shall have been made for the termination of
all Liens granted in connection therewith and (ii) a notice of redemption shall have been
delivered to all holders of the Existing Notes.

          (c)
Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
received (i) the Pro Forma Balance Sheet, (ii) audited balance sheets, together with all
footnotes thereto, of the ERO Division of Dunlop Standard Aerospace Group for the 2002 and
2003 fiscal years and

 

 

45

audited cash flow statements and income statements of the ERO Division of Dunlop Standard Aerospace
Group for the 2001, 2002 and 2003 fiscal years and (iii) unaudited interim consolidated financial
statements of the ERO Division of Dunlop Standard Aerospace Group for the last fiscal quarter ended
after the date of the latest applicable financial statements delivered pursuant to clause (ii) of
this paragraph.

          (d) Approvals. All material governmental (excluding the United States Department of
Defense) and third party approvals necessary in connection with the Transaction, and the
transactions contemplated hereby to be entered into as of the Closing Date shall have been obtained
and be in full force and effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would restrain, prevent or
otherwise impose materially adverse conditions on the Transaction or the financing contemplated
hereby.

          (e) Fees. The Agents shall have received all fees required to be paid (including those
to be passed on to the Lenders), and all reasonable out-of-pocket expenses for which reasonably
detailed invoices have been presented (including reasonable fees, disbursements and other charges
of counsel to the Administrative Agent), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

          (f) Solvency Certificate. The Administrative Agent shall have received a solvency
certificate signed by the Chief Financial Officer on behalf of the Borrower, substantially in the
form of Exhibit H hereto.

          (g) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions in which Uniform Commercial Code financing
statements, Personal Property Security Act financing statements, or other filings or recordations
should be made to evidence or perfect security interests in all assets of the Loan Parties, and
such search shall reveal no liens on any of the assets of the Loan Party, except for Liens
permitted by Section 7.3 or liens to be discharged on or prior to the Closing Date.

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

          (i) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:

               (i) the legal opinion of Latham & Watkins LLP, counsel to Holdings, the Borrower
and its Subsidiaries, substantially in the form of Exhibit F;

               (ii) to the extent consented to by the relevant counsel, each legal opinion, if any,
delivered in connection with the Acquisition Agreement, accompanied by a reliance letter in
favor of the Lenders; and

               (iii) the legal opinion of local counsel in each of Ontario, Manitoba, British
Columbia, Quebec, Nova Scotia, the Netherlands and of such other special and local
counsel as may be reasonably required by the Administrative Agent.

 

 

46

          (j)
Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares, if any, of Capital Stock pledged
pursuant to each of the Guarantee and Collateral Agreement, the CDN Guarantee and Collateral
Agreement and the Netherlands Security Documents, together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the pledgor thereof
and (ii) each promissory note (if any), excluding promissory notes issued by directors,
officers and employees of any Loan Party, pledged to the Administrative Agent pursuant to
each of the Guarantee and Collateral Agreement, the CDN Guarantee and Collateral Agreement
and the Netherlands Security Documents endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof.

          (k)
Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code or Personal Property Security Act financing
statement) required by the Security Documents or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to Liens expressly
permitted by Section 7.3), shall have been delivered to the Administrative Agent in proper
form for filing, registration or recordation.

          (1) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and Collateral
Agreement.

          (m) Ratings. The Facilities shall have received a rating from each of
Moody’s and S&P.

          (n) Consolidated Total Leverage Ratio. The Administrative Agent shall have
received a certificate signed by a Responsible Officer on behalf of the Borrower certifying
that the Consolidated Total Leverage Ratio shall not exceed 5.80 to 1.00 and supported by
calculations reasonably satisfactory to, and with certain adjustments agreed upon by, the
Administrative Agent.

          5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any
Loan or to issue or participate in any Letter of Credit hereunder on any date (including, without
limitation, its initial extension of credit) is subject to the satisfaction of the following
conditions precedent:

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

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

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

 

 

47

SECTION 6. AFFIRMATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:

          6.1 Financial Statements. Furnish to the Administrative Agent for delivery to
each Lender (which may be delivered via posting on Intralinks):

          (a) as soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower, a copy of the audited consolidated and unaudited consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated and unaudited consolidating statements of income and of cash
flows for such year, setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without qualification arising out of the scope
of the audit, by PricewaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing; and

          (b) as soon as available, but in any event not later than 45 days after the end of each
of the first three quarterly periods of each fiscal year of the Borrower, the unaudited
consolidated and consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited consolidated and
consolidating statements of income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case in comparative form
the figures as of the end of and for the corresponding period in the previous year,
certified by a Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments and the lack of notes);

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

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

          (a) concurrently with the delivery of the financial statements referred to in Section
6.1 (a), a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in such certificate;

          (b) concurrently with the delivery of any financial statements pursuant to Section 6.1,
(i) a certificate of a Responsible Officer on behalf of the Borrower stating that such
Responsible Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be, and (y) to the extent
not previously disclosed to the Administrative Agent, a description of any new Subsidiary
and of any change in the jurisdiction of organization of any other Loan Party and a listing
of any material Intellectual Property filings by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of

 

 

48

the first such list so delivered, since the Closing Date), together with such
documents, if any, required to be filed or recorded in order to perfect the security
interest of the Administrative Agent therein;

          (c) as soon as available, and in any event no later than 45 days after the end of each
fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year
(including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of projected cash
flow, projected changes in financial position and projected income) (collectively, the
“Annual Operating Budget”):

          (d) promptly after the same are sent, copies of all financial statements and reports
that Holdings or the Borrower sends to the holders of any class of its debt securities or
public equity securities (except for Private Investors) and, promptly after the same are
filed, copies of all financial statements and reports that Holdings or the Borrower may make
to, or file with, the SEC;

          (e) promptly upon delivery thereof to Holdings or the Borrower and to the extent
permitted, copies of any accountants’ letters addressed to their respective Board of
Directors (or any committee thereof);

          (f) promptly upon obtaining knowledge thereof: any development, event, or condition
that could reasonably be expected to result in the payment by the Borrower and its
Subsidiaries of a Material Environmental Amount;

          (g) no later than 10 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or other
modification with respect to the Senior Subordinated Note Indenture; and

          (h) promptly, such additional financial and other information as the
Administrative Agent (for its own account or upon the request from any Lender) may
from time to time reasonably request.

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

          6.4
Conduct of Business and Maintenance of Existence, etc;
Compliance. (a) Preserve,
renew and keep in full force and effect its corporate or other existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise permitted by Section 7.4 and except to
the extent that failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) comply with all Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

49

          6.5
Maintenance of Property; Insurance. (a) Keep all Property useful and necessary
in its business in reasonably good working order and condition, ordinary wear and tear excepted,
except where the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

          (b) Take all reasonable and necessary steps, including, without limitation, in any proceeding
before the United States Patent and Trademark Office, the United States Copyright Office or the
Canadian Intellectual Property Office, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability, except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

          (c) Maintain insurance with financially sound and reputable insurance companies insurance on
all its Property in at least such amounts and against at least such risks (but including in any
event public liability, product liability and business interruption) as are usually insured against
in the same general area by companies engaged in the same or a similar business. All such insurance
shall, to the extent customary (but in any event, not including business interruption insurance and
personal injury insurance) (i) provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof and (ii) name the Administrative Agent as insured
party or loss payee. Upon the request of the Administrative Agent (such request not to be made more
than once per year), the Borrower shall deliver to the Administrative Agent a report of a reputable
insurance broker with respect to such insurance.

          6.6
Inspection of Property; Books and Records; Discussions. (a) Keep proper books of
records and account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all material dealings and transactions in relation to its
business and activities, (b) permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records upon reasonable notice
and during normal business hours (provided that such visits shall be coordinated by the
Administrative Agent, and in no event shall there be more than one such visit per year except
during the continuance of an Event of Default), (c) permit representatives of any Lender to discuss
the business, operations, properties and financial and other condition of Holdings, the Borrower
and its Subsidiaries with officers and employees of Holdings, the Borrower and its Subsidiaries and
(d) permit representatives of the Administrative Agent to have reasonable discussions regarding the
business, operations, properties and financial and other condition of Holdings, the Borrower and
its Subsidiaries with its independent certified public accountants; provided, that any such
discussions with the Borrower’s independent certified public accountants at the Borrower’s expense
shall, except while an Event of Default has occurred and is continuing, be limited to one meeting
per calendar year.

          6.7
Notices. Promptly upon a Responsible Officer of any Loan Party obtaining knowledge
thereof, give notice to the Administrative Agent (who shall promptly notify each Lender) of:

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

          (b) any litigation, investigation or proceeding which may exist at any time between
Holdings, the Borrower or any of its Subsidiaries and any other Person, that in either
case, could reasonably be expected to have a Material Adverse Effect;

          (c) the following events, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, as soon as possible and in any event within 30
days after the Borrower or any Subsidiary knows thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required contribution to a
Plan, Canadian Benefit

 

 

50

Plan or Canadian Pension Plan, the creation of any Lien in favor of the PBGC or a Plan or
any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer
Plan, (ii) the institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan, (iii) the
occurrence of any similar events with respect to a Commonly Controlled Plan, Canadian
Benefit Plan or Canadian Pension Plan, that would reasonably be likely to result in a direct
obligation of the Borrower and its Subsidiaries to pay money, (iv) the occurrence of an
unfunded liability on a solvency or a going concern basis in any Canadian Pension Plan, or
(v) the termination or partial termination of a Canadian Pension Plan or the occurrence of
any event that could result in the full or partial termination of any Canadian Pension Plan;

          (d) any development or event that has had or could reasonably be expected to have a
Material Adverse Effect; and

          (e) the acquisition of any Property after the Closing Date in which a security interest
is required to be created or perfected pursuant to Section 6.10.

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

          6.8
Environmental Laws. (a) Except as would not have a Material Adverse Effect, comply in all
material respects with, and make commercially reasonable efforts to ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws,
and obtain and comply in all material respects with and maintain, and make commercially reasonable
efforts to ensure that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all Environmental Permits required by applicable Environmental Laws.

          (b) Except as would not have a Material Adverse Effect, conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and other similar actions
to the extent required under applicable Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

          6.9 Interest Rate Protection. In the case of the Borrower, within 90 days after the
Closing Date, enter into, and thereafter maintain, Hedge Agreements to the extent necessary to
provide that at least 50% of the aggregate principal amount of Consolidated Total Leverage is
subject to either a fixed interest rate or interest rate protection for a period of not less than
two years, which Hedge Agreements shall have terms and conditions reasonably satisfactory to the
Administrative Agent.

          6.10 Additional Collateral, etc. (a) With respect to any Property (other than
Vehicles, bank accounts, cash and Cash Equivalents) located in the United States, Canada or the
Netherlands having a value, individually or in the aggregate of at least $1,000,000 acquired after
the Closing Date by any Loan Party other than Holdings (other than (x) any interests in real
property and any Property described in paragraph (c) or paragraph (d) of this Section, (y) any
Property subject to a Lien expressly permitted by Section 7.3(g) and (z) Instruments, Certificated
Securities, Securities and Chattel Paper, which are referred to in the last sentence of this
paragraph (a)) as to which the Administrative Agent for the benefit of the Lenders does not have a
perfected Lien, promptly (i) give notice of such Property to the Administrative Agent and execute
and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement,
the Canadian Security Documents or the Netherlands Security Documents, as applicable, or such other
documents as the Administrative Agent

 

 

51

reasonably requests to grant to the Administrative Agent for the benefit of the Lenders a security
interest in such Property and (ii) take all actions reasonably requested by the Administrative
Agent to grant to the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest in such Property (with respect to Property of a type owned by a Loan
Party as of the Closing Date to the extent the Administrative Agent, for the benefit of the
Lenders, has a perfected security interest in such Property as of the Closing Date), including,
without limitation, the filing of Uniform Commercial Code or Personal Property Security Act
financing statements in such jurisdictions as may be required by the Guarantee and Collateral
Agreement, the Canadian Security Documents or the Netherlands Security Documents, as the case may
be, or by law or as may be requested by the Administrative Agent. If any amount in excess of
$1,000,000 payable under or in connection with any of the Collateral shall be or become evidenced
by any Instrument, Certificated Security, Security or Chattel Paper (or, if more than $5,000,000 in
the aggregate payable under or in connection with the Collateral shall become evidenced by
Instruments, Certificated Securities, Securities or Chattel Paper), such Instrument, Certificated
Security, Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly
indorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement; provided, however, that in no event shall the Borrower be
required to deliver to the Administrative Agent any Pledged Notes issued by directors, officers or
employees of any Loan Party.

          (b) With respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $5,000,000 acquired after the Closing Date by any Loan Party
other than Holdings (other than any such real property subject to a Lien expressly permitted by
Section 7.3(g)), (i) give notice of such acquisition to the Administrative Agent and, if requested
by the Administrative Agent, execute and deliver a first priority Mortgage in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real property (provided, that
no Mortgage nor survey shall be obtained if the Administrative Agent determines in consultation
with the Borrower that the costs of obtaining such Mortgage or survey are excessive in relation to
the value of the security to be afforded thereby), (ii) if reasonably requested by the
Administrative Agent, (A) provide the Lenders with title and extended coverage insurance covering
such real property in an amount at least equal to the purchase price of such real property (or such
other amount as shall be reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate and (B) use commercially reasonable
efforts to obtain any consents or estoppels reasonably deemed necessary by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

          (c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or
acquired after the Closing Date (which, for the purposes of this paragraph, shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), by any Loan Party other than
Holdings, promptly (i) give notice of such acquisition or creation to the Administrative Agent and,
if requested by the Administrative Agent, execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement (or (A) to the applicable Canadian Security
Documents if such new Subsidiary is formed under the laws of Canada or one of the provinces thereof
or owns Property located in Canada or (B) to the Netherlands Security Documents if such new
Subsidiary is formed under the laws of the Netherlands) or such other documents as the
Administrative Agent reasonably deems necessary to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the Capital Stock of such
new Subsidiary that is owned by such Loan Party, (ii) deliver to the Administrative Agent the
certificates, if any, representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of such Loan Party, and (iii) at the
reasonable request of the Administrative Agent, cause such new Subsidiary (A) to become a party to
the Guarantee and Collateral Agreement, the CDN Guarantee and

 

 

52

Collateral Agreement or the Netherlands Security Documents, as applicable, and deliver a Quebec
Security Document, as applicable, and (B) to take such actions necessary or advisable to grant to
the Administrative Agent for the benefit of the Lenders a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement, the Canadian
Security Documents or the Netherlands Security Documents, as applicable, with respect to such new
Subsidiary (to the extent the Administrative Agent, for the benefit of the Lenders, has a perfected
security interest in the same type of Collateral as of the Closing Date), including, without
limitation, the filing of Uniform Commercial Code or Personal Property Security Act financing
statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement, the
Canadian Security Documents or the Netherlands Security Documents, as applicable, or by law or as
may be reasonably requested by the Administrative Agent.

