Document:

Exhibit 4.1

 

EXECUTION VERSION

 

 

$250,000,000

 

AMENDED
AND RESTATED CREDIT AGREEMENT

 

Among

 

INTERNATIONAL
MULTIFOODS CORPORATION,

as U.S. Borrower,

 

ROBIN
HOOD MULTIFOODS INC.

as Canadian Borrower,

 

The
Several Lenders

from Time to Time Parties Hereto,

 

U.S.
BANK NATIONAL ASSOCIATION,

as U.S. Administrative Agent and Canadian Administrative Agent,

 

and

 

THE BANK
OF NOVA SCOTIA, as Canadian Funding Agent

Dated as of August 8, 2003

 

U.S.
BANK NATIONAL ASSOCIATION,

as Sole Lead Arranger

 

 

TABLE OF CONTENTS

 

	
  SECTION
  1.

  	
  DEFINITIONS;
  REPLACEMENT OF AGENTS

  
	
   

  	
   

  
	
  1.1

  	
  Definitions

  
	
  1.2

  	
  Replacement of Agents;
  Payoff.

  
	
  1.3

  	
  Defined Terms

  
	
  1.4

  	
  Other Definitional
  Provisions.

  
	
   

  	
   

  
	
  SECTION
  2.

  	
  AMOUNT AND TERMS OF
  COMMITMENTS

  
	
   

  	
   

  
	
  2.1

  	
  U.S.
  Term Commitments

  
	
  2.2

  	
  Procedure for
  U.S. Term Loan Borrowing

  
	
  2.3

  	
  Repayment of U.S. Term
  Loans

  
	
  2.4

  	
  Canadian Term Commitments

  
	
  2.5

  	
  Procedure
  for Canadian Term Loan Borrowing

  
	
  2.6

  	
  Repayment of Canadian
  Term Loans

  
	
  2.7

  	
  U.S. Revolving Commitments

  
	
  2.8

  	
  Procedure
  for U.S. Revolving Loan Borrowing

  
	
  2.9

  	
  Canadian Revolving
  Commitments

  
	
  2.10

  	
  Procedure
  for Canadian Revolving Loan Borrowing

  
	
  2.11

  	
  Bankers’
  Acceptances

  
	
  2.12

  	
  Circumstances
  Making Bankers’ Acceptances Unavailable

  
	
  2.13

  	
  Swingline
  Commitments

  
	
  2.14

  	
  Repayment of Swingline
  Loans

  
	
  2.15

  	
  Commitment
  Fees, etc.

  
	
  2.16

  	
  Termination
  or Reduction of Commitments and Swingline Commitment

  
	
  2.17

  	
  Optional
  Prepayments

  
	
  2.18

  	
  Mandatory
  Prepayments and Commitment Reductions

  
	
  2.19

  	
  Conversion and
  Continuation Options

  
	
  2.20

  	
  Limitations on
  Eurodollar Tranches

  
	
  2.21

  	
  Interest Rates and
  Payment Dates

  
	
  2.22

  	
  Computation of
  Interest and Fees

  
	
  2.23

  	
  Inability to
  Determine Interest Rate

  
	
  2.24

  	
  Pro Rata Treatment and
  Payments

  
	
  2.25

  	
  Requirements
  of Law

  
	
  2.26

  	
  Taxes

  
	
  2.27

  	
  Indemnity

  
	
  2.28

  	
  Change
  of Lending Office

  
	
  2.29

  	
  Replacement
  of Lenders

  
	
  2.30

  	
  Controls;
  Currency Exchange Rate Fluctuations

  
	
  2.31

  	
  Notes

  

 

 

	
  SECTION 3.

  	
  LETTERS OF
  CREDIT

  
	
   

  	
   

  
	
  3.1

  	
  L/C Commitment

  
	
  3.2

  	
  Procedure
  for Issuance of Letters of Credit

  
	
  3.3

  	
  Fees
  and Other Charges

  
	
  3.4

  	
  L/C
  Participations

  
	
  3.5

  	
  Reimbursement
  Obligation of the Borrowers

  
	
  3.6

  	
  Obligations
  Absolute

  
	
  3.7

  	
  Letter of Credit Payments

  
	
  3.8

  	
  Applications

  
	
   

  	
   

  
	
  SECTION
  4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
   

  
	
  4.1

  	
  Financial
  Condition

  
	
  4.2

  	
  No Change

  
	
  4.3

  	
  Existence; Compliance
  with Law

  
	
  4.4

  	
  Power;
  Authorization; Enforceable Obligations

  
	
  4.5

  	
  No Legal Bar

  
	
  4.6

  	
  Litigation

  
	
  4.7

  	
  No Default

  
	
  4.8

  	
  Ownership of Property;
  Liens

  
	
  4.9

  	
  Intellectual
  Property

  
	
  4.10

  	
  Taxes

  
	
  4.11

  	
  Federal
  Regulations

  
	
  4.12

  	
  Labor Matters

  
	
  4.13

  	
  ERISA

  
	
  4.14

  	
  Investment
  Company Act; Other Regulations

  
	
  4.15

  	
  Subsidiaries

  
	
  4.16

  	
  Use of Proceeds

  
	
  4.17

  	
  Environmental
  Matters

  
	
  4.18

  	
  Accuracy of Information,
  etc.

  
	
  4.19

  	
  Security
  Documents

  
	
  4.20

  	
  Solvency

  
	
  4.21

  	
  Regulation H

  
	
  4.22

  	
  Existing
  Loan Documents

  
	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  
	
  5.1

  	
  Conditions to
  Initial Extension of Credit

  
	
  5.2

  	
  Conditions to
  Each Extension of Credit

  
	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE
  COVENANTS

  
	
   

  	
   

  
	
  6.1

  	
  Financial
  Statements

  
	
  6.2

  	
  Certificates; Other
  Information

  
	
  6.3

  	
  Payment
  of Obligations

  
	
  6.4

  	
  Maintenance of
  Existence; Compliance

  
	
  6.5

  	
  Maintenance of
  Property; Insurance

  
	
  6.6

  	
  Inspection
  of Property; Books and Records; Discussions

  

 

ii

 

	
  6.7

  	
  Notices

  
	
  6.8

  	
  Environmental Management

  
	
  6.9

  	
  Additional Collateral, etc.

  
	
  6.10

  	
  Canadian
  Restructuring Transaction

  
	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE
  COVENANTS

  
	
   

  	
   

  
	
  7.1

  	
  Financial Condition
  Covenants

  
	
  7.2

  	
  Indebtedness

  
	
  7.3

  	
  Liens

  
	
  7.4

  	
  Fundamental
  Changes

  
	
  7.5

  	
  Disposition
  of Property

  
	
  7.6

  	
  [Reserved].

  
	
  7.7

  	
  [Reserved]

  
	
  7.8

  	
  Investments

  
	
  7.9

  	
  Optional
  Payments and Modifications of Certain Debt Instruments; Synthetic Purchase
  Agreements

  
	
  7.10

  	
  Transactions with
  Affiliates

  
	
  7.11

  	
  Sales
  and Leasebacks

  
	
  7.12

  	
  Changes in Fiscal Periods

  
	
  7.13

  	
  Negative
  Pledge Clauses

  
	
  7.14

  	
  Clauses
  Restricting Subsidiary Distributions

  
	
  7.15

  	
  Lines of
  Business

  
	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF
  DEFAULT

  
	
   

  	
   

  
	
  SECTION 9.

  	
  THE AGENTS

  
	
  9.1

  	
  Appointment

  
	
  9.2

  	
  Delegation
  of Duties

  
	
  9.3

  	
  Exculpatory
  Provisions

  
	
  9.4

  	
  Reliance
  by Agents

  
	
  9.5

  	
  Notice of
  Default

  
	
  9.6

  	
  Non-Reliance
  on Agents and Other Lenders

  
	
  9.7

  	
  Indemnification

  
	
  9.8

  	
  Agent in Its
  Individual Capacity

  
	
  9.9

  	
  Successor
  Agents

  
	
  9.10

  	
  Notices to
  Canadian Administrative Agent

  
	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  10.1

  	
  Amendments
  and Waivers

  
	
  10.2

  	
  Notices

  
	
  10.3

  	
  No Waiver; Cumulative
  Remedies

  
	
  10.4

  	
  Survival of Representations
  and Warranties

  
	
  10.5

  	
  Payment of Expenses and
  Taxes

  
	
  10.6

  	
  Successors
  and Assigns; Participations and Assignments

  
	
  10.7

  	
  Adjustments;
  Set-off

  
	
  10.8

  	
  Counterparts

  

 

iii

 

	
  10.9

  	
  Severability

  
	
  10.10

  	
  Integration

  
	
  10.11

  	
  GOVERNING LAW

  
	
  10.12

  	
  Submission To Jurisdiction;
  Waivers

  
	
  10.13

  	
  Acknowledgements

  
	
  10.14

  	
  Releases of Guarantees
  and Liens

  
	
  10.15

  	
  Confidentiality

  
	
  10.16

  	
  WAIVERS
  OF JURY TRIAL

  
	
  10.17

  	
  Effect of
  Existing Credit Agreement and Notes

  
	
  10.18

  	
  Independence of Covenants

  
	
  10.19

  	
  Currency
  Indemnity

  
	
  10.20

  	
  Permitted Liens

  

 

iv

 

	
  ANNEX:

  
	
   

  
	
  A-1

  	
  Pricing Grid for
  Revolving Loans, Canadian Swingline Loans, U.S. Swingline Loans, Term Loans
  and Commitment Fee Rate

  
	
   

  	
   

  
	
  SCHEDULES:

  
	
   

  
	
  1.3A

  	
  Mortgaged Property

  
	
  1.3B

  	
  [Reserved]

  
	
  1.3C

  	
  Lending Commitments

  
	
  1.3D

  	
  Existing Hedge Agreements and Existing Letters of
  Credit

  
	
  1.3E

  	
  Paid Off Exiting Lenders

  
	
  4.4

  	
  Consents, Authorizations, Filings and Notices

  
	
  4.15

  	
  Subsidiaries

  
	
  4.22

  	
  Existing Loan Documents

  
	
  7.2(d)

  	
  Existing Indebtedness

  
	
  7.3(f)

  	
  Existing Liens

  
	
  7.8

  	
  Permitted MDM Guaranty Obligations

  
	
   

  	
   

  
	
  EXHIBITS:

  
	
   

  
	
  A-1

  	
  Form of Canadian Revolving Note

  
	
  A-2

  	
  Form of Canadian Term Note

  
	
  A-3

  	
  Form of Canadian Swingline Note

  
	
  B-1

  	
  Form of U.S. Revolving Note

  
	
  B-2

  	
  Form of U.S. Term Note

  
	
  B-3

  	
  Form of U.S. Swingline Note

  
	
  C-1

  	
  Form of
  U.S. Guarantee and Collateral Agreement

  
	
  C-2

  	
  Form of Canadian
  Collateral Agreement

  
	
  C-3

  	
  Form of Canadian
  Pledge Agreement

  
	
  D

  	
  Form of Compliance Certificate

  
	
  E

  	
  Form of Closing Certificate

  
	
  F

  	
  Form of Assignment and Acceptance

  
	
  G

  	
  Form of Exemption Certificate

  
	
  H

  	
  Form of Global Assignment and Acceptance

  

 

 

AMENDED AND RESTATED CREDIT AGREEMENT (this
“Agreement”), dated as of August 8, 2003, among INTERNATIONAL MULTIFOODS
CORPORATION, a Delaware corporation (the “U.S. Borrower”), ROBIN HOOD
MULTIFOODS INC., a corporation organized under the laws of the Province of
Ontario and a Subsidiary of the U.S. Borrower (the “Canadian Borrower”),
the several banks and other financial institutions or entities from time to
time parties to this Agreement (the “Lenders”), THE BANK OF NOVA SCOTIA,
as Canadian Funding Agent for the Lenders (in such capacity, the “Canadian
Funding Agent”) and as Canadian Collateral Agent, and U.S. BANK NATIONAL
ASSOCIATION, as administrative agent for the U.S. Lenders (in such capacity,
the “U.S. Administrative Agent”), as administrative agent for the
Canadian Lenders (in such capacity, the “Canadian Administrative Agent”)
and as U.S. Collateral Agent.

 

Reference is made to the Existing Credit Agreement, as
defined below.  On or prior to the date
of this Agreement, all outstanding amounts upon the “U.S. Tranche A Term
Loans”, the “U.S. Tranche B Term Loans” and the “Canadian Term Loans” have been
paid in full by the relevant Borrower (as defined in the Existing Credit
Agreement), and following such payment, the only loans and commitments to
extend credit accommodations outstanding under the Existing Credit Agreement
were the “U.S. Revolving Facility” and the “Canadian Revolving Facility” (each
as defined in the Existing Credit Agreement). Further, on the date of this
Agreement, the Canadian Revolving Facility and the U.S. Revolving Facility are
being assigned to the Canadian Revolving Lenders or the U.S. Revolving Lenders
(as defined herein), respectively, pursuant to the Global Assignment and
Acceptance (as defined below), provided that, the U.S. Revolving
Facilities or the Canadian Revolving Facilities, as applicable, of the Paid Off
Exiting Lenders (as defined below) (which have declined to execute the Global
Assignment and Acceptance), are being paid in full and reduced to zero on the
Closing Date, as specified in Section 1.2 below.  As more particularly set forth in Section 10.17, this Agreement
amends and restates the Existing Credit Agreement in its entirety.

 

The parties hereto hereby agree as follows:

 

SECTION 1.  DEFINITIONS; REPLACEMENT OF AGENTS

 

1.1           Definitions. 
As used in this Agreement, the terms listed in Section 1.3 of this
Agreement shall have the respective meanings set forth in Section 1.3.

 

1.2           Replacement of Agents; Payoff.

 

(a)           (i) the Existing Agents have resigned
as such as of the Closing Date and (ii) the Lenders hereby appoint, with the
approval of the Borrowers, U.S. Bank as the successor U.S. Administrative
Agent, the successor Canadian Administrative Agent and the successor U.S.
Collateral Agent and Scotia as the successor Canadian Collateral Agent (collectively,
the “New Agents”) under the Existing Credit Agreement and the relevant “Loan
Documents” as defined in the Existing Credit Agreement (as such term is defined
in the Existing Credit Agreement, and hereinafter, the “Existing Loan
Documents”).  U.S. Bank and Scotia
hereby accept such appointments.  U.S.
Bank and Scotia shall each have all respective obligations of and all rights,
immunities, indemnities and protections in the performance of its duties
accorded the U.S. Administrative Agent,

 

 

the Canadian Administrative Agent and the relevant
Collateral Agent under the Existing Credit Agreement and the other Existing
Loan Documents, and the Existing Agents are hereby discharged from their duties
and obligations as U.S. Administrative Agent, the Canadian Administrative Agent
and the Collateral Agent, under the Existing Credit Agreement and the other
Existing Loan Documents.  All references
in the Existing Credit Agreement and each Existing Loan Document to the U.S.
Administrative Agent, the Canadian Administrative Agent, and the Collateral
Agent as applicable, shall from and after the Closing Date be deemed to refer
to U.S. Bank and Scotia, as applicable. The indemnification provisions of
Sections 9.7 and 10.5 of the Existing Credit Agreement shall survive the
resignation of the Existing Agents for any actions taken or omitted to be taken
by them while acting as such under the Existing Credit Agreement and the other
Existing Loan Documents.

 

(b)           The resignations of the Existing
Agents described above and the appointment of the New Agents shall apply
notwithstanding any provisions of the Existing Credit Agreement or other
Existing Loan Documents which require that any party give notice to any other
party prior to the effectiveness of such appointment or retirement, all such
requirements being hereby waived.

 

(c)           The Borrowers agree to take such
further actions as may be reasonably requested by the relevant New Agent to
carry out the intent of this Section 1.2 of this Agreement.

 

(d)           Upon the Closing Date, the Existing
Credit Agreement is hereby amended (a) by reducing to zero the “U.S. Revolving
Commitment” or “Canadian Revolving Commitment”, as applicable, of the Paid Off
Exiting Lenders under the Existing Credit Agreement, (b) by waiving any notice
requirements set forth in Sections 2.16 and 2.17 of the Existing Credit
Agreement to the optional prepayment by the U.S. Borrower of all outstanding
amounts upon the “Canadian Revolving Facilities” and the “U.S. Revolving
Facilities” of the Paid Off Exiting Lenders and to the reduction of those
facilities to zero and (c) by waiving any requirement under Section 2.24(b) of
the Existing Credit Agreement or otherwise that the payments to the Paid Off
Exiting Lenders made pursuant to the payoff letter delivered by the applicable
Existing Agent with respect to such Paid Off Exiting Lenders be distributed
ratably to the “U.S. Revolving Lenders” or the “Canadian Revolving Lenders”
pursuant to the Existing Credit Agreement.

 

1.3           Defined Terms

 

“ABR”: 
for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%.  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.

 

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

 

2

 

“Acceptance Fee”:  the fee payable in Canadian Dollars to each Canadian Lender in
respect of Bankers’ Acceptances computed in accordance with
Section 2.11(e).

 

“Acquisition” 
the acquisition by the U.S. Borrower of (A) the Pillsbury Retail
Business and the Pillsbury Foodservice Business (each as defined in the
Acquisition Agreement) from The Pillsbury Company and (B) the Robin Hood
Business (as defined in the Acquisition Agreement) from General Mills, in each
case pursuant to the Acquisition Documentation.

 

“Acquisition Agreement”:  the Amended and Restated Asset Purchase and
Sale Agreement entered into among the U.S. Borrower, General Mills and The
Pillsbury Company dated as of October 24, 2001, as further amended by Omnibus
Amendment Agreement dated as of January 16, 2003.

 

“Acquisition Documentation”:  collectively, the Acquisition Agreement and
all schedules, exhibits and annexes thereto and all side letters and agreements
affecting the terms thereof or entered into in connection therewith.

 

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

 

“Administrative Agents”:  the collective reference to the U.S.
Administrative Agent and the Canadian Administrative Agent.

 

“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 15% 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 Collateral Agents, the Canadian Funding
Agent and the Administrative Agents.

 

“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,
(ii) the amount of such Lender’s Revolving Commitments then in effect or,
if the Revolving Commitments have been terminated, the amount of such Lender’s
Revolving Extensions of Credit then outstanding; (iii) the amount of such
Lender’s Canadian Swingline Commitment then in effect or, if the Canadian
Swingline Commitment has been terminated, the amount of such Lender’s Canadian
Swingline Extensions of Credit then outstanding; and (iv) the amount of
such Lender’s U.S. Swingline Commitment then in effect or, if the U.S.
Swingline Commitment has been terminated, the amount of such Lender’s U.S. Swingline
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 Aggregate Exposures of all Lenders at such time.

 

3

 

“Agreement”: 
as defined in the preamble hereto.

 

“Applicable BA Discount Rate”:  in respect of a Bankers’ Acceptance,
(a) for a Canadian Lender that is listed in Schedule I to the Bank
Act (Canada), the CDOR Rate at approximately 10:00 a.m., Toronto time, on such
Borrowing Date for bankers’ acceptances having a comparable maturity date as
the maturity date of such Bankers’ Acceptance and (b) for any other
Canadian Lender the CDOR Rate at approximately 10:00 a.m., Toronto time, on
such Borrowing Date for bankers’ acceptances having a comparable maturity date
as the maturity date of such Bankers’ Acceptance, plus 0.10%.

 

“Applicable Margin”:  (a) for each Type of U.S. Loan, the rate per annum set forth
under the relevant column heading below:

 

	
   

  	
   

  	
  ABR Loans

  	
   

  	
  Eurodollar
  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. Revolving
  Loans

  	
   

  	
  1.25%

  	
   

  	
  2.25%

  	
   

  
	
  U.S. Term Loans

  	
   

  	
  1.25%

  	
   

  	
  2.25%

  	
   

  
	
  U.S. Swingline
  Loans

  	
   

  	
  1.25%

  	
   

  	
  N/A

  	
   

  

 

provided that on and after the first Adjustment Date occurring after delivery
of the financial statements pursuant to Section 6.1(b) for the fiscal
quarter of the U.S. Borrower ending on or about August 31, 2003, the Applicable
Margin with respect to U.S. Loans will be determined pursuant to the Pricing
Grid; and (b) for each Type of Canadian Loan, the rate per annum set forth
under the relevant column heading below:

 

	
   

  	
   

  	
  C$ Prime

  Loans

  	
   

  	
  U.S. Base

  Rate Loans

  	
   

  	
  Eurodollar

  Loans

  	
   

  	
  Bankers’

  Acceptances

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canadian
  Revolving Loans

  	
   

  	
  1.25%

  	
   

  	
  1.25%

  	
   

  	
  2.25%

  	
   

  	
  2.25%

  	
   

  
	
  Canadian Swingline
  Loans

  	
   

  	
  1.25%

  	
   

  	
  1.25%

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
  Canadian Term
  Loans

  	
   

  	
  1.25%

  	
   

  	
  1.25%

  	
   

  	
  2.25%

  	
   

  	
  2.25%

  	
   

  

 

provided that on and after the first
Adjustment Date occurring after delivery of the financial statements pursuant
to Section 6.1(b) for the fiscal quarter of the U.S. Borrower ending on or
about August 31 2003, the Applicable Margin with respect to all Canadian Loans
will be determined pursuant to the Pricing Grid.

 

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

 

“Arranger”: U.S. Bank National Association, as
sole lead arranger and sole book manager of the Facilities.

 

“Asset Sale”: 
any Disposition of property or series of related Dispositions of
property (excluding any such Disposition permitted by clauses (a), (b),
(c), (d), (f) or (g) of Section 7.5 and excluding Securitization
Transactions) that yields gross proceeds to any Group Member (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of

 

4

 

notes or other debt securities and valued at fair market value in the
case of other non-cash proceeds) in excess of $500,000.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Available U.S. Swingline Commitment”:  as to the U.S. Swingline Lender at any time,
an amount equal to the excess, if any, of (a) the U.S. Swingline
Commitment then in effect over (b) the aggregate U.S. Swingline
Extensions of Credit then outstanding.

 

“BA Discount Proceeds”:  in respect of any Bankers’ Acceptance to be
purchased by a Canadian Lender on any day under Section 2.11, an amount
(rounded to the nearest whole Canadian cent, and with one-half of one Canadian
cent being rounded up) calculated on such day by dividing:  (a) the face amount of such Bankers’
Acceptance by (b) the sum of (1) one plus (ii) the
product (rounded up or down to the fifth decimal place (with .000005 being
rounded up)) of:  (A) the
Applicable BA Discount Rate (expressed as a decimal) applicable to such
Bankers’ Acceptance and (B) a fraction, the numerator of which is the
number of days remaining in the term of such Bankers’ Acceptance and the
denominator of which is 365 or 366, as the case may be.

 

“Bankers’ Acceptance”:  a Draft denominated in Canadian Dollars
drawn by the Canadian Borrower and accepted by a Canadian Lender pursuant to
Section 2.11.

 

“Bank of Canada Noon Rate”:  the spot wholesale transaction buying rate
of the Bank of Canada for the purchase of Dollars with Canadian Dollars or
Canadian Dollars with Dollars, as the case may be, in effect as of 12:00 noon,
Toronto time, on the Business Day with respect to which such computation is
required.

 

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

 

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

 

5

 

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

 

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

 

“Business Day”:  (a) for all purposes other than as set forth in
clauses (b) and (c) below, a day other than a Saturday, Sunday or other
day on which commercial banks in Minneapolis, Minnesota or in New York City are
authorized or required by law to close, (b) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, any day described in clause (a) above and which is also
a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market in London and (c) for all purposes in connection with a
Canadian Loan or a Canadian Letter of Credit other than as set forth in
clause (b), a day on which banks are open for business in Toronto, Canada
other than a Saturday, Sunday or other day which is a legal holiday in Toronto,
Canada.

 

“Canadian Administrative Agent”:  U.S. Bank, together with its affiliates, as
the arranger of the Canadian Commitments and as the administrative agent for
the Canadian Lenders under this Agreement and the other Loan Documents,
together with any of its successors.

 

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

 

“Canadian Collateral Agent”: The Bank of Nova
Scotia, in its capacity as collateral agent for the Secured Parties, together
with any of its successors.

 

 “Canadian
Collateral Agreement”:  the Amended
and Restated Collateral Agreement to be executed and delivered by each of the
grantors party thereto, substantially in the form of Exhibit C-2, as
the same may be amended, supplemented, restated, replaced or otherwise modified
from time to time.

 

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

 

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

 

“Canadian Dollar Equivalent”:  with respect to any amount of Dollars on any
date, the equivalent amount in Canadian Dollars of such amount of currency as
determined by the relevant Administrative Agent using the applicable Exchange
Rate.

 

“C$ Excess”: 
as defined in Section 2.30(c).

 

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

 

“C$ Prime Rate”:  on any day, the greater of (a) the rate per annum announced
from time to time by the Canadian Funding Agent (or, in the case of Canadian
Swingline Loans, the Canadian Swingline Lender) as its reference rate then in
effect for determining interest rates on

 

6

 

Canadian Dollar denominated commercial loans in Canada and (b) the
rate per annum equal to the sum of (i) the CDOR Rate and (ii) 0.50%
per annum.

 

“CIBC” 
Canadian Imperial Bank of Commerce.

 

“Canadian Funding Agent”:  The Bank of Nova Scotia, together with its
affiliates, as the funding agent for the Canadian Loans, together with any of
its successors.

 

“Canadian Issuing Lender”:  CIBC, in its capacity as issuer of any
Canadian Letter of Credit.

 

“Canadian L/C Obligations”:  at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Canadian Letters of Credit and (b) the aggregate amount of
drawings under Canadian Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.

 

“Canadian Lenders”:  the collective reference to the Canadian Term Lenders, the
Canadian Revolving Lenders and the Canadian Swingline Lender.

 

“Canadian Lending Office”:  as to each Canadian Lender, the office in
Canada specified as the “Canadian Lending Office” of such Lender on the
signature pages hereto or in an Assignment and Acceptance, as the case may be,
or such other office in Canada as may be designated by such Lender by written notice
to the Canadian Borrower and the Canadian Administrative Agent.

 

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

 

“Canadian Loans”:  the collective reference to all Loans to the Canadian Borrower.

 

“Canadian Mortgaged Properties”:  the real properties listed and identified as
such on Part B of Schedule 1.3A (other than the Quebec Mortgaged
Properties), as to which the Canadian Collateral Agent, for the benefit of,
among others, the Canadian Lenders, shall now hold, or hereafter be granted, a
Lien pursuant to the Canadian Mortgages.

 

“Canadian Mortgages”:  the collective reference to (a) the Debenture executed by
the Canadian Borrower and/or each Canadian Subsidiary Guarantor that owns a
Canadian Mortgaged Property in favor of the Canadian Collateral Agent or
otherwise held by the Canadian Collateral Agent, for the benefit, among others,
of the Canadian Lenders, and (b) the Pledge of Debenture executed by the
Canadian Borrower and/or each such Canadian Subsidiary Guarantor in favor of the
Canadian Collateral Agent or otherwise held by the Canadian Collateral Agent,
for the benefit of, among others, the Canadian Lenders, in each case,
substantially on terms contained in the U.S. Mortgages (to the extent
applicable), as amended and/or assigned to the extent provided in the Mortgage
Amendment Documents and otherwise in form and substance reasonably satisfactory
to the Canadian Administrative Agent (with such changes thereto as shall be
advisable under the law of the jurisdiction in which such Debenture or Pledge
of Debenture is to be recorded), in the case of any fee interests, or in form
and substance reasonably satisfactory to the Canadian Administrative Agent, in
the case of any leasehold interests in which a Lien may in the future be
created to secure the Obligations (or any portion thereof), as each of the

 

7

 

foregoing, upon or after the execution thereof, may be amended,
supplemented, restated, replaced or otherwise modified from time to time.

 

“Canadian Pledge Agreement”:  the Amended and Restated Securities Pledge
Agreement to be executed and delivered by the U.S. Borrower, substantially in
the form of Exhibit C-3, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Canadian Reimbursement Obligations”:  the obligation of the Canadian Borrower to
reimburse the Canadian Issuing Lender pursuant to Section 3.5(b) for
amounts drawn under Canadian Letters of Credit.

 

“Canadian Restructuring Memorandum”:  The Summary of Proposed Legal Entity
Restructuring dated August 1, 2003, a copy of which has been delivered to the
Administrative Agents.

 

“Canadian Restructuring Transaction”:  the transaction or series of transactions
which are to be carried out by the Borrower and certain of its Subsidiaries
described in the Canadian Restructuring Memorandum.

 

“Canadian Revolving Commitment”:  as to any Canadian Lender, the obligation of
such Lender, if any, to make Canadian Revolving Loans in an aggregate principal
amount at any one time outstanding not to exceed the Canadian Dollar Equivalent
on the Business Day prior to the Closing Date of the amount set forth below the
heading “Canadian Revolving Commitment” on Schedule 1.3C or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the same
may be modified from time to time pursuant to the terms hereof.

 

“Canadian Revolving Facility”:  the Canadian Revolving Commitments and the
extensions of credit made thereunder.

 

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

 

“Canadian Revolving Loans”:  as defined in Section 2.9.

 

“Canadian Revolving Note”:  A promissory note of the Canadian Borrower
in the form of Exhibit A-1 hereto.

 

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

 

“Canadian Subsidiary Guarantor”:  each Foreign Subsidiary of the U.S. Borrower
other than the Canadian Borrower and other than Inversiones 91060, C.A.

 

8

 

“Canadian Swingline Commitment”:  as to the Canadian Swingline Lender, the
obligation of such Lender to make Canadian Swingline Loans in an aggregate
principal amount not to exceed C$10,000,000 or the Dollar Equivalent thereof,
as the same may be modified from time to time pursuant to the terms hereof.

 

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

 

“Canadian Swingline Facility”:  the Canadian Swingline Commitment and the
extensions of credit made thereunder.

 

“Canadian Swingline Lender”:  CIBC, in its capacity as the lender of
Canadian Swingline Loans.

 

“Canadian Swingline Loans”:  as defined in Section 2.13.

 

“Canadian Swingline Note”:  A promissory note of the Canadian Borrower
in the form of Exhibit A-3 hereto.

 

“Canadian Term Commitment”:  as to any Canadian Lender, the obligation of
such Lender, if any, to make a Canadian Term Loan to the Canadian Borrower
hereunder on the Closing Date in a principal amount not to exceed the Canadian
Dollar Equivalent on the Business Day prior to the Closing Date of the amount
set forth below the heading “Canadian Term Commitment” on Schedule 1.3C
hereto or in the Assignment and Acceptance to which such Lender became a party
hereto.  The original aggregate amount
of the Canadian Term Commitments is the Canadian Dollar Equivalent on the
Business Day prior to the Closing Date of $35,000,000.

 

“Canadian Term Facility”:  the Canadian Term Commitments and the
Canadian Term Loans made thereunder.

 

“Canadian Term Lender”:  each Lender that has a Canadian Term
Commitment or is the holder of a Canadian Term Loan.

 

“Canadian Term Loan”:  as defined in Section 2.4.

 

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

 

“Canadian Term Note”:  A promissory note of the Canadian Borrower in
the form of Exhibit A-2 hereto.

 

9

 

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

 

“Capital Expenditures”:  for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries, provided that
the purchase by any Group Member from General Mills, Inc. of the Toledo
Facility and the incurrence of additional capital expenditures in connection
therewith (to the extent such purchase price and additional capital
expenditures do not, in the aggregate, exceed $11,500,000) shall not constitute
a Capital Expenditure.

 

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

 

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

 

“Cash Equivalents”:  (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or the Canadian
government or issued by any agency thereof and backed by the full faith and
credit of the United States or Canada, as the case may be, in each case
maturing within one year from the date of acquisition; (b) certificates of
deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of six months or less from the date of acquisition issued by
any Lender or by any commercial bank organized under the laws of the United
States or any state thereof or Canada or any province thereof having combined
capital and surplus of not less than $500,000,000 or the Canadian Dollar
Equivalent thereof, (c) commercial paper of an issuer rated at least A-1
by S&P, P-1 by Moody’s or R-1 (high) by the Dominion Bond
Rating Services, Inc. (“DBRS”), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named United States
rating agencies or the named Canadian rating agency cease publishing ratings of
commercial paper issuers generally, and maturing within six months from the date
of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government or the
Canadian government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth, province or territory of the United States or Canada, by any political
subdivision or taxing authority of any such state, commonwealth, province or
territory or by any foreign government, the securities of which state,
commonwealth, province, territory, political subdivision, taxing authority or
foreign government, as the case may be, are rated at least A by S&P, A by
Moody’s or A by DBRS; (f) securities with maturities of

 

10

 

six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money
market mutual or similar funds which invest exclusively in assets satisfying
the requirements of clauses (a) through (f) of this definition.

 

“CDOR Rate”: 
on any day, the rate per annum based on the rates applicable to Canadian
Dollar bankers’ acceptances for a term of thirty-days (rounded up to two
decimal places in the case of the definition of “C$ Prime Rate”) or for a term
equivalent to the term of, and amounts comparable to the amount of, the
relevant Bankers’ Acceptances (in the case of the definition of “Applicable BA
Discount Rate”) appearing on the “Reuters Screen CDOR Page” (as defined in the
International Swap Dealer Association, Inc. definitions, as modified and
amended from time to time) for acceptances of Schedule I banks under the
Bank Act (Canada) as of 10:00 a.m., Toronto time, on such day, or if such day
is not a Business Day, then on the immediately preceding Business Day; provided,
however, that if no such rate appears on the Reuters Screen CDOR Page as
contemplated, then the CDOR Rate on any day shall be calculated as the rate for
the term referred to above applicable to Canadian Dollar bankers’ acceptances
quoted by the Canadian Funding Agent (or, in the case of Canadian Swingline
Loans, the Canadian Swingline Lender) as of 10:00 a.m., Toronto time, on such
day or, if such day is not a Business Day, then on the immediately preceding
Business Day.

 

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

 

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

 

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

 

“Collateral Agents”: the collective reference
to the Canadian Collateral Agent and the U.S. Collateral Agent.

 

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

 

“Commitment Fee Rate”: 0.375% per annum;
provided that on and after the first Adjustment Date occurring after delivery
of the financial statements pursuant to Section 6.1(b) for the fiscal
quarter of the U.S. Borrower ending on August 31, 2003, 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 U.S. Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes the U.S.
Borrower and that is treated as a single employer under Section 414 of the
Code.

 

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

 

11

 

“Consolidated Asset Base”:  as of any date of determination, 66.67% of
the sum of the net book value of all accounts receivable (excluding
intercompany accounts receivable) and all inventory owned by the U.S. Borrower
and its Subsidiaries, in each case calculated in accordance with GAAP.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge
in the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) Consolidated Interest Expense,
amortization or write-off of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans), (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
noncash expenses or losses (including non-cash losses on sales of assets
outside of the ordinary course of business), (f) any non-recurring
restructuring costs incurred during the first quarter of its 2004 fiscal year,
in an amount not exceeding $3,500,000 in the aggregate, (g) any non-recurring
charges related to the write-off of certain obligations owed to the U.S.
Borrower by The Fleming Companies, in an amount not exceeding $2,000,000 in the
aggregate, (h) non-recurring charges relating to the plant closing in Simcoe,
Canada, in an amount not exceeding $1,500,000 in the aggregate,  (i) non-recurring costs and expenses in
connection with the Canadian Restructuring Transaction in an amount not
exceeding $1,000,000 in the aggregate, (j) non-recurring start-up costs
incurred in connection with the business acquired pursuant to the Acquisition,
provided that the amounts referred to in this clause (j) shall not exceed
$4,500,000 during the U.S. Borrower’s 2003 fiscal year, (k) fees and expenses
in connection with the MDM Sale, (l) non-recurring retention and severance
costs resulting from the MDM Sale, (m) any nonrecurring non-cash expenses or
losses related to settlement and curtailment of pension plans as a result of
the MDM Sale, (n) all earnings and losses of the MDM Entities in fiscal year
2003, which were classified as discontinued operations, (o) any other unusual
and non-recurring cash charges up to $10,000,000 in the aggregate and (p) any
other non-cash charges or expenses, and provided, further, that
such amounts shall be specified in reasonable detail in each applicable
Compliance Certificate minus, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales
of assets outside of the ordinary course of business), (c) any non-cash
income or gains under any Plan or any other pension plan and (d) any other
non-cash income, all as determined on a consolidated basis.  For the purposes of calculating Consolidated
EBITDA for any period of four consecutive fiscal quarters (each, a “Reference
Period”) pursuant to any determination of the Consolidated Leverage Ratio,
(i) if at any time during such Reference Period the U.S. Borrower or any
of its Subsidiaries shall have made any Material Disposition, the Consolidated
EBITDA for such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Reference Period and (ii) if during such Reference Period the
U.S. Borrower or any of its Subsidiaries shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro  forma effect thereto (calculated in a manner
reasonably acceptable to the U.S. Administrative Agent) as if such Material
Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material
Acquisition”

 

12

 

means any acquisition of property or series of related acquisitions of
property that (a) constitutes assets comprising all or substantially all
of an operating unit of a business or constitutes all or substantially all of
the common stock of a Person and (b) involves the payment of consideration
by the U.S. Borrower and its Subsidiaries in excess of $10,000,000; and “Material
Disposition” means any Disposition of property or series of related
Dispositions of property that yields gross proceeds to the U.S. Borrower or any
of its Subsidiaries in excess of $10,000,000.

 

“Consolidated Fixed Charge Coverage Ratio”:  for any period, the ratio of (a) the
sum of (i) Consolidated EBITDA for such period plus (ii) any cash proceeds
received by the U.S. Borrower or any of the Subsidiaries in connection with the
exercise of stock options in the U.S. Borrower less (iii) the aggregate
amount actually paid by the U.S. Borrower and its Subsidiaries during such
period on account of Capital Expenditures that are not financed with long-term
Indebtedness permitted by Section 7.2(e) less (iv) income taxes paid in
cash by the U.S. Borrower or any Subsidiary less (v) Restricted Payments to
(b) Consolidated Fixed Charges for such period.

 

“Consolidated Fixed Charges”:  for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period and
(b) scheduled payments made during such period on account of principal of
Indebtedness of the U.S. Borrower or any of its Subsidiaries (including
scheduled principal payments in respect of the Term Loans but specifically
excluding any payments in respect of Revolving Loans and Swingline Loans).

 

“Consolidated Interest Expense”:  for any period, the excess of (a) total
net interest expense of the U.S. Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the U.S. Borrower and its
Subsidiaries determined in accordance with GAAP (including that attributable to
Capital Lease Obligations and including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP)
over (b) the sum of the following for such period (but only to the extent
included in the amount calculated pursuant to clause (a) above):  (i) amortization of financing fees with
respect to any Indebtedness of the U.S. Borrower and its Subsidiaries and
(ii) non-cash interest expense.

 

“Consolidated Leverage Ratio”:  as at the last day of any period, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period, provided that, in calculating Consolidated Total Debt
for purposes of this definition, the amount of Revolving Loans and Swingline
Loans outstanding on such day shall be deemed to be equal to the average of the
aggregate Revolving Loans and Swingline Loans, respectively, outstanding on
such day and of the aggregate Revolving Loans and Swingline Loans,
respectively, outstanding on the respective last days of each of the three most
recently preceding fiscal quarters.

 

“Consolidated Net Income”:  for any period, the consolidated net income
(or loss) of the U.S. Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

 

“Consolidated Senior Secured Leverage Ratio”:  as at the last day of any period, the ratio
of (a) Consolidated Total Debt on such day (other than Indebtedness
evidenced by the Senior

 

13

 

Notes and other unsecured Indebtedness) to (b) Consolidated EBITDA
for such period, provided that, in calculating such secured Consolidated
Total Debt for purposes of this definition, the amount of Revolving Loans and
Swingline Loans outstanding on such day shall be deemed to be equal to the
average of the aggregate Revolving Loans and Swingline Loans outstanding on
such day and of the aggregate Revolving Loans and Swingline Loans,
respectively, outstanding on the respective last days of each of the three most
recently preceding fiscal quarters.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount
of all Indebtedness for borrowed money of the U.S. Borrower and its
Subsidiaries at such date (including the Loans and all Capitalized Lease
Obligations, but excluding Guarantee Obligations to the extent that demand for
payment thereon has not been made by the holder thereof) , determined on a
consolidated basis in accordance with GAAP.

 

“Continuing Directors”:  the directors of the U.S. Borrower on the
Closing Date, and each other director, if, such other director’s nomination for
election to the board of directors of the U.S. Borrower is recommended by at
least a majority of the then Continuing Directors.

 

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

 

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

 

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

 

“Dollar Equivalent”:  with respect to any amount of Canadian Dollars on any date, the
equivalent amount in Dollars of such amount of currency as determined by the
relevant Administrative Agent using the applicable Exchange Rate.

 

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

 

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

 

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

 

“Environmental Laws”:  any and all laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any foreign, federal, state, provincial,
local, municipal or other Governmental Authority, or other Requirements of Law
(including common law) regulating,

 

14

 

relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as have been now or may at any
time hereafter be in effect.

 

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

 

“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 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 relevant Administrative Agent or, in the
absence of such availability, by reference to the rate at which the relevant
Administrative Agent is offered Dollar deposits at or about 11:00 a.m., New
York City time or Toronto time, as applicable, 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 1/100th 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).

 

15

 

“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.

 

“Exchange Rate”:  with respect to Dollars or Canadian Dollars on any date, the rate
at which Dollars may be exchanged into Canadian Dollars, or Canadian Dollars
may be exchanged into Dollars, as the case may be, as determined in accordance
with the Bank of Canada Noon Rate.

 

“Existing Agents”:  CIBC, as “U.S. Administrative Agent”, “Canadian Administrative
Agent” and “Collateral Agent” pursuant to the Existing Credit Agreement and the
other Existing Loan Documents.

 

“Existing Canadian Letters of Credit”:  the irrevocable letters of credit existing
on the Closing Date and issued by CIBC for the account of the U.S. Borrower, as
more particularly described in Schedule 1.3D hereof.

 

“Existing Credit Agreement”: the $450,000,000
Credit Agreement dated as of September 28, 2001 among the Borrowers, the
several banks and other financial institutions or entities from time to time
parties thereto, Canadian Imperial Bank of Commerce, as Canadian administrative
agent and as U.S. administrative agent for the Lenders and certain other
parties, as amended by a First Amendment to Credit Agreement dated as of August
20, 2002 and as amended hereby.

 

“Existing Hedge Agreements”: the interest rate
hedging arrangements existing on the Closing Date between a Borrower and the counterparties
specified in Schedule 1.3D hereof, as more particularly described in Schedule
1.3D hereof.

 

“Existing Loan Documents”:  as defined in Section 1.2(a).

 

“Existing U.S. Letters of Credit”:  the irrevocable letters of credit existing
on the Closing Date and issued by CIBC for the account of the U.S. Borrower, as
more particularly described in Schedule 1.3D hereof.

 

“Facility”: 
each of the U.S. Term Facility, the U.S. Revolving Facility, the U.S.
Swingline Facility, the Canadian Term Facility, the Canadian Revolving Facility
and the Canadian Swingline Facility.

 

“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 U.S. Bank from three
federal funds brokers of recognized standing selected by it.

 

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

 

“Foundation”: 
International Multifoods Charitable Foundation, a charitable foundation organized
under Section 501(c)(3) of the Code.

 

16

 

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

 

“GAAP”: 
generally accepted accounting principles in the United States as in
effect from time to time, provided that if any change in GAAP results in
a change in the calculation of the financial covenants or interpretation of
related provisions of this Agreement or any other Loan Document, then the
Lenders, the Administrative Agents and the Borrowers agree to negotiate in good
faith to attempt to amend such provisions of this Agreement in accordance with
Section 10.1 so as to reflect equitably such changes in GAAP with the
desired result that the criteria for evaluating the Borrowers’ financial condition
shall be the same after such change in GAAP as if such change had not been
made.

 

“Global Assignment and Acceptance”:  a Global Assignment and Acceptance,
substantially in the form of Exhibit H.

 

“Governmental Authority”:  any nation or government, any state,
province or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities
exchange and any self regulatory organization (including the National
Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to the Borrowers and their respective
Subsidiaries.

 

“Guarantee and Collateral Agreements”:  the collective reference to the U.S.
Guarantee and Collateral Agreement and the Canadian Collateral Agreement.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing
person”), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof, provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is

 

17

 

made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in which
case the amount of such Guarantee Obligation shall be such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrowers in good faith.

 

“Guarantors”: 
the U.S. Borrower, in its capacity as a guarantor of the Obligations of
the Canadian Borrower pursuant to the U.S. Guarantee and Collateral Agreement,
the U.S. Subsidiary Guarantors and the Canadian Subsidiary Guarantors.

 

“Hedge Agreements”:  all interest rate swaps, caps or collar agreements or similar
arrangements dealing with interest rates or currency exchange rates or the
exchange of nominal interest obligations, either generally or under specific
contingencies.

 

“Indebtedness”:  of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business and the remaining deferred purchase price in the amount of $5,750,000
payable in September, 2003 under the Acquisition Agreement), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an account
party or applicant under or in respect of acceptances, letters of credit,
surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (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 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 (j) for the purposes of Sections 7.2
and 8(e) only, all obligations of such Person in respect of Hedge
Agreements.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor.

 

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

 

“Insolvent”: 
pertaining to a condition of Insolvency.

 

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, Canadian or foreign laws or otherwise, including
copyrights, copyright licenses, copyright applications, patents, patent

 

18

 

licenses, patent applications, trademarks, trademark licenses,
trademark applications, service marks, service mark applications, trade
secrets, trade dress, confidential or proprietary information, inventions,
data, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

 

“Interest Payment Date”:  (a) as to any ABR Loan, the last 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 U.S.
Base Rate Loan or C$ Prime Loan, the first Business Day following the last day
of each calendar quarter to occur while such Loan is outstanding, (c) as
to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (d) 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 and (e) as to any Loan (other than,
except in the case of the termination of the relevant Commitment, any Revolving
Loan that is an ABR Loan, U.S. Base Rate Loan, C$ Prime Loan or Swingline Loan),
the date of any repayment or prepayment made in respect thereof.

 

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

 

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

 

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

 

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

 

(iv)          the Borrowers shall select Interest
Periods so as not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.

 

19

 

“Investments”: 
as defined in Section 7.8.

 

“Issuing Lenders”:  the collective reference to the U.S. Issuing Lender and the
Canadian Issuing Lender.

 

“L/C Fee Payment Date”:  the last day of each March, June, September
and December and on the Revolving Termination Date.

 

“L/C Obligations”:  the collective reference to the U.S. L/C Obligations and the
Canadian L/C Obligations.

 

“Lender Affiliate”:  (a) any Affiliate of any Lender, (b) any Person that is
administered or managed by any Lender and that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and (c) with
respect to any Lender which is a fund that invests in commercial loans and
similar extensions of credit, any other fund that invests in commercial loans
and similar extensions of credit and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such Lender or
investment advisor.

 

“Lenders”: 
as defined in the preamble hereto and such term shall include, for the
avoidance of doubt, the Canadian Swingline Lender, the U.S. Swingline Lender
and the Issuing Lenders.

 

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

 

“Lien”: 
any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or
any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).

 

“Loan”: 
any loan or advance made by any Lender pursuant to this Agreement, including
without limitation, any advance made by way of the acceptance by any Canadian
Lender of a Draft.

 

“Loan Documents”:  this Agreement, the Security Documents and the Notes.

 

“Loan Parties”:  each Group Member that is a party to a Loan Document.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders of
at least 51% of the aggregate unpaid principal amount of the Term Loans, the
Total Revolving Extensions of Credit, the U.S. Swingline Extensions of Credit
or the Canadian Swingline Extensions of Credit, as the case may be, outstanding
under such Facility (or, in the case of either Revolving Facility, prior to any
termination of such Revolving Commitments, the holders of at least 51% of the
Total Revolving Commitments under such Revolving Facility).

 

20

 

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

 

“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 of any kind, whether or not any such
substance is defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any Environmental
Law.

 

“MDM Entities”:  the collective reference to Multifoods Distribution Management,
Inc. and its Subsidiaries (which, for the avoidance of doubt, includes Better
Brands, Inc., Multifoods Distribution Group, Inc. and Multifoods Merchandising,
Inc.).

 

“MDM Sale”: 
the sale of all of the Capital Stock of the MDM Entities pursuant to,
and the consummation of the other transactions contemplated by, the Stock
Purchase Agreement dated as of July 29, 2002 between the U.S. Borrower and
Wellspring Distribution Corp.

 

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

 

“Mortgage Amendment Documents”: as defined in
Section 5.1(i).

 

“Mortgaged Properties”:  the collective reference to the U.S.
Mortgaged Properties, the Canadian Mortgaged Properties and the Quebec
Mortgaged Properties.

 

“Mortgages”: 
the collective reference to the U.S. Mortgages, the Canadian Mortgages
and the Quebec Mortgages.

 

“Multiemplover 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, Securitization
Transaction 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, Securitization Transaction or Recovery Event, net of
attorneys’ fees, accountants’ fees, investment banking fees, amounts required
to be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Asset Sale,
Securitization Transaction or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in
connection therewith (including, in the case of an Asset Sale, severance and
other employee-related costs) 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 Capital Stock or any incurrence of Indebtedness,
the cash proceeds received from such issuance or incurrence, net of attorneys’
fees, investment

 

21

 

banking fees, accountants’ fees, underwriting discounts and commissions
and other customary fees and expenses actually incurred in connection
therewith.

 

“Non-Excluded Taxes”:  as defined in Section 2.26(a).

 

“Non-U.S. Lender”:  as defined in Section 2.26(d).

 

“Notes”: 
the Canadian Revolving Notes, the Canadian Swingline Note, Canadian Term
Notes, the U.S. Revolving Notes, the U.S. Term Notes and the U.S. Swingline
Note.

 

“Obligations “:  the unpaid principal of and interest on (including 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
either Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrowers to either Administrative Agent, any other Agent or
to any Lender (or, in the case of Specified Hedge Agreements, any Lender
Affiliate or other counterparty thereto), 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 any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to either Administrative Agent, any other Agent or to any Lender that
are required to be paid by the Borrowers pursuant hereto) or otherwise.

 

“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.

 

“Paid Off Exiting Lenders”:  The financial institutions listed in
Schedule 1.3E.

 

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

 

“Payment Office”:  (a) with respect to the U.S. Administrative Agent or the Canadian
Funding Agent, the office of such Administrative Agent or the Canadian Funding
Agent specified in Section 10.2 or such other office as may be specified
from time to time by such Administrative Agent or the Canadian Funding Agent as
its funding office by written notice to the relevant Borrower and the relevant
Lenders and (b) with respect to the Canadian Swingline Lender, the office of
the Canadian Swingline Lender specified in Section 10.2 or such other
office as may be specified from time to time by the Canadian Swingline Lender
by written notice to the relevant Borrower and the Administrative Agents.

 

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

 

“Permitted Canadian Real Property Liens”:  any of (a) Liens in respect of
reservations, limitations, provisos and conditions, if any, expressed in any
original grant from the Crown of

 

22

 

any real property of the U.S. Borrower or any Subsidiary thereof
located in Canada or any interest therein that, in the aggregate, are not
substantial in amount and do not in any case detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the U.S. Borrower and its Subsidiaries, (b) Liens in favor
of a public utility or municipality or any public authority or Governmental
Authority which is required by such utility or other authority in connection
with the operation of the business, or the ownership of property, in Canada of
the U.S. Borrower or any Subsidiary thereof which Liens, in the aggregate, are
not substantial in amount and do not in any case detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the U.S. Borrower and its Subsidiaries, (c) servicing
agreements, development agreements, site plan agreements and other agreements
with Governmental Authorities with respect to the use or development of any of
real property located in Canada of the U.S. Borrower or any Subsidiary thereof
so long as such agreements are complied with and which agreements, in the
aggregate, do not in any case detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the U.S. Borrower and its Subsidiaries, (d) applicable municipal and other
governmental restrictions, including municipal by-laws and regulations,
affecting the use of land located in Canada or the nature of any structures
which may be erected thereon so long as such restrictions are complied with and
which restrictions, in the aggregate, do not in any case detract from the value
of the property subject thereto or materially interfere with the ordinary
conduct of the business of the U.S. Borrower and its Subsidiaries, and
(e) rights reserved to or vested in any Governmental Authority of Canada
or any province thereof by any statutory provision or by their terms of any
lease, license, franchise, grant or permit of the U.S. Borrower or any
Subsidiary thereof, to terminate any such lease, license, franchise, grant or
permit, or to require annual or other payments as a condition to the
continuance thereof that, in the aggregate, do not materially interfere with
the ordinary conduct of the business of the U.S. Borrower and its Subsidiaries.

 

“Permitted MDM Guarantee Obligations”:  Guarantee Obligations of the U.S. Borrower
of lease obligations of the MDM Entities as more fully set forth on Schedule
7.8.

 

“Permitted U.S. Real Property Liens”:  with respect to each of the U.S. Mortgages,
the matters identified as “Permitted Exceptions” therein.

 

“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 Single Employer Plan or Multiemployer Plan in
respect of which the U.S. Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pricing Grid”:  the pricing grid attached hereto as Annex A-1.

 

“Prime Rate”: 
the rate of interest per annum publicly announced from time to time by
U.S. Bank as its prime rate in effect at its principal office in Minneapolis,
Minnesota (the Prime

 

23

 

Rate not being intended to be the lowest rate of interest charged by
U.S. Bank in connection with extensions of credit to debtors).

 

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

 

“Quebec Mortgaged Properties”:  the real properties listed and identified as
such on Part B of Schedule 1.3A which are located in the Province of
Quebec, as to which the Canadian Collateral Agent, for the benefit of, among
others, the Canadian Lenders, shall now hold, or hereafter be granted a Lien,
pursuant to the Quebec Mortgages.

 

“Quebec Mortgages”:  the Quebec Security Documents only to the extent they relate to
the Quebec Mortgaged Properties.

 

“Quebec Security Documents”:  the collective reference to (a) the Deed
of Hypothec Issue of Bonds executed and delivered by the Canadian Borrower and
each Canadian Subsidiary Guarantor that owns property located in the Province
of Quebec, Canada, together with the bond issued pursuant thereto, (b) the
Pledge of Bond executed and delivered by the Canadian Borrower and each such
Canadian Subsidiary Guarantor and (c) each such other document executed
and/or delivered in connection with either of the foregoing, including without
limitation, a delivery order and a receipt for such bond, in the case of each
of the foregoing contained clauses (a), (b) and (c) as amended and/or
assigned by one or more documents and otherwise in form and substance
reasonably satisfactory to the Canadian Administrative Agent, as the same, upon
or after the execution thereof, may be amended, supplemented, restated,
replaced 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 any Group Member.

 

“Refunding Bankers’ Acceptance”:  as defined in Section 2.11(d).

 

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

 

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

 

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

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Group Member in connection
therewith that are not applied to prepay the Term Loans or reduce the Revolving
Commitments pursuant to Section 2.18(c) as a result of the delivery of a
Reinvestment Notice.

 

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

 

“Reinvestment Notice”:  a written notice executed by a Responsible
Officer of a Borrower stating that no Event of Default has occurred and is
continuing and that such Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion

 

24

 

of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
or repair assets useful in its business.