          (d) With respect to any new Excluded Foreign Subsidiary created or acquired after the Closing
Date by any Loan Party other than Holdings, promptly (i) give notice of such acquisition or
creation to the Administrative Agent and, if requested by the Administrative Agent, execute and
deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or
such other documents as the Administrative Agent deems necessary or reasonably advisable in order
to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by such Loan Party
(provided, that in no event shall more than 65% of the total outstanding voting Capital Stock of
any such new Excluded Foreign Subsidiary be required to be so pledged), and (ii) deliver to the
Administrative Agent the certificates, if any, representing such Capital Stock, together with
undated stock powers, in blank, executed and delivered by a duly authorized officer of such Loan
Party, and take such other action as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Lien of the Administrative Agent thereon.

          6.11 Further Assurances. Maintain the security interest created by the Guarantee
and Collateral Agreement, the Canadian Security Documents and the Netherlands Security Documents as
a perfected security interest having at least the priority described in Section 4.19 (to the extent
such security interest can be perfected through the filing of UCC-1 or Personal Property Security
Act financing statements or financing change statements, publication in the Quebec Registry of
Personal and Movable Real Rights, the Intellectual Property filings to be made pursuant to Schedule
3 of the Guarantee and Collateral Agreement or the CDN Guarantee Collateral Agreement or the
Netherlands Security Documents, as applicable, the registrations required pursuant to the
Netherlands Security Documents, as applicable, or the delivery of Pledged Securities required to be
delivered under the Guarantee and Collateral Agreement, the CDN Guarantee and Collateral Agreement
or the Netherlands Security Documents, as applicable), subject to the rights of the Loan Parties
under the Loan Documents to dispose of the Collateral. From time to time the Loan Parties shall
execute and deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this Agreement and the
other Loan Documents, or of more fully perfecting or renewing the rights of the Administrative
Agent and the Lenders with respect to the Collateral as to which the Administrative Agent, for the
ratable benefit of the Lenders, has a perfected Lien as of the Closing Date pursuant hereto or
thereto, including, without limitation, filing any financing or continuation statements or
financing change statements under the Uniform Commercial Code or Personal Property Security Act (or
other similar laws) in effect in any jurisdiction with respect to the security interests created
hereby. Upon the exercise by the Administrative Agent or any Lender of any power, right, privilege
or remedy pursuant to this Agreement or the other Loan Documents which requires any consent,
approval, recording, qualification or authorization of any Governmental Authority, the Borrower
will execute and deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the Administrative Agent or such
Lender may be required to obtain from the

 

 

53

Borrower or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.

          6.12 Use of Proceeds. The proceeds of the Term Loans shall be used to effect the Transaction
and to pay related fees and expenses. The proceeds of the Revolving Loans, the Swingline Loans and
the Letters of Credit, shall be used to finance a portion of the Transaction (including purchase
price adjustments), to finance Permitted Acquisitions and for other general corporate purposes of
the Borrower and its Subsidiaries.

          6.13 Post Closing Real Property Matters. Within 60 days after the Closing
Date:

          (a) Deliver to the Administrative Agent a Mortgage with respect to each Mortgaged
Property, executed by a duly authorized officer of each party thereto.

          (b) If requested by the Administrative Agent, furnish (A) a policy of flood insurance that (1)
covers any parcel of improved real property that is encumbered by any Mortgage and is located in a
special flood hazard area, (2) is written in an amount not less than the outstanding principal
amount of the Indebtedness secured by such Mortgage that is reasonably allocable to such real
property or the maximum limit of coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is less, and (3) has a term
ending not earlier than the maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board.

          (c) Furnish to the Administrative Agent in respect of each Mortgaged Property a mortgagee’s
title insurance policy (or policies) or marked up unconditional binder for such insurance. Each
such policy shall (i) be in an amount satisfactory to the Administrative Agent; (ii) be issued at
ordinary rates; (iii) insure that the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances, except as disclosed therein;
(iv) name the Administrative Agent for the benefit of the Lenders as the insured thereunder; (v) be
in the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies);
(vi) contain such endorsements and affirmative coverage as the Administrative Agent may reasonably
request and (vii) be issued by title companies satisfactory to the Administrative Agent (including
any such title companies acting as co-insurers or reinsurers, at the option of the Administrative
Agent). The Administrative Agent shall have received evidence satisfactory to it that all premiums
in respect of each such policy, all charges for mortgage recording tax, and all related expenses,
if any, have been paid.

          (d) To the extent reasonably available, furnish to the Administrative Agent a copy
of (i) all recorded documents referred to, or listed as exceptions to title in, the title policy or
policies referred to in clause (a) above and (ii) all other material documents affecting the
Mortgaged Properties.

          (e) Deliver to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent.

SECTION 7. NEGATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or the Administrative
Agent hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:

 

 

54

          7.1 Financial Condition Covenants.

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

	 	 	 
	 	 	Consolidated
	Fiscal Quarter Ending During	 	Leverage Ratio
	          Fiscal Year 2004
	 	6.50:1.00
	          Fiscal Year 2005
	 	6.25:1.00
	          Fiscal Year 2006
	 	5.75:1.00
	          Fiscal Year 2007
	 	5.25:1.00
	          Fiscal Year 2008
	 	4.50:1.00
	          Fiscal Year 2009
	 	4.00:1.00
	          Fiscal Year 2010
	 	3.50:1.00
	          Fiscal Year 2011
	 	3.00:1.00

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

	 	 	 
	 	 	Consolidated Interest
	Fiscal Quarter Ending During	 	Coverage Ratio
	          Fiscal Year 2004
	 	2.00:1.00
	          Fiscal Year 2005
	 	2.00:1.00
	          Fiscal Year 2006
	 	2.25:1.00
	          Fiscal Year 2007
	 	2.50:1.00
	          Fiscal Year 2008
	 	2.75:1.00
	          Fiscal Year 2009
	 	3.00:1.00
	          Fiscal Year 2010
	 	3.25:1.00
	          Fiscal Year 2011
	 	3.50:1.00

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

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

     (b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any Subsidiary
Guarantor to the Borrower or any other Subsidiary and (iii) of any Excluded Foreign
Subsidiary to another Excluded Foreign Subsidiary;

     (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by
Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $50,000,000
at any one time outstanding;

     (d) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and any
refinancings, refundings, renewals or extensions thereof (without any increase in the
principal amount thereof or any shortening of the maturity of any principal amount thereof);

 

 

55

          (e) Guarantee Obligations made in the ordinary course of business (i) by the Borrower or
any of its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor and (ii) by
Excluded Foreign Subsidiaries of obligations of Excluded Foreign Subsidiaries;

          (f) Indebtedness of Excluded Foreign Subsidiaries, Canadian Subsidiary Guarantors and
Netherlands Subsidiary Guarantors in respect of local lines of credit, letters of credit, bank
guarantees, factoring arrangements, sale/leaseback transactions and similar extensions of credit in
the ordinary course of business not to exceed an aggregate principal amount of $30,000,000 at any
time;

          (g) Indebtedness of the Borrower or any of its Subsidiaries arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument inadvertently drawn by
the Borrower or such Subsidiary in the ordinary course of business against insufficient funds, so
long as such Indebtedness is repaid within five Business Days;

          (h) Indebtedness of an Excluded Foreign Subsidiary to a Loan Party in an aggregate principal
amount for all Excluded Foreign Subsidiaries not to exceed $25,000,000 at any time;

          (i) Indebtedness in the form of earn-outs and other contingent payments in respect of
acquisitions (both before or after any liability associated therewith becomes fixed);

          (j) (i) (A) Indebtedness of the Borrower in respect of the Senior Subordinated Notes in an
aggregate principal amount not to exceed $200,000,000 and (B) Guarantee Obligations of any
Subsidiary Guarantor in respect of such Indebtedness, provided that such Guarantee
Obligations are subordinated to the same extent as the obligations of the Borrower in respect of
the Senior Subordinated Notes and (ii) any refinancings, refundings, renewals or extensions of any
Indebtedness described in the foregoing clause (i); provided that (A) the principal amount
thereof is not increased, (B) the weighted average life to maturity of the principal amount thereof
has not decreased, nor the final maturity thereof shortened, (C) the obligations of the Borrower
and the Subsidiary Guarantors in respect of such Indebtedness are subordinated to the Obligations
to the same extent as the obligations of the Borrower and the Subsidiary Guarantors in respect of
the Senior Subordinated Notes, (D) the interest rate applicable to and fees payable in connection
with such Indebtedness is not in excess of that payable in respect of the Senior Subordinated
Notes, and (E) such Indebtedness otherwise contains terms which are, when taken as a whole, at
least as favorable to the Borrower and the Subsidiary Guarantors as the terms of the Indebtedness
described in the foregoing clause (i);

          (k) additional unsecured Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed $20,000,000 at any
one time outstanding;

          (1) (i) Indebtedness of the Borrower or any of its Subsidiaries pursuant to the agreement
for any other acquisition permitted under Section 7.8(f) and (ii) Indebtedness of the Borrower
under a Permitted Seller Note issued as consideration in connection with an acquisition permitted
under Section 7.8(f), in an aggregate amount for clauses (i) and (ii) hereof not to exceed
$20,000,000;

          (m) Indebtedness of the Borrower or any of its Subsidiaries in respect of workers’
compensation claims, self-insurance obligations, performance, bid and surety bonds and
completion guaranties, in each case in the ordinary course of business;

 

 

56

          (n) Indebtedness with respect to Purchase Card Arrangements in an aggregate amount
not to exceed $40,000,000;

          (o) Indebtedness incurred by the Borrower or any of it Subsidiaries arising from
agreements providing for indemnification related to sales or goods or adjustment of purchase
price or similar obligations in any case incurred in connection with the disposition of any
business, assets or Subsidiary of the Borrower; and

          (p) Indebtedness related to the conversion of contract status, with respect to the
T-56 Engine and Accessories Support Sub-Contract, from government-furnished materials to
contractor-furnished materials in an amount not to exceed $30,000,000 while this Agreement
is in effect, subject to the negotiation of arrangements relating to the payment thereof (to
the extent that any material portion of the principal amount thereof is required or
anticipated to be paid in cash other than cash earned by the Borrower and its Subsidiaries
in the performance of its obligations relating to such contract) that are reasonably
satisfactory to the Administrative Agent.

          7.3
Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property,
whether now owned or hereafter acquired, except for:

          (a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case may be, to the
extent required by GAAP;

          (b) landlords’, 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 30 days or that are being contested in good faith by appropriate
proceedings;

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

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

          (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in
the ordinary course of business that, in the aggregate, do not materially detract from the
value of the Property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;

          (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(d) and Liens created after the date hereof in
connection with any refinancing, refundings, or renewals or extensions thereof permitted by
Section 7.2(d), provided, that no such Lien is spread to cover any additional
Property after the Closing Date and that the amount of Indebtedness secured thereby is not
increased;

          (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred
pursuant to Section 7.2(c) or 7.2(f) to finance the acquisition of fixed or capital assets,
provided, that (i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any
Property other than the Property

 

 

57

financed by such Indebtedness and the proceeds thereof and (iii) the principal
amount of Indebtedness secured thereby is not increased;

          (h) Liens created pursuant to the Security Documents;

          (i) any interest or title of a lessor under any lease entered into by the Borrower or
any other Subsidiary in the ordinary course of its business and covering only the assets so
leased, and any financing statement filed in connection with any such lease;

          (j) (i) inchoate Liens arising from judgments in circumstances not constituting an
Event of Default under Section 8(i) and (ii) Liens (other than inchoate Liens) arising from
judgments in circumstances not constituting an Event of Default under Section 8(i) for a
period not in excess of sixty (60) days after such Lien attaches to specific assets of a
Loan Party;

          (k) Liens on property or assets acquired pursuant to an acquisition permitted under
Section 7.8(h) (and the proceeds thereof) or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to an acquisition permitted under
Section 7.8(h) and not created in contemplation thereof;

          (1) Liens on Property of Excluded Foreign Subsidiaries securing Indebtedness
permitted by this Agreement to be incurred by such Excluded Foreign Subsidiaries;

          (m) receipt of progress payments and advances from customers in the ordinary course of
business to the extent same creates a Lien on the related inventory and proceeds thereof;

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

          (o) other Liens with respect to obligations that do not exceed $5,000,000 at any one
time outstanding;

          (p) Liens on assets of any Canadian Subsidiary Guarantor or any Netherlands Subsidiary
Guarantor securing Indebtedness permitted by Section 7.2(f); provided that prior to
the incurrence of such Liens, the Administrative Agent shall have entered into an
intercreditor agreement and any amendments to the Canadian Security Documents and the
Netherlands Security Documents, as applicable, providing for the sharing of the Collateral
of such Canadian Subsidiary Guarantor and Netherlands Subsidiary Guarantor, as applicable,
on an equal and ratable basis, on terms and conditions reasonably satisfactory to the
Administrative Agent; and

          (q) Liens arising out of consignment or similar arrangements for the sale by the
Borrower and its Subsidiaries of goods through third parties in the ordinary course of
business.

          7.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
or substantially all of its Property or business, except that:

          (a) any Subsidiary of the Borrower may be merged, amalgamated or consolidated with or
into the Borrower (provided, that the Borrower shall be the continuing or surviving
corporation) or with or into any Subsidiary Guarantor (provided, that (i) such
Subsidiary Guarantor shall be the continuing or surviving corporation or (ii) simultaneously
with such

 

 

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transaction, the continuing or surviving corporation shall become a Subsidiary Guarantor
and the Borrower shall comply with Section 6.10 in connection therewith);

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

          (c) any Excluded Foreign Subsidiary may be merged or consolidated with or into, or
be liquidated into, another Excluded Foreign Subsidiary;

          (d) any Excluded Foreign Subsidiary may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to any other Excluded Foreign Subsidiary;

          (e) Dispositions permitted by Section 7.5 may be consummated; and

          (f) any Investment expressly permitted by Section 7.8 may be structured as a merger,
consolidation or amalgamation.

          7.5 Disposition of Property. Dispose of any of its owned Property (including, without
limitation, receivables) or its leased real property located in San Antonio, Texas, whether now
owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s Capital Stock to any Person, except:

          (a) the Disposition of obsolete or worn out property in the ordinary course of
business;

          (b) (i) the sale of inventory in the ordinary course of business, (ii) the
cross-licensing or non-exclusive licensing of Intellectual Property, in the ordinary course
of business and (iii) the contemporaneous exchange, in the ordinary course of business, of
Property for Property of a like kind (other than as set forth in clause (ii)), to the extent
that the Property received in such exchange is of a value equivalent to the value of the
Property exchanged (provided, that after giving effect to such exchange, the value
of the Property of the Loan Parties subject to perfected first priority Liens in favor of
the Administrative Agent under the Security Documents is not materially reduced);

          (c) Dispositions permitted by Section 7.4;

          (d) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any
Subsidiary Guarantor;

          (e) the Disposition of other assets having a fair market value not to exceed 5% of
consolidated total assets of the Borrower in the aggregate for any fiscal year of the
Borrower;

          (f)
any Recovery Event, provided, that the requirements of Section 2.12(b)
are complied with in connection therewith;

          (g) the leasing, occupancy agreements or sub-leasing of Property that would not
materially interfere with the required use of such Property by the Borrower or its
Subsidiaries;

          (h) the transfer for fair value of Property (including Capital Stock of Subsidiaries)
to another Person in connection with a joint venture arrangement with respect to the
transferred Property; provided, that the aggregate book value of all Property so
transferred, plus, without

 

 

59

duplication, the aggregate amount of Investments made pursuant to Section 7.8(h),
shall not exceed 5% of consolidated total assets of the Borrower while this Agreement
is in effect;

          (i) the sale or discount, in each case without recourse and in the ordinary course of
business, of overdue accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale or financing of receivables);

          (j) the Disposition of Engine Pool Assets;

          (k) transfers of condemned property as a result of the exercise of “eminent domain” or
other similar policies to the respective Governmental Authority or agency that has condemned
same (whether by deed in lieu of condemnation or otherwise), and transfers of properties
that have been subject to a casualty to the respective insurer of such property as part of
an insurance settlement; and

          (1) the Disposition of any Immaterial Subsidiary that is a Foreign Subsidiary.