 

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

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the
earlier of (a) the date occurring twelve months after such Reinvestment
Event and (b) the date on which a Borrower shall have determined not to,
or shall have otherwise ceased to, acquire or repair assets useful in such
Borrower’s business with all or any portion of the relevant 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 notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67
of PBGC Reg. § 4043.

 

“Required Lenders”:  at any time, the holders of at least 51% 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, (ii) the Total Revolving Commitments then in effect or, if
the Revolving Commitments have been terminated, the Total Revolving Extensions
of Credit then outstanding, and (iii) the Canadian Swingline Commitment
then in effect or, if the Canadian Swingline Commitment has been terminated,
the aggregate Canadian Swingline Extensions of Credit then outstanding.

 

“Requirement of Law”:  as to any Person, the Certificate of Incorporation and By-Laws or
other organizational or governing documents of such Person, and any law,
treaty, 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 or
chief financial officer of a Borrower, but in any event, with respect to
financial matters, the chief financial officer and the vice president and
treasurer of such Borrower.

 

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

 

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

 

25

 

“Revolving Commitments”:  as to any Lender, the collective reference
to the U.S. Revolving Commitments and the Canadian Revolving Commitments of
such Lender.

 

“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, the
collective reference to the U.S. Revolving Extensions of Credit and the
Canadian Revolving Loans of such Lender then outstanding.

 

“Revolving Facility”:  each of the U.S. Revolving Facility and the Canadian Revolving
Facility.

 

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

 

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

 

“Revolving Termination Date”:  August 8, 2008.

 

“S&P”: 
Standard and Poor’s, a division of The McGraw-Hill Companies.

 

“Scotia”: The Bank of Nova Scotia.

 

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

 

“Secured Parties”:  as defined in the relevant Guarantee and Collateral Agreement.

 

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

 

“Securitization Transaction”:  Any sale (including a license) of accounts receivable by the U.S. Borrower
or any of its Subsidiaries, with limited recourse, or no recourse, or other
forms of off-balance sheet financing with respect to accounts receivable by the
U.S. Borrower or any of its Subsidiaries.

 

“Senior Note Indenture”:  that certain Fiscal Agency Agreement dated
as of December 17, 2001 entered into by the U.S. Borrower in connection with
the issuance of the Senior Notes together with all instruments and other
agreements entered into by the U.S. Borrower in connection therewith, as the
same, after the execution thereof, may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.

 

“Senior Notes”:  senior unsecured notes of the U.S. Borrower issued on or about
December 17, 2001 pursuant to the Senior Note Indenture.

 

26

 

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

 

“Solvent”: 
when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the
assets of such Person will, as of such date, exceed the amount of all
“liabilities of such Person, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state and
provincial 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 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 Hedge Agreement”:  (a) any Hedge Agreement (i) entered
into by a Borrower and any Lender or Lender Affiliate and (ii) that has
been designated by the relevant Lender and the relevant Borrower, by written
notice to the relevant Administrative Agent, as a Specified Hedge Agreement and
(b) the Existing Hedge Agreements (without giving effect to any extensions
thereof).  Specified Hedge Agreements
may be identified by reference to the Borrower which is a party thereto,
namely, a “U.S. Borrower Specified Hedge Agreement” or a “Canadian Borrower
Specified Hedge Agreement.”  The
designation of any Hedge Agreement as a Specified Hedge Agreement shall not create
in favor of such Lender, Lender Affiliate or any other counterparty thereto any
rights in connection with the management or release of any Collateral or of the
obligations of any Loan Party under the Guarantee and Collateral Agreements.

 

“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 relevant Borrower.

 

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

 

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

 

27

 

“Synthetic Purchase Agreement”:  any agreement pursuant to which any Group
Member is or may become obligated to make (a) any payment in connection
with the purchase by any third party from a Person other than a Group Member of
any Capital Stock of any Group Member or any Indebtedness referred to in
Section 7.9 or (b) any payment (except as otherwise expressly
permitted by Section 7.6 or 7.9) the amount of which is determined by
reference to the price or value at any time of any such Capital Stock or
Indebtedness; provided that no phantom stock or similar plan providing
for payments only to current or former directors, officers or employees of any
Group Member (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.

 

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

 

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

 

“Toledo Facility”:  the facility owned by Multifoods Manufacturing, Inc., a Domestic
Subsidiary of the U.S. Borrower, and located at 1250 Laskey Road, Toledo, Ohio,
and all improvements, facilities and fixtures located thereon.

 

“Total Canadian Revolving Commitments”:  at any time, the aggregate amount of the
Canadian Revolving Commitments of the Canadian Revolving Lenders then in
effect.  The original amount of the
Total Canadian Revolving Commitments (after giving effect to the commitment
reductions of any Paid Off Exiting Lenders, as provided in Section 1.2(d)) is
the excess of (a) the Canadian Dollar Equivalent of $50,000,000 on the Business
Day prior to the Closing Date over (b) the Canadian Swingline Commitment.

 

“Total Canadian Revolving Loans”:  at any time, the aggregate amount of the
Canadian Revolving Loans of all Canadian Revolving Lenders outstanding at such
time.

 

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

 

“Total Revolving Extensions of Credit”:  at any time, the collective reference to the
Total U.S. Revolving Extensions of Credit outstanding at such time and the
Dollar Equivalent of the Total Canadian Revolving Loans outstanding at such
time.

 

“Total U.S. Revolving Commitments”:  at any time, the aggregate amount of the
U.S. Revolving Commitments of the U.S. Revolving Lenders then in effect.  The original amount of the Total U.S.
Revolving Commitments (after giving effect to the commitment reductions of any
Paid Off Exiting Lenders, as provided in Section 1.2(d)) is $125,000,000.

 

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

 

“Transferee”: 
any Assignee or Participant.

 

28

 

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

 

“U.S. Administrative Agent”:  U.S. Bank, together with its affiliates, as
the arranger of the U.S. Commitments and as the administrative agent for the
U.S. Lenders under this Agreement and the other Loan Documents, together with
any of its successors.

 

“U.S. Bank”: U.S. Bank National Association, a
national banking association.

 

“U.S. Base Rate”:  a fluctuating rate of interest per annum which is equal at all
times to the greater of (a) the reference rate of interest (however designated)
of the Canadian Funding Agent (or, in the case of Canadian Swingline Loans, the
Canadian Swingline Lender) for determining interest chargeable by it on U.S.
Dollar commercial loans made in Canada; and (b) 1.00% above the Federal Funds
Effective Rate from time to time in effect.

 

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

 

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

 

“U.S. Collateral Agent”: U.S. Bank, in its
capacity as collateral agent for the Secured Parties, together with any of its
successors.

 

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

 

“U.S. Guarantee and Collateral Agreement”:  the Amended and Restated U.S. Guarantee and
Collateral Agreement to be executed and delivered by each of the grantors party
thereto, substantially in the form of Exhibit C-1.

 

“U.S. Issuing Lender”:  U.S. Bank, in its capacity as issuer of any
U.S. Letter of Credit (other than the Existing U.S. Letters of Credit), or, as
to the Existing U.S. Letters of Credit, CIBC, in its capacity as issuer of the
Existing U.S. Letters of Credit.

 

“U.S. L/C Commitment”:  $25,000,000.

 

“U.S. L/C Obligations”:  at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
U.S. Letters of Credit and (b) the aggregate amount of drawings under U.S.
Letters of Credit that have not then been reimbursed pursuant to
Section 3.5(a).

 

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

 

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

 

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

 

29

 

“U.S. Loans”: 
the collective reference to all Loans to the U.S. Borrower.

 

“U.S. Mortgaged Properties”:  the real properties listed and identified as
such on Part A of Schedule 1.3 A, as to which the U.S. Collateral Agent,
for the benefit of the Lenders, shall be granted a Lien pursuant to the U.S.
Mortgages.

 

“U.S. Mortgages”:  each of the mortgages and deeds of trust made by any Loan Party
in favor of, or for the benefit of, the U.S. Collateral Agent, for the benefit
of the Lenders, substantially in the form of Exhibit E-1 attached to
the Existing Credit Agreement, as the same, upon or after the execution
thereof, may be amended, supplemented, restated, replaced or otherwise modified
from time to time.

 

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

 

“U.S. Revolving Commitment”:  as to any U.S. Lender, the obligation of
such Lender, if any, to make U.S. Revolving Loans and participate in U.S.
Letters of Credit in an aggregate principal and/or face amount not to exceed
the amount below the heading “U.S. Revolving Commitment” on Schedule 1.3C
hereto or in the Assignment and Acceptance pursuant to which such Lender became
a party hereto, as the same may be changed from time to time pursuant to the
terms hereof.

 

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

 

“U.S. Revolving Facility”:  the U.S. Revolving Commitments and the
extensions of credit made thereunder.

 

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

 

“U.S. Revolving Loans”:  as defined in Section 2.7.

 

“U.S. Revolving Note”:  A promissory note of the U.S. Borrower in
the form of Exhibit B-1 hereto.

 

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

 

30

 

“U.S. Swingline Commitment”:  as to the U.S. Swingline Lender, the
obligation of such Lender to make U.S. Swingline Loans in an aggregate
principal amount not to exceed $5,000,000, as the same may be modified from
time to time pursuant to the terms hereof.

 

“U.S. Swingline Extensions of Credit”:  as to the U.S. Swingline Lender at any time,
an amount equal to the sum of the aggregate principal amount of all U.S.
Swingline Loans then outstanding.

 

“U.S. Swingline Facility”:  the U.S. Swingline Commitment and the
extensions of credit made thereunder.

 

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

 

“U.S. Swingline Loans”:  as defined in Section 2.13 (b).

 

“U.S. Swingline Note”:  A promissory note of the U.S. Borrower in
the form of Exhibit B-3 hereto.

 

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

 

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

 

“U.S. Term Loans”:  as defined in Section 2.1.

 

“U.S. Term Note”:  A promissory note of the Borrower in the form of Exhibit B-2
hereto.

 

“U.S. Term Commitment”:  as to any U.S. Lender, the obligation of
such Lender, if any, to make a U.S. Term Loan to the U.S. Borrower in a
principal amount not to exceed the amount set forth below the heading “U.S.
Term Commitment” on Schedule 1.3C hereto or in the Assignment and
Acceptance to which such Lender became party hereto.  The original aggregate amount of the U.S. Term Commitments is
$40,000,000.

 

“U.S. Term Facility”:  the Term Commitments and the Term Loans made thereunder.

 

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

 

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

 

“United States”:  the United States of America.

 

31

 

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

 

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

 

1.4           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 any Group Member not defined in Section 1.3 and accounting
terms partly defined in Section 1.3, 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”, (iii) the word “incur” shall be construed to mean
incur, create, issue, assume or become liable in respect of (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, Capital Stock, securities, revenues, accounts,
leasehold interests and contract rights, (v) references to any Person shall be
construed to include such Person’s successors and permitted assigns, including,
for greater certainty, in the case of any Agent, any successor Agent appointed
pursuant to this Agreement, (vi) definitions of or references to
agreements or other Contractual Obligations shall, unless otherwise expressly
specified, be deemed to refer to such agreements or Contractual Obligations as
amended, supplemented, restated, replaced or otherwise modified from time to
time (subject to any restrictions on such amendments, supplements,
restatements, replacements or modifications set forth herein) and (vii)
references to any statute or section thereof shall, unless otherwise expressly
stated, be deemed to refer to such statute or section as amended, restated or
re-enacted 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.

 

(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           U.S. Term Commitments.  Subject to the terms and conditions hereof,
each U.S. Term Lender severally agrees to make a term loan (a “U.S. Term
Loan”) to the U.S. Borrower on the Closing Date in an amount not to exceed
the amount of the U.S. Term Commitment of such

 

32

 

Lender.  The U.S. Term Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the U.S.
Borrower and notified to the U.S. Administrative Agent in accordance with
Sections 2.2 and 2.19.

 

2.2           Procedure for U.S. Term Loan
Borrowing.  The U.S. Borrower
shall give the U.S. Administrative Agent irrevocable notice (which notice must
be received by the U.S. Administrative Agent prior to 11:00 a.m., Minneapolis,
Minnesota time, (a) three Business Days prior to the Closing Date, in the
case of Eurodollar Loans, or (b) on the requested Closing Date, in the
case of ABR Loans), specifying (i) the amount and Type of U.S. Term 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.  Each borrowing under the U.S. Term
Commitments shall be in an amount equal to $500,000 (or, in the case of
Eurodollar Loans, $1,000,000) or a whole multiple of $100,000 in excess
thereof.  Upon receipt of such notice,
the U.S. Administrative Agent shall promptly notify each U.S. Term Lender
thereof.  Not later than 12:00 p.m.,
Minneapolis, Minnesota time, on the Closing Date each U.S. Term Lender shall
make available to the U.S. Administrative Agent at its Funding Office an amount
in immediately available funds equal to the U.S. Term Loan or U.S. Term Loans
to be made by such Lender.  The U.S.
Administrative Agent shall make available to the U.S. Borrower, in accordance
with instructions received from it by the U.S. Administrative Agent, the
aggregate of the amounts made available to the U.S. Administrative Agent by the
U.S. Term Lenders in immediately available funds.

 

2.3           Repayment of U.S. Term Loans.  The U.S. Term Loan of each U.S. Term Lender
shall mature in ten semi-annual consecutive installments, payable on the last
day of each of the fiscal quarters of the U.S. Borrower ending on or about the
dates set forth below and on August 8, 2008, each of which shall be in an
amount equal to such Lender’s U.S. Term Percentage multiplied by the amount set
forth below opposite such date:

 

	
  Date

  	
   

  	
  Principal Amount

  
	
  February 28, 2004

  	
   

  	
  $2,500,000

  
	
  August 31, 2004

  	
   

  	
  $2,500,000

  
	
  February 28, 2005

  	
   

  	
  $3,125,000

  
	
  August 31, 2005

  	
   

  	
  $3,125,000

  
	
  February 28, 2006

  	
   

  	
  $3,750,000

  
	
  August 31, 2006

  	
   

  	
  $3,750,000

  
	
  February 28, 2007

  	
   

  	
  $4,375,000

  
	
  August 31, 2007

  	
   

  	
  $4,375,000

  
	
  February 28, 2008

  	
   

  	
  $6,250,000

  
	
  August 8, 2008

  	
   

  	
  $6,250,000

  

 

2.4             Canadian Term Commitments.  Subject to the terms and conditions hereof,
(a) each Canadian Term Lender severally agrees to make a term loan to, and
accept Drafts from, the Canadian Borrower (such loan and acceptances of Drafts,
a “Canadian Term Loan”) on the Closing Date in an amount not to exceed
the amount of the Canadian Term Commitment of such Lender.  The Canadian Term Loans may (a) be
denominated in Dollars or in Canadian Dollars as determined by the Canadian
Borrower and notified to the Canadian Administrative Agent and the Canadian
Funding Agent in accordance with Section 2.5 and (b) from time to
time be

 

33

 

(i) Eurodollar Loans, in the case such Loan is denominated in
Dollars, (ii) U.S. Base Rate Loans, in the case of such Loans denominated
in Dollars, (iii) C$ Prime Loans, in the case of such Loans denominated in
Canadian Dollars, or (iv) Bankers’ Acceptances, in the case of such Loans
denominated in Canadian Dollars, as determined by the Canadian Borrower and
notified to the Canadian Administrative Agent and the Canadian Funding Agent in
accordance with Sections 2.5, 2.11 and 2.19.

 

2.5           Procedure for Canadian Term Loan
Borrowing.  The Canadian
Borrower shall give the Canadian Funding Agent irrevocable notice (which notice
must be received by the Canadian Funding Agent prior to 12:00 noon, Toronto
time, (a) three Business Days prior to the Closing Date, in the case of
Eurodollar Loans, (b) two Business Days prior to the Closing Date, in the
case of Bankers’ Acceptances or (c) one Business Day prior to the Closing
Date, in the case of C$ Prime Loans and U.S. Base Rate Loans), specifying
(i) the amount and Type of Canadian Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans and Bankers’ Acceptances, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Period therefor.  Each borrowing under the Canadian Term
Commitments shall be in an amount equal to $500,000 (or the Canadian Dollar
Equivalent thereof) (or, in the case of Eurodollar Loans, $1,000,000 or the
Canadian Dollar Equivalent thereof) or a whole multiple of $100,000 (or the
Canadian Dollar Equivalent thereof) in excess thereof.  Upon receipt of such notice the Canadian
Funding Agent shall promptly notify each Canadian Term Lender and the Canadian
Administrative Agent thereof.  Not later
than 12:00 noon, Toronto time, on the Closing Date each Canadian Term Lender
shall make available to the Canadian Funding Agent at its Funding Office an
amount in immediately available funds equal to the Canadian Term Loan to be
made by such Lender.  Unless directed
otherwise by the Canadian Administrative Agent, the Canadian Funding Agent
shall credit the account of the Canadian Borrower on the books of such office
of the Canadian Funding Agent with the aggregate of the amounts made available
to the Canadian Funding Agent by the Canadian Term Lenders in immediately
available funds.  The Canadian Borrower
may request that if the Canadian Term Loans are made available in Canadian
Dollars, such Loans may be made by way of Bankers’ Acceptances in accordance
with and pursuant to the procedures set forth in Section 2.11.

 

2.6           Repayment of Canadian Term Loans.  The Canadian Term Loan of each Canadian Term
Lender shall mature in ten semi-annual consecutive installments, payable on the
last day of each of the fiscal quarters of the U.S. Borrower ending on or about
the dates set forth below and on August 8, 2008, each of which shall be in an
amount equal to such Lender’s Canadian Term Percentage multiplied by the
percentage set forth below opposite such installment multiplied by the original
amount of the aggregate Canadian Term Loan Commitments:

 

34

 

	
  Date

  	
   

  	
  Percentage

  
	
  February 28, 2004

  	
   

  	
  7.15%

  
	
  August 31, 2004

  	
   

  	
  7.15%

  
	
  February 28, 2005

  	
   

  	
  8.93%

  
	
  August 31, 2005

  	
   

  	
  8.93%

  
	
  February 28, 2006

  	
   

  	
  10.71%

  
	
  August 31, 2006

  	
   

  	
  10.71%

  
	
  February 28, 2007

  	
   

  	
  12.50%

  
	
  August 31, 2007

  	
   

  	
  12.50%

  
	
  February 28, 2008

  	
   

  	
  10.71%

  
	
  August 8, 2008

  	
   

  	
  10.71%

  

 

2.7           U.S. Revolving Commitments.

 

(a)           Subject
to the terms and conditions hereof, each U.S. Revolving Lender severally agrees
to make revolving credit loans (“U.S. Revolving Loans”) to the U.S.
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 U.S. Revolving Percentage of the U.S. L/C Obligations then
outstanding, does not exceed the amount of such Lender’s U.S. Revolving
Commitment.  During the Revolving
Commitment Period the U.S. Borrower may use the U.S. Revolving Commitments by
borrowing, prepaying the U.S. Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.  The U.S. Revolving Loans may from time to
time be Eurodollar Loans or ABR Loans, as determined by the U.S. Borrower and
notified to the U.S. Administrative Agent in accordance with Sections 2.8
and 2.19.

 

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

 

2.8           Procedure for U.S. Revolving Loan
Borrowing.  The U.S.
Borrower may borrow under the U.S. Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the U.S. Borrower shall
give the U.S. Administrative Agent irrevocable notice (which notice must be received
by the U.S. Administrative Agent prior to 11:00 a.m., Minneapolis, Minnesota
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 U.S.
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.  Each borrowing under the U.S.
Revolving Commitments shall be in an amount equal to $500,000 (or, in the case
of Eurodollar Loans, $1,000,000) or a whole multiple of $100,000 in excess
thereof (or, if the then aggregate Available U.S. Revolving Commitments are
less than the forgoing amounts, such lesser amount).  Upon receipt of any such notice from the U.S. Borrower, the U.S.
Administrative Agent shall promptly notify each U.S. Revolving Lender thereof and
in no event later than 1:00 p.m., Minneapolis, Minnesota time, in the case of
ABR Loans.  Each U.S. Revolving Lender
will make the amount of its pro rata share of each borrowing available to the
U.S. Administrative Agent for the account of the U.S. Borrower at the

 

35

 

Funding Office of the U.S. Administrative Agent prior to 2:00 p.m.,
Minneapolis, Minnesota time, on the Borrowing Date requested by the U.S.
Borrower in funds immediately available to the U.S. Administrative Agent.  Such borrowing will then be made available
to the U.S. Borrower by the U.S. Administrative Agent making available to the
U.S. Borrower, in accordance with instructions received from it by the U.S.
Administrative Agent, the aggregate of the amounts made available to the U.S.
Administrative Agent by the U.S. Revolving Lenders and in like funds as
received by the U.S. Administrative Agent.

 

2.9           Canadian Revolving Commitments.

 

(a)           Subject
to the terms and conditions hereof, each Canadian Revolving Lender severally
agrees to make revolving credit loans to, and accept Drafts from, the Canadian
Borrower (such loans and acceptances of Drafts, the “Canadian Revolving Loans”)
from time to time during the Revolving Commitment Period in an aggregate
principal amount at any one time outstanding which does not exceed the amount
of such Lender’s Canadian Revolving Commitment.  During the Revolving Commitment Period the Canadian Borrower may
use the Canadian Revolving Commitments by borrowing, prepaying the Canadian
Revolving Loans in whole or in part, and reborrowing, and by requesting the
Canadian Revolving Lenders to accept Drafts, all in accordance with the terms
and conditions hereof.  The Canadian
Revolving Loans may (a) be denominated in Dollars or Canadian Dollars as
determined by the Canadian Borrower and notified to the Canadian Funding Agent
in accordance with Section 2.10 and (b) from time to time be
(i) Eurodollar Loans, in the case of such Loans denominated in Dollars,
(ii) U.S. Base Rate Loans, in the case of such Loans denominated in
Dollars, (iii) C$ Prime Loans, in the case of such Loans denominated in
Canadian Dollars, or (iv) Bankers’ Acceptances, in the case of such Loans
denominated in Canadian Dollars; in each case as determined by the Canadian
Borrower and notified to the Canadian Funding Agent in accordance with
Sections 2.10, 2.11 and 2.19.

 

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

 

2.10         Procedure for Canadian Revolving
Loan Borrowing.  The Canadian
Borrower may borrow under the Canadian Revolving Commitments during the
Revolving Commitment Period on any Business Day, provided that the Canadian
Borrower shall give the Canadian Funding Agent irrevocable notice (which notice
must be received by the Canadian Administrative Agent prior to 12:00 noon,
Toronto time, (a) three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, (b) two Business Days prior to the
requested Borrowing Date, in the case of Bankers’ Acceptances or (c) one
Business Day prior to the requested Borrowing Date, in the case of C$ Prime
Loans and U.S. Base Rate Loans), specifying (i) the amount and Type of
Canadian Revolving Loans to be borrowed, (ii) the requested Borrowing Date
and (iii) in the case of Eurodollar Loans and Bankers’ Acceptances, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor.  Each
borrowing under the Canadian Revolving Commitments shall be in an amount equal
to $500,000 (or the Canadian Dollar Equivalent thereof) (or, in the case of
Eurodollar Loans, $1,000,000 or the Canadian Dollar Equivalent thereof) or a
whole multiple of $100,000 (or the Canadian Dollar Equivalent thereof) in
excess thereof (or, if the then aggregate

 

36

 

Available Canadian Revolving Commitments are less than $1,000,000 (or
the Canadian Dollar Equivalent thereof), such lesser amount).  Upon receipt of any such notice from the
Canadian Borrower, the Canadian Funding Agent shall promptly notify each
Canadian Revolving Lender and the Canadian Administrative Agent thereof.  Each Canadian Revolving Lender will make the
amount of its pro rata share of each borrowing available to the Canadian
Funding Agent for the account of the Canadian Borrower at its Funding Office
prior to 2:00 p.m., Toronto time, on the Borrowing Date requested by the
Canadian Borrower in funds immediately available to the Canadian Funding
Agent.  Unless directed otherwise by the
Canadian Administrative Agent prior to 2:00 p.m., Toronto time, on the
Borrowing Date, such borrowing will then be made available to the Canadian
Borrower by the Canadian Funding Agent crediting the account of the Canadian
Borrower on the books of the Canadian Lending Office with the aggregate of the
amounts made available to the Canadian Funding Agent by the Canadian Revolving
Lenders and in like funds as received by the Canadian Funding Agent.  The Canadian Borrower may make Bankers’
Acceptance borrowings during the Revolving Credit Commitment Period on any
Business Day, in accordance with and pursuant to the procedures set forth in
Section 2.11.

 

2.11         Bankers’ Acceptances.

 

(a)           Drafts.  The Canadian Borrower may (i) issue
Drafts denominated in Canadian Dollars for acceptance by the Canadian Lenders
and (ii) at its option, require that Bankers’ Acceptances denominated in
Canadian Dollars be purchased by the Canadian Lenders.  Notwithstanding anything to the contrary in
this Agreement, no more than 10 Bankers’ Acceptances shall be outstanding at
any time.

 

(b)           Procedures.

 

(i)            Notice.  The Canadian Borrower shall notify the
Canadian Funding Agent by irrevocable written or telephonic notice (in the case
of telephonic notice, to be promptly confirmed in writing) by 12:00 noon,
Toronto time, two Business Days prior to the Borrowing Date in respect of any
borrowing by way of Bankers’ Acceptances.

 

(ii)           Minimum
Borrowing Amount.  Each borrowing by
way of Bankers’ Acceptances shall be in a minimum aggregate face amount of
C$3,000,000 or a whole multiple of C$100,000 in excess thereof.

 

(iii)          Face
Amounts.  The face amount of each
Bankers’ Acceptance shall be C$100,000 or any whole multiple thereof.

 

(iv)          Term.  Bankers’ Acceptances shall be issued and
shall mature on a Business Day.  Each
Bankers’ Acceptance shall have a term of 1, 2, 3 or 6 months (or such shorter
or longer term as shall be agreed to by all of the Canadian Lenders under the
relevant Facility), shall mature on or before the Revolving Termination Date or
the final maturity date of the Canadian Term Loans, as the case may be, and
shall be in form and substance reasonably satisfactory to each relevant
Canadian Lender.  The Canadian Borrower
shall select terms for

 

37

 

Bankers’ Acceptances so as not to require a payment or
prepayment of any Bankers’ Acceptance during a term for such Bankers’
Acceptance.

 

(v)           Bankers’
Acceptances in Blank.  To facilitate
the acceptance of Drafts under this Agreement, the Canadian Borrower shall,
from time to time as required, provide to the Canadian Lenders Drafts duly
executed and endorsed in blank by the Canadian Borrower in quantities
sufficient for each Canadian Lender to fulfill its obligations hereunder.  Each Canadian Lender is hereby authorized to
accept such Drafts endorsed in blank in such face amounts as may be determined
by such Canadian Lender in accordance with the terms of this Agreement, provided
that the aggregate amount thereof is less than or equal to the aggregate amount
of Bankers’ Acceptances required to be accepted by such Canadian Lender.  No Canadian Lender shall be responsible or
liable for its failure to accept a Draft if the cause of such failure is, in
whole or in part, due to the failure of the Canadian Borrower to provide duly
executed and endorsed Drafts to such Canadian Lender on a timely basis, nor
shall any Canadian Lender be liable for any damage, loss or other claim arising
by reason of any loss or improper use of any such instrument except loss or
improper use arising by reason of the gross negligence or willful misconduct of
such Canadian Lender, its officers, employees, agents or representatives.  Each Canadian Lender shall exercise such
care in the custody and safekeeping of Drafts as it would exercise in the
custody and safekeeping of similar property owned by it.  Each Canadian Lender will, upon the request
of the Canadian Borrower, promptly advise the Canadian Borrower of the number
and designation, if any, of Drafts then held by it for the Canadian
Borrower.  Each Canadian Lender shall
maintain a record with respect to Drafts and Bankers’ Acceptances
(A) received by it from the Canadian Borrower in blank hereunder,
(B) voided by it for any reason, (C) accepted by it hereunder,
(D) purchased by it hereunder and (E) canceled at their respective
maturities.  Each Canadian Lender
further agrees to retain such records in the manner and for the statutory
periods provided in the various Canadian provincial or federal statutes and
regulations which apply to such Canadian Lender.

 

(vi)          Execution
of Bankers’ Acceptances.  Drafts of
the Canadian Borrower to be accepted as Bankers’ Acceptances hereunder shall be
duly executed on behalf of the Canadian Borrower.  The Canadian Borrower hereby appoints each Canadian Lender as its
attorney to sign and endorse on its behalf (in accordance with a borrowing
notice relating to an advance by way of Bankers’ Acceptances), in handwriting
or by facsimile or mechanical signature as and when deemed necessary by such
Canadian Lender, Drafts in the form requested by such Canadian Lender.  In this respect, it is each Canadian
Lender’s responsibility to maintain an adequate supply of Drafts for acceptance
under this Agreement.  All Drafts signed
and/or endorsed by a Canadian Lender on behalf of the Canadian Borrower shall
bind the Canadian Borrower as fully and effectually as if signed in the
handwriting of and duly issued by the proper signing officers of the Canadian
Borrower.  Each Canadian Lender is
hereby authorized (in accordance with a borrowing notice relating to an advance
by way of Bankers’ Acceptances) to issue such Drafts endorsed in blank in such
face amounts as may be determined by such

 

38

 

Canadian Lender; provided that the aggregate amount
thereof is equal to the aggregate amount of Drafts required to be accepted and
purchased by such Canadian Lender.  No
Canadian Lender shall be liable for any damage, loss or other claim arising by
reason of any loss or improper use of any such instrument except to the extent
such damage, loss or other claim is determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
fraud, gross negligence or willful misconduct of the Canadian Lender or its
officers, employees, agents or representatives.  Each Canadian Lender shall maintain a record with respect to
Drafts (A) received by it in blank hereunder, (B) voided by it for
any reason, (C) accepted and purchased by it hereunder and (D) cancelled
at their respective maturities.  On
request by or on behalf of the Canadian Borrower, a Canadian Lender shall
cancel all forms of Drafts which have been pre-signed or pre-endorsed on behalf
of the Canadian Borrower and which are held by such Canadian Lender and are not
required to be issued in accordance with the Canadian Borrower’s irrevocable
notice.  Notwithstanding that any person
whose signature appears on any Draft or Bankers’ Acceptance may no longer be an
authorized signatory for any Canadian Lender or the Canadian Borrower at the
date of issuance of a Draft or Bankers’ Acceptance, such signature shall
nevertheless be valid and sufficient for all purposes as if such authority had
remained in force at the time of such issuance and any such Draft or Bankers’
Acceptance so signed shall be binding on the Canadian Borrower.

 

(vii)         Issuance
of Bankers’ Acceptances.  Promptly
following receipt of a notice of borrowing by way of Bankers’ Acceptances, the
Canadian Funding Agent shall so advise the Canadian Lenders and the Canadian
Administrative Agent and shall advise each Canadian Lender of the face amount
of each Draft to be accepted by it and the term thereof.  The aggregate face mount of Drafts to be
accepted by a Canadian Lender shall be determined by the Canadian Funding Agent
on a pro  rata basis by reference to the respective Canadian
Revolving Commitments and Canadian Term Loans, as the case may be, of the
Canadian Lenders, except that, if the face amount of a Bankers’ Acceptance,
which would otherwise be accepted by a Canadian Lender, would not be C$1,000 or
a whole multiple thereof, such face amount shall be increased or reduced by the
Canadian Funding Agent in its sole and unfettered discretion to the nearest
whole multiple of C$1,000.

 

(viii)        Acceptance
of Bankers’ Acceptances.  Each Draft
to be accepted by a Canadian Lender shall be accepted at the Canadian Lending
Office of such Canadian Lender.

 

(ix)           Purchase
of Bankers’ Acceptances.  If the
Canadian Borrower exercises its option pursuant to Section 2.11(a)(ii),
each Canadian Lender shall be required to purchase (subject to
Section 2.12) from the Canadian Borrower on such Borrowing Date, at the
Applicable BA Discount Rate, the Bankers’ Acceptances accepted by it on such
Borrowing Date and to provide to the Canadian Funding Agent the BA Discount
Proceeds thereof (net of the applicable Acceptance Fee as determined under
Section 2.11(e)) not later than 2:00 p.m.,

 

39

 

Toronto time, on such Borrowing Date for the account
of the Canadian Borrower.  Not later
than 3:00 p.m., Toronto time, on such Borrowing Date, the Canadian Funding
Agent shall make such BA Discount Proceeds (net of the applicable Acceptance
Fee) available to the Canadian Borrower by crediting the account of the
Canadian Borrower on the books of its Canadian Lending Office with the
aggregate of the amounts made available to the Canadian Funding Agent by the
Canadian Lenders and in like funds as received by the Canadian Funding Agent.

 

(x)            Sale
of Bankers’ Acceptances.  Each
Canadian Lender may at any time and from time to time purchase, hold, sell,
rediscount or otherwise dispose of any or all Bankers’ Acceptances accepted and
purchased by it, and no such dealing shall prejudice or impair the Canadian
Borrower’s obligations under Section 2.11(c).

 

(xi)           Waiver
of Presentment and Other Conditions. 
The Canadian Borrower waives demand, presentment for payment, protest,
noting of protest, dishonor, noting of dishonor and any other defense to payment
of any amounts due to a Canadian Lender in respect of a Bankers’ Acceptance
accepted by such Canadian Lender pursuant to this Agreement, including merger,
which might exist solely by reason of such Bankers’ Acceptance being held, at
the maturity thereof, by such Canadian Lender in its own right, and the
Canadian Borrower agrees not to claim any days of grace if such Canadian Lender
as holder sues the Canadian Borrower on the Bankers’ Acceptances for payment of
the amount payable by the Canadian Borrower thereunder.

 

(c)           The
Canadian Borrower shall reimburse a Canadian Lender for, and there shall become
due and payable at 10:00 a.m., Toronto time, on the contract maturity date for
each Bankers’ Acceptance, an amount in Canadian Dollars in same day funds equal
to the full face amount of such Bankers’ Acceptance.  The Canadian Borrower shall make each such reimbursement payment
(i) by causing any proceeds of a Refunding Bankers’ Acceptance issued in
accordance with Section 2.11(d) or conversion of such Bankers’ Acceptance
in accordance with Section 2.19(c) to be applied in reduction of such
reimbursement payment and (ii) by depositing the amount of such
reimbursement payment (or any portion thereof remaining unpaid after
application of any proceeds referred to in clause (i)) to the relevant
payment account.  The Canadian
Borrower’s payment in accordance with this Section shall satisfy its
obligations under any Bankers’ Acceptance to which it relates, and the Canadian
Lender which has accepted such Bankers’ Acceptance shall thereafter be solely
responsible for the payment of such Bankers’ Acceptance.

 

(d)           The
Canadian Borrower shall give irrevocable written or telephonic notice (in the
case of telephonic notice, to be promptly confirmed in writing) (or such other
method of notification as may be agreed upon between the Canadian Funding Agent
and the Canadian Borrower) to the Canadian Funding Agent prior to 12:00 noon,
Toronto time, two Business Days prior to the maturity date of each Bankers’
Acceptance of the Canadian Borrower’s intention to issue a Bankers’ Acceptance
on such maturity date (a “Refunding Bankers’ Acceptance”) to provide for
the payment of such maturing

 

40

 

Bankers’ Acceptance (it being understood that payments
by the Canadian Borrower and fundings by the Canadian Lenders in respect of
each maturing Bankers’ Acceptance and the related Refunding Bankers’ Acceptance
shall be made on a net basis reflecting the difference between the face amount
of such maturing Bankers’ Acceptance and the BA Discount Proceeds (net of the
applicable Acceptance Fee) of such Refunding Bankers’ Acceptance).  If the Canadian Borrower fails to give such
notice or does not have sufficient funds on deposit in the amount of the
reimbursement payment in accordance with Section 2.11(c), the Canadian
Borrower shall be deemed to have requested that such maturing Bankers’
Acceptances be repaid with the proceeds of C$ Prime Loans (without any
requirement to give notice with respect thereto), commencing on the maturity
date of such maturing Bankers’ Acceptances.

 

(e)           An
Acceptance Fee shall be payable by the Canadian Borrower to each Canadian
Lender in advance (in the manner specified in Section 2.11(b)(ix)) upon
the issuance of a Bankers’ Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Applicable Margin, such
Acceptance Fee to be calculated on the face amount of such Bankers’ Acceptance
and to be computed on the basis of the number of days in the term of such
Bankers’ Acceptance.

 

(f)            Upon
the occurrence of any Event of Default which is continuing, and in addition to
any other rights or remedies of any Canadian Lender and the Canadian
Administrative Agent hereunder, any Canadian Lender, the Canadian
Administrative Agent or the Canadian Funding Agent (or such alternate
arrangement as may be agreed upon by the Canadian Borrower and such Canadian
Lender, the Canadian Administrative Agent, or the Canadian Funding Agent, as
applicable) shall be entitled to deposit and retain in an account to be
maintained by the Canadian Funding Agent (bearing interest at the Canadian
Funding Agent’s rates as may be applicable in respect of other deposits of
similar amounts for similar terms), for the ratable benefit of the Canadian
Lenders, amounts which are received by such Canadian Lender, the Canadian
Funding Agent or the Canadian Administrative Agent from the Canadian Borrower
hereunder or as proceeds of the exercise of any rights or remedies of any
Canadian Lender, the Canadian Funding Agent or the Canadian Administrative
Agent hereunder against the Canadian Borrower, to the extent such amounts may
be required to satisfy any contingent or unmatured obligations or liabilities
of the Canadian Borrower to the Canadian Lenders or the Canadian Administrative
Agent or the Canadian Funding Agent, or any of them hereunder in respect of
outstanding Bankers’ Acceptances.

 

2.12         Circumstances Making Bankers’
Acceptances Unavailable.

 

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

 

(i)            the
right of the Canadian Borrower to request a borrowing by way of Bankers’
Acceptance shall be suspended until the Canadian Funding Agent

 

41

 

determines that the circumstances causing such
suspension no longer exist and the Canadian Funding Agent so notifies the
Canadian Borrower; and

 

(ii)           any
notice relating to a borrowing by way of Bankers’ Acceptance which is
outstanding at such time shall be deemed to be a notice requesting a borrowing
by way of C$ Prime Loans (all as if it were a notice given pursuant to
Section 2.10).

 

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

 

2.13         Swingline Commitments.

 

(a)           Canadian
Swingline Commitment.  Subject to
the terms and conditions hereof, the Canadian Swingline Lender agrees to make
extensions of credit to the Canadian Borrower from time to time during the
Revolving Commitment Period by making swing line loans (“Canadian Swingline
Loans”) to the Canadian Borrower and/or issuing Canadian Letters of Credit
on behalf of the Canadian Borrower in an aggregate amount not to exceed the
Canadian Swingline Commitment (or the Dollar Equivalent thereof) of such
Lender.   The Canadian Swingline Loans
may (a) be denominated in Dollars or Canadian Dollars as determined by the
Canadian Borrower and notified to the Canadian Swingline Lender and (b) from
time to time be (i) U.S. Base Rate Loans, in the case of such Loans denominated
in Dollars, (ii) C$ Prime Loans, in the case of such Loans denominated in
Canadian Dollars or (iii) issued as Canadian Letters of Credit on behalf of the
Canadian Borrower, in each case as determined by the Canadian Borrower.   Each Canadian Swingline Loan will be made
by the Canadian Swingline Lender on an overdraft basis to meet a drawing upon
any account maintained by the Canadian Borrower with the Canadian Swingline
Lender, and no notice of such borrowing shall be required, by debiting the
account of the Canadian Borrower on the books of the Canadian Lending
Office.  The Canadian Borrower shall
ensure that, after giving effect to the making of any Canadian Swingline Loan
the aggregate amount of Canadian Swingline Extensions of Credit then
outstanding shall not exceed the Canadian Swingline Commitment.  During the Revolving Commitment Period, the
Canadian Borrower may use the Canadian Swingline Commitment by borrowing,
repaying, reborrowing and causing Canadian Letters of Credit to be issued, all
in accordance with terms and conditions hereof.

 

(b)           U.S.
Swingline Commitment.  Subject to
the terms and conditions hereof, the U.S. Swingline Lender agrees to make
extensions of credit to the U.S. Borrower from time to time during the
Revolving Commitment Period by making swing line loans (“U.S.  Swingline Loans”) to the U.S. Borrower in
Dollars on behalf of the U.S. Borrower in an aggregate amount not to exceed the
U.S. Swingline Commitment of such Lender. 
The amount of such Loan from time to time shall be deemed to be an ABR
Loan or such other type of Loans as shall be agreed to by the U.S. Borrower and
the U.S. Swingline Lender.  The U.S.
Borrower shall ensure that, after giving effect to the making

 

42

 

of any U.S. Swingline Loan the aggregate amount of
U.S. Swingline Extensions of Credit then outstanding shall not exceed the U.S.  Swingline Commitment.  During the Revolving Commitment Period, the
U.S. Borrower may use the U.S. Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with terms and conditions hereof.

 

(i)            Procedure
for U.S. Swingline Loans.  The U.S.
Borrower may borrow under the U.S. Swingline Commitments during the Revolving
Commitment Period on any Business Day, provided that the U.S. Borrower shall
give the U.S. Administrative Agent irrevocable notice (which notice must be
received by the U.S. Administrative Agent prior to 3:00 p.m., Minneapolis,
Minnesota time on the requested Borrowing Date).  Each borrowing under the U.S. Swingline Commitments shall be in
an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof
(or, if the then aggregate available U.S. Swingline Commitment is less than the
forgoing amount, such lesser amount). 
The U.S. Swingline Lender will make the amount such borrowing available
to the U.S. Administrative Agent for the account of the U.S. Borrower at the
Funding Office of the U.S. Administrative Agent prior to 4:00 p.m.,
Minneapolis, Minnesota time, on the Borrowing Date requested by the U.S.
Borrower in funds immediately available to the U.S. Administrative Agent.  Such borrowing will then be made available
to the U.S. Borrower by the U.S. Administrative Agent making available to the
U.S. Borrower, in accordance with instructions received from it by the U.S.
Administrative Agent, the aggregate of the amounts made available to the U.S.
Administrative Agent by the U.S. Swingline Lender and in like funds as received
by the U.S. Administrative Agent.

 

(ii)           Permissive Refinancings of U.S.
Swingline Loans.  The U.S. Swingline
Lender, at any time in its sole and absolute discretion, may notify the U.S.
Administrative Agent, not later than 12:00 noon (Minneapolis time) on any
Business Day, that it desires to have any portion of the outstanding U.S.
Swingline Loans refunded with U.S. Revolving Loans made by the U.S. Revolving
Lenders under Section 2.7(a), whereupon the U.S. Administrative Agent
shall promptly request that each U.S. Revolving Lender (including
U.S. Bank) make a U.S. Revolving Loan in an amount equal to its U.S.
Revolving Percentage of the U.S. Revolving Loans to be made to repay to the U.S.
Swingline Lender the portion of the aggregate unpaid principal amount of the  U.S. Swingline Loans specified in such
notice.  The U.S.  Administrative Agent shall promptly notify
the U.S. Borrower of its receipt of any such notice from the U.S. Swingline
Lender.

 

(iii)          Mandatory Refinancings of U.S.
Swingline Loans.  On Wednesday of
each week (or if such day is not a Business Day, on the first Business Day
immediately preceding such day), the U.S. Administrative Agent shall notify
each U.S. Revolving Lender of the aggregate amount of U.S. Swingline Loans
outstanding as of the end of the previous day and the amount of U.S. Revolving
Loans required to be made by each U.S. Revolving Lender to refinance such
outstanding  U.S. Swingline Loans
(which shall be in the amount of each U.S.

 

43

 

Revolving Lender’s U.S. Revolving Percentage of such
outstanding U.S. Swingline Loans).

 

(iv)          U.S. Revolving Lenders’ Obligation
to Fund Refinancings of U.S. Swingline Loans.  Upon its receipt of a request from the U.S. Administrative Agent
under Sections 2.13(b)(ii) or (iii), each U.S. Revolving Lender (including
U.S. Bank) shall make a U.S. Revolving Loan (which shall not be made as a
U.S. Swingline Loan) in an amount equal to its U.S. Revolving Percentage of the
aggregate principal amount of  U.S.
Swingline Loans to be refinanced, and make the proceeds of such U.S. Revolving
Loans available to the U.S. Swingline Lender, in immediately available funds,
at the main office of the U.S. Administrative Agent in Minneapolis, Minnesota
not later than 3:00 P.M. (Minneapolis time) on the date such notice was
received; provided, however, that a U.S. Revolving Lender shall
not be obligated to make any such U.S. Revolving Loan unless (A) the U.S. Swingline
Lender believed in good faith that all conditions to the making of the subject
U.S. Revolving Loan were satisfied at the time the related U.S. Swingline Loan
was made, or (B) such U.S. Revolving Lender had actual knowledge, by receipt of
the statements furnished to it pursuant to Sections 6.1 or 6.2 or
otherwise, that any such condition had not been satisfied and failed to notify
the U.S. Swingline Lender in a writing received by the U.S. Swingline Lender
prior to the time it made such U.S. Swingline Loan that the U.S. Swingline
Lender was not authorized to make a U.S. Swingline Loan until such condition
has been satisfied, or (C) the satisfaction of any such condition that was not
satisfied had been waived in a writing by the Required Lenders in accordance
with the provisions of this Agreement. 
The proceeds of U.S. Revolving Loans made pursuant to the preceding
sentence shall be delivered to the U.S. Swingline Lender (and not to the U.S.
Borrower) and applied to the outstanding U.S. Swingline Loans.   If the proceeds of any such U.S. Revolving
Loans is not made available to the U.S. Swingline Lender by the required time,
the relevant U.S. Revolving Lender shall pay to the U.S. Swingline Lender, on
demand, such amount with interest thereon at a rate equal to the daily average
Federal Funds Effective Rate for the period until such U.S. Revolving Lender
makes such amount immediately available to the U.S. Swingline Lender and such
other compensatory fees as the U.S. Swingline Lender may reasonably request.  A certificate of the U.S. Swingline Lender,
submitted to any U.S. Revolving Lender with respect to any amounts owing under
this paragraph shall be conclusive in the absence of manifest error.  If such U.S. Revolving Lender’s share of
such borrowing is not made available to the U.S. Swingline Lender by such U.S.
Revolving Lender upon such demand the U.S. Swingline Lender shall also be
entitled to recover from the U.S. Borrower upon demand such amount with
interest thereon at the rate per annum applicable to ABR Loans.  Upon the making of a U.S. Revolving Loan by
a U.S. Revolving Lender pursuant to this Section 2.13(b)(iv), the amount
so funded shall become an Obligation evidenced by such U.S. Revolving Lender’s
U.S. Revolving Revolving Note and shall no longer be an Obligation evidenced by
the U.S. Swingline Note.   Each U.S.
Revolving Lender’s obligation to make U.S. Revolving Loans referred to in this
Section 2.13(b)(iv) shall, subject to the proviso to the first sentence of
this 

 

44

 

Section 2.13(b)(iv), be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense or other right
which such U.S. Revolving Lender may have against the U.S. Swingline Lender,
any Borrower or anyone else for any reason whatsoever; (ii) the occurrence or
continuance of a Default or Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of any Borrower; (iv) any breach of this
Agreement or any Loan Document by any Borrower, any Agent or any Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; provided, that in no event shall a U.S.
Revolving Lender be obligated to make a U.S. Revolving Loan under this
Section 2.13(b)(iv) if, after giving effect thereto, such U.S. Lender’s
U.S. Revolving Percentage of the U.S. Revolving Extensions of Credit (after
giving effect to the repayment of the U.S. Swingline Loans to be funded with
such U.S. Revolving Loan and U.S. Revolving Loans made the same day by the
other U.S. Revolving Loans) would exceed such U.S. Revolving Lender’s U.S.
Revolving Commitment.

 

(v)           Funding of Loans.  Each U.S. Revolving Loan made to refund U.S.
Swingline Loans pursuant to Section 2.13(b)(iv) shall be funded as ABR
Loans, but the U.S. Borrower may elect to convert such ABR Loans to Eurodollar
Loans on or after the date made pursuant to Section 2.19.

 

(vi)          Usage
Under Revolving Commitment. 
Notwithstanding anything to the contrary herein, until any U.S.
Swingline Loans have been repaid or refinanced with the proceeds of U.S.
Revolving Loans made pursuant to Section 2.13(b)(iv), such U.S. Swingline Loans
shall be treated for all purposes (including Section 2.15(a) below), as usage
under the U.S. Swingline Lender’s U.S. Revolving Commitment.

 

2.14         Repayment of Swingline Loans.

 

(a)           Repayment
of Canadian Swingline Loans.  The
Canadian Borrower shall repay all outstanding Canadian Swingline Loans on the
Revolving Termination Date.

 

(b)           Repayment
of U.S. Swingline Loans.  The U.S.
Borrower shall repay all outstanding U.S. Swingline Loans on the Revolving
Termination Date.

 

2.15         Commitment Fees, etc.

 

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

 

45

 

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

 

(c)           [Reserved]

 

(d)           The
Canadian Borrower agrees to pay in Canadian Dollars to the Canadian Swingline
Lender a commitment fee for the period from and including the date hereof
through the last day of the Revolving Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available Canadian
Swingline Commitment of such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Termination Date, commencing on the
first of such dates to occur after the Closing Date.

 

(e)           Each
Borrower agrees to pay to the relevant Administrative Agent and the Canadian
Funding Agent the fees in the amounts and on the dates previously agreed to in
writing by such Borrower and such Administrative Agent and by the Borrower and
the Canadian Funding Agent.

 

2.16         Termination or Reduction of
Commitments and Swingline Commitment.

 

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

 

(b)           The
Canadian Borrower shall have the right, upon not less than (i) one Business
Day’s notice to the Canadian Administrative Agent, to terminate the Canadian
Commitments or (ii) three Business Days’ notice to the Canadian Administrative
Agent, from time to time after the Closing Date, to reduce the amount of the Canadian
Revolving Commitments; provided that no such termination or reduction of
Canadian Revolving Commitments shall be permitted if, after giving effect
thereto and to any prepayments of the Canadian Revolving Loans made on the
effective date thereof, the Canadian Dollar Equivalent of the Total Canadian
Revolving Loans would exceed the Total Canadian Revolving Commitments.  Any such reduction shall be in an amount
equal to

 

46

 

C$1,000,000, or a whole multiple thereof, and shall
reduce permanently the Canadian Revolving Commitments then in effect.

 

(c)           The
U.S. Borrower shall have the right, upon not less than three Business Days’
notice to the U.S. Swingline Lender, to reduce the amount of the U.S. Swingline
Commitment; provided that no such termination or reduction of U.S.
Swingline Commitment shall be permitted if, after giving effect thereto and to
any prepayments of the U.S. Swingline Loans made on the effective date thereof,
the aggregate then outstanding U.S. Swingline Extensions of Credit would exceed
the U.S. Swingline Commitment.  Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the U.S. Swingline Commitment then in
effect.

 

(d)           The
Canadian Borrower shall have the right, upon not less than three Business Days’
notice to the Canadian Swingline Lender, to reduce the amount of the Canadian
Swingline Commitment; provided that no such termination or reduction of
Canadian Swingline Commitment shall be permitted if, after giving effect
thereto and to any prepayments of the Canadian Swingline Loans made on the
effective date thereof, the aggregate then outstanding Canadian Swingline
Extensions of Credit would exceed the Canadian Swingline Commitment.  Any such reduction shall be in an amount
equal to C$1,000,000, or a whole multiple thereof, and shall reduce permanently
the Canadian Swingline Commitment then in effect.

 

2.17         Optional Prepayments.  Each 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 U.S. Administrative Agent (in the case of
prepayments upon the U.S. Revolving Loans or U.S. Term Loans) or, as the case
may be, the Canadian Funding Agent, the Canadian Swingline Lender and the U.S.
Swingline Lender (in the case of any other Loans), at least three Business Days
prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, C$ Prime Loans or U.S. Base Rate Loans,
which notice shall specify the date, amount of prepayment and the Type of Loans
to be prepaid; provided that if a Eurodollar Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, such Borrower
shall also pay any amounts owing pursuant to Section 2.27.  Upon receipt of any such notice the relevant
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 (other than, except in the case of the termination of
the relevant Commitment, in the case of Revolving Loans that are ABR Loans, C$
Prime Loans, U.S. Base Rate Loans, U.S. Swingline Loans or Canadian Swingline
Loans) accrued interest to such date on the amount prepaid.  Partial prepayments of Term Loans and
Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a
whole multiple thereof.  Partial
prepayments of Canadian Swingline Loans and U.S. Swingline Loans shall be in an
aggregate principal amount of C$100,000 or $100,000, respectively, or a whole
multiple thereof.  Notwithstanding
anything to the contrary contained herein, Canadian Loans consisting of
Bankers’ Acceptances may not be prepaid pursuant to this Section.

 

47

 

2.18         Mandatory Prepayments and
Commitment Reductions.

 

(a)           If
any Capital Stock shall be issued by any Group Member to any Person that is not
a Group Member (other than Capital Stock of the U.S. Borrower issued
(x) to employees of the U.S. Borrower and its Subsidiaries pursuant to the
U.S. Borrower’s 401(k) plan or to employees of the Canadian Borrower and its
Subsidiaries pursuant to the Robin Hood Stock Purchase Plan or (y) in
connection with the exercise of options issued to employees, consultants and
directors of the U.S. Borrower and its Subsidiaries), an amount equal to 50% of
the Net Cash Proceeds thereof shall be applied on the date of such issuance or
incurrence toward the prepayment of the Term Loans as set forth in
Section 2.18(e); provided that no such application shall be made
and no such prepayment shall be required if (a) the Consolidated Leverage
Ratio, for the four fiscal quarters ended on the last day of the two fiscal
quarters ended immediately preceding the date on which such application would
otherwise be made, was less than 3.00 to 1.00 and (b) no Default or Event of
Default is continuing or will result therefrom.

 

(b)           If
any Indebtedness shall be issued or incurred by any Group Member subsequent to
the Closing Date (excluding any Indebtedness incurred in accordance with
Sections 7.2 (a) through (j)), an amount equal to 100% of the Net Cash
Proceeds thereof shall be applied on the date of such incurrence toward the
prepayment of the Term Loans as set forth in Section 2.18(e); provided
that no such application shall be made and no such prepayment shall be required
if (a) the Consolidated Leverage Ratio, for the four fiscal quarters ended on
the last day of the two fiscal quarters ended immediately preceding the date on
which such application would otherwise be made, was less than 3.00 to 1.00 and
(b) no Default or Event of Default is continuing or will result therefrom.

 

(c)           If
on any date any Group Member shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event which, when aggregated with all other Net Cash Proceeds
from Asset Sales or Recovery Events, respectively, theretofore received by the
Group Members during the fiscal year of the U.S. Borrower in which such date
occurs, exceeds $10,000,000 for all such Asset Sales or Recovery Events, as the
case may be, then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds in excess of $10,000,000 shall be applied on
such date toward the prepayment of the Term Loans as set forth in
Section 2.18(e); provided that notwithstanding the foregoing,
(i) the aggregate Net Cash Proceeds of Asset Sales that may be excluded
from the foregoing requirement pursuant to a Reinvestment Notice shall not
exceed $25,000,000, (ii) the aggregate Net Cash Proceeds of Recovery
Events that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $25,000,000 and (iii) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the
prepayment of the Term Loans as set forth in Section 2.18(e); provided
that no such application shall be made and no such prepayment shall be required
if (a) the Consolidated Leverage Ratio, for the four fiscal quarters ended on
the last day of the two fiscal quarters ended immediately preceding the date on
which such application would otherwise be made, was less than 3.00 to 1.00 and
(b) no Default or Event of Default is continuing or will result therefrom.