          7.6
Restricted Payments. Declare or pay any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of the Borrower or
any Subsidiary, whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in obligations of the
Borrower or any Subsidiary, or enter into any derivatives or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”)
obligating the Borrower or any Subsidiary to make payments to such Derivatives Counterparty as a
result of any change in market value of any such Capital Stock (collectively, “Restricted
Payments”), except that:

          (a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary
Guarantor;

          (b) (i) the Borrower may pay dividends to Holdings to permit Holdings to purchase
Holdings’ common stock or common stock options from present or former officers or employees
of Holdings, the Borrower or any Subsidiary upon the death, disability or termination of
employment of such officer or employee, provided, that the aggregate amount of
payments under this clause (i) in any fiscal year (net of any proceeds received by Holdings
and contributed to the Borrower subsequent to the date hereof in connection with resales of
any common stock or common stock options so purchased) shall not exceed the lesser of (A)
the sum of (1) $2,500,000 and (2) any Restricted Payments permitted (but not made) pursuant
to this clause (i) in prior fiscal years and (B) $7,500,000, and (ii) the Borrower may pay
dividends to Holdings to permit Holdings to pay management fees to the Sponsor pursuant to
the terms of the Management Agreement;

          (c) the Borrower may pay dividends to Holdings to permit Holdings to (A) pay general
and administrative expenses incurred in the ordinary course of business not to exceed
$1,000,000 in any fiscal year and (B) pay any taxes to the extent Holdings is liable for
such taxes and such taxes are attributable to the operations of the Borrower and its
Subsidiaries; provided, however, that the Borrower shall not make any such tax
distributions in excess of its and its Subsidiaries stand-alone tax liability in respect of
such taxes;

          (d) the Borrower may make Restricted Payments to Holdings to effect the Transaction;

 

 

60

          (e) Excluded Foreign Subsidiaries may make Restricted Payments to other Excluded
Foreign Subsidiaries; and

          (f) the Borrower may purchase fractional shares of the Borrower’s common stock
arising out of stock dividends, splits or combinations or business combinations.

          7.7
Capital Expenditures. Make any Capital Expenditure, except Capital Expenditures of
the Borrower and its Subsidiaries in the ordinary course of business not to exceed in any fiscal
year $25,000,000; provided, that (A) up to 100% of any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried over for expenditure
in the next succeeding fiscal year and (B) Capital Expenditures made during any fiscal year shall
be deemed made, first, in respect of amounts permitted for such fiscal year as provided
above and second, in respect of amounts carried over from the prior fiscal year as provided
above.

          7.8 Investments. Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or
other debt securities of, or all or substantially all of the assets constituting an ongoing
business from, or make any other investment in, any other Person (all of the foregoing,
“Investments”), except:

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

          (b) Investments in Cash Equivalents and Foreign Cash Equivalents;

          (c) Investments arising in connection with the incurrence of Indebtedness permitted by
Sections 7.2(b) and (e);

          (d) loans and advances to employees of Holdings, the Borrower or any of its
Subsidiaries in the ordinary course of business (excluding travel and entertainment
expenses, but including relocation expenses) in an aggregate amount (for the Borrower and
all Subsidiaries) not to exceed $2,000,000 at any one time outstanding;

          (e) Investments (other than those relating to the incurrence of Indebtedness permitted
by Section 7.8(c)) by the Borrower or any of its Subsidiaries in the Borrower or any Person
that, prior to such Investment, is a Subsidiary Guarantor;

          (f) Permitted Acquisitions (i) agreed to by the Required Lenders or (ii) in an
aggregate purchase price (other than purchase price paid through the issuance of equity)
amount not to exceed in any fiscal year an amount equal to $50,000,000 plus 50% of any
increase in Consolidated EBITDA of the Borrower since the Closing Date up to the date of
such Permitted Acquisition, with Consolidated EBITDA as of the Closing Date being deemed to
be $88,229,000 and Consolidated EBITDA as of the date of such Permitted Acquisition being
deemed to be Consolidated EBITDA for the most recent four fiscal quarters for which
financial statements are available without giving effect to any pro forma treatment of such
Permitted Acquisition;

          (g) loans by the Borrower to the officers and directors of Holdings or the Borrower or
any of their Subsidiaries in connection with management incentive plans in an aggregate
amount not to exceed $1,000,000 in any fiscal year and not to exceed $2,000,000 at any one
time outstanding, provided that such officers and directors invest such loans in the
Capital Stock of Holdings;

 

 

61

          (h) Investments by the Borrower and its Subsidiaries in joint ventures or similar
arrangements; provided, that the aggregate amount of such Investments, plus,
without duplication, the aggregate book value of Property transferred by the Borrower and
its Subsidiaries to joint ventures or similar arrangements pursuant to Section 7.5(h), shall
not exceed 5% of consolidated total assets of the Borrower while this Agreement is in
effect;

          (i) Investments (including debt obligations) received in the ordinary course of
business by the Borrower or any Subsidiary 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 out of the ordinary course of
business;

          (j) Investments by any Excluded Foreign Subsidiary in other Excluded Foreign
Subsidiaries;

          (k) Investments in existence on the Closing Date and listed on Schedule 7.8;

          (1) Investments of the Borrower or any Subsidiary under Hedge Agreements permitted
hereunder;

          (m) Investments of any Person in existence at the time such Person becomes a
Subsidiary of the Borrower; provided such Investment was not made in connection
with or anticipation of such Person becoming a Subsidiary of the Borrower;

          (n) Investments by the Borrower and the Subsidiary Guarantors in the form of loans and
advances to Excluded Foreign Subsidiaries permitted to be incurred by the Excluded Foreign
Subsidiaries under Section 7.2(h);

          (o) the Acquisition;

          (p) Investments so long as the aggregate amount thereof (determined as the amount
originally advanced, loaned or otherwise invested, less any returns on the respective
Investment not to exceed the original amount invested) at no time exceeds $30,000,000 at the
time made; and

          (q) Subsidiaries may be established or created, if (i) to the extent such new
Subsidiary is a Domestic Subsidiary, such Subsidiary complies with the provisions of Section
6.10(c) and (ii) if such new Subsidiary is an Excluded Foreign Subsidiary, such Subsidiary
complies with the provisions of Section 6.10(d), provided, that, in each case, to
the extent such new Subsidiary is created solely for the purpose of consummating a merger
transaction pursuant to an acquisition permitted by Section 7.8(f), and such new Subsidiary
at no time holds any assets or liabilities other than any merger consideration contributed
to it contemporaneously with the closing of such merger transactions, such new Subsidiary
shall not be required to take the actions set forth in Section 6.10(c) or Section 6.10(d),
as applicable, until the respective acquisition is consummated (at which time the surviving
entity of the respective merger transaction shall be required to so comply within ten
Business Days).

          7.9
Optional Payments and Modifications of Certain Debt Instruments. (a) Make or
offer to make any optional or voluntary payment, prepayment, repurchase or redemption of, or
otherwise voluntarily or optionally defease, any Senior Subordinated Notes, or segregate funds for
any such payment, prepayment, repurchase, redemption or defeasance (except, in each case, in
connection with any refinancing permitted under Section 7.2(j)), or enter into any derivative or
other transaction with any Derivatives Counterparty obligating the Borrower or any Subsidiary to
make payments to such

 

 

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Derivatives Counterparty as a result of any change in market value of any Senior Subordinated
Notes, (b) amend, modify or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of any Senior Subordinated Notes, if such modification
would (i) increase the principal amount thereof (other than any such increase in principal amount
arising from interest payments paid in kind), (ii) increase the interest rate payable in cash,
(iii) reduce the ability of Holdings to pay interest in kind, (iv) shorten the maturity thereof,
(v) make the subordination terms thereof less favorable to the Lenders, (vi) require Holdings or
the Borrower to maintain compliance with any financial covenants, whether compliance with such
covenants is required at all times or is tested only at the end of any fiscal period, (vii) provide
for any default under such Senior Subordinated Notes in the case of a Default or Event of Default
under this Agreement or (viii) prohibit, restrict or limit the ability of Holdings to act, or
refrain from acting, in a manner permitted by this Agreement, or (c) designate any Indebtedness
(other than obligations of the Loan Parties pursuant to the Loan Documents) as “Designated Senior
Indebtedness” (or any other defined term having a similar purpose) for the purposes of the Senior
Subordinated Note Indenture.

          7.10 Transactions with Affiliates. Enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the
payment of any management, advisory or similar fees, with any Affiliate (other than Holdings, the
Borrower, any Subsidiary Guarantor or any Excluded Foreign Subsidiary) unless such transaction is
(a) otherwise not prohibited under this Agreement and (b) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm’s length transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, the Borrower and its Subsidiaries may (i) pay to the Sponsor and its Affiliates fees and
expenses pursuant to the Management Agreement, (ii) enter into any transaction with an Affiliate
that is expressly permitted by the terms of this Agreement to be entered into by the Borrower or
such Subsidiary with an Affiliate and (iii) without being subject to the terms of this Section
7.10, enter into any transaction with any Person which is an Affiliate of the Borrower only by
reason of such Person and the Borrower having common directors. For the avoidance of doubt, this
Section 7.10 shall not apply to employment arrangements with, and payments of compensation or
benefits to or for the benefit of, management.

          7.11 Sales and Leasebacks. Enter into any arrangement with any Person providing for
the leasing by the Borrower or any Subsidiary of real or personal property which is to be sold or
transferred by the Borrower or such Subsidiary (a) to such Person or (b) to any other Person to
whom funds have been or are to be advanced by such Person on the security of such property or
rental obligations of the Borrower or such Subsidiary, except for sales or transfers (i) in
connection with dispositions of Engine Pool Assets, (ii) that do not exceed $25,000,000 in the
aggregate at any time outstanding or (iii) between the Borrower and any Subsidiary Guarantor or
between Subsidiary Guarantors.

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

          7.13 Negative Pledge Clauses. Enter into any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any Guarantor, its obligations under the Guarantee and Collateral
Agreement, the Canadian Security Documents or the Netherlands Security Documents, other than (a)
this Agreement and the other Loan Documents, (b) any agreements governing any purchase money Liens
or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby and the proceeds thereof),
(c) software and other Intellectual Property licenses pursuant to which the Borrower is the
licensee of the relevant software or Intellectual Property, as the

 

 

63

case may be, (in which case, any prohibition or limitation shall relate only to the assets
subject of the applicable license), (d) Contractual Obligations incurred in the ordinary course of
business and on customary terms which limit Liens on the assets subject of the applicable
Contractual Obligation, (e) the Senior Subordinated Note Indenture (and the instruments or
agreements governing any Indebtedness permitted pursuant to Section 7.2(j)(ii)), (f) any agreements
regarding Indebtedness of any Excluded Foreign Subsidiary (in which case, any prohibition or
limited shall only be effective against the assets of such Excluded Foreign Subsidiary and its
Subsidiaries) and (g) prohibitions and limitations in effect on the date hereof and listed on
Schedule 7.13.

          7.14 Clauses Restricting Subsidiary Distributions. Enter into any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary or (b) make Investments in the Borrower or any other Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary, (iii) any restrictions set
forth in the Senior Subordinated Note Indenture (and the instruments or agreements governing any
Indebtedness permitted pursuant to Section 7.2(j)(ii)), (iv) any restrictions contained in
agreements related to Indebtedness of any Excluded Foreign Subsidiary (in which case such
restriction shall relate only to such Excluded Foreign Subsidiary and its Subsidiaries) and (v) any
restrictions regarding licenses or sublicenses by the Borrower and its Subsidiaries of Intellectual
Property in the ordinary course of business (in which case such restriction shall relate only to
such Intellectual Property).

          7.15 Lines of Business. Enter into any business, either directly or through any
Subsidiary, except for the Business or a business reasonably related thereto or that are
reasonable extensions thereof.

          7.16 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge
Agreements entered into in the ordinary course of business, and not for speculative purposes, to
protect against changes in interest rates or foreign exchange rates.

          7.17 Changes in Jurisdictions of Organization: Name. Except upon prompt written notice
(but in any event no later than five (5) Business Days after consummating an activity referred to
in clause (a) or (b) below) to the Administrative Agent and delivery to the Administrative Agent of
all additional executed financing statements, financing change statements and other documents
reasonably requested by the Administrative Agent to maintain the validity, perfection and priority
of the security interests provided for in the Security Documents:

          (a) change its jurisdiction of organization; or

          (b) change its name.

SECTION 8. EVENTS OF DEFAULT

          If any of the following events shall occur and be continuing:

          (a) The Borrower shall fail to pay any principal of any Loan when due in accordance
with the terms hereof; or the Borrower shall fail to pay any Reimbursement Obligation or
interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or
under any

 

 

64

other Loan Document, within three Business Days after any such Reimbursement Obligation, interest
or other amount becomes due in accordance with the terms hereof; or

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

          (c) Any Loan Party shall default in the observance or performance of any agreement contained
in Section 6.7(a) or Section 7; or

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

          (e) The Borrower or any of its Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness for Borrowed Money (excluding the Loans and Reimbursement
Obligations) on the scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness for Borrowed Money beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness for Borrowed Money
was created; or (iii) default in the observance or performance of any other agreement or condition
relating to any such Indebtedness for Borrowed Money or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event of default shall occur, the effect of
which payment or other default or other event of default is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness for Borrowed Money to become due
prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor
thereunder or to become payable; provided, that (A) a default, event or condition described
in this paragraph shall not at any time constitute an Event of Default unless, at such time, one or
more defaults or events of default of the type described in this paragraph shall have occurred and
be continuing with respect to Indebtedness for Borrowed Money the outstanding principal amount of
which individually exceeds $15,000,000, and in the case of Indebtedness for Borrowed Money of the
types described in clauses (i) and (ii) of the definition thereof, with respect to such
Indebtedness which exceeds such amount either individually or in the aggregate and (B) this
paragraph (e) shall not apply to (i) secured Indebtedness that becomes due as a result of the sale,
transfer, destruction or other disposition of the Property or assets securing such Indebtedness for
Borrowed Money if such sale, transfer, destruction or other disposition is not prohibited hereunder
and under the documents providing for such Indebtedness or (ii) any Guarantee Obligations except to
the extent such Guarantee Obligations shall become due and payable by the Borrower or any of its
Subsidiaries and remain unpaid after any applicable grace period or period permitted following
demand for the payment thereof; or

          (f) (i) Holdings, the Borrower or any of its Material Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution,

 

 

65

composition or other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Holdings, the Borrower or any of its Subsidiaries (other than
any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against Holdings, the Borrower or any of its Subsidiaries (other than
any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause
(i) above that (A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of its Subsidiaries (other than any
Immaterial Subsidiary) any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against substantially all of its assets that
results in the entry of an order for any such relief that shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings, the
Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall consent to or
approve of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or
(v) Holdings, the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall
generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or