 

48

 

(d)           If
on any date any Group Member shall receive Net Cash Proceeds from any
Securitization Transaction, such Net Cash Proceeds shall be applied on such
date toward the permanent reduction of the Revolving Commitments as set forth
in Section 2.18(e); provided that no such application shall be made
and no such permanent reduction shall be required if (a) the Consolidated
Leverage Ratio, for the four fiscal quarters ended on the last day of the two
fiscal quarters ended immediately preceding the date on which such application
would otherwise be made, was less than 3.00 to 1.00 and (b) no Default or Event
of Default is continuing or will result therefrom.

 

(e)           Any
prepayments made pursuant to paragraph (a) and (b) of this Section shall be
applied, (x) in the case of Indebtedness incurred or Capital Stock issued by
the U.S. Borrower or any of its Subsidiaries (other than the Canadian Borrower
or any of its Subsidiaries or any other Foreign Subsidiary of the U.S.
Borrower) to the prepayment of the U.S. Term Loans (ratably to the remaining
installments thereof), and (y) in the case of Indebtedness incurred or Capital
Stock issued by the Canadian Borrower or any of its Subsidiaries or any other
Foreign Subsidiary of the U.S. Borrower to the prepayment of the Canadian Term
Loans (ratably to the remaining installments thereof).  Any prepayments made pursuant to paragraph
(c) of this Section, to the extent the assets that are the subject of any Asset
Sale or Recovery Event are owned by the U.S. Borrower or any of its
Subsidiaries (other than the Canadian Borrower or any of its Subsidiaries or
any other Foreign Subsidiary of the U.S. Borrower) shall be applied to the
prepayment of the U.S. Term Loans (ratably to the remaining installments
thereof).   Any prepayments made
pursuant to paragraph (c) of this Section, to the extent the assets that are
the subject of any Asset Sale or Recovery Event are owned by the Canadian
Borrower or any of its Subsidiaries or any other Foreign Subsidiary of the U.S.
Borrower shall be applied to the prepayment of the Canadian Term Loans (ratably
to the remaining installments thereof). Any Commitment reductions made pursuant
to paragraph (d) of this Section, to the extent the assets that are the subject
of any Securitization Transaction are owned by the U.S. Borrower or any of its
Subsidiaries (other than the Canadian Borrower or any of its Subsidiaries or
any other Foreign Subsidiary of the U.S. Borrower) shall be applied to the
ratable permanent reduction of the U.S. Revolving Commitment and the U.S.
Swingline Commitment.   Any Commitment
reductions made pursuant to paragraph (d) of this Section, to the extent the
assets that are the subject of any Securitization Transaction are owned by the
Canadian Borrower or any of its Subsidiaries or any other Foreign Subsidiary of
the U.S. Borrower shall be applied to the ratable permanent reduction of the
Canadian Revolving Commitment and the Canadian Swingline Commitment.

 

(f)            Any
reduction of the U.S. Revolving Commitments pursuant to this Section 2.18
shall be accompanied by prepayment of the U.S. Revolving Loans to the extent,
if any, that the Total U.S. Revolving Extensions of Credit exceed the amount of
the Total U.S. Revolving Commitments as so reduced, provided that if the
aggregate principal amount of U.S. Revolving Loans then outstanding is less
than the amount of such excess (because U.S. L/C Obligations constitute a
portion thereof), the U.S. Borrower shall, to the extent of the balance of such
excess, replace outstanding U.S. Letters of Credit and/or deposit an amount in
cash in a cash collateral account established with the U.S. Administrative
Agent, for the benefit of the U.S. Lenders, on terms and conditions
satisfactory to the U.S. Administrative Agent. 
Any reduction of the Canadian

 

49

 

Revolving Commitments pursuant to this Section shall
be accompanied by prepayment of the Canadian Revolving Loans to the extent, if
any, that the Canadian Dollar Equivalent of the Total Canadian Revolving Loans
exceed the amount of the Total Canadian Revolving Commitments as so reduced.  Any reduction of the Canadian Swingline
Commitment pursuant to this Section shall be accompanied by prepayment of the
Canadian Swingline Loans to the extent, if any, that the aggregate then
outstanding amount of the Canadian Swingline Extensions of Credit exceeds the amount
of the Canadian Swingline Commitment as so reduced, provided that if the
aggregate principal amount of Canadian Swingline Loans then outstanding is less
than the amount of such excess (because Canadian L/C Obligations constitute a
portion thereof), the Canadian Borrower shall, to the extent of the balance of
such excess, replace outstanding Canadian Letters of Credit and/or deposit an
amount in cash in a cash collateral account established with the Canadian
Swingline Lender, on terms and conditions satisfactory to the Canadian
Swingline Lender.  Any reduction of the
U.S. Swingline Commitment pursuant to this Section shall be accompanied by
prepayment of the U.S. Swingline Loans to the extent, if any, that the aggregate
then outstanding amount of the U.S. Swingline Extensions of Credit exceeds the
amount of the U.S. Swingline Commitment as so reduced.  The application of any prepayment pursuant
to this Section shall be made, first, to ABR Loans, U.S. Base Rate Loans or C$
Prime Loans, as the case may be, and, second, to Eurodollar Loans.  Each prepayment of the Loans under this
Section (except in the case of Revolving Loans that are ABR Loans, U.S. Base
Rate Loans, C$ Prime Loans, Canadian Swingline Loans or U.S. Swingline Loans)
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid.

 

2.19         Conversion and Continuation Options.

 

(a)           Either
Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans
(in the case of any U.S. Loan) or to convert Eurodollar Loans to U.S. Base Rate
Loans (in the case of any Canadian Loan in U.S. Dollars that is not a Canadian
Swingline Loan) by giving the relevant Administrative Agent and, in the case of
Canadian Loans, the Canadian Funding Agent, at least three Business Days’ prior
irrevocable notice of such election, provided that any such conversion
of Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto.  Either Borrower may
elect from time to time to convert ABR Loans (in the case of any U.S. Loan that
is not a U.S. Swingline Loan) or U.S. Base Rate Loans (in the case of any
Canadian Loan in U.S. Dollars that is not a Canadian Swingline Loan) to
Eurodollar Loans by giving the relevant Administrative Agent at least three
Business Days’ prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), provided
that no ABR Loan or U.S. Base Rate Loan, as the case may be, under a particular
Facility may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the relevant 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 relevant Administrative
Agent shall promptly notify each relevant Lender and the Canadian Funding Agent
thereof.

 

50

 

(b)           Any
Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the relevant Borrower giving
irrevocable notice to the relevant Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.3, 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 relevant
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 relevant
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, at the option of the relevant Administrative Agent,
be either (a) automatically continued as Eurodollar Loans having an Interest
Period selected by the Administrative Agent or (b) automatically converted to
ABR Loans (in the case of any U.S. Loan) or U.S. Base Rate Loans (in the case
of any Canadian Loan in U.S. Dollars that is not a Canadian Swingline Loan) on
the last day of such then expiring Interest Period.  Upon receipt of any such notice the relevant Administrative Agent
shall promptly notify each relevant Lender and the Canadian Funding Agent
thereof.

 

(c)           Subject to the provisions of this
Agreement, the Canadian Borrower may, prior to the Revolving Termination Date
or the final maturity date of the Canadian Term Loans, as the case may be,
effective on any Business Day, convert, in whole or in part, Canadian Loans
(other than Canadian Swingline Loans) that are C$ Prime Loans into Bankers’ Acceptances
or Bankers’ Acceptances into C$ Prime Loans upon giving to the Canadian Funding
Agent prior irrevocable written or telephonic notice (in the case of telephonic
notice, to be promptly confirmed in writing) within the notice period and in
the form which would be required to be given to the Canadian Funding Agent in
respect of the relevant Facility under which such Canadian Loan was made or
into which the outstanding Canadian Loan (other than Canadian Swingline Loans)
is to be converted in accordance with the provisions of Sections 2.5, 2.10
or 2.11, as applicable, provided that:

 

(i)            no
C$ Prime Loan may be converted into a Bankers’ Acceptance when any Event of
Default has occurred and is continuing;

 

(ii)           each
conversion to Bankers’ Acceptances shall be for an aggregate amount of
C$3,000,000 (and whole multiples of C$100,000 in excess thereof), and each
conversion to C$ Prime Loans shall be in a minimum aggregate amount of
C$500,000; and

 

(iii)          Bankers’ Acceptances may be converted only on the
maturity date of such Bankers’ Acceptances and, provided that, if less than all
Bankers’ Acceptances are converted, then after such conversion not less than
C$3,000,000 (and whole multiples of C$100,000 in excess thereof) shall remain
as Bankers’ Acceptances.

 

2.20         Limitations on Eurodollar Tranches.  Notwithstanding anything to the contrary in
this Agreement, all borrowings, conversions and continuations of Eurodollar
Loans and all

 

51

 

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 $1,000,000 or a whole multiple of $100,000 in excess
thereof and (b) no more than fifteen Eurodollar Tranches shall be
outstanding at any one time.

 

2.21         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)           Each
C$ Prime Loan shall bear interest at a rate per annum equal to the C$ Prime
Rate plus the Applicable Margin, and each U.S. Base Rate Loan shall bear
interest at a rate per annum equal to the U.S. Base Rate plus the Applicable
Margin.

 

(d)           (i) If
all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal amount of all Loans and Reimbursement
Obligations 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%, (y) in the
case of U.S. Reimbursement Obligations, the rate applicable to ABR Loans under
the U.S. Revolving Facility plus 2% or (z) in the case of Canadian
Reimbursement Obligations, the rate applicable to C$ Prime Loans under the
Canadian Swingline 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, U.S. Base Rate Loans or C$ Prime Loans, as the case
may be, 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 U.S. Revolving Facility plus 2%), in
each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (as well after as before
judgment); provided that the additional 2% referred to in this Section
2.21(d) shall not apply to the interest, fees or other amounts upon or with
respect to the Canadian Loans or the Reimbursement Obligations with respect to
Canadian Letters of Credit to the extent that such application is prohibited by
applicable law.

 

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

 

52

 

Obligations are denominated in Canadian Dollars (and
all other amounts denominated in Canadian Dollars) shall be payable in Canadian
Dollars.

 

(f)            (i) If
any provision of this Agreement would obligate any Loan Party to make any
payment of interest or other amount payable to any Canadian Lender in an amount
or calculated at a rate which would be prohibited by law or would result in a
receipt by such Canadian Lender of interest at a criminal rate (as such terms
are construed under the Criminal Code (Canada)), then notwithstanding such
provision, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by such
Canadian Lender of interest at a criminal rate, such adjustment to be effected,
to the extent necessary, as follows: 
(x) first, by reducing the amount or rates of interest required to
be paid under this Section; and (y) thereafter, by reducing any fees,
commissions, premiums and other amounts which would constitute interest for
purposes of Section 347 of the Criminal Code (Canada).

 

(ii)           If,
notwithstanding the provisions of clause (i) of this paragraph (f),
and after giving effect to all adjustments contemplated thereby, any Canadian
Lender shall have received an amount in excess of the maximum permitted by such
clause, then the applicable Loan Party shall be entitled, by notice in writing
to such Canadian Lender, to obtain reimbursement from such Canadian Lender of
an amount equal to such excess, and, pending such reimbursement, such amount
shall be deemed to be an amount payable by such Canadian Lender to such Loan
Party.

 

(iii)          Any
amount or rate of interest referred to in this paragraph (f) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term of any
Canadian Loan on the assumption that any charges, fees or expenses that fall
within the meaning of “interest” (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be prorated over that
period of time and otherwise be prorated over the period from the Closing Date
to the Revolving Termination Date or the final maturity date of the Canadian
Term Loans, as the case may be, and, in the event of dispute, a certificate of
a Fellow of the Canadian Institute of Actuaries appointed by the Canadian
Administrative Agent shall be conclusive for the purposes of such determination
absent manifest error.

 

2.22         Computation of Interest and Fees.

 

(a)           Interest,
fees and commissions payable pursuant hereto shall be calculated on the basis
of a 360-day year for the actual days elapsed, except that (i) with
respect to ABR Loans the rate of interest on which is calculated on the basis
of the Prime Rate, U.S. Base Rate Loans and C$ Prime Loans, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed and (ii) Acceptance Fees and
interest calculated on the basis of the CDOR Rate shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed.  The relevant Administrative
Agent or, in the case of the Applicable BA

 

53

 

Discount Rate, the Canadian Funding Agent, shall as
soon as practicable notify the relevant Borrower and the relevant Lenders of
each determination of a Eurodollar Rate or the applicable BA Discount
Rate.  Any change in the interest rate
on a Loan resulting from a change in the ABR, the C$ Prime Rate, the U.S. Base
Rate or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes effective.  The relevant Administrative Agent, the
Canadian Funding Agent or the Canadian Swingline Lender, as the case may be,
shall as soon as practicable notify the relevant 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 relevant Administrative Agent, the
Canadian Funding Agent, or the Canadian Swingline Lender as the case may be,
pursuant to any provision of this Agreement shall be conclusive and binding on
the relevant Borrower and the relevant Lenders in the absence of manifest
error.  The relevant Administrative
Agent, the Canadian Swingline Lender or the Canadian Funding Agent shall, at
the request of the relevant Borrower, deliver to such Borrower (and in the case
of determinations by the Canadian Funding Agent or the Canadian Swingline
Lender, to the Canadian Administrative Agent) a statement showing the
quotations used by such Administrative Agent, the Canadian Swingline Lender or
the Canadian Funding Agent in determining any interest rate pursuant to
Section 2.22(a).

 

(c)           For
the purposes of the Interest Act (Canada), in any case in which an interest
rate or fee rate is stated in this Agreement to be calculated on the basis of a
year of 360 days or 365 days, as the case may be, the yearly rate of interest
or fee to which such interest rate or fee rate is equivalent is equal to such
interest rate or fee rate multiplied by the number of days in the year in which
the relevant interest or fee payment accrues and divided by 360 or 365, respectively.  In addition, the principles of deemed
investment of interest do not apply to any interest calculations under this
Agreement and the rates of interest stipulated in this Agreement are intended
to be nominal rates and not effective rates or yields.

 

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

 

(a)           either
Administrative Agent or the Canadian Funding Agent shall have determined (which
determination shall be conclusive and binding upon the relevant Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or

 

(b)           either
Administrative Agent or the Canadian Funding Agent shall have received notice
from the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively certified
by such Lenders) of making or maintaining their affected Loans during such
Interest Period,

 

54

 

then such Administrative Agent or the Canadian Funding Agent  shall give telecopy or telephonic notice
thereof to the relevant 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 (in the case of any U.S. Loan) or
U.S. Base Rate Loans (in the case of any Canadian Loan), (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 or
U.S. Base Rate Loans, as the case may be, and (z) any outstanding
Eurodollar Loans under the relevant Facility shall be converted, on the last
day of the then-current Interest Period, to ABR Loans (in the case of any U.S.
Loan) or to U.S. Base Rate Loans (in the case of any Canadian Loan).  Until such notice has been withdrawn by the
relevant Administrative Agent or the Canadian Funding Agent, no further
Eurodollar Loans under the relevant Facility shall be made or continued as
such, nor shall the relevant Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.

 

2.24         Pro Rata Treatment and Payments.

 

(a)           Each
borrowing by the Borrowers from the Lenders hereunder, each payment by the
Borrowers on account of any Acceptance Fee or commitment fee and any reduction
of the Commitments of the Lenders shall be made pro rata according to the
respective U.S. Term Percentages, U.S. Revolving Percentages, Canadian Term
Percentages or Canadian Revolving Percentages, as the case may be, of the
relevant Lenders.  The preceding
sentence shall not apply to the Canadian Swingline Facility or the U.S.
Swingline Facility.

 

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

 

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

 

55

 

(d)           All
payments (including prepayments) to be made by the Borrowers hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 1:00 p.m. Minneapolis,
Minnesota time (in the case of U.S. Loans or obligations) or Toronto time (in
the case of Canadian Loans or obligations), on the due date thereof to the U.S.
Administrative Agent or, as to Canadian Loans or obligations, the Canadian
Funding Agent or the Canadian Swingline Lender, as applicable, for the account
of the relevant Lenders, at the relevant Payment Office, in Dollars or Canadian
Dollars, as the case may be, and in immediately available funds.  The U.S. Administrative Agent or, as to Canadian
Loans or obligations, the Canadian Funding Agent or the Canadian Swingline
Lender, as applicable, shall distribute such payments to the relevant Lenders
as soon as practicable following 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 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 U.S. Administrative Agent, or, in the case of Canadian Loans, the Canadian
Funding 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 such Agent, such Agent may assume that
such Lender is making such amount available to such Agent, and such Agent may,
in reliance upon such assumption, make available to the relevant Borrower a
corresponding amount.  If such amount is
not made available to such Agent, by the required time on the Borrowing Date
therefor, such Lender shall pay to such Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate (in the case of U.S. Loans) or at the then effective CDOR Rate (in the case
of Canadian Loans) for the period until such Lender makes such amount
immediately available to such Agent and such other compensatory fees as such
Agent, may reasonably request.  A
certificate of the relevant 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 relevant Agent by such Lender
within three Business Days after such Borrowing Date, such Agent, shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to ABR Loans, U.S. Base Rate Loans or C$ Prime Loans, as the case
may be, under the relevant Facility, on demand, from the relevant Borrower.  The Canadian Funding Agent shall promptly
furnish to the Canadian Administrative Agent a copy of any notices received by
the Canadian Funding Agent pursuant to this subsection (e).

 

(f)            Unless
the U.S. Administrative Agent, or in the case of Canadian Loans, the Canadian
Funding Agent, shall have been notified in writing by the relevant Borrower
prior to the date of any payment due to be made by such Borrower hereunder that
such

 

56

 

Borrower will not make such payment to such Agent,
such Agent may assume that such Borrower is making such payment, and such Agent
may, but shall not be required to, in reliance upon such assumption, make
available to, or direct the Canadian Funding Agent to make available to, the
Lenders their respective pro  rata shares of a corresponding
amount.  If such payment is not made to
the relevant Agent by such Borrower within three Business Days after such due
date, such 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 (accruing on and after one Business Day after
the relevant demand) at the rate per annum equal to the daily average Federal
Funds Effective Rate (in the case of U.S. Loans) or at the then effective CDOR
Rate (in the case of Canadian Loans) and such other compensatory fees as such
Agent, may reasonably request.  Nothing
herein shall be deemed to limit the rights of either Agent or any Lender
against the Borrowers.   The Canadian
Funding Agent shall promptly furnish to the Canadian Administrative Agent a
copy of any notices received by the Canadian Funding Agent pursuant to this
subsection (e).

 

2.25         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 made
subsequent to the date hereof:

 

(i)            shall
subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by
it, or any Bankers’ Acceptances purchased or accepted by it, or change the basis
of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.26 and changes in the rate of tax
on the net income of such Lender or changes in the rate of any branch taxes or
doing business taxes (in both cases, imposed in lieu of net income taxes)
imposed on 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, the BA Discount Rate or
any other rate of interest hereunder; or

 

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

 

and the result of any of the foregoing is to increase the cost to such
Lender, by an amount that such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or purchasing or accepting Bankers’
Acceptances, or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, the relevant Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such

 

57

 

Lender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
relevant Borrower (with a copy to the relevant Administrative Agent, and, as to
Canadian Loans, the Canadian Funding 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 made subsequent
to the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit 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 relevant Borrower (with a copy to the relevant Administrative
Agent, and, as to Canadian Loans, the Canadian Funding Agent) of a written
request therefor, such Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction; provided that neither Borrower shall be required to compensate
a Lender pursuant to this paragraph for any amounts incurred more than six
months prior to the date that such Lender notifies such Borrower of such
Lender’s intention to claim compensation therefor; and provided  further
that, if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such
retroactive effect.

 

(c)            If
any Requirement of Law shall make it unlawful or impossible for any Lender to
make, maintain or fund any Eurodollar Loans, such Lender shall notify the
Borrowers and the Administrative Agents, and in the case of Canadian Loans, the
Canadian Funding Agent, whereupon the obligation of such Lender to make or
continue, or to convert any Loans to, Eurodollar Loans, shall be suspended
until such Lender notifies the Borrower and the Administrative Agents, and in
the case of Canadian Loans, the Canadian Funding Agent, that the circumstances
giving rise to such suspension no longer exist.  If any Lender determines that it may not lawfully continue to
maintain any Eurodollar to the end of the applicable Interest Periods, all of
the affected Loans made by such Lender shall be automatically converted to ABR
Loans (or U.S. Base Rate Loans in the case of Canadian Loans) as of the date of
such Lender’s notice, and upon such conversion the relevant Borrower shall
indemnify such Lender in accordance with Section 2.27.

 

(d)           A
certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the relevant Borrower (with a copy to the relevant
Administrative Agent, and, as to Canadian Loans, the Canadian Funding Agent )
shall be conclusive in the absence of manifest error.  The obligations of the Borrowers pursuant to this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

58

 

2.26         Taxes.

 

(a)           All
payments made by the Borrowers under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on either Administrative Agent, the Canadian Funding Agent or any Lender as a
result of a present or former connection between such Administrative Agent, the
Canadian Funding 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 such Administrative
Agent, the Canadian Funding 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 either Administrative
Agent, the Canadian Funding Agent or any Lender hereunder, the amounts so
payable to such Administrative Agent, the Canadian Funding Agent or such Lender
shall be increased to the extent necessary to yield to such Administrative
Agent, the Canadian Funding Agent or such Lender (after payment of all
Non-Excluded 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 neither Borrower shall be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes
(i) that are attributable to such Lender’s failure to comply with the
requirements of paragraph (d) or (e) of this Section, (ii) 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 U.S. Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph or (iii) that are Canadian
withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Canadian Borrower with respect to such Non-Excluded
Taxes pursuant to this paragraph.

 

(b)           In
addition, the Borrowers 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 either Borrower, as
promptly as possible thereafter such Borrower shall send to the relevant
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by such Borrower showing payment thereof.  If either Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to the
relevant Administrative Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the relevant Administrative
Agent and the Lenders for any

 

59

 

incremental taxes, interest or penalties that may
become payable by such Administrative Agent or any Lender as a result of any
such failure.

 

(d)           Each
Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver
to the U.S. Borrower and the U.S. Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit G and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the U.S. 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 U.S. Borrower at any time it determines that it is no longer in a position
to provide any previously delivered certificate to the U.S. Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose).  Notwithstanding any other
provision of this paragraph, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.

 

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

 

(f)            The
U.S. Borrower does not intend to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). 
In the event the U.S. Borrower determines to take any action
inconsistent with such intention, it will promptly notify the U.S.
Administrative Agent thereof.  If the
U.S. Borrower so notifies the U.S. Administrative Agent, the U.S. Borrower
acknowledges that one or more of the Lenders may treat its Loans and/or Letters
of Credit as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain
the lists and other records required by such Treasury Regulation.

 

60

 

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

 

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

 

2.28         Change of Lending Office.  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.25 or 2.26(a) with
respect to such Lender, it will, if requested by the relevant Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided further, that nothing in this
Section shall affect or postpone any of the obligations of either Borrower or
the rights of any Lender pursuant to Section 2.25 or 2.26(a).

 

2.29         Replacement of Lenders.  The Borrowers shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.25 or 2.26(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; 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 replacement, such Lender
shall have taken no action under Section 2.28 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.25 or
2.26(a), (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 (including amounts of interest and fees that have
accrued but are not then due), (v) the relevant Borrower shall be liable
to such replaced Lender under Section 2.27 if any Eurodollar Loan owing to
such replaced Lender shall be purchased other than on the last day of the
Interest Period relating thereto,

 

61

 

(vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the relevant 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
relevant Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the relevant Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.25 or 2.26(a), as the case may be, and
(ix) any such replacement shall not be deemed to be a waiver of any rights
that either Borrower, either Administrative Agent, the Canadian Funding Agent
or any other Lender shall have against the replaced Lender.

 

2.30         Controls; Currency Exchange Rate
Fluctuations.

 

(a)           In
the event that at any time the Canadian Borrower determines that by reason of
changes in currency exchange rates (i) the aggregate then outstanding
Canadian Dollar Equivalent of the Total Canadian Revolving Loans exceeds the
Total Canadian Revolving Commitment by more than 5% or (ii) the aggregate
then outstanding Canadian Dollar Equivalent principal amount of the Canadian
Term Loans exceeds by more than 5% the aggregate principal amount of Canadian
Term Loans that would have been then outstanding in Canadian Dollars if the
Canadian Term Loans had been made in Canadian Dollars, had remained outstanding
at all times in Canadian Dollars and were repaid in accordance with
Section 2.6 (disregarding any optional or mandatory prepayments), the Canadian
Borrower shall immediately notify the Canadian Administrative Agent and the
Canadian Funding Agent (which notice shall promptly be confirmed in writing).

 

(b)           The
Canadian Funding Agent shall calculate the Canadian Dollar Equivalent of the
Total Canadian Revolving Loans from time to time, and in any event on each date
of receipt of a notice of a borrowing of Canadian Revolving Loans and otherwise
not less frequently than once each calendar month.

 

(c)           In
the event that on any date the Canadian Funding Agent calculates or is notified
that any excess of a type described in Section 2.30(a)(i) or (ii) (a “C$
Excess”) exists, Canadian Funding Agent shall give notice to such effect to
the Canadian Borrower and the Canadian Lenders and the Canadian Administrative
Agent.

 

(d)           Within five Business Days after notification to the
Canadian Funding Agent pursuant to clause (a) above or receipt of notice
pursuant to paragraph (c) above, the Canadian Borrower shall make such
repayments or prepayments of the Canadian Revolving Loans or, as the case may
be, Canadian Term Loans (together with interest accrued to the date of such
repayment or prepayment) as shall be necessary to eliminate any C$ Excess,
unless, by the time such repayment or prepayment is required to be made, such
C$ Excess no longer exists by reason of currency exchange rate
fluctuations.  If any such repayment or
prepayment of a Eurodollar Loan pursuant to this Section occurs on a day which
is not the last day of the then current Interest Period with respect thereto,
the Canadian Borrower shall pay to the Canadian Lenders such amounts, if any,
as may be required under Section 2.27.

 

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2.31         Notes.  The U.S.
Revolving Loans of each U.S. Revolving Lender shall be evidenced by a single
U.S. Revolving Note payable to the order of such Lender in a principal amount
equal to such Lender’s U.S. Revolving Commitment originally in effect.   The U.S. Swingline Loans of the U.S.
Swingline Lender shall be evidenced by a single U.S. Swingline Note payable to
the order of such Lender in a principal amount equal to such Lender’s U.S.
Swingline Commitment originally in effect. 
The U.S. Term Loans of each U.S. Term Lender shall be evidenced by a
single U.S. Term Note payable to the order of such Lender in a principal amount
equal to such Lender’s U.S. Term Commitment originally in effect.  The Canadian Revolving Loans of each
Canadian Revolving Lender shall be evidenced by a single Canadian Revolving
Note payable to the order of such Lender in a principal amount equal to such
Lender’s Canadian Revolving Commitment originally in effect.   The Canadian Swingline Loans of the
Canadian Swingline Lender shall be evidenced by a single Canadian Swingline
Note payable to the order of such Lender in a principal amount equal to such
Lender’s Canadian Swingline Commitment originally in effect.  The Canadian Term Loans of each Canadian
Term Lender shall be evidenced by a single Canadian Term Note payable to the
order of such Lender in a principal amount equal to such Lender’s Canadian Term
Commitment originally in effect.  Upon
receipt of each Lender’s Notes from the applicable Borrowers, the relevant
Administrative Agent shall mail such Notes to such Lender.  Each Lender shall enter in its ledgers and
records the amount of its Loans made, converted or continued and the payments
made thereon, and each Lender is authorized by the Borrowers to enter on a
schedule attached to the relevant Note, a record of such Loans and payments;
provided, however that the failure by any Lender to make any such entry or any
error in making such entry shall not limit or otherwise affect the obligation
of the Borrower hereunder and on the Notes, and, in all events, the principal
amounts owing by the Borrower in respect of the Notes shall be the aggregate
amount of the relevant Loans made by the relevant Lenders less all payments of
principal thereof made by the Borrower.