          (g) (i) The Borrower or any of its Subsidiaries shall incur any liability in connection with
any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a
Plan shall arise on the assets of the Borrower or any Subsidiary, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event
or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Subsidiary shall, or in the reasonable opinion of the Required Lenders is likely
to, incur any liability as a result of a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition (other than one which could not reasonably
be expected to result in a violation of any applicable law or of the qualification requirements of
the Code) shall occur or exist with respect to a Plan or a Commonly Controlled Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to result in a direct obligation of the
Borrower and its Subsidiaries to pay money that could have a Material Adverse Effect; or

          (h) One or more judgments or decrees shall be entered against the Borrower or any of its
Material Subsidiaries involving for the Borrower and its Material Subsidiaries taken as a whole a
liability (not paid or fully covered by insurance or effective indemnity) of $15,000,000 or more,
and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or

          (i) Any of the Security Documents shall cease, for any reason (other than by reason of the
express release thereof pursuant to Section 10.16), to be in full force and effect in any material
respect, or any Loan Party shall so assert, or any Lien created by any of the Security Documents
shall cease in any material respect to be enforceable and of the same effect and priority purported
to be created thereby; provided, that there shall be no Event of Default under this clause
(i) to the extent such Event of Default arises from (A) the resignation of the Administrative Agent
or (B) the negligence or willful misconduct of the Administrative Agent

 

 

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following a reasonable request from the Borrower to execute any document or take any other
action relating to such Security Document or the Liens granted thereunder; or

          (j) The guarantee contained in Section 2 of the Guarantee and Collateral Agreement or
the CDN Guarantee and Collateral Agreement shall cease, for any reason (other than by reason
of the express release thereof pursuant to Section 10.16), to be in full force and effect in
any material respect or any Loan Party shall so assert; or

          (k) (i) Holdings shall cease to own 100% of the Capital Stock of the Borrower or
Holdings shall incur, create, assume or suffer to exist any Lien on the Capital Stock of the
Borrower (other than under the Loan Documents); or (ii) if Holdings’ Capital Stock is not
traded on a nationally-recognized stock exchange, the Private Investors shall cease to own,
free and clear of all Liens, at least 50.1% of the Capital Stock of Holdings; or (iii) if
Holdings’ Capital Stock is traded on a nationally-recognized stock exchange, the Private
Investors shall cease to own, free and clear of all Liens, at least 30% of the Capital Stock
of Holdings and any other shareholder shall own a greater amount, or (iv) at any time and
for any reason whatsoever, a majority of the Board of Directors of Holdings shall not be
Continuing Directors, or (v) a Specified Change of Control shall occur; or

          (1) the Senior Subordinated Notes or the guarantees thereof shall cease, for any
reason, to be validly subordinated to the Obligations or the obligations of the Subsidiary
Guarantors under the Guarantee and Collateral Agreement or the CDN Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note Indenture, or any
Loan Party shall so assert;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including, without limitation, all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Facility Lenders, the Administrative Agent
may, or upon the request of the Majority Revolving Facility Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Revolving Commitments to be terminated forthwith,
whereupon the Revolving Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents required thereunder) to
be due and payable forthwith, whereupon the same shall immediately become due and payable. In the
case of all Letters of Credit with respect to which presentment for honor shall not have occurred
at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other obligations of the
Borrower hereunder and under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower then due and owing hereunder and under the other Loan Documents
shall have been paid in full, the balance, if

 

 

67

any, in such cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this Section or
otherwise in any Loan Document, presentment, demand and protest of any kind are hereby expressly
waived by the Borrower.

SECTION 9. THE AGENTS

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

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

          9.3 Exculpatory Provisions. Neither any Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a
final and nonappealable decision of a court of competent jurisdiction to have resulted from its or
such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made by any Loan Party
or any officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in, or received by the
Agents under or in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document or for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties, books or records of
any Loan Party.

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

 

 

68

appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

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

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

          9.7 Indemnification. The Lenders agree to indemnify each Agent in its capacity as such
(to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of
Holdings or the Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any

 

 

69

documents contemplated by or referred to herein or therein or the transactions contemplated hereby
or thereby or any action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent’s gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other amounts payable
hereunder.

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

          9.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Borrower effective upon
appointment of a successor Agent. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event
of Default under Section 8(a) or Section 8(f) with respect to the Borrower shall have occurred and
be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties
of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent
effective upon such appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or further act or deed on
the part of such former Administrative Agent or any of the parties to this Agreement or any holders
of the Loans. If no successor Administrative Agent shall have been so appointed by the Required
Lenders with such consent of the Borrower and shall have accepted such appointment within 30 days
after the retiring Administrative Agent’s giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and with the consent of the Borrower (such
consent not to be unreasonably withheld or delayed), appoint a successor Administrative Agent, that
shall be a bank that has an office in New York, New York with a combined capital and surplus of at
least $500,000,000. After any retiring Administrative Agent’s resignation as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

          9.10 Authorization to Release Liens and Guarantees. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to effect any release of Liens or Guarantee
Obligations contemplated by Section 10.16.

          9.11
Quebec. (a) Without prejudice to the foregoing, each Lender and each provider of
a Specified Hedge Agreement and/or Specified Cash Management
Arrangement (collectively, the “Quebec Secured Parties”) and the Administrative Agent (in its sole capacity as the initial holder of the
Debentures (as defined below) hereby irrevocably appoints and authorizes the Administrative Agent
to act as the person holding the power of attorney (in such capacity,
the “fonde de pouvoir”) of
all present and future Quebec Secured Parties and holders of the Debentures as contemplated under
Article 2692 of the Civil Code of Quebec for the purposes of holding any security granted under the
Quebec Security Documents pursuant to the laws of the Province of Quebec to secure payment of
debentures or any titles of indebtedness issued by any Loan Party (collectively, the “Quebec
Security Granting Parties”) (which debentures, as amended, restated, replaced, modified or
supplemented at any time shall, for purposes of

 

 

70

this Section 9.11, be
referred to as the “Debentures”), and to enter into, to take and to hold on
their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are
conferred upon the fondé de pouvoir under any hypothec. Moreover, without prejudice to such
appointment and authorization to act as the person holding the power of attorney as aforesaid, each
Quebec Secured Party hereby irrevocably appoints and authorizes the Administrative Agent (in such
capacity, the “Custodian”) to act as agent and custodian on its own behalf as Administrative Agent
and for and on behalf of the present and future Quebec Secured Parties to hold and to be the sole
registered holder of any Debenture or other title of indebtedness, the whole notwithstanding
Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other
applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and
addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of
any such Debenture or other title of indebtedness and owing to each Quebec Secured Party in
accordance with Section 10.6 and (ii) each Quebec Secured Party will be entitled to the benefits of
any charged property covered by any hypothec and will participate in the proceeds of realization of
any such charged property, the whole in accordance with the terms of the Loan Documents.

          (b) Each of the fondé de pouvoir and the Custodian shall (i) have the sole and exclusive right
and authority to exercise, except as may be otherwise specifically restricted by the terms of the
Loan Documents, all rights and remedies given to fondé de pouvoir and the Custodian (as applicable)
with respect to the charged property under any hypothec, any Debenture, any other title of
indebtedness or pledge thereof relating to any hypothec, applicable laws or otherwise, (ii) benefit
from and be subject to all provisions hereof with respect to the Administrative Agent mutatis
mutandis, including, without limitation, all such provisions with respect to the liability or
responsibility to and indemnification by the Lenders, and (iii) be entitled to delegate from time
to time any of its powers or duties under any hypothec, any Debenture, any other title of
indebtedness or pledge thereof relating to any hypothec, applicable laws or otherwise and on such
terms and conditions as it may determine from time to time. Any person who becomes a Lender, any
assignee of a Quebec Secured Party and any assignee of a holder of Debentures or other titles of
indebtedness shall, by execution of the relevant assignment agreement or otherwise, be deemed to
have consented to and confirmed, and ratified the constitution of: (A) the fondé de pouvoir as the
person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a
Lender, a Quebec Secured Party or a holder of Debentures or other titles of indebtedness, all
actions taken by the fondé de pouvoir in such capacity and (B) the Custodian as the agent and
custodian as aforesaid and to have ratified, as of the date it becomes a Lender, a Quebec Secured
Party or a holder of Debentures or other titles of indebtedness, all actions taken by the Custodian
in such capacity.

          (c) The Administrative Agent hereby agrees to act as such fondé de pouvoir and Custodian.

          (d) The parties hereto expressly waive the provisions and protection of Section 32 of the Act
respecting the special powers of legal persons (Quebec). The Administrative Agent may acquire and
be the holder of the Debentures or other titles of indebtedness. Each of the parties hereto
acknowledge and agree that the Debentures constitute a title of indebtedness as such term is used
in Article 2692 of the Civil Code of Quebec.

          (e) Notwithstanding Section 10.11, the provisions of this Section 9.11 shall be governed by
the laws of the Province of Quebec and the federal laws of Canada applicable therein.

          9.12 Co-Syndication Agents. The Co-Syndication Agents shall not have any duties
or responsibilities hereunder in their respective capacities as such.

 

 

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SECTION 10. MISCELLANEOUS

          10.1 Amendments and Waivers. Neither this Agreement, any other Loan Document, nor
any terms hereof or thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights or obligations of the Administrative Agent, the Swingline Lender, the Issuing
Lender, the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive or reduce the principal amount
or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee
payable hereunder (except (A) in connection with the waiver of applicability of any post-default
increase in interest rates (which waiver shall be effective with the consent of the Majority
Facility Lenders of each adversely affected Facility) and (B) that any amendment or modification of
defined terms used in the financial covenants in this Agreement shall not constitute a reduction in
the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any
payment thereof, or increase the amount or extend the expiration date of any Lender’s Revolving
Commitment, in each case without the written consent of each Lender directly and adversely affected
thereby; (ii) eliminate or reduce the voting rights of any Lender under this Section 10.1 without
the written consent of such Lender; (iii) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or substantially all of
the Collateral or release all or substantially all of the Guarantors from their obligations under
the Guarantee and Collateral Agreement or the CDN Guarantee and Collateral Agreement, as
applicable, in each case without the written consent of all Lenders; (iv) amend, modify or waive
any provision of Section 2.18 without the written consent of the Majority Facility Lenders in
respect of each Facility adversely affected thereby; (v) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility without the written consent of
all Lenders under such Facility; (vi) amend, modify or waive any provision of Section 9 without the
written consent of the Administrative Agent; (vii) amend, modify or waive any provision of Section
2.6 or 2.7 without the written consent of the Swingline Lender; or (viii) amend, modify or waive
any provision of Section 3 without the written consent of the Issuing Lender. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of
the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not continuing unless
limited by the terms of such waiver; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.

          Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with
the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add
one or more additional credit facilities to this Agreement and to permit the extensions of credit
from time to time outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans
and Revolving Extensions of Credit and the accrued interest and fees in respect thereof and (b) to
include

 

 

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appropriately the Lenders holding such credit facilities in any determination of the Required
Lenders and Majority Facility Lenders.

          In addition, notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the relevant
Replacement Term Loans (as defined below) to permit the refinancing of all outstanding Term Loans
(“Refinanced Term Loans”) with a replacement term loan tranche hereunder (“Replacement Term
Loans”), provided that (a) the aggregate principal amount of such Replacement Term
Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) the
Applicable Margin for such Replacement Term Loans shall not be higher than the Applicable Margin
for such Refinanced Term Loans, (c) the weighted average life to maturity of such Replacement Term
Loans shall not be shorter than the weighted average life to maturity of such Refinanced Term Loans
at the time of such refinancing and (d) all other terms applicable to such Replacement Term Loans
shall be substantially identical to, or less favorable to the Lenders providing such Replacement
Term Loans than, those applicable to such Refinanced Term Loans, except to the extent necessary to
provide for covenants and other terms applicable to any period after the latest final maturity of
the Term Loans in effect immediately prior to such refinancing.

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

	 	 	 	 	 
	

	 	Borrower:
	 	Standard Aero Holdings, Inc.
	

	 	 	 	500-1780 Wellington Avenue
	

	 	 	 	Winnipeg, Manitoba, Canada
	

	 	 	 	Attention: Bradley Bertouille
	

	 	 	 	Telecopy: 204-784-9647
	

	 	 	 	Telephone: 204-987-8860
	 
	 	 	 	 
	

	 	 	 	with a copy to:
	 
	 	 	 	 
	

	 	 	 	The Carlyle Group
	

	 	 	 	1001 Pennsylvania Avenue, N.W., Suite 220 South
	

	 	 	 	Washington, D.C. 20004
	

	 	 	 	Attention: Andrew S. Shinn
	

	 	 	 	Telecopy: 202-347-5550
	

	 	 	 	Telephone: 202-347-2626
	 
	 	 	 	 
	

	 	Administrative Agent:
	 	JPMorgan Chase Bank
	

	 	 	 	1111 Fannin, 10th Floor
	

	 	 	 	Loan and Agency Services Group
	

	 	 	 	Houston, Texas 77002
	

	 	 	 	Attention: Peggy Sanders
	

	 	 	 	Telecopy: 713-750-2938
	

	 	 	 	Telephone: 713-750-7940
	 
	 	 	 	 
	

	 	With a copy to:
	 	JPMorgan Chase Bank

 

 

73

	 	 	 	 	 
	

	 	 	 	270 Park Avenue, 4th Floor
	

	 	 	 	New York, New York 10017
	

	 	 	 	Attention: Richard C. Smith
	

	 	 	 	Telecopy: 212-270-5100
	

	 	 	 	Telephone: 212-270-5435

provided that any notice, request or demand to or upon the Administrative Agent, the Lenders
or the Borrower shall not be effective until received.

          Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or
the Borrower may, in its 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.

          10.3
No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder
or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

          10.4 Survival of Representations and Warranties. All representations and warranties
made hereunder, in the other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans and other extensions of credit hereunder.

          10.5
Payment of Expenses; Indemnification. The Borrower agrees (a) to pay or reimburse
the Administrative Agent and the Joint Lead Arrangers for all their respective reasonable out-of-pocket costs and expenses incurred in connection with the syndication of the Facilities (other
than fees payable to syndicate members) and the development, preparation, execution and delivery of
this Agreement and the other Loan Documents and any other documents prepared in connection herewith
or therewith and any amendment, supplement or modification thereto, and, as to the Administrative
Agent only, the administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of counsel to the
Administrative Agent (including one primary counsel and such local counsel as the Administrative
Agent may reasonably require in connection with collateral matters, but no more than one counsel in
any jurisdiction) in connection with all of the foregoing, (b) to pay or reimburse each Lender and
the Administrative Agent for all their documented out-of-pocket costs and expenses incurred in
connection with the enforcement of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the documented fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent, (c) to pay, indemnify, or reimburse each Lender and the
Administrative Agent for, and hold each Lender and the Administrative Agent harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and similar other taxes, if any, which may be payable or determined
to be payable in connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Agreement, the other

 

 

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Loan Documents and any such other documents and (d) to pay, indemnify or reimburse each Lender,
each Agent, their respective affiliates, and their respective officers, directors, trustees,
employees, advisors, agents and controlling Persons (each, an
“Indemnitee”) for, and hold each
Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages,
penalties, costs, expenses or disbursements arising out of any actions, judgments or suits of any
kind or nature whatsoever, arising out of or in connection with any claim, action or proceeding
relating to or otherwise with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the Loans or the
violation of, noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower any of its Subsidiaries or any of the Properties and the fees and
disbursements and other charges of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”),
provided, that the Borrower shall have no
obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found to have resulted from the gross negligence or willful misconduct
of such Indemnitee or its affiliates, officers, directors, trustees, employees, advisors, agents or
controlling Persons. Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights
of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee. All amounts due under
this Section 10.5 shall be payable promptly after receipt of a reasonably detailed invoice
therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to Senior
Vice President - Finance (Telephone No. 204-987-8860) (Fax No. 204-784-9647), at the address of the
Borrower set forth in Section 10.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The agreements in this
Section 10.5 shall survive repayment of the Obligations.