 

SECTION
3.  LETTERS OF CREDIT

 

3.1           L/C Commitment.

 

(a)           Prior
to the Closing Date, CIBC has issued the Existing U.S. Letters of Credit which,
from and after the Closing Date, shall constitute U.S. Letters of Credit
hereunder.  
Subject to the terms and conditions hereof, the U.S. Issuing
Lender, in reliance on the agreements of the other U.S. Revolving Lenders set
forth in Section 3.4(a), agrees to issue letters of credit (“U.S.
Letters of Credit”, which term shall include the Existing U.S. Letters of
Credit) for the account of the U.S. Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time
by the U.S. Issuing Lender; provided that the U.S. Issuing Lender shall
not issue any U.S. Letter of Credit if, after giving effect to such issuance,
(i) the U.S. L/C Obligations would exceed the U.S. L/C Commitment or
(ii) the aggregate amount of the Available U.S. Revolving Commitments
would be less than zero. Each U.S. 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 five Business Days prior to the Revolving Termination Date, provided
that any U.S. 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).

 

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(b)           Prior
to the Closing Date, CIBC has issued the Existing Canadian Letters of Credit
which, from and after the Closing Date, shall constitute Canadian Letters of
Credit hereunder.  Subject to the terms and conditions hereof, the
Canadian Issuing Lender agrees to issue letters of credit (“Canadian Letters
of Credit”) for the account of the Canadian Borrower on any Business Day
during the Revolving Commitment Period in such form as may be approved from
time to time by the Canadian Issuing Lender; provided that the Canadian
Issuing Lender shall have no obligation to issue any Canadian Letter of Credit
if, after giving effect to such issuance, the Canadian L/C Obligations, when
added to the aggregate principal amount of the Canadian Swingline Loans then
outstanding, would exceed the Canadian Swingline Commitment.  Each Canadian Letter of Credit shall
(i) be denominated in Canadian 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 five Business Days prior to the Revolving Termination
Date, provided that any Canadian 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).

 

(c)           Neither
Issuing Lender shall at any time be obligated to issue any Letter of Credit if
such issuance would conflict with, or cause such Issuing Lender or any U.S. L/C
Participant to exceed any limits imposed by, any applicable Requirement of
Law.  In no event shall CIBC be
obligated to issue any U.S. Letter of Credit after the Closing Date or to extend,
or permit the extension, of the expiry date of any Existing U.S. Letter of
Credit beyond the expiry date thereof in effect on the Closing Date.

 

3.2           Procedure for Issuance of Letters
of Credit.

 

(a)           The
U.S. Borrower may from time to time request that the U.S. Issuing Lender issue
a U.S. Letter of Credit by delivering to the U.S. Issuing Lender at its address
for notices specified herein an Application therefor, completed to the
satisfaction of the U.S. Issuing Lender, and such other certificates, documents
and other papers and information as the U.S. Issuing Lender may request.  Upon receipt of any Application, the U.S.
Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the U.S.
Letter of Credit requested thereby (but in no event shall the U.S. Issuing
Lender be required to issue any U.S. Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the U.S. Issuing Lender and the U.S. Borrower.  The U.S. Issuing Lender shall furnish a copy
of such Letter of Credit to the U.S. Borrower promptly following the issuance
thereof.  The U.S. Issuing Lender shall
promptly furnish to the U.S. Administrative Agent, which shall in turn promptly
(but in any event within 2 Business Days) furnish to the U.S. Revolving
Lenders, notice of the issuance of each U.S. Letter of Credit (including the
amount thereof).

 

(b)           The
Canadian Borrower may from time to time request that the Canadian Issuing
Lender issue a Canadian Letter of Credit by delivering to the Canadian Issuing

 

64

 

Lender and the Canadian Administrative Agent, in each
case at its address for notices specified herein, an Application therefor,
completed to the satisfaction of the Canadian Issuing Lender, and such other
certificates, documents and other papers and information as the Canadian
Issuing Lender may request.  Upon
receipt of any Application, the Canadian 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, unless directed by the Canadian Administrative Agent not to
issue such Canadian Letter of Credit, shall promptly issue the Canadian Letter
of Credit requested thereby (but in no event shall the Canadian Issuing Lender
be required to issue any Canadian 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 Canadian Issuing Lender and the Canadian
Borrower.  The Canadian Issuing Lender
shall furnish a copy of such Letter of Credit to the Canadian Borrower and the
Canadian Administrative Agent promptly following the issuance thereof.

 

3.3           Fees and Other Charges.

 

(a)           The
U.S. Borrower will pay a fee (to be shared among the U.S. Revolving Lenders
ratably according to their respective U.S. Revolving Percentages) on all
outstanding U.S. Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the U.S. Revolving
Facility, and payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date of such U.S. Letters of Credit.  In addition, the U.S. Borrower shall pay to the U.S. Issuing
Lender for its own account a fronting fee of 0.1875% per annum on the undrawn
and unexpired amount of each U.S. Letter of Credit, payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date of such U.S.
Letter of Credit.

 

(b)           The
Canadian Borrower will pay a fee on all outstanding Canadian Letters of Credit
at a per annum rate equal to the Applicable Margin then in effect with respect
to Eurodollar Loans under the Canadian Revolving Facility and payable quarterly
in arrears on each L/C Fee Payment Date after the issuance date of such Canadian
Letters of Credit.  In addition, the
Canadian Borrower shall pay to the Canadian Issuing Lender for its own account
a fronting fee of 0.1875% per annum on the undrawn and unexpired amount of each
Canadian Letter of Credit, payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date of such Canadian Letter of Credit.

 

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

 

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3.4           L/C Participations.

 

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

 

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

 

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

 

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3.5           Reimbursement Obligation of the
Borrowers.

 

(a)           The
U.S. Borrower agrees to reimburse the U.S. Issuing Lender on the Business Day
next succeeding the Business Day on which the U.S. Issuing Lender notifies the
U.S. Borrower of the date and amount of a draft presented under any U.S. Letter
of Credit and paid by the U.S. Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the U.S. Issuing Lender in connection with such payment.  Each such payment shall be made to the U.S.
Issuing Lender at its address for notices 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 Business
Day next succeeding the date of the relevant notice, Section 2.21(b) and
(ii) thereafter, Section 2.21(d).

 

(b)           The
Canadian Borrower agrees to reimburse the Canadian Issuing Lender on the
Business Day next succeeding the Business Day on which the Canadian Issuing
Lender notifies the Canadian Borrower of the date and amount of a draft
presented under any Canadian Letter of Credit and paid by the Canadian Issuing
Lender for the amount of (a) such draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by the Canadian Issuing
Lender in connection with such payment. 
Each such payment shall be made to the Canadian Issuing Lender at its
address for notices referred to herein in Canadian 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 Business Day
next succeeding the date of the relevant notice, Section 2.21(c) and
(ii) thereafter, Section 2.21(d).

 

3.6           Obligations Absolute.  Each 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 such Borrower may have or have had against the relevant Issuing
Lender, any beneficiary of a Letter of Credit or any other Person.  Each Borrower also agrees with the relevant
Issuing Lender that (except as provided in the following sentence) such Issuing
Lender shall not be responsible for, and such 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 such 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 such Borrower against any
beneficiary of such Letter of Credit or any such transferee.  Neither Issuing Lender shall 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 which have resulted from the
gross negligence or willful misconduct of such Issuing Lender.  Each Borrower agrees that any action taken
or omitted by the relevant 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 of
care specified in the Uniform Commercial Code of the State of Minnesota (in the
case of U.S. Letters of Credit) or in the laws of the Province of Ontario and
the laws of Canada applicable thereto (in the case of

 

67

 

Canadian Letters of Credit), shall be binding on the relevant Borrower
and shall not result in any liability of such Issuing Lender to such Borrower.

 

3.7           Letter of Credit Payments.  If any draft shall be presented for payment
under any Letter of Credit, the relevant Issuing Lender shall promptly notify
the relevant Borrower of the date and amount thereof.  The responsibility of either Issuing Lender to the relevant
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.

 

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

 

4.1           Financial Condition.  The audited consolidated balance sheets of
the U.S. Borrower and its consolidated Subsidiaries as at March 1, 2003,
and the related consolidated statements of operations and of cash flows for
each of the years in the three-year period ended March 1, 2003, reported
on by and accompanied by an unqualified report from KPMG LLP, copies of which
have heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the U.S. Borrower and its consolidated Subsidiaries as
at such dates, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended.  The unaudited consolidated balance sheet of
the U.S. Borrower and its consolidated Subsidiaries as at May 31, 2003, and the
related unaudited consolidated statements of operations and cash flows for the
three month period ended on such date, present fairly the consolidated
financial condition of the U.S. Borrower and its consolidated Subsidiaries as
at such date, and the consolidated results of its operations and its
consolidated cash flow for the three month period then ended (subject to normal
year-end adjustments).  All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein).  Except for
Permitted MDM Guarantee Obligations, no Group Member has any material Guarantee
Obligations, contingent liabilities of the nature required to be disclosed in
financial statements under GAAP and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.  During
the period from May 31, 2003 to and including the date of this Agreement
there has been no Disposition by any Group Member of any material part of its
business or property other than sales of inventory in the ordinary course of
business.

 

68

 

4.2           No Change. 
Since March 1, 2003 there has been no development or event that has
had or could reasonably be expected to have a Material Adverse Effect.

 

4.3           Existence; Compliance with Law.  Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the 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
where the failure to be so qualified could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent
that the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

4.4           Power; Authorization; Enforceable
Obligations.  Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of each
Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary organizational action to
authorize the execution, delivery and performance of the Loan Documents to
which it is a party and, in the case of each Borrower, to authorize the
extensions of credit on the terms and conditions of this Agreement.  No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the extensions of credit hereunder
or with the execution, delivery, performance, validity or enforceability of
this Agreement or any of the Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices will have been obtained or made
on or before the Closing Date and will be in full force and effect on and after
the Closing Date, (ii) the filings referred to in Section 4.19 and
(iii) consents, authorizations, filings and notices the absence of which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  Each Loan
Document has been duly executed and delivered on behalf of each Loan Party
party thereto.  This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability 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 and, on and after the Closing Date, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of any Group
Member and will not result in, or require, the creation or imposition of any
Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents).  No
Requirement of Law or Contractual Obligation applicable to U.S. Borrower or any
of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.

 

69

 

4.6           Litigation. 
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of either Borrower,
threatened by or against any Group Member or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any
of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.

 

4.7           No Default. 
No Group Member is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to
have a Material Adverse Effect.  No
Default or Event of Default has occurred and is continuing.

 

4.8           Ownership of Property; Liens.  Each Group Member 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 necessary in the
course of their respective businesses, and none of such property is subject to
any Lien except as permitted by Section 7.3.

 

4.9           Intellectual Property.  (a) Each Group Member owns, is licensed
to use or otherwise has the right to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except to the extent
that the absence of such property could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; (b) as of the
date hereof and the date of each extension of credit, no claim has been
asserted or is pending or, to the knowledge of either Borrower, threatened
against such Group Member by any Person challenging or questioning the use by
such Group Member of any Intellectual Property in a manner that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, nor does either Borrower know of any reason to believe that any
such claim would be successful if brought; (c) as of the date hereof and
the date of each extension of credit, no claim has been asserted or is pending
or, to the knowledge of either Borrower, threatened against such Group Member
by any Person challenging or questioning the validity or effectiveness of any
of such Group Member’s Intellectual Property in a manner that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and (d) the use of Intellectual Property by each Group
Member does not infringe on the rights of any Person in a manner that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

4.10         Taxes.  Each Group Member has filed or caused to be
filed all federal, state, provincial, foreign and other tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant Group Member), except where the failure to make any such
filing or payment could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; no tax Lien has been filed, and, to
the knowledge of either Borrower, no claim is being asserted, with respect to
any such tax, fee or other charge.

 

4.11         Federal Regulations.  No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for “buying” or “carrying”
any “margin stock”

 

70

 

within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board.  If requested by any Lender or either
Administrative Agent, the Borrowers will furnish to each Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.

 

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

 

4.13         ERISA.  Neither
a Reportable Event nor an “accumulated funding deficiency” (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred during
the five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code.  No termination of a Single Employer Plan has
occurred, 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
by a material amount.  Neither the U.S.
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the U.S.
Borrower nor any Commonly Controlled Entity would become subject to any
material liability under ERISA if the U.S. Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. 
No such Multiemployer Plan is in Reorganization or Insolvent.

 

4.14         Investment Company Act; Other
Regulations.  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.

 

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

 

71

 

4.16         Use of Proceeds.  The proceeds of the Term Loans and a portion of the U.S.
Revolving Loans shall be used to refinance Indebtedness of the Borrowers
outstanding on the Closing Date and to pay related fees and expenses.  The U.S. Letters of Credit and the proceeds
of the U.S. Revolving Loans and the U.S. Swingline Loans shall be used to
finance working capital needs and for general corporate purposes of the U.S.
Borrower and its Subsidiaries in the ordinary course of business.  The Canadian Letters of Credit and the
proceeds of the Canadian Revolving Loans and the Canadian Swingline Loans shall
be used to pay down intercompany debt owed to the U.S. Borrower and to finance
working capital needs and for general corporate purposes of the Canadian
Borrower and its Subsidiaries in the ordinary course of business.

 

4.17         Environmental Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:

 

(a)           each
Group Member:  (i) is, and within
the period of all applicable statutes of limitation has been, in compliance
with all applicable Environmental Laws; (ii) holds all Environmental
Permits (each of which is in full force and effect) required for any of its
current or intended operations or for any property owned, leased, or otherwise
operated by it; (iii) is, and within all applicable statutes of limitation
has been, in compliance with all of its Environmental Permits; and
(iv) reasonably believes that each of its Environmental Permits will be
timely renewed and complied with, without material expense; any additional
Environmental Permits that may be required of it will be timely obtained and
complied with, without material expense; and compliance with any Environmental
Law that is or is expected to become applicable to it will be timely attained
and maintained, without material expense;

 

(b)           to
the knowledge of either Borrower, Materials of Environmental Concern are not
and have not been present at, on, under, in, or about any real property now or
formerly owned, leased or operated by any Group Member, 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) under conditions which could reasonably be expected
to:  (i) give rise to liability of
any Group Member under any applicable Environmental Law or otherwise result in
costs to any Group Member; (ii) interfere with any Group Member’s
continued or planned operations; or (iii) impair the fair saleable value
of any real property owned or leased by any Group Member;

 

(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 a Group Member is, or to the knowledge of any Group Member will be, named
as a party that is pending or, to the knowledge of any Group Member,
threatened;

 

(d)           no
Group Member has received any 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, or with respect to any Materials of Environmental
Concern;

 

72

 

(e)           no
Group Member has entered into or agreed to any consent decree, order, or
settlement or other agreement, nor is subject to any judgment, decree, order or
other agreement in any judicial, administrative, or arbitral forum, relating to
compliance with or liability under any applicable Environmental Law or with
respect to any Materials of Environmental Concern; and

 

(f)            no
Group Member has assumed or retained, by contract or operation of law, any liabilities,
fixed or contingent, known or unknown, under any applicable Environmental Law
or with respect to any Materials of Environmental Concern.

 

4.18         Accuracy of Information, etc.  The statements and information contained in
this Agreement, the other Loan Documents and the other documents, certificates
and statements furnished by or on behalf of any Loan Party to the
Administrative Agents or the Lenders, or any of them, for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, taken as a whole, do not contain, as of the date of this Agreement,
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained herein or therein not misleading.  The projections contained in the materials
referenced above are based upon good faith estimates and assumptions believed
by management of the U.S. Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.  There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agents
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.

 

4.19         Security Documents.

 

(a)           The
U.S. Guarantee and Collateral Agreement shall be, when executed in accordance
with this Agreement, effective to create in favor of the U.S. Collateral Agent,
for the benefit of the Lenders and all other Persons specified therein, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the
U.S. Guarantee and Collateral Agreement, when stock certificates representing
such Pledged Stock are delivered to the Collateral Agent, and in the case of
the other Collateral described in the U.S. Guarantee and Collateral Agreement,
when financing statements and other filings specified on Schedule 3 to the
U.S. Guarantee and Collateral Agreement in appropriate form are filed in the
offices specified on said Schedule, the U.S. Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in the Pledged Stock and such
other Collateral in which (x) a security interest may be perfected by
filing under the applicable Uniform Commercial Code or (y) in which a
security interest may be perfected by taking such other actions described in
Schedule 3 to the U.S. Guarantee and Collateral Agreement and the proceeds
thereof, as security for the Secured Obligations (as defined in the U.S.
Guarantee and Collateral Agreement), in each case prior and superior in right
to any other Person (except Liens permitted by Section 7.3).

 

73

 

(b)           The
Canadian Collateral Agreement shall be, when executed in accordance with this
Agreement, effective to create in favor of the Canadian Collateral Agent, for
the benefit of the Canadian Lenders and all other Persons specified therein, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof.  In the
case of the Pledged Stock described in the Canadian Collateral Agreement, when
stock certificates representing such Pledged Stock are delivered to the
Canadian Collateral Agent, and in the case of the other Collateral described in
the Canadian Collateral Agreement, when financing statements and other filings
specified on Schedule 3 to the Canadian Collateral Agreement in
appropriate form are filed in the offices specified on said Schedule, the
Canadian Collateral Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Collateral in which (x) a security interest may be perfected by filing
under the Canadian personal property security legislation or (y) in which
a security interest may be perfected by taking such other actions described in
Schedule 3 to the Canadian Collateral Agreement and the proceeds thereof,
as security for the Secured Obligations (as defined in the Canadian Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral described in the Canadian Collateral
Agreement, Liens permitted by Section 7.3).

 

(c)           The
Canadian Pledge Agreement shall be, when executed in accordance with this
Agreement, effective to create in favor of the U.S. Collateral Agent, for the
benefit of the Lenders and all other Persons specified therein, a legal, valid
and enforceable security interest in the Collateral described therein and
proceeds thereof.  When stock
certificates representing the Pledged Securities (as defined in the Canadian
Pledge Agreement) are delivered to the U.S. Collateral Agent and when a
financing statement is registered under the Personal
Property Security Act of Ontario or the corresponding act under any
other appropriate jurisdiction, the Canadian Pledge Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the U.S. Borrower in the Pledged Securities and the proceeds
thereof, as security for the Secured Obligations (as defined in the Canadian
Pledge Agreement), in each case prior and superior in right to any other Person
(except for Liens permitted by Section 7.3).

 

(d)           The
Quebec Security Documents shall be, when executed in accordance with this
Agreement, effective to create in favor of the Canadian Collateral Agent
(including the Canadian Collateral Agent acting as fonde du pouvoir), for the benefit of the Canadian Lenders
and all other Persons specified therein, a legal, valid and enforceable
security interest and hypotec in the Collateral described therein and proceeds
thereof.  In the case of the Collateral
described in the Quebec Security Documents, when financing statements and other
filings specified therein in appropriate form are filed in the offices so
specified, the Quebec Security Documents shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Collateral described in the Quebec Security Documents as
security for the Secured Obligations (as defined in the Quebec Security
Documents), in each case prior and superior in right to any other Person
(except Liens permitted by Section 7.3).

 

74

 

(e)           Each
of the Mortgages shall be, when the Mortgage Amendment Documents are executed
in accordance with this Agreement, effective to create in favor of the U.S.
Collateral Agent (in the case of Mortgaged Properties located in the United
States) or the Canadian Collateral Agent (in the case of Mortgaged Properties
located in Canada) or the Canadian Collateral Agent acting as fonde du pouvoir (in the case of the
Quebec Mortgaged Properties), for the benefit of, among others, the relevant
Lenders, a legal, valid and enforceable Lien on the Mortgaged Properties
described therein and proceeds thereof, and when the Mortgage Amendment
Documents and financing statements are filed in the applicable offices of the
counties in which the Mortgaged Properties described therein are located, each
such Mortgage shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the applicable Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
or Secured Obligations (as defined in the relevant Mortgage), as applicable, in
each case prior and superior in right to any other Person except as permitted
by Section 7.3.  Schedule 1.3A
lists each parcel of real property in the United States and Canada owned in fee
simple by the U.S. Borrower or any of its Subsidiaries as of the date hereof.

 

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

 

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

 

4.22         Existing Loan Documents.   All Loan Documents (other than (i) the
Mortgages, and (ii) any financing statements, Canadian personal property act
registrations and collateral assignments of intellectual property filed
pursuant to any of the Loan Documents) to which either Existing Agent is a
party, including all amendments with respect thereto, are listed on Schedule
4.22.   Notwithstanding Section 1
hereof, capitalized terms used in this Section have the meanings given to them
in the Existing Credit Agreement.

 

SECTION 5.  CONDITIONS
PRECEDENT

 

5.1           Conditions to Initial Extension
of Credit.  The
effectiveness of this Agreement, including the obligation of each Lender to
make the initial extensions of credit requested to be made by it, are subject
to the satisfaction of the following conditions precedent:

 

(a)           Credit
Agreement; Global Assignment and Acceptance, Guarantee and Collateral Agreement.  Each Administrative Agent shall have
received (i) this Agreement, executed and delivered by the Administrative
Agents, the Canadian Swingline Lender, the Collateral Agents, the Canadian
Funding Agent, the Borrowers and each Lender, (ii) the Global Assignment and
Acceptance, executed and delivered by the Existing Agents, the Borrowers, each
Exiting Lender (as defined therein) and each Lender,  (iii) the relevant Notes properly completed for each Lender,
executed and delivered by the relevant Borrower; (iv) the U.S. Guarantee
and Collateral Agreement,

 

75

 

executed and delivered by the U.S. Borrower and each
Subsidiary Guarantor, (v) the Canadian Collateral Agreement, executed and
delivered by the Canadian Borrower, and each Canadian Subsidiary Guarantor,
(vi) an Acknowledgement and Consent in the form attached to each Guarantee
and Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party, (vii) the Canadian Pledge
Agreement, executed and delivered by the U.S. Borrower, (viii) the Quebec
Security Documents, executed and delivered by the Canadian Borrower and each
Canadian Subsidiary Guarantor that owns property located in the Province of
Quebec, Canada and (ix) one or more confirmations of security interest or short
form security agreements executed by the relevant Borrower and any other Loan
Party with respect to any U.S. and Canadian registered intellectual property.

 

(b)           Lien
Searches.  The Administrative Agents
shall have received the results of a recent lien search in each of the jurisdictions
where the U.S. Borrower and the Domestic Subsidiaries are located, and where
assets of, the chief executive office of and the registered office of, the
Canadian Borrower and the Canadian Subsidiary Guarantors are located, and such
search shall reveal no liens on any of the assets of the Loan Parties except
for liens permitted by Section 7.3 or discharged on or prior to the
Closing Date pursuant to documentation satisfactory to the Administrative
Agents.

 

(c)           Environmental
Matters.  The Administrative Agents
shall have completed and shall be satisfied in all material respects with an
environmental due diligence investigation of the U.S. Borrower and its
Subsidiaries.

 

(d)           Fees.  The Lenders, the Arranger and the
Administrative Agents shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable fees
and expenses of legal counsel), 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 relevant Borrower to the relevant Administrative
Agent on or before the Closing Date.

 

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

 

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

 

(i)            the
legal opinion of Faegre & Benson, counsel to the U.S. Borrower and its
Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agents;

 

(ii)           the
legal opinion of Stikeman Elliott, Canadian counsel to the Canadian Borrower
and its Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agents;

 

76

 

(iii)          the
legal opinion of Frank W. Bonvino, general counsel of the U.S. Borrower
and its Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agents;

 

(iv)          the
legal opinion of local counsel to the Canadian Borrower in Quebec, and of such
other special and local counsel as may be required by the Administrative
Agents, each of which legal opinions shall cover matters relating to the
Collateral and shall be in form and substance reasonably satisfactory to the
Administrative Agents.  Each such legal
opinion shall cover such other matters incident to the transactions contemplated
by this Agreement as the Administrative Agents may reasonably require.

 

(g)           Pledged
Stock; Stock Powers; Pledged Notes. (i) The U.S. Administrative Agent
shall have received, or shall have received an undertaking of CIBC to deliver
to the U.S. Collateral Agent (A) the certificates representing the shares
of Capital Stock pledged pursuant to the U.S. Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof and
(B) each promissory note (if any) pledged to the U.S. Collateral Agent
pursuant to the U.S. Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by
the pledgor thereof.

 

(ii)           The
Canadian Administrative Agent shall have received, or shall have received an
undertaking of CIBC to deliver to the Canadian Collateral Agent (A) the
certificates representing the shares of Capital Stock pledged pursuant to the
Canadian Collateral Agreement, together with an undated stock power for each
such certificate executed in blank by a duly authorized officer of the pledgor
thereof and (B) each promissory note (if any) pledged to the Canadian
Collateral Agent pursuant to the Canadian Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by
the pledgor thereof.

 

(h)           Filings,
Registrations and Recordings.  Each
document (including any Uniform Commercial Code or Personal Property Security
Act (Ontario) financing statement) required by the Security Documents or under
law (including the law of the Province of Quebec) or reasonably requested by
the relevant Collateral Agent to be filed, registered or recorded in order to
create in favor of the relevant Collateral Agent, for the benefit of the
relevant Lenders and the other Persons specified therein, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by
Section 7.3), shall be in proper form for filing, registration or
recordation.

 

(i)            Mortgages  The relevant Administrative Agent shall have
received an amendment, assignment or other documents in the form prescribed by
the relevant Administrative Agent (collectively, the “Mortgage Amendment
Documents”) with respect to the Mortgages granted in connection with the
Existing Credit Agreement with

 

77

 

respect to each of the Mortgaged Properties, executed
and delivered by a duly authorized officer of each party thereto.

 

(j)            Title
Endorsements.  The relevant
Administrative Agent shall have received in respect of each applicable
Mortgaged Property an endorsement to the mortgagee’s title insurance policy (or
policies) (or equivalent thereof satisfactory to the relevant Administrative
Agent) with respect to the mortgagee’s title insurance policies delivered in
connection with the Existing Credit Agreement, or, if necessary under local
custom, a new title insurance policy with respect to the applicable Mortgage
Property.  Each such endorsement or
title policy shall (A) be issued at ordinary rates; (C) insure that
the applicable Mortgage insured by the existing title insurance policy or such
new policy creates a valid first Lien on such Mortgaged Property free and clear
of all defects and encumbrances, except as disclosed therein; (D) name the
relevant Collateral Agent for the benefit of the relevant Lenders as the
insured thereunder; (E) be in the form and substance acceptable to the
relevant Administrative Agent; and (F) be issued by title companies that
issued the relevant title insurance policy under the Existing Credit
Agreement.  The relevant Administrative
Agent shall have received evidence satisfactory to it that all premiums in
respect of each such endorsement or new title policy, all charges for mortgage
recording tax, and all related expenses, if any, have been paid.

 

(k)           Surveys.  The relevant Administrative Agent shall have
received copies of all maps or plats or as-built surveys of the sites of the
applicable Mortgaged Properties that were delivered under the Existing Credit
Agreement and all other material documents affecting the Mortgaged Properties,
certified to the relevant Administrative Agents in a manner satisfactory to
them, dated a date satisfactory to the relevant Administrative Agent.