          10.6
Successors and Assigns; Participations and Assignments. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any affiliate of the Issuing Lender
that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null
and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section.

          (b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees (each, an “Assignee”) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

     (A) the Borrower, provided that no consent of the Borrower shall be required
for an assignment to a Lender, an affiliate of a Lender, an Approved Fund (as defined below)
or, if an Event of Default under Section 8(a) or (f) has occurred and is continuing, any
other Person; and

     (B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender,
an Affiliate of a Lender or an Approved Fund.

     (C) the Issuing Lender, provided that no consent of the Issuing Lender shall be
required for an assignment of all or any portion of a Term Loan.

 

 

75

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

     (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an
Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s
Commitments or Loans under any Facility, the amount of the Commitments or 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)
shall not be less than $5,000,000 (or, in the case of the Term Facility, $1,000,000) unless
each of the Borrower and the Administrative Agent otherwise consent, provided that
(1) no such consent of the Borrower shall be required if an Event of Default under Section
8(a) or (f) has occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its affiliates or Approved Funds, if any;

     (B) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500; provided that only one such fee shall be payable in the case of
contemporaneous assignments to or by two or more Approved Funds; and

     (C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an administrative questionnaire.

            For
the purposes of this Section 10.6, “Approved
Fund” means any Person (other than a natural
person) that is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c)(i) an entity or an Affiliate of an entity that
administers or manages a Lender or (ii) an entity or an Affiliate of an entity that is the
investment advisor to a Lender.

          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from
and after the effective date specified in each Assignment and Assumption the Assignee thereunder
shall be a party hereto 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 2.19, 2.20, 2.21 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6 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 paragraph (c) of this Section.

          (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices 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 amount of the Loans and L/C Obligations 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
Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower, the Issuing Lender and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.

 

 

76

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

          (c)(i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a
“Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement. Any
agreement 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 may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver that (1) requires the consent of each Lender directly and adversely affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section.

          (ii) A Participant shall not be entitled to receive any greater payment under Section 2.19 or
2.20 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 Borrower’s prior written consent to such greater amounts. Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 2.20 unless such Participant
complies with Section 2.20(d).

          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided, that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.

          (e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue
Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph
(d) above.

          10.7
Adjustments; Set-off. (a) Except to the extent that this Agreement provides
for payments to be allocated to a particular Lender or to the Lenders under a particular Facility,
if any Lender (a “Benefitted Lender”) shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section
8(f), or otherwise) in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender’s Obligations, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such portion of each such
other Lender’s Obligations, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the excess

 

 

77

payment or benefits of such
collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

          (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) after the
expiration of any cure or grace periods, to set off and appropriate and apply against such amount
any and all deposits (general or special, time or demand, provisional or final but excluding trust
accounts), in any currency, and any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided, that the failure to give such
notice shall not affect the validity of such setoff and application.

          10.8 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.

          10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

          10.10 Integration. This Agreement and the other Loan Documents represent the entire
agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof.

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

          10.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:

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

     (b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action
or

 

 

78

proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;

     (c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Borrower at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall have been notified pursuant thereto;

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

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

          10.13 Judgment Currency.

          (a) If, for the purpose of obtaining or enforcing judgment against the Borrower in any court
in any jurisdiction, it becomes necessary to convert into any other
currency (the “Judgment Currency”) an amount due under this Agreement or any other Loan Document in any currency (the
“Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate
of exchange prevailing on the Business Day immediately preceding the date of actual payment of the
amount due, in the case of any proceeding in the courts of the State of New York or in the courts
of any other jurisdiction that will give effect to such conversion being made on such date, or the
date on which the judgment is given, in the case of any proceeding in the courts of any other
jurisdiction (the applicable date as of which such conversion is made being referred to as the
“Judgment Conversion Date”).

          (b) If, in the case of any proceeding in the court of any jurisdiction referred to in Section
10.13(a), there is a change in the rate of exchange prevailing between the Judgment Conversion Date
and the date of actual receipt of the amount due in immediately available funds, the Borrower shall
pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to
ensure that the amount actually received in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of the Obligation Currency
which could have been purchased with the amount of the Judgment Currency stipulated in the judgment
or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount
due from the Borrower under this Section 10.13 shall be due as a separate debt and shall not be
affected by judgment being obtained for any other amounts due under or in respect of this
Agreement. The term “rate of exchange” in this Section means the rate of exchange at which the
Administrative Agent, on the relevant date at or about 12:00 noon (New York time), would be
prepared to sell, in accordance with its normal course foreign currency exchange practices, the
Obligation Currency against the Judgment Currency.

          10.14 Acknowledgments. The Borrower hereby acknowledges that:

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

     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with
or duty to the Borrower arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and

 

 

79

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

          10.15 Confidentiality. The Agents and the Lenders agree to treat any and all
information, regardless of the medium or form of communication, that is disclosed, provided or
furnished, directly or indirectly, by or on behalf of the Borrower or any of its affiliates,
whether in writing, orally, by observation or otherwise and whether furnished before or after the
Closing Date (“Confidential Information”), strictly confidential and not to use Confidential
Information for any purpose other than evaluating the Transaction and negotiating, making
available, syndicating and administering the Credit Agreement (the
“Agreed Purposes”). Without
limiting the foregoing, each Agent and each Lender agrees to treat any and all Confidential
Information with no less than adequate means to preserve its confidentiality, and each Agent and
each Lender agrees not to disclose Confidential Information, at any time, in any manner whatsoever,
directly or indirectly, to any other Person whomsoever, except (1) to its directors, officers,
employees, counsel and other representatives (collectively, the
“Representatives”), to the extent
necessary to permit such Representatives to assist in connection with the Agreed Purposes, (2) to
prospective Lenders and participants in connection with the syndication (including secondary
trading) of the Facilities and Commitments and Loans hereunder, in each case who are informed of
the confidential nature of the information and agree to observe and be bound by standard
confidentiality terms, (3) upon the request or demand of any Governmental Authority having
jurisdiction over it, (4) in response to any order of any Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (5) to the extent reasonably required or
necessary, in connection with any litigation or similar proceeding relating to the Facilities, (6)
that has been publicly disclosed other than in breach of this Section 10.15, (7) to the National
Association of Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender or (8) to the extent reasonably required
or necessary, in connection with the exercise of any remedy under the Loan Documents. Each Agent
and each Lender acknowledges that (i) Confidential Information includes information that is not
otherwise publicly available and that such non-public information may constitute confidential
business information which is proprietary to the Borrower and (ii) the Borrower has advised the
Agents and the Lenders that it is relying on the Confidential Information for its success and would
not disclose the Confidential Information to the Agents and the Lenders without the confidentiality
provisions of this Agreement.

          10.16
Release of Collateral and Guarantee Obligations. (a) Notwithstanding anything to
the contrary contained herein or in any other Loan Document, upon request of the Borrower in
connection with any Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any affiliate of any Lender
that is a party to any Specified Hedge Agreement) take such actions as shall be required to release
its security interest in any Collateral being Disposed of in such Disposition, and to release any
Guarantee Obligations under any Loan Document of any Person being Disposed of in such Disposition,
to the extent necessary to permit consummation of such Disposition in accordance with the Loan
Documents.

          (b) Notwithstanding anything to the contrary contained herein or any other Loan
Document, when all Obligations (other than obligations in respect of any Specified Hedge Agreement
or any Specified Cash Management Arrangement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon request of the Borrower,
the Administrative Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to release all Guarantee
Obligations under any Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge

 

 

80

Agreements. Any such release of Guarantee Obligations shall be deemed subject to the
provision that such Guarantee Obligations shall be reinstated if after such release any portion of
any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise
be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization
of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or
any substantial part of its property, or otherwise, all as though such payment had not been made.

          10.17 Accounting Changes. In the event that any Accounting Change (as defined below)
shall occur and such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent
agree to enter into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the criteria for evaluating
the Borrower’s financial condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. Until such time as such an amendment shall have been executed
and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated or construed as if
such Accounting Changes had not occurred. “Accounting Changes” refers to changes in
accounting principles required by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

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

          10.19 USA PATRIOT ACT. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Publ. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.

          10.20
Parallel Debt. With a view to the Parallel Debt (as defined in the Guarantee and
Collateral Agreement) created pursuant to Section 2.9 of the Guarantee and Collateral Agreement,
each of the Lenders and the Agents agrees and confirms that to the extent the Administrative Agent
irrevocably (onaantastbaar) receives any amount in payment of the Parallel Debt of a Netherlands
Subsidiary Guarantor, the Administrative Agent shall distribute that amount among the Lenders or
Agents that are creditors of the Obligations (as defined in the Guarantee and Collateral Agreement)
of that Netherlands Subsidiary Guarantor in accordance with this Agreement and the Guarantee and
Collateral Agreement relating to the distribution of proceeds. Upon irrevocable receipt by a Lender
or agent of any amount so distributed to it (a “Received
Amount”), the Obligations of that
Netherlands Subsidiary Guarantor to the relevant Lender(s) or Agent(s) shall be reduced by amounts
totaling an amount (a “Deductible Amount”) equal to the Received Amount in the manner as if the
Deductible Amount were received as a payment of the Obligations on the date of receipt by that
Lender or Agent of the Received Amount.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	 	STANDARD AERO HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ [ILLEGIBLE]
	

	 	 	 	 
	

	 	 	 	Name:
	

	 	 	 	Title:

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	POST HIGH YIELD, LP

BY: POST ADVISORY GROUP, LLC

AS GENERAL PARTNER
	 
	 	 	 	 
	

	 	By:
	 	/s/ Lawrence A. Post
	

	 	 	 	 
	 	 	Name: Lawrence A. Post

Title: Chairman

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION 
	 	 	Name of Lender
	 
	 	 	 	 
	

	 	By:
	 	/s/ Brian P. Schwinn
	

	 	 	 	 
	

	 	Name:
	 	Brian P. Schwinn
	

	 	Tltle:
	 	Duly Authorized Signatory

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	KZH CYPRESSTREE-1 LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ Susan Lee
	

	 	 	 	 
	 	 	Name: SUSAN LEE

Title: AUTHORIZED AGENT

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	KZH PONDVIEW LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ Susan Lee
	

	 	 	 	 
	 	 	Name: SUSAN LEE

Title: AUTHORIZED AGENT

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	KZH SOLEIL-2LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ Susan Lee
	

	 	 	 	 
	 	 	Name: SUSAN LEE

Title: AUTHORIZED AGENT

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	KZH STERLING LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ Susan Lee
	

	 	 	 	 
	 	 	Name: SUSAN LEE

Title: AUTHORIZED AGENT

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	Crédit Industriel et Commercial
	 
	 	 	 	 
	

	 	By:
	 	/s/ Brian O’Leary
	

	 	 	 	 
	

	 	 	 	Name: Brian O’Leary
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	

	 	By:
	 	/s/ Sean Mounier
	

	 	 	 	 
	

	 	 	 	Name: Sean Mounier
	

	 	 	 	Title: Vice President

 

 

	 	 	 	 	 
	 	 	LEHMAN BROTHERS INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ [ILLEGIBLE]
	

	 	 	 	 
	 	 	Name:

Title:

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	LEH MAN COMMERCIAL PAPER INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ [ILLEGIBLE]
	

	 	 	 	 
	 	 	Name:

Title:

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 NATEXIS BANQUES POPULAIRES 

 	 
	 	 	 
	 	Name of Lender 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                      /s/ FRANK H. MADDEN, JR.
 	 
	 	 	Name:  	FRANK H. MADDEN, JR. 	 
	 	 	Title: VICE PRESIDENT & GROUP
MANAGER 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                     /s/ JORDAN H. LEVY
 	 
	 	 	Name:  JORDAN H. LEVY 	 
	 	 	Title:  	ASSISTANT VICE PRESIDENT 	 
	 

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch

 	 
	 	By:  	/s/ Peter Chanvin
 	 
	 	 	Peter Chanvin  	 
	 	 	Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	  /s/ Vanessa Gomez
 	 
	 	 	Vanessa Gomez 	 
	 	 	Associate 	 
	 

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	JPMORGAN SECURITIES INC.

 	 
	 	By:  	/s/ Thomas H. Kozlark
 	 
	 	 	Name:  Thomas H. Kozlark 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK

 	 
	 	By:  	/s/ Thomas H. Kozlark
 	 
	 	 	Name:  Thomas H. Kozlark 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Credit Agreement

 

 

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

          This Compliance Certificate is delivered to you pursuant to Section 6.2 of the Credit
Agreement, dated as of August 24, 2004 (as amended, supplemented or otherwise modified from
time to
time, the “Credit Agreement”), among Standard Aero Holdings, Inc., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from time to time
parties to the
Credit Agreement as lenders (the “Lenders”), Lehman Commercial Paper Inc. and Credit Suisse
First
Boston, as co-syndication agents (in such capacity, the
“Co-Syndication Agents”), and JPMorgan
Chase
Bank, as administrative agent (in such capacity, the
“Administrative Agent”). Unless otherwise
defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to
them in
the Credit Agreement.

          1. At the end of the accounting period, for the accounting period ended                 ,
covered by the financial statements attached hereto as Attachment
1, the Borrower has no
knowledge of
the existence of any condition or event which constitutes a Default or Event of Default [, except
as set
forth below].

          2. Attached hereto as Attachment 2 are the computations showing compliance with
the covenants set forth in Sections 7.1 and 7.7 of the Credit Agreement.

          [3. Include description of any new Subsidiary, any change in jurisdiction of
incorporation and any material Intellectual Property filings, to the extent not previously
disclosed to the
Administrative Agent.]

 

 

          IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed as of
this                      day of                     , 200  .

	 	 	 	 	 
	 	STANDARD AERO HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

Attachment 1

to Compliance Certificate

[Financial Statements]

 

 

Attachment 2

to Compliance Certificate

          The information described herein is as of                     , 200  , and pertains to the period from
                    , 200   to                     , 200  .

[Covenant Calculations]

 

 

EXHIBIT C

FORM OF CLOSING CERTIFICATE

          Pursuant to section 5.1(h) of the Credit Agreement dated as of August 24, 2004, among
Standard Aero Holdings, Inc., as Borrower, the several lenders from time to time parties
thereto, Lehman
Commercial Paper Inc. and Credit Suisse First Boston, as co-syndication agents and JPMorgan
Chase
Bank, as administrative agent (the “Credit Agreement”; unless otherwise defined herein, terms
defined in
the Credit Agreement and used herein shall have the meanings given to them in the Credit
Agreement),
the undersigned [Insert name of officer] [Insert title
of officer] of                      (the “Company”), hereby certifies on behalf of the Company as follows:

	 	1.  	The representations and warranties of the Company set forth in
each of the Loan
Documents to which it is a party or which are contained in any certificate
furnished by or on behalf of the Company pursuant to any of the Loan
documents
to which it is a party are true and correct in all material respects on and
as of the
date hereof with the same effect as if made on the date hereof, except for
representations and warranties expressly stated to relate to a specific
earlier date,
in which case such representations and warranties were true and correct in
all
material respects as of such earlier date.
	 
	 	2.  	                     is the duly elected and qualified Corporate Secretary of
the Company and the signature set forth for such officer below is such
officer’s true and genuine signature.
	 
	 	3.  	No Default or Event of Default has occurred and is continuing
as of the date
hereof or after giving effect to the Loans and other extensions of credit to
be
made on the date hereof [Borrower only].

          The undersigned Corporate Secretary of the Company hereby certifies as follows:

	 	1.  	Attached hereto as Annex 1 is a true and complete copy
of a Certificate of Good
Standing or the equivalent from the Company’s jurisdiction of organization
dated
as of a recent date prior to the date hereof. There are no liquidation or
dissolution proceedings pending or to my knowledge threatened against the
Company, nor has any other event occurred adversely affecting or threatening
the
continued corporate existence of the Company.
	 
	 	2.  	Attached hereto as Annex 2 is a true and complete copy of resolutions
duly adopted by the Board of Directors of the Company on                     , 2004, such
resolutions have not in any way been amended, modified, revoked or
rescinded,
have been in full force and effect since their adoption to and including the
date
hereof and are now in full force and effect and are the only corporate
proceedings
of the Company now in force relating to or affecting the matters referred to
therein.
	 
	 	3.  	Attached hereto as Annex 3 is a true and complete copy
of the Bylaws of the Company as in effect on the date hereof.

 

 

	 	4.  	Attached hereto as Annex 4 is a true and complete certified copy
of the Articles
of Incorporation of the Company as in effect on the date hereof, and such
Articles of Incorporation have not been amended, repealed, modified or
restated.
	 
	 	5.  	The following persons are now duly elected and qualified
officers of the
Company holding the offices indicated next to their respective names below, and
the signatures appearing opposite their respective names below are the true and
genuine signatures of such officers, and each of such officers is duly authorized
to execute and deliver on behalf of the Company each of the Loan Documents to
which it is a party and any certificate or other document to be delivered by the
Company pursuant to the Loan Documents to which it is a party:

	 	 	 	 	 
	Name
	 	Office
	 	Signature
	 
	 	

	 
	 	

	 	6.  	Latham & Watkins LLP may rely on this certificate in rendering its
opinion.

          IN WITNESS WHEREOF, the undersigned have hereunto set our names as of the date
set forth below.

	 	 	 
	

	 	

	 
	 	 
	Name:

	 	Name:
	Title:

	 	Title:

Date:                     , 2004

 

 

Annex 1

to Closing Certificate

[Certificate of Good Standing]

 

 

Annex 2

to Closing Certificate

[Board Resolutions]

 

 

Annex 3

to Closing Certificate

[Bylaws]

 

 

Annex 4

to Closing Certificate

[Articles of Incorporation]

 

 

EXHIBIT E

FORM OF

ASSIGNMENT AND ASSUMPTION

          Reference is made to the Credit Agreement, dated as of August 24, 2004 (as amended,
supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Standard
Aero
Holdings, Inc., a Delaware corporation (the “Borrower”), the several banks and other financial
institutions
or entities from time to time parties to the Credit Agreement as
lenders (the “Lenders”),
Lehman
Commercial Paper Inc. and Credit Suisse First Boston, as co-syndication agents (in such
capacity, the
“Co-Syndication Agents”), and JPMorgan Chase Bank, as administrative agent (in such capacity,
the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit
Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

          The
Assignor identified on Schedule 1 hereto (the
“Assignor”) and the Assignee identified
on Schedule 1 hereto (the “Assignee”) agree as follows:

     1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the
Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Effective Date (as defined below), the interest described
in Schedule 1
hereto (the “Assigned Interest”) in and to the Assignor’s rights and obligations under the
Credit
Agreement with respect to those credit facilities contained in the Credit Agreement as are set
forth on
Schedule 1 hereto (individually, an “Assigned
Facility”; collectively, the “Assigned Facilities”), in a
principal amount for each Assigned Facility as set forth on Schedule 1 hereto.

     2. The Assignor (a) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with the
Credit
Agreement or with respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument or document
furnished
pursuant thereto, other than that the Assignor has not created any adverse claim upon the
interest being
assigned by it hereunder and that such interest is free and clear of any such adverse claim
and (b) makes
no representation or warranty and assumes no responsibility with respect to the financial
condition of the
Borrower, any of its Affiliates or any other obligor or the performance or observance by the
Borrower,
any of its Affiliates or any other obligor of any of their respective obligations under the
Credit Agreement
or any other Loan Document or any other instrument or document furnished pursuant hereto or
thereto.

     3. The Assignee (a) represents and warrants that it is legally authorized to enter into this
Assignment and Assumption; (b) confirms that it has received a copy of the Credit Agreement,
together
with copies of the financial statements delivered pursuant to Section 4.1 thereof 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; (c) agrees that it will, independently and without reliance
upon the
Assignor, the Agents or any Lender and based on such documents and information as it shall
deem
appropriate at the time, continue to make its own credit decisions in taking or not taking
action under the
Credit Agreement, the other Loan Documents or any other instrument or document furnished
pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as
agent on its
behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan
Documents
or any other instrument or document furnished pursuant hereto or thereto as are delegated to
the
Administrative Agent by the terms thereof, together with such powers as are incidental
thereto; and (e)
agrees that it will be bound by the provisions of the Credit Agreement and will perform in
accordance

 

 

 2

with its terms all the obligations which by the terms of the Credit Agreement are required to be
performed
by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United
States, its
obligation pursuant to Section 2.20(d) of the Credit Agreement.

     4. The effective date of this Assignment and Assumption shall be the Effective Date of
Assignment described in Schedule 1 hereto (the
“Effective Date”). Following the execution of
this
Assignment and Assumption, it will be delivered to the Administrative Agent for acceptance by
it and
recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective
Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than
five
Business Days after the date of such acceptance and recording by the Administrative Agent).

     5. Upon such acceptance and recording, 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
the
Effective Date and to the Assignee for amounts which have accrued subsequent to the Effective
Date.

     6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Assumption, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall be bound by
the
provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and
Assumption,
relinquish its rights and be released from its obligations under the Credit Agreement.

     7. This Assignment and Assumption shall be governed by and construed in accordance with
the laws of the State of New York.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed as of the date first above written by their respective duly authorized
officers on Schedule 1 hereto.

 

 

Schedule 1

to Assignment and Assumption with respect to

the Credit Agreement, dated August 24, 2004 among Standard Aero Holdings, Inc., a Delaware

corporation (the “Borrower”), the several banks and other financial institutions or entities from time to

time parties to the Credit Agreement as lenders (the
“Lenders”) and JPMorgan Chase Bank,

administrative agent (in such capacity, the “Administrative
Agent”)

	 	 	 	 	 
	Name of Assignor:

	 
	 	 

	 	 	 	 	 
	Name of Assignee:

	 	 
	 	 

	 	 	 	 	 
	Effective Date of Assignment:

	 	 
	 	 

	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 
	Credit Facility Assigned	 	Amount Assigned	 	Commitment Percentage Assigned
	 
	 	$	 	 	 	 	  	%
	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	[Name of Assignee]	 	[Name of Assignor]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	 
	 	 	 	 
	

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Accepted for Recordation in the Register:	 	Required Consents (if any):
	 
	 	 	 	 	 	 
	JPMorgan Chase Bank, as	 	[Standard Aero Holdings, Inc.]
	Administrative Agent	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 
	 	By:	 	 
	

	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	JPMorgan Chase Bank, as
	 	 	 	 	Administrative Agent
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	 	 	JPMorgan Chase Bank, as
	 	 	 	 	Issuing Lender
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Title:

 

 

EXHIBIT G

FORM OF EXEMPTION CERTIFICATE

          Reference is made to the Credit Agreement, dated as of August 24, 2004 (as amended,
supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Standard
Aero
Holdings, Inc., a Delaware corporation (the “Borrower”), the several banks and other financial
institutions
or entities from time to time parties thereto as Lenders (the
“Lenders”), Lehman Commercial
Paper Inc.
and Credit Suisse First Boston as co-syndication agents (in such
capacity, the “Co-Syndication Agents”),
and JPMorgan Chase Bank, as administrative agent (in such capacity,
the “Administrative Agent”).
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the
meanings given to them in the Credit Agreement.

                                                  
(the “Non-U.S. Lender”) is providing this certificate pursuant
to Section 2.20(d) of the Credit Agreement. The Non-U.S. Lender hereby represents and warrants
that:

          1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans or
the obligations evidenced by Note(s) in respect of which it is providing this certificate.

          2. The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the
Code. In this regard, the Non-U.S. Lender further represents and warrants that:

     (a) the Non-U.S. Lender is not subject to regulatory or other legal requirements as a
bank in any jurisdiction; and

     (b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority, any
application
made to a rating agency or qualification for any exemption from tax, securities law or
other legal
requirements;

     3. The Non-U.S. Lender is not a 10-percent shareholder of the Borrower within the
meaning of Section 881(c)(3)(B) of the Code; and

     4. The Non-U.S. Lender is not a controlled foreign corporation receiving interest
from a related person within the meaning of Section 881(c)(3)(C) of the Code.

 

 

          IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

	 	 	 	 	 
	 	[NAME OF NON-U.S. LENDER]

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

	 	 	 	 	 
	Date:

	 	 
	 	 

 

 

EXHIBIT H

FORM OF SOLVENCY CERTIFICATE

          Pursuant to Section 5.1(f) of the Credit Agreement, dated as of August 24, 2004 (as
amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among
Standard Aero Holdings, Inc., a Delaware corporation (the
“Borrower”), the several banks and
other
financial institutions or entities from time to time parties to the Credit Agreement as
lenders (the
“Lenders”), Lehman Commercial Paper Inc. and Credit Suisse First Boston, as co-syndication
agents (in
such capacity, the “Co-Syndication Agents”), and JPMorgan Chase Bank, as administrative agent
(in such
capacity, the “Administrative Agent”), the undersigned hereby certifies that he is the duly
elected and
acting Chief Financial Officer of the Borrower, and that as such he is authorized to execute
and deliver
this Solvency Certificate on behalf of the Borrower.

          The Borrower further certifies that the Borrower and its Subsidiaries, on a consolidated
basis, are Solvent after giving effect to the initial extensions of credit to be made on the
Closing Date and
the consummation of the Transaction on the Closing Date.

 

 

     IN WITNESS WHEREOF, the undersigned Borrower has caused this Solvency Certificate to
be executed as of this                      day of                     , 2004.

	 	 	 	 	 
	 	STANDARD AERO HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 
	 	 	Title:  	Chief Financial Officerexv10w2

 

Exhibit 10.2

EXECUTION COPY

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

STANDARD AERO ACQUISITION HOLDINGS, INC.

STANDARD AERO HOLDINGS, INC.

and certain of its Subsidiaries

in favor of

JPMORGAN CHASE BANK,

as Administrative Agent

Dated as of August 24, 2004

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	SECTION 1.	 	DEFINED TERMS	 	 	1	 
	

	 	 	1.1	 	 	Definitions
	 	 	1	 
	

	 	 	1.2	 	 	Other Definitional Provisions
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 2.	 	GUARANTEE	 	 	5	 
	

	 	 	2.1	 	 	Guarantee
	 	 	5	 
	

	 	 	2.2	 	 	Right of Contribution
	 	 	6	 
	

	 	 	2.3	 	 	No Subrogation
	 	 	6	 
	

	 	 	2.4	 	 	Amendments, etc. with respect to the Borrower Obligations
	 	 	6	 
	

	 	 	2.5	 	 	Guarantee Absolute and Unconditional
	 	 	7	 
	

	 	 	2.6	 	 	Reinstatement
	 	 	8	 
	

	 	 	2.7	 	 	Payments
	 	 	8	 
	

	 	 	2.8	 	 	Limitation on Netherlands Guarantee
	 	 	8	 
	

	 	 	2.9	 	 	Parallel Debt
	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 3.	 	GRANT OF SECURITY INTEREST	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 4.	 	REPRESENTATIONS AND WARRANTIES	 	 	10	 
	

	 	 	4.1	 	 	Representations in Credit Agreement
	 	 	10	 
	

	 	 	4.2	 	 	Title; No Other Liens
	 	 	10	 
	

	 	 	4.3	 	 	Jurisdiction of Organization; Chief Executive Office
	 	 	11	 
	

	 	 	4.4	 	 	Inventory and Equipment
	 	 	11	 
	

	 	 	4.5	 	 	Farm Products
	 	 	11	 
	

	 	 	4.6	 	 	Pledged Securities
	 	 	11	 
	

	 	 	4.7	 	 	Intellectual Property
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 5.	 	COVENANTS	 	 	11	 
	

	 	 	5.1	 	 	Covenants in Credit Agreement
	 	 	11	 
	

	 	 	5.2	 	 	Investment Property
	 	 	11	 
	

	 	 	5.3	 	 	Activities of Holdings
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 6.	 	REMEDIAL PROVISIONS	 	 	12	 
	

	 	 	6.1	 	 	Certain Matters Relating to Receivables
	 	 	12	 
	

	 	 	6.2	 	 	Communications with Obligors; Grantors Remain Liable
	 	 	12	 
	

	 	 	6.3	 	 	Pledged Securities
	 	 	13	 
	

	 	 	6.4	 	 	Proceeds to be Turned Over To Administrative Agent
	 	 	14	 
	

	 	 	6.5	 	 	Application of Proceeds
	 	 	14	 
	

	 	 	6.6	 	 	Code and Other Remedies
	 	 	14	 
	

	 	 	6.7	 	 	Private Sales
	 	 	15	 
	

	 	 	6.8	 	 	Deficiency
	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 7.	 	THE ADMINISTRATIVE AGENT	 	 	15	 
	

	 	 	7.1	 	 	Administrative Agent’s
Appointment as Attorney-in-Fact, etc
	 	 	15	 
	

	 	 	7.2	 	 	Duty of Administrative Agent
	 	 	17	 
	

	 	 	7.3	 	 	Execution of Financing Statements
	 	 	17	 
	

	 	 	7.4	 	 	Authority of Administrative Agent
	 	 	17	 

i

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	SECTION 8.	 	MISCELLANEOUS	 	 	17	 
	

	 	 	8.1	 	 	Amendments in Writing
	 	 	17	 
	

	 	 	8.2	 	 	Notices
	 	 	17	 
	

	 	 	8.3	 	 	No Waiver by Course of Conduct; Cumulative Remedies
	 	 	17	 
	

	 	 	8.4	 	 	Enforcement Expenses; Indemnification
	 	 	18	 
	

	 	 	8.5	 	 	Successors and Assigns
	 	 	18	 
	

	 	 	8.6	 	 	Set-Off
	 	 	18	 
	

	 	 	8.7	 	 	Counterparts
	 	 	18	 
	

	 	 	8.8	 	 	Severability
	 	 	18	 
	

	 	 	8.9	 	 	Section Headings
	 	 	18	 
	

	 	 	8.10	 	 	Integration
	 	 	19	 
	

	 	 	8.11	 	 	GOVERNING LAW
	 	 	19	 
	

	 	 	8.12	 	 	Submission To Jurisdiction; Waivers
	 	 	19	 
	

	 	 	8.13	 	 	Acknowledgements
	 	 	19	 
	

	 	 	8.14	 	 	Additional Grantors
	 	 	19	 
	

	 	 	8.15	 	 	Releases
	 	 	20	 
	

	 	 	8.16	 	 	WAIVER OF JURY TRIAL
	 	 	20	 

SCHEDULES

	 	 	 
	Schedule 1

	 	Notice Addresses
	Schedule 2

	 	Investment Property
	Schedule 3

	 	Perfection Matters
	Schedule 4

	 	Jurisdictions of Organization and Chief Executive Offices
	Schedule 5

	 	Inventory and Equipment Locations
	Schedule 6

	 	Intellectual Property
	Schedule 7

	 	Excluded Notes
	 
	 	 
	Annexes
	 	 
	 
	 	 
	Annex I

	 	Assumption Agreement
	Annex II

	 	Acknowledgment and Consent

ii

 

GUARANTEE AND COLLATERAL AGREEMENT

          GUARANTEE AND COLLATERAL AGREEMENT, dated as of August 24, 2004, made by each of the
signatories hereto, in favor of JPMorgan Chase Bank, as Administrative Agent (in such capacity, the
“Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”)
from time to time parties to the Credit Agreement, dated as of August 24, 2004 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among Standard Aero
Holdings, Inc. (the “Borrower”), the Lenders and the Administrative Agent.