 

(l)            Flood
Check.  The U.S. Collateral Agent
shall have received a flood check satisfactory to the U.S. Collateral Agent and
satisfying the requirements of 42 U.S.C. § 4104b and any rules and regulating
promulgated provisions thereto.

 

(m)          Insurance.  The Administrative Agents shall have
received insurance certificates satisfying the requirements of
Section 5.2(c) of the U.S. Guarantee and Collateral Agreement and Section
4.2(c) of the Canadian Collateral Agreement.

 

(n)           Term
B Loan Payoff Letter.  The U.S.
Administrative Agent shall have received a payoff letter prepared by the
Existing Agents setting forth all amounts due and payable with respect to the
“U.S. Tranche B Term Loans” as defined in the Existing Credit Agreement and
otherwise in form and substance acceptable to the U.S. Administrative Agent.

 

(o)           Paid
Off Exiting Lender Payoff Letter. 
The U.S. Administrative Agent shall have received a payoff letter
prepared by the Existing Agents setting forth all amounts due and payable with
respect to the “U.S. Revolving Facilities” and the “Canadian Revolving
Facilities” (as defined in the Existing Credit Agreement) of the Paid Off
Exiting Lenders and otherwise in form and substance acceptable to the U.S.
Administrative Agent.

 

78

 

(p)           Agency
Resignation Letter.  The U.S.
Administrative Agent shall have received a letter prepared by the Existing
Agents resigning as such under the Existing Credit Agreement and otherwise in
form and substance acceptable to the U.S. Administrative Agent.

 

(q)           Request
for Initial Loans.  The U.S.
Administrative Agent and the Canadian Funding Agent shall have received
requests from the Borrowers to fund the initial loans in an amount sufficient
to pay the amounts to the Exiting Lenders specified in the Global Assignment
and Acceptance and to the Term B Lenders and the Paid Off Exiting Lenders
pursuant to the payoff letter with respect thereto.

 

(r)            Fees
and Expenses.   The Administrative
Agents, the U.S. Collateral Agent and the Canadian Collateral Agent shall have
received for itself all fees and other amounts due and payable by the Borrowers
on or prior to the Closing Date, including the reasonable fees and disbursements
of counsel to such Agents payable pursuant to Section 10.5.

 

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

 

(a)           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 such
representation and warranties expressly refer to an earlier date, in which case
they 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, submission of a notice of borrowing and issuance of
a Letter of Credit on behalf of either Borrower hereunder shall constitute a
representation and warranty by such Borrower as of the date of such extension
of credit that the conditions contained in this Section 5.2 have been
satisfied.

 

SECTION
6.  AFFIRMATIVE COVENANTS

 

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

 

6.1           Financial Statements.  Furnish to each Administrative Agent and
each Lender:

 

(a)           as
soon as available, but in any event within 90 days after the end of each fiscal
year of the U.S. Borrower, a copy of the audited consolidated balance sheet of
the

 

79

 

U.S. Borrower and its consolidated Subsidiaries as at
the end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative form
the figures for the previous year (provided that the electronic filing
of the U.S. Borrower’s annual report on Form 10-K shall satisfy the
foregoing requirement) reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the
audit, by KPMG 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 quarterly period of each fiscal year of the U.S. Borrower, the unaudited
consolidated balance sheet of the U.S. Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income for such quarter and the portion of the
fiscal year through the end of such quarter and cash flows for the portion of
the fiscal year through the end of such quarter, setting forth in each case in
comparative form for the 2004 fiscal year and each subsequent fiscal year the
figures for the previous year, certified by a Responsible Officer of the U.S.
Borrower as being fairly stated in all material respects (subject to normal
year-end adjustments), provided that (x) the electronic filing of the U.S.
Borrower’s quarterly report on form 10-Q shall satisfy the
requirement of this Section 6.1(b) in respect of each of the first three
quarterly periods of each fiscal year of the U.S. Borrower and (y) the
electronic filing of the U.S. Borrower’s quarterly earnings release (including
schedules detailing the unaudited consolidated condensed balance sheet of the
U.S. Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statement of income for such quarter)
shall satisfy the requirement of this Section 6.1(b) in respect of the
fourth quarter of each fiscal year of the U.S. Borrower.

 

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

 

6.2           Certificates; Other Information.  Furnish to each Administrative Agent (or, in
the case of clause (g), 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(a)
and (b) (except that the information described in clause (ii)(y) below need
only be delivered concurrently with the financial statements required by
Section 6.1(a)), (i) a certificate of a Responsible Officer of the U.S.
Borrower stating that, to the best of each such Responsible Officer’s
knowledge, each Loan Party during such period has observed or performed all of
its covenants and other agreements, and satisfied every

 

80

 

condition, contained in this Agreement and the other
Loan Documents to which it is a party to be observed, performed or satisfied by
it, and 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 Borrowers with the provisions
of this Agreement referred to therein as of the last day of the fiscal quarter
or fiscal year of the U.S. Borrower, as the case may be, and (y) to the
extent not previously disclosed to the Administrative Agents, a listing of any
change in name or jurisdiction of organization of any Loan Party, or of any
county, state or province within the United States or Canada where any Loan
Party keeps inventory or equipment with a book value in excess of $5,000,000
and of any Intellectual Property (except for (A) rights licensed to such
Loan Party pursuant to licenses for (1) computer software, or
(2) patents, copyrights, trademarks, service marks, technology, know-how
and/or processes which are embedded in equipment or fixtures,
(B) copyrights, trademarks, service marks, trade dress, technology,
know-how, inventions and/or processes for which no steps have been taken to
obtain registrations or patents and (C) each co-pack and joint promotions
agreement) acquired by any Loan Party since the date of the most recent list delivered
pursuant to this clause (y) (or, in the case of the first such list so
delivered, since the Closing Date);

 

(c)           as
soon as available, and in any event no later than 45 days after the end of each
fiscal year of the U.S. Borrower, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of the
U.S. Borrower and its Subsidiaries as of the end of each fiscal quarter of the
following fiscal year, the related quarterly consolidated statements of projected
cash flow and projected income and a description of the underlying assumptions
(including assumptions with respect to Capital Expenditures)) applicable
thereto (the “Projections”), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer of the U.S. Borrower
stating that such Projections are based on reasonable estimates, information
and assumptions and that such Responsible Officer has no reason to believe that
such Projections are incorrect or misleading in any material respect;

 

(d)           no
later than 5 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 Note Indenture;

 

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

 

(f)            promptly
upon receipt thereof, copies of all final reports submitted to either Borrower
by independent certified public accountants in connection with each annual,
interim or special financial audit of the books of such Borrower made by such
accountants, including without limitation, any final comment letter submitted
by such accountants to management in connection with their annual audit;

 

81

 

(g)           promptly
after the U.S. Borrower has notified the Administrative Agent of any intention
by the U.S. Borrower to treat the Loans and/or Letters of Credit and related
transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886
or any successor form; and

 

(h)           promptly,
such additional financial and other information as the U.S. Administrative
Agent on behalf of any Lender may from time to time reasonably request.

 

Promptly upon receipt of any of the forgoing information and reports
that, by the terms hereof or of its delivery to such Agent, have not been
furnished to the Lenders, the relevant Administrative Agent shall furnish
copies of such information and reports to the Lenders by electronic delivery or
such other medium reasonably selected by such Administrative Agent.

 

6.3           Payment of Obligations.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Group Member; provided that any failure to pay
Indebtedness shall only constitute an Event of Default as provided in
Section 8(e).

 

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

 

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

 

6.6           Inspection of Property; Books and
Records; Discussions. 
(a) Keep 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 dealings and transactions in relation to its business and
activities and (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 prior notice, at any reasonable time and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Group Members with officers
and employees of the Group Members and with their independent certified public
accountants.

 

6.7           Notices.  Promptly give notice to each Administrative
Agent and each Lender of:

 

82

 

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

 

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

 

(c)           any
litigation or proceeding affecting any Group Member (i) in which the
amount involved is $10,000,000 or more and not covered by insurance,
(ii) in which injunctive or similar relief is sought or (iii) which
relates to any Loan Document;

 

(d)           the
U.S. Borrower or any of its Subsidiaries becoming liable for remediation and/or
environmental compliance expenses and/or fines, penalties or other charges
which, in the aggregate, could reasonably be expected to result in payments by
the U.S. Borrower and its Subsidiaries (other than with the proceeds of
insurance) having a present value (based upon then applicable ABR) in excess of
$10,000,000;

 

(e)           the
following events, as soon as possible and in any event within 30 days after the
U.S. Borrower knows thereof: 
(i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by the
PBGC or the U.S. Borrower or any Commonly Controlled Entity or any
Multiemployer Plan to effectuate a withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and

 

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

 

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

 

6.8           Environmental
Management.

 

(a)           Comply
in all material respects with, and undertake all 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 ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

 

(b)           Handle,
store, and otherwise manage Materials of Environmental Concern, and undertake
all reasonable efforts to ensure that all tenants, subtenants, and others
handle, store, and otherwise manage Materials of Environmental Concern, in a
manner that does not, and is not reasonably likely to:  (i) give rise to any material liability
(including any material exacerbation of any existing condition) of any Group
Member

 

83

 

under any applicable Environmental Law; or
(ii) materially impair the fair saleable value (including any material
exacerbation of any existing condition) of any real property owned by any Group
Member.

 

(c)           Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.

 

6.9           Additional Collateral, etc.

 

(a)           With
respect to any property acquired after the Closing Date by any Group Member
(other than (x) any property described in paragraph (b) (or which
would have been described in paragraph (b) but for the dollar threshold therein),
(c), (d) or (e) below and (y) any property subject to a Lien expressly
permitted by Section 7.3(g)) as to which the relevant Collateral Agent,
for the benefit of, among others, the relevant Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the U.S. Collateral
Agent or the Canadian Collateral Agent, as appropriate, such amendments to the
relevant Guarantee and Collateral Agreement or such other documents as the
relevant Administrative Agent deems necessary or advisable to grant to the U.S.
Collateral Agent or the Canadian Collateral Agent, as appropriate, for the
benefit of, among others, the relevant Lenders, a security interest in such
property and (ii) take all actions necessary or advisable to grant to the
U.S. Collateral Agent or the Canadian Collateral Agent, as appropriate, for the
benefit of, among others, the Lenders, a first priority security interest in
such property subject to Liens permitted by Section 7.3, perfected to the
extent required by the relevant Guarantee and Collateral Agreement including
the filing of such financing statements in such jurisdictions as may be
required by the relevant Guarantee and Collateral Agreement or by law or as may
be requested by the applicable Collateral Agent.  Notwithstanding anything herein to the contrary, with respect to
(A) Intellectual Property of any Group Member which arises under laws of
countries (or political subdivisions thereof) other than the United States or
Canada, such Group Member shall not be required to comply with the foregoing
obligations, and (B) non-material Intellectual Property licensed to any
Group Member, such Group Member shall not be required to comply with the
foregoing obligations to the extent that (1) such Group Member does not
have the right under the applicable license or under applicable law to comply
with such obligations for such property, or (2) doing so would impair the
value of such property or otherwise subject such Group Member to material
penalties or liability.

 

(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 date hereof by
any Group Member (other than any such real property subject to a Lien expressly
permitted by Section 7.3(g)), promptly (or, in the case of any such
interest acquired prior to the Closing Date, on the Closing Date) (A) execute
and deliver a first priority Mortgage subject to Liens permitted by Section
7.3, in favor of the relevant Collateral Agent, for the benefit of, among
others, the relevant Lenders, covering such real property, (B) if
requested by the relevant Administrative Agent, provide such Lenders with
(x) title and extended coverage insurance covering such real property in
an amount at

 

84

 

least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the relevant
Administrative Agent) as well as a current ALTA survey thereof or equivalent
thereof satisfactory to the relevant Administrative Agent, together with a
surveyor’s certificate, (y) any consents or estoppels reasonably deemed
necessary or advisable by the relevant Administrative Agent in connection with
such Mortgage, each of the foregoing in form and substance reasonably
satisfactory to the relevant Administrative Agent and (z) environmental
reports or other evidence reasonably satisfactory to the relevant
Administrative Agent as to any potential liabilities under Environmental Laws
associated with such real property and (C) if requested by the relevant
Administrative Agent, deliver to the relevant 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 relevant
Administrative Agent.

 

(c)           With
respect to any new Subsidiary (other than a Foreign Subsidiary) created or
acquired after the Closing Date by any Group Member (which, for the purposes of
this paragraph (c), shall include any existing Subsidiary that ceases to
be a Foreign Subsidiary), promptly (i) execute and deliver to the relevant
Administrative Agent and the relevant Collateral Agent such amendments to the
U.S. Guarantee and Collateral Agreement or the Canadian Collateral Agreement,
as applicable, as the relevant Administrative Agent deems necessary or
advisable to grant to the relevant Collateral Agent, for the benefit of, among
others, the U.S. Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any Group Member, subject
to Liens permitted by Section 7.3 (ii) deliver to the relevant Collateral
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the relevant Group Member, (iii) cause such new Subsidiary (A) to
become a party to the U.S. Guarantee and Collateral Agreement, (B) to take
such actions necessary or advisable to grant to the relevant Collateral Agent
for the benefit of, among others, the U.S. Lenders a first priority security
interest subject to Liens permitted by Section 7.3 in the Collateral described
in the U.S. Guarantee and Collateral Agreement with respect to such new
Subsidiary which is perfected to the extent required by the U.S. Guarantee and
Collateral Agreement or Canadian Collateral Agreement, as applicable, including
the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the U.S. Guarantee and Collateral Agreement
or by law or as may be requested by the relevant Administrative Agent and
(C) to deliver to the relevant Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit E, with appropriate
insertions and attachments, and (iv) if requested by the relevant
Administrative Agent, deliver to the relevant 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 relevant
Administrative Agent.

 

(d)           With
respect to any new Foreign Subsidiary created or acquired after the Closing
Date by any Group Member (other than by any Group Member that is a Foreign
Subsidiary), promptly (i) execute and deliver to the relevant
Administrative Agent and the relevant Collateral Agent such amendments to the
U.S. Guarantee and Collateral

 

85

 

Agreement or such separate securities pledge
agreements substantially in the form of the Canadian Pledge Agreement, as
applicable, as the relevant Administrative Agent deems necessary or advisable
to grant to the relevant Collateral Agent, for the benefit of, among others,
the U.S. Lenders, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by any such Group Member, subject to
Liens permitted by Section 7.3 (provided that in no event shall more than 66%
of the total outstanding voting Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the relevant Collateral Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, and take such other action as may be necessary or, in
the opinion of the relevant Administrative Agent, desirable to perfect the
relevant Collateral Agent’s security interest therein, and (iii) if
requested by the relevant Administrative Agent, deliver to the relevant 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 relevant Administrative Agent.

 

(e)           With
respect to any new Foreign Subsidiary created or acquired after the Closing
Date by any Group Member, promptly (i) if such Group Member is a Foreign
Subsidiary, execute and deliver to the relevant Collateral Agent and the
relevant Administrative Agent such amendments to the Canadian Collateral Agreement
as the relevant Administrative Agent deems necessary or advisable to grant to
the relevant Collateral Agent, for the benefit of the Canadian Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Group Member, subject to Liens permitted by
Section 7.3, (ii) if such Group Member is a Foreign Subsidiary, deliver to
the relevant Collateral Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, (iii) cause such new
Subsidiary (A) to become a party to the Canadian Collateral Agreement,
(B) to take such actions necessary or advisable to grant to the relevant
Collateral Agent for the benefit of, among others, the Lenders a first priority
security interest subject to Liens permitted by Section 7.3 in the Collateral
described in the Canadian Collateral Agreement with respect to such new
Subsidiary which is perfected to the extent required by the Canadian Collateral
Agreement, including the filing of financing statements or other instruments in
such jurisdictions as may be required by the Canadian Collateral Agreement or
by law or as may be requested by the relevant Administrative Agent and
(C) to deliver to the relevant Collateral Agent and the relevant
Administrative Agent a certificate of such Subsidiary, substantially in the
form of Exhibit E, with appropriate insertions and attachments,
(iv) cause such new Subsidiary to become a Guarantor under and as defined
in the U.S. Guarantee and Collateral Agreement of the Obligations of the
Canadian Borrower, and (v) if requested by the relevant Administrative
Agent, deliver to the Collateral Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the relevant Administrative Agent.

 

6.10         Canadian Restructuring Transaction.  Notwithstanding anything to the contrary
herein or in the Security Documents, (i) in the event that the Borrowers
proceed with the

 

86

 

Canadian Restructuring Transaction (it being understood that the
Borrowers shall have no obligation to commence the Canadian Restructuring Transaction)
the taking by the Borrowers of the interim steps described in the Canadian
Restructuring Memorandum (or such other steps in connection therewith as shall
be approved by the U.S. Administrative Agent) shall not constitute a breach of
the terms of this Agreement or the Security Documents so long as the Borrower
complies with the following clause (ii), and (ii) the Borrowers need not take
any action otherwise required hereby (including action under Section 6.9) until
the earlier of (x) ten (10) days after the Canadian Restructuring Transaction
is completed, or (y) sixty (60) days following the commencement of the Canadian
Restructuring Transaction.  The U.S.
Collateral Agent hereby agrees that concurrently with the delivery by the
Borrowers of the various documentation required by Section 6.9 following
completion of the Canadian Restructuring Transaction, it will release its Lien
on the capital stock of the Canadian Borrower (but not its Lien on the capital
stock of the ultimate Canadian parent of the successor to the Canadian Borrower
contemplated by the Canadian Restructuring Transaction).  Upon the request of the U.S. Administrative
Agent, the Borrowers shall deliver to the U.S. Administrative Agent (a) copies
of the articles of incorporation, bylaws or other constituent documents for any
new Subsidiaries of the U.S. Borrower which exist following completion of the
Canadian Restructuring Transaction (to the extent such documents are not
delivered pursuant to the immediately preceding sentence), (b) an assumption
agreement (in form and substance reasonably satisfactory to the U.S.
Administrative Agent) executed by the successor to the Canadian Borrower and
(c) if requested by the U.S. Administrative Agent, legal opinions to the
matters described in clause (b) above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the U.S. Administrative
Agent.

 

SECTION
7.  NEGATIVE COVENANTS

 

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

 

7.1           Financial
Condition Covenants.

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  Q2, Q3 and Q4 of ‘04

  	
   

  	
  4.25
  to 1

  
	
  Q1, Q2, Q3 and Q4 of
  ‘05

  	
   

  	
  4.00
  to 1

  
	
  Q1 and Q2 of ‘06

  	
   

  	
  3.75
  to 1

  
	
  Q3 and Q4 of ‘06

  	
   

  	
  3.50
  to 1

  
	
  Q1 of ‘07 and thereafter

  	
   

  	
  3.25 to 1

  

 

87

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Senior

  Secured Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  Q2, Q3 and Q4 of ‘04

  	
   

  	
  2.25
  to 1

  
	
  Q1 of ‘05 and
  thereafter

  	
   

  	
  2.00
  to 1

  

 

(c)           Consolidated
Fixed Charge Coverage Ratio.  Permit
the Consolidated Fixed Charge Coverage Ratio, for the four consecutive fiscal
quarters of the U.S. Borrower ending on or about August 31, 2003 and for each
period of four consecutive fiscal quarters ending thereafter, to be less than
1.25 to 1.00.

 

(d)           Consolidated
Asset Base.  Permit the Consolidated
Asset Base as of the last day of any fiscal quarter to be less than the
Revolving Extensions of Credit on such day, provided that the foregoing
requirement shall not apply for any fiscal quarter for which the Consolidated
Senior Secured Leverage Ratio was less than 1.25 to 1.00 as of the last day of
the two fiscal quarters ended on and immediately prior to such date for the
four fiscal quarters ended on each such date.

 

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

 

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

 

(b)           (i) Indebtedness
of the U.S. Borrower to any of its Subsidiaries and of any U.S. Wholly Owned
Subsidiary Guarantor to the U.S. Borrower or any of its Subsidiaries,
(ii) Indebtedness of the Canadian Borrower to any of its Subsidiaries and
of any Canadian Wholly Owned Subsidiary Guarantor to the Canadian Borrower or
to any of its Subsidiaries, (iii) Indebtedness of the U.S. Borrower to any
of its Subsidiaries and of any Subsidiary of the U.S. Borrower to the U.S.
Borrower or to any other Subsidiary of the U.S. Borrower constituting the
deferred purchase price of inventory acquired in the ordinary course of
business consistent with prior practice and (iv) Indebtedness of any
Subsidiary of the U.S. Borrower to the U.S. Borrower or to any other Subsidiary
of the U.S. Borrower not otherwise permitted by this clause (b) in an
aggregate principal amount (for all such Subsidiaries), when added to the then
outstanding Guarantee Obligations permitted under Section 7.2(c)(iii), not
to exceed $25,000,000 (or, in the case of any Indebtedness that is denominated
in Canadian Dollars, the Dollar Equivalent thereof) at any time outstanding;

 

(c)           Guarantee
Obligations incurred in the ordinary course of business by (i) the U.S.
Borrower or any of its Subsidiaries of Indebtedness of the U.S. Borrower or any
U.S. Wholly Owned Subsidiary Guarantor, (ii) the Canadian Borrower or any
of its

 

88

 

Subsidiaries of Indebtedness of the Canadian Borrower
or any Canadian Wholly Owned Subsidiary Guarantor and (iii) the U.S.
Borrower or any of its Subsidiaries that are not permitted by either
clause (i) or clause (ii) of this paragraph (c), provided that
the aggregate amount of all such Guarantee Obligations incurred as permitted by
this clause (iii), when added to the aggregate amount of the then outstanding
Indebtedness permitted under Section 7.2(b)(iv), shall not exceed
$25,000,000 (or, in the case of any Guarantee Obligations that are denominated
in Canadian Dollars, the Dollar Equivalent thereof) at any time outstanding;

 

(d)           Indebtedness
outstanding on the date hereof and listed on Schedule 7.2(d).

 

(e)           Indebtedness
(including, without limitation, Capital Lease Obligations) secured by Liens
permitted by Section 7.3(g) in an aggregate principal amount not to exceed
$10,000,000 at any one time outstanding;

 

(f)            Indebtedness
of the U.S. Borrower in respect of the Senior Notes in an aggregate principal
amount not to exceed $200,000,000;

 

(g)           Hedge
Agreements, provided that (i) such Hedge Agreement relating to
interest rates may only be entered into in respect of Indebtedness otherwise
permitted hereby and (ii) no such Hedge Agreement may be entered into for
speculative purposes;

 

(h)           Indebtedness
to be incurred pursuant to the Canadian Restructuring Transaction, provided
that no such Indebtedness in favor of any Person that is not an Affiliate of
the U.S. Borrower may remain outstanding for longer than one day;

 

(i)            Indebtedness
incurred in connection with any Securitization Transaction by any Affiliate of
the U.S. Borrower that is a special purpose vehicle established for the purpose
of such transaction;

 

(j)            limited
recourse Guarantee Obligations (ie, Guarantee Obligations that are limited to a
guaranty of the validity and enforceability of the assets transferred pursuant
to such Securitization Transaction) incurred by the U.S. Borrower or any
Subsidiary of the U.S. Borrower (other than a special purpose vehicle
established for the purpose of such transaction) in connection with any
Securitization Transaction; and,

 

(k)           additional
unsecured Indebtedness (other than Guarantee Obligations) in favor of any
Person that is not an Affiliate of the U.S. Borrower or any of its
Subsidiaries.

 

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

 

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

 

89

 

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

 

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

 

(d)           deposits
to secure the performance of bids, trade contracts (other than for borrowed
money), grain hedging accounts, leases, 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, are not substantial in
amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the U.S. Borrower or any of its Subsidiaries;

 

(f)            Liens
in existence on the date hereof and listed on Schedule 7.3(f);

 

(g)           Liens
securing Indebtedness of the U.S. Borrower or any Subsidiary thereof incurred
pursuant to Section 7.2(e) 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 financed by such Indebtedness and (iii) the 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 U.S. Borrower
or any Subsidiary thereof in the ordinary course of its business and covering
only the assets so leased;

 

(j)            Liens
granted in connection with any Securitization Transaction by any Affiliate of
the U.S. Borrower that is a special purpose vehicle established for the purpose
of such transaction;

 

(k)           Permitted
Canadian Real Property Liens; and

 

(l)            Permitted
U.S. Real Property Liens.

 

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:

 

(a)           (i) any
Subsidiary of the U.S. Borrower (other than the Canadian Borrower or any of its
Subsidiaries) may be merged or consolidated with or into the U.S.

 

90

 

Borrower (provided that the U.S. Borrower shall
be the continuing or surviving corporation) or with or into any U.S. Wholly
Owned Subsidiary Guarantor (provided that such U.S. Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation) and
(ii) any Subsidiary of the Canadian Borrower may be merged or consolidated
with or into the Canadian Borrower (provided that the Canadian Borrower
shall be the continuing or surviving corporation) or with or into any Canadian
Wholly Owned Subsidiary Guarantor (provided that such Canadian Wholly
Owned Subsidiary Guarantor shall be the continuing or surviving corporation);

 

(b)           (i) any
Subsidiary of the U.S. Borrower may Dispose of any or all of its assets
(A) to the U.S. Borrower or any U.S. Wholly Owned Subsidiary Guarantor
(upon voluntary liquidation or otherwise) or (B) pursuant to a Disposition
permitted by Section 7.5 and (ii) any Subsidiary of the Canadian
Borrower may Dispose of any or all of its assets (A) to the Canadian
Borrower or any Canadian Wholly Owned Subsidiary Guarantor (upon voluntary
liquidation or otherwise) or (B) pursuant to a Disposition permitted by
Section 7.5;

 

(c)           any
acquisition permitted under Section 7.8(f) or (j) may be consummated by
merger or consolidation with or into the U.S. Borrower or any Subsidiary
thereof (provided that the U.S. Borrower shall be the continuing or
surviving corporation in any such merger involving the U.S. Borrower); and

 

(d)           the
Borrowers may consummate the Canadian Restructuring Transaction, so long as
such Canadian Restructuring Transaction is consummated on or prior to December
31, 2003.

 

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

 

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

 

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

 

(c)           Dispositions
(i) permitted by Section 7.4(b) and (ii) in connection with
Investments permitted by Section 7.8;

 

(d)           (i) the
sale or issuance of the Capital Stock of any Subsidiary of the U.S. Borrower to
the U.S. Borrower or any U.S. Wholly Owned Subsidiary Guarantor and
(ii) the sale or issuance of the Capital Stock of any Subsidiary of the
Canadian Borrower to the Canadian Borrower or any Canadian Wholly Owned
Subsidiary Guarantor;

 

(e)           the
Disposition of other property having a fair market value not to exceed
$40,000,000 in the aggregate during any fiscal year of the U.S. Borrower,
excluding the sales permitted by Section 7.5(g);

 

91

 

(f)            Dispositions
contemplated in connection with the Canadian Restructuring Transaction; and

 

(g)           the
sale of certain assets of a Canadian Subsidiary Guarantor related to its pie
products business to be made pursuant to the Asset Purchase Agreement dated as
of June 25, 2003 between Gourmet Baker, Inc. and Weston Foods, Inc. in the form
furnished to the Administrative Agents, provided that such sale is consummated
by December 31, 2003 and the sale of the related plant (including machinery and
equipment) in Simcoe, Ontario, Canada at any time thereafter.

 

7.6           [Reserved].  

 

7.7           [Reserved].