W I T N E S S E T H :

          WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the conditions set forth
therein;

          WHEREAS, the Borrower is a member of an affiliated group of companies that includes each
other Grantor;

          WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in
part to enable the Borrower to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;

          WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the making of the extensions of
credit under the Credit Agreement; and

          WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective
extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have
executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the
Lenders;

          NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:

SECTION 1. DEFINED TERMS

     1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and
the following terms are used herein as defined in the New York UCC: Accounts, Certificated
Security, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.

     (b) The following terms shall have the following meanings:

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

          “Borrower Cash Management Obligations”: the collective reference to all obligations
and liabilities of the Borrower (including, without limitation, interest accruing at the then
applicable rate

 

 

2

provided in the Specified Cash Management Arrangement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to any Lender or any affiliate of any Lender (or any Lender or any affiliate thereof at
the time such Specified Cash Management Arrangement was entered into), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, any Specified Cash Management Arrangement or any other
document made, delivered or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the relevant Lender or
affiliate thereof that are required to be paid by the Borrower pursuant to the terms of any
Specified Cash Management Arrangement).

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

          “Borrower Hedge Agreement Obligations”: the collective reference to all obligations
and liabilities of the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to any Lender or any affiliate of any Lender (or any Lender or any affiliate thereof at
the time such Specified Hedge Agreement was entered into), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, any Specified Hedge Agreement or any other document made, delivered or
given in connection therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant Lender or affiliate thereof that
are required to be paid by the Borrower pursuant to the terms of any Specified Hedge Agreement).

          “Borrower
Obligations”: the collective reference to (i) the Borrower Credit Agreement
Obligations, (ii) the Borrower Hedge Agreement Obligations, but only to the extent that, and only
so long as, the Borrower Credit Agreement Obligations are secured and guaranteed pursuant hereto,
and (iii) the Borrower Cash Management Obligations, but only to the extent that, and only so long
as, the Borrower Credit Agreement Obligations are secured and guaranteed pursuant hereto.

          “Collateral”: as defined in Section 3.

 

 

3

          “Collateral Account”: any collateral account established by the Administrative Agent as
provided in Section 6.1 or 6.4.

          “Copyright Licenses”: all written agreements naming any Grantor as licensor or licensee
(including, without limitation, those listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture, distribute, exploit and sell
materials derived from any Copyright.

          “Copyrights”: (i) all copyrights arising under the laws of the United States, whether
registered or unregistered and whether published or unpublished (including, without limitation,
those listed in Schedule 6), all registrations and recordings thereof, and all applications
in connection therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain all renewals
thereof.

          “Deposit Account”: as defined in the Uniform Commercial Code of any applicable jurisdiction
and, in any event, including, without limitation, any demand, time, savings, passbook or like
account maintained with a depositary institution.

          “Excluded Foreign Subsidiary Stock”: the Capital Stock of any Excluded Foreign
Subsidiary.

          “Excluded Notes”: all of the intercompany notes listed on Schedule 7.

          “Grantors”: the collective reference to each signatory hereto together with any other entity
that may become a party hereto as provided herein other than the Netherlands Subsidiary Guarantors.

          “Guarantor Obligations”: with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid
by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

          “Guarantors”: the collective reference to each signatory hereto together with any other entity
that may become a party hereto as provided herein other than the Borrower.

          “Intellectual Property”: the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States, multinational or foreign
laws or otherwise, now existing or hereafter adopted or acquired, including, without limitation,
the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages therefrom.

          “Intercompany Note”: any promissory note, other than the Excluded Notes, evidencing loans made
by any Grantor to Holdings or any of its Subsidiaries.

          “Investment Property”: the collective reference to (i) all “investment property” as such term
is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary Stock

 

 

4

excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting
“investment property” as so defined, all Pledged Securities.

          “Issuers”: the collective reference to each issuer of a Pledged Security.

          “New York UCC”: the Uniform Commercial Code as from time to time in effect in the State of New
York.

          “Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and (ii) in the case
of each Guarantor, its Guarantor Obligations.

          “Patent License”: all written agreements providing for the grant by or to any Grantor of any
right to manufacture, use or sell any invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in
Schedule 6.

          “Patents”: (i) all letters patent of the United States, all reissues and extensions thereof,
and all goodwill associated therewith, including, without limitation, any of the foregoing referred
to in Schedule 6, (ii) all applications for letters patent of the United States, any other
country or any political subdivision thereof, continuations and continuations in part thereof,
including, without limitation, any of the foregoing referred to in Schedule 6, and (iii)
all rights to obtain any reissues or extensions of the foregoing.

          “Pledged
Notes”: all promissory notes listed on
Schedule 2, all Intercompany Notes at
any time issued to any Grantor in excess of $1,000,000 (or Intercompany Notes which, in the
aggregate, are in excess of $5,000,000) and all other promissory notes issued to or held by any
Grantor in excess of $1,000,000 (other than promissory notes issued in connection with extensions
of trade credit by any Grantor in the ordinary course of business); provided, however, that
the Pledged Notes shall not include the Excluded Notes.

          “Pledged NSULC Shares”: all Pledged Stock of a Person that is a Nova Scotia unlimited
liability company, now owned or hereafter acquired by a Grantor.

          “Pledged Securities”: the collective reference to the Pledged Notes and the Pledged Stock.

          “Pledged
Stock”: the shares of Capital Stock listed on
Schedule 2, together with any other
shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the
Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; provided that in no event shall more than 65% of the total
outstanding Excluded Foreign Subsidiary Stock of any Excluded Foreign Subsidiary be required to be
pledged hereunder.

          “Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC
and, in any event, shall include, without limitation, all dividends or other income from the
Investment Property, collections thereon or distributions or payments with respect thereto.

          “Receivable”: any right to payment for goods sold or leased or for services rendered, whether
or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including, without limitation, any Account).

          “Securities Act”: the Securities Act of 1933, as amended.

 

 

5

          “Specified Cash Management Arrangement”: any cash management arrangement (a) entered
into by (i) the Borrower or any of its subsidiaries and (ii) any Lender or any affiliate thereof at
the time such cash management arrangement was entered into, as counterparty, and (b) which has been
designated by such Lender and the Borrower, by notice to the Administrative Agent not later than 90
days after the execution and delivery by the Borrower or its Subsidiary thereof, as a Specified
Cash Management Arrangement. The designation of any cash management arrangement as a Specified Cash
Management Arrangement shall not create in favor of the Lender or affiliate thereof that is a party
thereto any rights in connection with the management or release of any Collateral or any Guarantor
Obligations.

          “Trademark License”: all written agreements providing for the grant by or to any Grantor of
any right to use any Trademark, including, without limitation, any of the foregoing referred to in
Schedule 6.

          “Trademarks”: (i) all trademarks, trade names, corporate names, company names, business names,
domain names, fictitious business names, trade styles, service marks, logos and other source or
business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.

          “Vehicles”: all cars, trucks, trailers, construction and earth moving equipment and other
vehicles covered by a certificate of title law of any state.

     1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.

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

     (c) Where the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.

SECTION 2. GUARANTEE

     2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

     (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no
event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state
laws relating to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

     (c) Each Guarantor agrees that the Borrower Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the
guarantee

 

 

 6

contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any
Lender hereunder.

     (d) The guarantee contained in this Section 2 shall remain in full force and effect until all
the Borrower Obligations and the obligations of each Guarantor under the guarantee contained in
this Section 2 shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and
the Commitments shall have terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations.

     (e) No payment (other than payment in full) made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the Administrative Agent
or any Lender from the Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such Guarantor hereunder until the
Borrower Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated.

     2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that to the extent
that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against
any other Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment.
Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of
Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities
of any Subsidiary Guarantor to the Administrative Agent and the Lenders, and each Subsidiary Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such
Subsidiary Guarantor hereunder.

     2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any
set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any
Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset
held by the Administrative Agent or any Lender for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or
any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent and the Lenders by the Borrower on account of the Borrower Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall
have terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower Obligations, whether
matured or unmatured, in such order as the Administrative Agent may determine.

     2.4
Amendments, etc. with respect to the Borrower Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the
Borrower

 

 

7

Obligations made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the Administrative Agent
or any Lender for the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

     2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice
of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, with
respect to the Loan Documents and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower or any of the
Guarantors with respect to the Borrower Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other
collateral security therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any time be available to
or be asserted by the Borrower or any other Person against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (other than a defense of payment or performance) (with or
without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or
in any other instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it
may have against the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to exercise any such right
of offset, or any release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or any Lender against
any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of
any legal proceedings.

 

 

8

     2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of
the Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its properly,
or otherwise, all as though such payments had not been made.

     2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to
the Administrative Agent without set-off or counterclaim in Dollars at the Funding Office.

     2.8 Limitation on Netherlands Guarantee.

     (a) (i) Each Netherlands Subsidiary Guarantor, and each of its Subsidiaries, will not
guarantee any obligation or incur any liability or provide security to the extent that it has been
entered into with a view to the subscription or acquisition by third parties of shares in its share capital or
would otherwise constitute unlawful financial assistance under Section 2:98c or section 2:207c of the
Netherlands Civil Code or similar provisions under other relevant law. The Obligations for each Netherlands
Subsidiary Guarantor shall be no greater than the amount of the Borrower Obligations, as reduced by
$19,000,000, the purchase price of the shares of the Netherlands Subsidiary Guarantors.

          (ii) Each Netherlands Subsidiary Guarantor, and each of its Subsidiaries, will not guarantee
any obligation or provide security to the extent that in doing so, it would transgress its objects
as set out and described in Section 2:7 of the Netherlands Civil Code.

     (b) If, notwithstanding Section 2.8(a), in relation to a Netherlands Subsidiary Guarantor, any
provision of this Section 2 is null and void, voidable or unenforceable (either in whole or in
part), the remainder of Section 2 shall continue to be effective to the extent that, given this clause’s
substance and purpose, such remainder is not inextricably related to the null and void or unenforceable
provision.

     2.9 Parallel Debt.

     (a) Each Netherlands Subsidiary Guarantor hereby irrevocably and unconditionally undertakes to
pay to the Administrative Agent an amount equal to the aggregate amount payable by any Loan
Party in respect of the Obligations as they may exist from time to time. The payment undertaking of
each Netherlands Subsidiary Guarantor to the Administrative Agent under this Section 2.9(a) is
hereinafter to be referred to as “Parallel Debt”. Each Parallel Debt will be payable in the currency or
currencies of the relevant Obligations.

     (b) Each Parallel Debt of a Netherlands Subsidiary Guarantor will become due and payable
(opeisbaar) as and when one or more of the Obligations become due and payable.

     (c) Each of the parties hereto hereby acknowledges that:

     (i) each Parallel Debt constitutes an undertaking, obligation and liability of the
relevant Netherlands Subsidiary Guarantor to the Administrative Agent which is separate and
independent from, and without prejudice to, the Obligations; and

     (ii) each Parallel Debt represents the Administrative Agent’s own separate and
independent claim (eigen en zelfstandige vordering) to receive payment of such Parallel Debt
from the relevant Netherlands Subsidiary Guarantor,

 

 

9

it being understood, in each case, that the amount which may become payable by a
Netherlands Subsidiary Guarantor as its Parallel Debt shall never exceed the total of the
amounts which are payable under the Obligations of such Guarantor.

     (d) For the avoidance of doubt, the parties hereto confirm that the claim of the
Administrative Agent against a Netherlands Subsidiary Guarantor in respect of a Parallel Debt and the claims
of any one or more of the Lenders or Agents against such Guarantor in respect of the Obligations payable
by such Guarantor to such Lenders or Agents do not constitute common
property (gemeenschap) within the
meaning of article 3:166 of the Netherlands Civil Code (“NCC”) and that the provisions
relating to common property shall not apply. If, however, it shall be held that such claim of the
Administrative Agent and such claims of any one or more of the Lenders or Agents do not constitute common
property and the provisions relating to common property do apply, the parties hereto agree that the
Credit Agreement and this Agreement shall constitute the
administration agreement (beheersregeling)
within the meaning of article 3:168 NCC.

     (e) To
the extent the Administrative Agent irrevocably (onaantastbaar) receives any amount in
payment of the Parallel Debt of a Netherlands Subsidiary Guarantor, the Administrative Agent
shall distribute that amount among the Lenders or Agents that are creditors of the Obligations of
that Guarantor in accordance with the Credit Agreement and this Agreement relating to the distribution of
proceeds. Upon irrevocable receipt by a Lender or Agent of any amount so distributed (the “Received
Amount”), the Obligations of that Guarantor to the relevant Lender(s) or Agent(s) shall be reduced by
amounts totaling an amount (a “Deductible Amount”) equal to the Received Amount in the manner as if
the Deductible Amount were received as a payment of the Obligations on the date of receipt by that
Lender or Agent of the Received Amount.

SECTION 3. GRANT OF SECURITY INTEREST

          Each Grantor hereby grants to the Administrative Agent, for the ratable benefit of the Lenders
(and any affiliates of any Lender to which Borrower Hedge Agreement Obligations or Borrower Cash
Management Obligations are owing), a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time
in the future may acquire any right, title or interest (collectively, the “Collateral”), as
collateral security for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

     (a) all Accounts;

     (b) all Chattel Paper;

     (c) all Documents;

     (d) all Equipment;

     (e) all General Intangibles;

     (f) all Instruments;

     (g) all Intellectual Property;

     (h) all Inventory;

 

 

10

     (i) all Investment Property;

     (j) all Letter-of-Credit Rights;

     (k) all other personal property not otherwise described above;

     (1) all books and records pertaining to the Collateral; and

     (m) to the extent not otherwise included, all Proceeds, Supporting Obligations and
products of any and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing;

          provided,
however, that notwithstanding any of the other provisions set forth in this
Section 3, this Agreement shall not constitute a grant of a security interest in (i) any leasehold
interest in real property, (ii) any of the Excluded Notes, (iii) any Vehicles or Deposit Accounts
(other than Deposit Accounts which are Proceeds of the Collateral) and all Proceeds thereof, (iv)
any property to the extent that such grant of a security interest is prohibited by any Requirements
of Law of a Governmental Authority, requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise to such property or, in the case
of any Investment Property, Pledged Stock or Pledged Note, any applicable shareholder or similar

agreement, except to the extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is ineffective under
applicable law and (v) property of Holdings acquired after the date hereof, other than Proceeds of
the Collateral granted by Holdings as of the date hereof or additional Investment Property
consisting of Capital Stock of the Borrower.

SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each
Guarantor and each Grantor hereby represents and warrants to the Administrative Agent and each
Lender that:

     4.1 Representations in Credit Agreement. In the case of each Guarantor, the
representations and warranties set forth in Section 4 of the Credit Agreement as they relate to such Guarantor
or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein
by reference, are true and correct, and the Administrative Agent and each Lender shall be
entitled to rely on each of them as if they were fully set forth
herein, provided, that each reference in
each such representation and warranty to the Borrower’s knowledge shall, for the purposes of this
Section 4.1, be deemed to be a reference to such Guarantor’s knowledge.

     4.2 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Lenders pursuant to this Agreement and the other Liens
permitted to exist on the Collateral by the Credit Agreement, such Grantor owns each item of the Collateral
free and clear of any and all Liens or claims of others. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any public office, except (i)
such as have been filed in favor of the Administrative Agent, for the ratable benefit of the Lenders, pursuant
to this Agreement, (ii) as are permitted by the Credit Agreement or (iii) financing statements that
have been filed without the consent of any Grantor. For the avoidance of doubt, it is understood and agreed
that any

 

 

11

Grantor may, as part of its business, grant licenses to third parties to use Intellectual
Property owned or developed by a Grantor. For purposes of this Agreement and the other Loan
Documents, such licensing activity shall not constitute a “Lien” on such Intellectual Property.
Each of the Administrative Agent and each Lender understands that any such licenses may be
exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the
Administrative Agent to utilize, sell, lease or transfer the related Intellectual Property or
otherwise realize value from such Intellectual Property pursuant hereto.

     4.3
Jurisdiction of Organization; Chief Executive Office. On the date hereof, such
Grantor’s jurisdiction of organization, identification number from the jurisdiction of organization (if
any), and the location of such Grantor’s chief executive office are specified on Schedule 4.

     4.4 Inventory and Equipment. On the date hereof, the Inventory and the Equipment
(other than mobile goods) in excess of $750,000 are kept at the locations listed on Schedule 5.

     4.5 Farm Products. On the date hereof, none of the Collateral constitutes, or is the
Proceeds of, Farm Products.

     4.6 Pledged Securities. On the date hereof, the shares of Pledged Stock pledged by
such Grantor hereunder:

     (a) with respect to the shares of Pledged Stock issued by the Borrower and its Subsidiaries,
have been duly authorized, validly issued and are fully paid and non-assessable, to the extent such
concepts are applicable; and

     (b) constitute all the issued and outstanding shares of all classes of the Capital Stock of
each Issuer owned by such Grantor or, in the case of Excluded Foreign Subsidiary Stock, if less,
65% of the outstanding Excluded Foreign Subsidiary Stock of each relevant Issuer.

     4.7 Intellectual Property. (a) Schedule 6 lists all material Intellectual
Property owned by such Grantor in its own name on the date hereof.

     (b) Except as set forth in Schedule 6, on the date hereof, none of the Intellectual
Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is
the licensor or franchisor.

SECTION 5. COVENANTS

          Each Guarantor and each Grantor covenants and agrees with the Administrative Agent and the
Lenders that, from and after the date of this Agreement until the Obligations shall have been paid
in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated:

     5.1 Covenants in Credit Agreement. In the case of each Guarantor, such Guarantor shall
take, or shall refrain from taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to
take such action or to refrain from taking such action by such Guarantor or any of its Subsidiaries.

     5.2 Investment Property. In the case of each Grantor which is an Issuer, such Issuer
agrees that (a) it will be bound by the terms of this Agreement relating to the Pledged Securities
issued by it and will comply with such terms insofar as such terms are applicable to it and (b) the terms of
Sections 6.3(c)

 

 

12

and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section 6.3(c) or 6.7 with respect to the Pledged Securities issued by
it.

     5.3 Activities of Holdings. In the case of Holdings, Holdings shall not (a)
conduct, transact or otherwise engage in any business or operations other than those incidental to
its ownership of the Capital Stock of the Borrower and any of Holdings’ other Subsidiaries (whether
now held or hereafter acquired), (b) incur, create, assume or suffer to exist any Indebtedness,
except (i) nonconsensual obligations imposed by operation of law, (ii) indebtedness and obligations
of Holdings pursuant to the Loan Documents to which it is a party, (iii) obligations with respect
to its Capital Stock and (iv) up to $5,000,000 in aggregate principal amount of other Indebtedness,
(c) incur, create, assume or suffer to exist any Lien on the Capital Stock of the Borrower, or (d)
own, lease, manage or otherwise operate (other than through ownership of the Borrower and any of
Holdings’ other Subsidiaries (whether now held or hereafter acquired)) any properties or assets,
other than (i) cash and Cash Equivalents and deposit and securities accounts comprised of cash and
cash equivalents, (ii) the ownership of shares of Capital Stock of the Borrower and any of
Holdings’ other Subsidiaries (whether now held or hereafter acquired), (iii) other assets, not
material in amount, incidental to the operations of Holdings as the holding company of the Borrower
and any of Holdings’ other Subsidiaries (whether now held or hereafter acquired) and (iv) other
assets with an aggregate fair market value of not more than $5,000,000.

SECTION 6. REMEDIAL PROVISIONS

     6.1 Certain Matters Relating to Receivables. (a) At any time during the continuance of
an Event of Default, upon the Administrative Agent’s reasonable request at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Receivables.

     (b) If required by the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default under Section 8(a) or 8(f) of the Credit Agreement, any
payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within
two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to
the Administrative Agent if required, in a Collateral Account maintained under the sole dominion
and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account
of the Lenders only as provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.

     (c) If an Event of Default has occurred and is continuing and at the Administrative Agent’s
request, each Grantor shall deliver to the Administrative Agent all documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables, including, without
limitation, all orders, invoices and shipping receipts.

     6.2
Communications with Obligors; Grantors Remain Liable. (a) Upon the request of the
Administrative Agent at any time after the occurrence and during the continuance of an Event
of Default under Section 8(a) or 8(f) of the Credit Agreement, each Grantor shall notify obligors on the
Receivables that the Receivables have been assigned to the Administrative Agent for the ratable benefit of
the Lenders and that payments in respect thereof shall be made directly to the Administrative Agent.

     (b) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under the Receivables to observe and perform all the conditions and obligations to be
observed and performed

 

 

13

by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither
the Administrative Agent nor any Lender shall have any obligation or liability under any Receivable
(or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt
by the Administrative Agent or any Lender of any payment relating thereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.

     6.3 Pledged Securities. (a) Unless an Event of Default shall have occurred and
be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate rights with respect to the Pledged Securities.

     (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall
give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i)
unless otherwise provided in the Credit Agreement, the Administrative Agent shall have the right to receive any
and all cash dividends, payments or other Proceeds paid in respect of the Pledged Securities and make
application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or
all of the Pledged Securities shall be registered in the name of the Administrative Agent or its nominee,
and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and
other rights pertaining to such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion any and all of the
Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other fundamental change
in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Administrative
Agent of any right, privilege or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so doing unless the
Administrative Agent has given notice of its intent to exercise as set forth above.

     (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities
pledged by such Grantor hereunder to comply with any instruction received by it from the
Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and
(y) is otherwise in accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so
complying.

     (d) Notwithstanding any other provision of this Agreement, none of the rights and remedies
granted by a Grantor to the Administrative Agent herein in respect of any Pledged NSULC Shares
(other than the grant of the security interest) shall be exercisable or otherwise vest in the
Administrative Agent or any Lender hereunder and such Grantor shall remain the legal and beneficial owner of such
Pledged NSULC Shares and shall retain all of the incidents of such ownership until (i) an Event of
Default has occurred, and (ii) the Administrative Agent has given notice to such Grantor of such Event of
Default and

 

 

14

its intention to exercise such rights and remedies in respect of such Pledged NSULC Shares.
Nothing herein shall be construed to subject the Administrative Agent or any Lender hereunder
to liability as a member or owner of shares of a Nova Scotia unlimited company.

     6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the rights of
the Administrative Agent and the Lenders specified in Section 6.1 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing and the Loans shall have been accelerated
pursuant to Section 8 of the Credit Agreement, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor, and shall, promptly upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be
held as collateral security for all the Obligations and shall not constitute payment thereof until
applied as provided in Section 6.5.

     6.5 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any
part of Proceeds constituting Collateral and any proceeds of the guarantee set forth in Section 2, in
payment of the Obligations in the following order:

          First, to pay incurred and unpaid reasonable, out-of-pocket fees and
expenses of the Administrative Agent under the Loan Documents;

          Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations, pro
rata among the Lenders according to the amounts of the Obligations then due and owing and
remaining unpaid to the Lenders; and

          Third, any balance of such Proceeds remaining after the Obligations shall have
been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.

     6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any
kind (except any notice required by law referred to below or notices otherwise provided in the Loan
Documents) to or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived unless otherwise provided in the Loan Documents),
may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or
any pan thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any Lender shall have the right upon any such public sale or
sales, and,

 

 

15

to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which
right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative
Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind
actually incurred in connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and
the Lenders hereunder, including, without limitation, reasonable attorneys’ fees and disbursements,
to the payment in whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the Administrative Agent of any
other amount required by any provision of law, including, without limitation, Section 9-615(a)(3)
of the New York UCC, need the Administrative Agent account for the surplus, if any, to any Grantor.
If any notice of a proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

     6.7 Private Sales. Each Grantor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for investment and not with a view to
the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Administrative Agent shall be under no obligation to delay
a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under applicable state securities
laws, even if such Issuer would agree to do so.

     6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent to collect such
deficiency.

SECTION 7. THE ADMINISTRATIVE AGENT

     7.1
Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of
the following (provided, that anything in this Section 7.1 (a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1 (a) unless an Event of Default shall have occurred and be
continuing):

   (i) in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due

 

 

16

under any Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and all such
moneys due under any Receivable or with respect to any other Collateral whenever payable;

   (ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the Administrative Agent
may request to evidence the Administrative Agent’s and the Lenders’ security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto
or represented thereby;

   (iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement and
pay all or any part of the premiums therefor and the costs thereof;

   (iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral; and

   (v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust
any such suit, action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Lenders’ security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.

     (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may give such
Grantor written notice of such failure to perform or comply and if such Grantor fails to perform or comply
within three (3) Business Days of receiving such notice (or if the Administrative Agent reasonably
determines that irreparable harm to the Collateral or to the security interest of the Administrative Agent
hereunder could result prior to the end of such three-Business Day period), then the Administrative Agent may
perform or comply, or otherwise cause performance or compliance, with such agreement.

     (c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are
coupled with

 

 

17

an interest and are irrevocable until this Agreement is terminated and the security interests
created hereby are released.

     7.2 Duty of Administrative Agent. To the extent permitted by law, the Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with similar property for its own account. None
of the Administrative Agent, any Lender or any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request
of any Grantor or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent’s and the Lenders’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct or that of their directors, officers, employees or agents.

     7.3 Execution of Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent reasonably determines appropriate to
perfect the security interests of the Administrative Agent under this Agreement. Each Grantor authorizes
the Administrative Agent to use the collateral description “all personal property” in any such
financing statements.

     7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect to any action
taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

SECTION 8. MISCELLANEOUS

     8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of
the Credit Agreement.

     8.2 Notices. All notices, requests and demands to or upon the Administrative Agent or
any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit
Agreement; provided, that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1.

     8.3
No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant to Section
8.1), delay,

 

 

18

indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising,
on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

     8.4 Enforcement Expenses: Indemnification. Each Guarantor agrees to pay, and to save
the Administrative Agent and the Lenders harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit
Agreement. The agreements in this Section 8.4 shall survive repayment of the Obligations and all other
amounts payable under the Credit Agreement and the other Loan Documents.

     8.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the
Lenders and their successors and assigns; provided, that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative
Agent (it being understood that Dispositions permitted under the Credit Agreement shall not be subject to
this proviso).

     8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative Agent and
each Lender at any time and from time to time while an Event of Default shall have occurred and be
continuing, without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to the extent permitted by applicable law, upon any amount becoming due and
payable by each Grantor (whether at the stated maturity, by acceleration or otherwise after the
expiration of any applicable grace periods) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final but excluding trust accounts),
in any currency, and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the account of such
Grantor. The Administrative Agent and each Lender shall notify such Grantor promptly of any such
set-off and the application made by the Administrative Agent or such Lender of the proceeds
thereof, provided that the failure to give such notice shall not affect the validity of such
set-off and application.

     8.7 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.

     8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

     8.9 Section Headings. The Section headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration
in the interpretation hereof.

 

 

19

     8.10 Integration. This Agreement and the other Loan Documents represent the agreement
of the Grantors, the Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof.

     8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     8.12
Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:

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

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

     (c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;

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

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

     8.13 Acknowledgements. Each Grantor hereby acknowledges that:

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

     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Grantor arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative
Agent and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

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

     8.14 Additional Grantors. Each Subsidiary of the Borrower that is required to
become a party to this Agreement pursuant to Section 6.10 of the Credit Agreement shall become a Guarantor or
Grantor,

 

 

20

as the case may be, for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

     8.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the
other Obligations (other than Borrower Hedge Agreement Obligations and Borrower Cash Management
Obligations) shall have been paid in full, the Commitments shall have terminated and no
Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

     (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be
released from its obligations hereunder in the event that all the Capital Stock of such Guarantor
shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written request for release
identifying the relevant Guarantor and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

     8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH LENDER, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

 

     IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral
Agreement to be duly executed and delivered as of the date first above written.

	 	 	 	 	 
	 	 	STANDARD AERO ACQUISITION HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	DUNLOP STANDARD AEROSPACE (US), INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	DUNLOP AEROSPACE PARTS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	DUNLOP AEROSPACE (US) LEGAL, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to the Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO (SAN ANTONIO) INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO (ALLIANCE) INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO CANADA, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ (ILLEGIBLE)
	

	 	 	 	

	

	 	Name:	 	 
	

	 	Title:	 	 

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	STANDARD AERO BV
	 
	 	 	 	 
	

	 	By:	 	/s/ David W. Shaw
	

	 	 	 	

	

	 	Name:
	 	David W. Shaw
	

	 	Title:
	 	Managing Director

Signature Page to Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	DUNLOP STANDARD AEROSPACE
	 	 	(NEDERLAND) BV
	 
	 	 	 	 
	

	 	By:	 	/s/ David W. Shaw
	

	 	 	 	

	 

	 	Name:
	 	David W. Shaw
	

	 	Title:
	 	Managing Director

Signature Page to Guarantee and Collateral Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]