 

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

 

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

 

(b)           investments
in Cash Equivalents;

 

(c)           Guarantee
Obligations permitted by Section 7.2, Permitted MDM Guaranty Obligations
and other Guarantee Obligations by (i) the U.S. Borrower or any of its
Subsidiaries of obligations (other than Indebtedness, which is covered in
Section 7.2) of the U.S. Borrower or any U.S. Wholly Owned Subsidiary
Guarantor, (ii) the Canadian Borrower or any of its Subsidiaries of obligations
(other than Indebtedness) of the Canadian Borrower or any Canadian Wholly Owned
Subsidiary Guarantor and (iii) the U.S. Borrower or any of its Subsidiaries
that are not permitted by either clause (i) or clause (ii) of this paragraph
(c), provided that (x) the aggregate amount of all such Guarantee Obligations
incurred as permitted by this clause (iii) shall not exceed $10,000,000 (or, in
the case of any Guarantee Obligations that are denominated in Canadian Dollars,
the Dollar Equivalent thereof) at any time outstanding and (y) the obligations
referred to in clauses (i), (ii) and (iii) of this paragraph (c) are not
prohibited hereby;

 

(d)           loans
and advances to employees of any Group Member in the ordinary course of
business (including for travel, entertainment and relocation expenses) in an
aggregate amount for all Group Members not to exceed $5,000,000 at any one time
outstanding;

 

(e)           Investments
in connection with the Canadian Restructuring Transaction;

 

(f)            (i) Investments
in assets (including through the purchase of Capital Stock of any Person)
useful in the business of the U.S. Borrower and its Subsidiaries made by the
U.S. Borrower or any of its Subsidiaries with the proceeds of any Reinvestment
Deferred Amount derived from assets owned by the U.S. Borrower or any of its

 

92

 

Subsidiaries (other than the Canadian Borrower or any
of its Subsidiaries) and (ii) Investments in assets (including through the
purchase of Capital Stock of any Person) useful in the Subsidiaries (other than
the Canadian Borrower or any of its business of the Canadian Borrower and its
Subsidiaries made by the Canadian Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount derived from assets owned by the
Canadian Borrower or any of its Subsidiaries;

 

(g)           (i) intercompany
Investments by any Subsidiary of the U.S. Borrower in the U.S. Borrower or any
Person that, prior to such investment, is a U.S. Wholly Owned Subsidiary
Guarantor and (ii) intercompany Investments by any Subsidiary of the
Canadian Borrower in the U.S. Borrower, the Canadian Borrower or any Person
that, prior to such investment, is a Wholly Owned Subsidiary Guarantor;

 

(h)           intercompany
loans permitted by Section 7.2(b);

 

(i)            Investments
by the U.S. Borrower or any of its Subsidiaries in any Wholly Owned Subsidiary
Guarantor;

 

(j)            Investments
in connection with any Securitization Transaction with respect to any Affiliate
of the U.S. Borrower that is a special purpose vehicle established for the
purpose of such transaction; and

 

(k)           in addition to Investments otherwise expressly
permitted by this Section, Investments by the U.S. Borrower or any of its
Subsidiaries in an aggregate amount (valued at cost) not to exceed during the
term of this Agreement $40,000,000 plus the proceeds of any disposition
under Section 7.5(g), provided for purposes of computing the foregoing
sum there shall be disregarded any investments made under this subsection (k)
during any period (x) commencing on the date financial statements of the U.S.
Borrower and its consolidated Subsidiaries are delivered under Section 6.1(b)
showing that the Consolidated Leverage Ratio as of the last day of the two
consecutive fiscal quarters ended immediately preceding such delivery was less
than 3.25 to 1.0 and (y) terminating on the date financial statements of the
U.S. Borrower and its consolidated Subsidiaries are delivered under Section
6.1(b) showing that the Consolidated Leverage Ratio as of the last day of the
fiscal quarter ended immediately preceding such delivery was 3.25 to 1.0 or
greater.

 

7.9           Optional Payments and
Modifications of Certain Debt Instruments; Synthetic Purchase
Agreements.  (a) Make or offer
to make any optional or voluntary payment, prepayment, repurchase or redemption
of or otherwise optionally or voluntarily defease or segregate funds with
respect to the Senior Notes; (b) amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or other change to,
any of the terms of the Senior Notes (other than any such amendment,
modification, waiver or other change that (i) would extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon and (ii) does not involve
the payment of a consent fee; or (c) enter into or be party to, or make
any payment under, any Synthetic Purchase Agreement.

 

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7.10         Transactions with Affiliates.  Enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrowers or any Wholly Owned Subsidiary Guarantor and other
than contributions to the Foundation and other than with any Affiliate of the
U.S. Borrower that is a special purpose vehicle established for the sole
purpose of a Securitization Transaction) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary
course of business of the relevant Group Member, and (c) upon fair and
reasonable terms no less favorable to the relevant Group Member than it would
obtain in a comparable arm’s length transaction with a Person that is not an
Affiliate.

 

7.11         Sales and Leasebacks.  Enter into any arrangement after the date
hereof with any Person providing for the leasing by any Group Member of real or
personal property that has been or is to be sold or transferred by such Group
Member to such Person or to any other Person to whom funds have been or are to
be advanced by such Person on the security of such property or rental
obligations of such Group Member unless such arrangement is entered into in
connection with (x) the financing of the acquisition of such property
through the proceeds of a Capital Lease Obligation permitted by
Section 7.2(e) and the sale or transfer of such property occurs within
thirty days following the acquisition thereof by the U.S. Borrower or any of
its Subsidiaries or (y) the sale or transfer of such property to a
Governmental Authority which is financed by the issuance of tax-exempt bonds or
other debt instruments issued by such Governmental Authority, provided
that such property is contemporaneously leased to the U.S. Borrower or any of
its Subsidiaries and provided, further, that the aggregate fair
market value of the property subject of all such sales or transfers consummated
pursuant to this clause (y) shall not exceed $15,000,000.

 

7.12         Changes in Fiscal Periods.  Permit the fiscal year of the U.S. Borrower
to end on a day other than the Saturday closest to the last day of February or
change the U.S. Borrower’s method of determining fiscal quarters.

 

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

 

7.14         Clauses Restricting Subsidiary
Distributions.  Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the U.S. Borrower (other than a
Subsidiary of the U.S. Borrower that is a special purpose vehicle established
for the purpose of a Securitization Transaction) to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the U.S. Borrower or any Subsidiary of the U.S. Borrower,
(b) make loans or advances to, or other Investments in, the U.S. Borrower
or any Subsidiary of the U.S. Borrower or (c) transfer any of its assets
to the U.S. Borrower or any Subsidiary of the U.S. Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents, and (ii) any restrictions with respect
to a Subsidiary imposed pursuant to an

 

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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.

 

7.15         Lines of Business.  Enter into any business, either directly or through any
Subsidiary, except for those businesses in which the Borrowers and their
respective Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.

 

SECTION
8.  EVENTS OF DEFAULT

 

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

 

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

 

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

 

(c)           (i) any Loan Party shall default
in the observance or performance of any agreement contained in clause (i)
or (ii) of Section 6.4(a) (with respect to the Borrowers only),
Section 6.7(a), 6.10 or Section 7 of this Agreement, Sections 5.5
or 5.7(b) of the U.S. Guarantee and Collateral Agreement or Sections 4.5 or
4.7(b) of the Canadian Collateral Agreement or (ii) an “Event of Default”
under and as defined in any Mortgage shall have occurred and be continuing; or

 

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

 

(e)           any Group Member shall
(i) default in making any payment of any principal of any Indebtedness
(including any Guarantee Obligation, but excluding the Loans) on the scheduled
or original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause such Indebtedness to become due prior to its stated maturity or (in

 

95

 

the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided that a default, event
or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred
and be continuing with respect to Indebtedness the outstanding principal amount
of which exceeds in the aggregate $10,000,000 (or the Canadian Dollar
Equivalent thereof); or

 

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

 

(g)           (i) any Person shall engage in
any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan that is not exempt under Section 408 of
ERISA or Section 4975 of the Code, (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 U.S. Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the 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 U.S. Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (1) through (vi)
above, such event or condition,

 

96

 

together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or

 

(h)           one or more judgments or decrees
shall be entered against any Group Member involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $10,000,000 (or the Canadian
Dollar Equivalent thereof) 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
at any time after the execution and delivery thereof cease, for any reason, to
be in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall at any time after the execution and delivery thereof cease to be
enforceable and of the same effect and priority purported to be created thereby
(other than by reason of the action or inaction of either Administrative Agent
or any Lender); or

 

(j)            the guarantee contained in
Section 2 of the U.S. Guarantee and Collateral Agreement shall at any time
after the execution and delivery thereof be (i) revoked or purported to be
revoked by any Loan Party or (ii) cease, for any reason (other than by reason
of the action or inaction of either Administrative Agent or any Lender or as a
result of a transaction permitted hereby), to be in full force and effect or
any Loan Party or any Affiliate of any Loan Party shall so assert; or

 

(k)           (i) any “person” or “group” (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), shall become, or obtain
rights (whether by means of warrants, options or otherwise) to become, the
“beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 40% of the
outstanding common stock of the U.S. Borrower; or (ii) the board of
directors of the U.S. Borrower shall cease to consist of a majority of
Continuing Directors; or

 

(1)           the U.S. Borrower or any of its
Subsidiaries shall become liable for remediation and/or environmental
compliance expenses and/or fines, penalties or other charges which, in the
aggregate, could reasonably be expected to result in payments by the U.S.
Borrower and its Subsidiaries (other than with the proceeds of insurance)
having a present value (based upon then applicable ABR) in excess of
$10,000,000;

 

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 either Borrower, automatically the Commitments shall immediately
terminate and the Loans (including the face amount of all Bankers’ Acceptances
accepted by any Canadian Lender), with accrued interest thereon, and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event
is any other Event of Default, either or both of the following actions may be
taken:  (i) with the consent of the
Required Lenders, the Administrative Agents may, or upon the request of the

 

97

 

Required Lenders, the Administrative Agents shall, by notice to the
Borrowers declare the Revolving Commitments, the U.S. Swingline Commitment and
the Canadian Swingline Commitment to be terminated forthwith, whereupon the
Revolving Commitments, the U.S. Swingline Commitment and the Canadian Swingline
Commitment shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agents may, or upon the request of the
Required Lenders, the Administrative Agents shall, by notice to the Borrowers,
declare the Loans hereunder (including the face amount of all Bankers’
Acceptances accepted by any Canadian Lender), 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 the Borrowers to be due and
payable forthwith, whereupon the same shall immediately become due and payable.

 

With respect to all Bankers’ Acceptances which are
outstanding at the time the Administrative Agents take any action pursuant to
this paragraph, the Canadian Borrower shall at such time deposit in a cash
collateral account opened by Canadian Funding Agent an amount of cash equal to
the aggregate undiscounted face amount of all unmatured Bankers’
Acceptances.  Amounts held in such cash
collateral account shall be applied by the Canadian Funding Agent to the
payment of maturing Bankers’ Acceptances, and the unused portion thereof after
all such Bankers’ Acceptances shall have matured, if any, shall be applied to
repay other obligations of the Canadian Borrower hereunder and under the Loan
Documents.  After all Bankers’
Acceptances shall have been satisfied and all other obligations of the Canadian
Borrower hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Canadian Borrower (or such other Person as may be lawfully entitled
thereto).

 

With respect to 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 relevant Borrower shall at such time
deposit in a cash collateral account opened by the U.S. Administrative Agent or
the Canadian Funding Agent, as applicable, 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 U.S. Administrative Agent or the Canadian Funding
Agent, as applicable, 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 relevant 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 relevant
Borrower hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the relevant Borrower (or such other Person as may be lawfully entitled
thereto).  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrowers.

 

98

 

SECTION
9.  THE AGENTS

 

9.1           Appointment.

 

(a)           Each
U.S. Lender hereby irrevocably designates and appoints the U.S. Administrative
Agent as the agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes the U.S. 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 U.S. Administrative Agent
by the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto.  Each Canadian Lender hereby irrevocably designates and appoints
the Canadian Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Canadian 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 Canadian Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Each Lender hereby
irrevocably designates and appoints the U.S. Collateral Agent as the collateral
agent of such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes the U.S. Collateral 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 U.S. Collateral Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. 
Each Lender hereby irrevocably designates and appoints the Canadian
Collateral Agent as the Canadian Collateral Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Canadian Collateral 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 Canadian Collateral Agent by the terms of this Agreement and
the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Each Lender hereby
irrevocably designates and appoints the Canadian Funding Agent as the Canadian
Funding Agent of such Lender under this Agreement and the other Loan Documents,
and each such Lender irrevocably authorizes the Canadian Funding 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 Canadian Funding 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, none of the Agents shall 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 any Agent.

 

99

 

(b)           For
greater certainty, and without limiting the powers of the Canadian Collateral
Agent hereunder or under any of the other Loan Documents, each of the Lenders
hereby acknowledges that the Canadian Collateral Agent shall, for purposes of
holding any security granted by the Canadian Borrower or any Canadian
Subsidiary Guarantor on their respective property pursuant to the laws of the
Province of Quebec to secure payment of the bond issued by the Canadian
Borrower or any such Canadian Subsidiary Guarantor pursuant to the Quebec
Security Documents and pledged in favor of the Canadian Collateral Agent (the “Bond”),
be the holder of an irrevocable power of attorney (fonde de pouvoir) (within the meaning of the Civil Code of Quebec) for all present and
future Lenders and in particular for all present and future holders of the
Bond.  Each of the Administrative Agents
and the Lenders hereby irrevocably constitutes, to the extent necessary, the
Canadian Collateral Agent as the holder of an irrevocable power of attorney (fonde de pouvoir) (within the meaning of
Article 2692 of the Civil Code of
Quebec) in order to hold security granted by the Canadian Borrower
or any Canadian Subsidiary Guarantor in the Province of Quebec to secure the
Bond.  Each Assignee shall be deemed to
have confirmed and ratified the constitution of the Canadian Collateral Agent
as the holder of such irrevocable power of attorney (fonde de pouvoir) by execution of this Agreement or the
relevant Assignment and Acceptance. 
Notwithstanding the provisions of Section 32 of the Special Corporate Powers Act (Quebec), the
Canadian Collateral Agent may acquire and be the holder of the Bond.  The Canadian Borrower, for itself and for
each Canadian Subsidiary Guarantor, hereby acknowledges that the Bond
constitutes a title of indebtedness, as such term is used in Article 2692
of the Civil Code of Quebec.  Anything in this Section 9.1(b) to the
contrary notwithstanding, the Canadian Collateral Agent agrees that it will not
exercise any rights under the irrevocable power of attorney (fonde de pouvoir) provided in this
Section 9.1(b) unless an Event of Default shall have occurred and be
continuing.

 

9.2           Delegation of Duties.  Each of the Administrative Agents, the
Canadian Funding Agent and the Collateral Agents 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.  None
of the Administrative Agents, the Canadian Funding Agent or the Collateral
Agents shall 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 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

 

100

 

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 Agents.  Each of the Administrative Agents, the
Canadian Funding Agent and the Collateral Agents shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrowers), independent accountants and other experts selected
by such Administrative Agent, Canadian Funding Agent or such Collateral Agent,
as the case may be.  Each 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 such Administrative Agent. 
Each of the Administrative Agents, the Canadian Funding Agent and the
Collateral Agents 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 relevant Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or continuing
to take any such action.  Each of the
Administrative Agents, the Canadian Funding Agent and the Collateral Agents
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 relevant 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.  No Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless such Agent has received
notice from a Lender, or either Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that any Agent
receives such a notice, such Agent shall give notice thereof to the Lenders and
the other Agents.  The Administrative
Agents and the Collateral Agents shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the relevant
Required Lenders (or, if so specified by this Agreement, all Lenders); provided
that unless and until the Administrative Agents or such Collateral Agents shall
have received such directions, the Administrative Agents or Collateral Agents
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders (except that, in any case where
this Agreement or any other Loan Document expressly requires that such action
be taken, or not be taken, only with consent or upon the authorization of the
relevant Required Lenders, the relevant Majority Facility Lenders, or all of
the Lenders, the Administrative Agents or Collateral Agents may take such
action, or refrain from taking such action, only if it shall have received such
consent or authorization).

 

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

 

101

 

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 either
Administrative Agent or Collateral Agent hereunder or under the other Loan
Documents, no Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party or any affiliate of a Loan Party that may come into the
possession of such 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 the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (whether
before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that 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.

 

102

 

9.9           Successor Agents.  Either Administrative Agent, the Canadian Funding Agent or either
Collateral Agent may resign as such Administrative Agent, the Canadian Funding
Agent or such Collateral Agent upon 30 days’ notice to the relevant Lenders, the
other Agents and the relevant Borrower. 
If either Administrative Agent, the Canadian Funding Agent or either
Collateral Agent shall resign as such under this Agreement and the other Loan
Documents, then the relevant Required Lenders shall appoint from among the
relevant Lenders a successor agent for the relevant Agent, which successor
agent shall (unless an Event of Default under Section 8(a) or
Section 8(f) with respect to the Borrowers shall have occurred and be
continuing) be subject to approval by the relevant Borrower (which approval
shall not be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the relevant Agent, and the
term “U.S. Administrative Agent”, “Canadian Administrative Agent”, “Canadian
Collateral Agent”, “U.S. Collateral Agent” or “Canadian Funding Agent”, as the
case may be, shall mean such successor agent effective upon such appointment
and approval, and the former Agent’s rights, powers and duties as such Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement or any holders of the
Loans.  Nevertheless, upon the
reasonable written request of the relevant successor Agent, the resigning Agent
shall execute and deliver a document assigning and transferring to such
successor Agent all of the rights, interests and powers of such resigning Agent
under this Agreement and under any other applicable Loan Documents to which
such resigning Agent is a party, and shall duly assign, transfer and deliver
all property and money held by such resigning Agent pursuant hereto or thereto
to the successor Agent so appointed in its place.  If any deed, conveyance or other document in writing from any
Loan Party is required by any successor Agent for the purpose of more fully and
certainly vesting in and confirming to such successor Agent such properties,
rights, interests and powers, then the Borrowers shall execute and deliver or
cause to be executed and delivered any and all such deeds, conveyances,
acknowledgments and other documents as may be reasonably requested from time to
time by such successor Agent.   If no
successor agent has accepted appointment as Administrative Agent, Canadian
Funding Agent or Collateral Agent by the date that is 10 days following a
retiring Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective, and the relevant Lenders shall assume
and perform all of the duties of the relevant Agent hereunder until such time,
if any, as the relevant Required Lenders appoint a successor agent as provided
for above.  After any retiring Agent’s
resignation as such 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
such Agent under this Agreement and the other Loan Documents.

 

9.10         Notices to Canadian
Administrative Agent.   The
Canadian Funding Agent and the Canadian Swingline Lender shall promptly furnish
to the Canadian Administrative Agent with written notice of any payments
required to be made by the Canadian Borrower to the Canadian Funding Agent
pursuant to this Agreement that are not timely made.

 

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,

 

103

 

the Administrative Agents and each Loan Party party to the relevant
Loan Document may, from time to time, (a) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Administrative Agents, 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) 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, or
change the scheduled payment date, of any interest or fee payable hereunder
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with
the written consent of the Majority Facility Lenders of each adversely affected
Facility) and (y) 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 Commitment, in each case without the written
consent of each Lender directly 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
either 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 any Guarantor that is a “significant subsidiary” under
Regulation S-X promulgated under the Securities and Exchange Act of
1934, as amended, from its obligations under the Guarantee and Collateral
Agreements, in each case without the written consent of all Lenders;
(iv) amend, modify or waive any provision of Section 2.18(e) or (f)
or Section 2.24 without the written consent of the Majority Facility
Lenders in respect of each Facility adversely affected thereby; (v) reduce
the amount of Net Cash Proceeds required to be applied to prepay Loans under
this Agreement without the written consent of the Majority Facility Lenders
with respect to each Facility; (vi) 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; (vii) amend,
modify or waive any provision of Section 9 without the written consent of
each Agent affected thereby; (viii) amend, modify or waive any provision
of Section 2.13(a) or 2.14(a) without the written consent of the Canadian
Swingline Lender, (ix) amend, modify or waive any provision of
Section 2.13(b) or 2.14(b) without the written consent of the U.S.
Swingline Lender; or (ix) amend, modify or waive any provision of
Section 3 or the last paragraph of Section 8 without the written consent
of each Issuing Lender affected thereby. 
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 Agents and all future holders of the
Loans.  In the case of any waiver, the
Loan Parties, the Lenders and the Administrative Agents shall be restored to
their former position and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

 

10.2         Notices.  All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly

 

104

 

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 (a) in
the case of the Borrowers, the Administrative Agents, the Canadian Funding
Agent, the Collateral Agents and the Issuing Lenders, as follows, (b) in the
case of the Lenders, as set forth in the signature page hereto for such Lenders
or, in the case of a Lender which becomes a party to this Agreement pursuant to
an Assignment and Acceptance, in such Assignment and Acceptance or (c) in the
case of any Party, to such other address as such party may hereafter notify the
other parties hereto:

 

	
  U.S. Borrower

  	
  International Multifoods Corporation

  110 Cheshire Lane

  Suite 300

  Minnetonka, MN 55305

  Attention:  Vice President and
  Treasurer

  Telecopy:  952-594-3362

  Telephone:  952-594-3322

  
	
   

  	
   

  
	
  Canadian Borrower

  	
  Robin Hood Multifoods Inc.

  60 Columbia Way

  Markham, Ontario, L3R 0C9

  Attention:  Vice President, Finance
  and Treasurer

  Telecopy:  905-940-0742

  Telephone:  905-940-5919

  
	
   

  	
   

  
	
  In the case of either

  Borrower with a copy to:

  	
  International Multifoods Corporation

  110 Cheshire Lane

  Suite 300

  Minnetonka, Minnesota 55305

  Attention:  General Counsel

  Telecopy:  952-594-3367

  Telephone:  952-594-3579

  
	
   

  	
   

  
	
  U.S. Administrative Agent,

  Canadian Administrative Agent

  U.S. Issuing Lender and

  U.S. Collateral Agent

  	
  U.S. Bank National Association

  800 Nicollet Mall

  Minneapolis, MN 55402

  Attention:  David Draxler

  Telecopy:  612-303-2265

  Telephone:  612-303-3765

  
	
   

  	
   

  
	
  Canadian Collateral Agent 

  	
  The Bank of Nova Scotia

  40 King Street West,

  Scotia Plaza, 62nd Floor

  Toronto, ONT. M5W 2X6

  Attention: Managing Director Consumer Products

  Telecopy: 416-866-2009

  Telephone: 416-866-6078

  

 

105

 

	
  Canadian Funding Agent

  	
  The Bank of Nova Scotia

  720 King Street West, 4th Floor

  Toronto, ON M5V 2T3

  Attention:  Loan Administration &
  Agency Services

  Telecopy: 416-866-5991

  
	
  Canadian Issuing Lender and Canadian Swingline
  Lender

  	
  Canadian Imperial Bank of Commerce

  199 Bay Street

  Commerce Court West, 3rd Floor

  Toronto, Ontario M5L 1A2

  Attention:  Patrick Ng

  Facsimile:  (416) 861-9295

  

 

provided that any notice, request or
demand to or upon the Agents, the Issuing Lenders or the Lenders shall not be
effective until received.

 

10.3         No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of 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 and Taxes.  The Borrowers agree (a) to pay or
reimburse the Administrative Agents, the U.S. Collateral Agent and the Canadian
Collateral Agent and the Arranger for all their respective out-of-pocket costs
and expenses incurred in connection with the syndication of the Facilities and
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of U.S. and Canadian counsel to the
Administrative Agents and the U.S. Collateral Agent and Canadian counsel to the
Canadian Collateral Agent and filing and recording fees and expenses, with
statements with respect to the foregoing to be submitted to the Borrowers prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agents shall deem appropriate, (b) to pay or
reimburse each of the Lenders and the Agents for all its costs and incurred
expenses in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents (including
those incurred in connection with any credit restructuring or any “workout”
relating to the Obligations), including the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to each Administrative Agent, (c) to pay, indemnify, and
hold each of the Lenders, the

 

106

 

Administrative Agents, the Canadian Funding Agent and each Collateral
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each of the Lenders, the Administrative
Agents, the Canadian Funding Agent, each Collateral Agent, each Issuing Lender
and the Arranger and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of any
Group Member or any of the facilities and properties owned, leased or operated
by any Group Member and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”), provided that the
Borrowers shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.  Without limiting the
foregoing, and to the extent permitted by applicable law, each Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries 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 not
later than 10 days after written demand therefor.  Statements payable by each Borrower pursuant to this Section
shall be submitted to the Treasurer of the U.S. Borrower (Telephone
No. 952-594-3322) (Telecopy No. 952-594-3362),
at the address of the U.S. Borrower set forth in Section 10.2, or to such
other Person or address as may be hereafter designated by such Borrower in a
written notice to the relevant Administrative Agent.  The agreements in this Section shall survive repayment of the
Loans and all other amounts payable hereunder.

 

10.6         Successors and Assigns;
Participations and Assignments.

 

(a)           This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Administrative Agents, the Canadian Funding Agent, the Issuing
Lenders, the Collateral Agents, all future holders of the Loans and their
respective successors and assigns, except that neither Borrower may assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each U.S. Lender or Canadian Lender, as the case may
be.

 

(b)           Any
Lender may, without the consent of either Borrower, in accordance with
applicable law, at any time sell to one or more banks, financial institutions
or other

 

107

 

entities (each, a “Participant”) participating
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.  In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender shall
remain the holder of any such Loan for all purposes under this Agreement and
the other Loan Documents, and the relevant Borrower and the relevant
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents. 
In no event shall any Participant under any such participation have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would:  reduce the principal of, or interest on, the Loans or any fees
payable hereunder; postpone the date of the final maturity of the Loans, the
scheduled date of amortization of any Term Loan or the scheduled date of any
payment of interest or fees on the Loans; release all or substantially all of
the Collateral; release all or substantially all of the Guarantors from their
obligations under the Guarantee and Collateral Agreements; or increase the
amount or extend the expiration date of any Lender’s Revolving Commitment, in
each case described in this sentence to the extent subject to such
participation.  Each Borrower agrees
that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
Section 10.7(a) as fully as if it were a Lender hereunder.  Each Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.25, 2.26, 2.27
and 10.5(d) with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in
the case of Section 2.26, such Participant shall have complied with the
requirements of such Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any
such Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.

 

(c)           Any
Lender (an “Assignor”) may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any Lender Affiliate or,
with the consent of the relevant Borrower and the relevant Administrative Agent
(which, in each case, shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or other entity (an “Assignee”)
all or any part of its rights and obligations under this Agreement and the
other Loan Documents pursuant to an Assignment and Acceptance, executed by such
Assignee, such Assignor and any other Person whose consent is required pursuant
to this paragraph, and delivered to the relevant Administrative Agent for its
acceptance and recording in the Register; provided that,

 

108

 

unless otherwise agreed by the relevant Borrower and
the relevant Administrative Agent, no such assignment to an Assignee (other
than any Lender or any Lender Affiliate) shall be in an aggregate principal
amount of less than $5,000,000 (or the Canadian Dollar Equivalent thereof), in
each case except in the case of an assignment of all of a Lender’s interests
under this Agreement.  For purposes of
the proviso contained in the preceding sentence, the amount described therein
shall be aggregated in respect of each Lender and its Lender Affiliates, if
any.  Any such assignment need not be
ratable as among the Facilities.  Upon
such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, shall have the rights and
obligations of a Lender hereunder with a Commitment and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor’s rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto). 
Concurrently with the execution and delivery of each Assignment and
Acceptance, the assigning Lender shall surrender to the relevant Administrative
Agent the Note a portion of which is being assigned, and the relevant Borrower
shall execute and deliver a new applicable Note to the Assignee in the amount
of its Commitment being assumed, and a new applicable Note to the assigning
Lender in the amount of its Commitment being assigned, after giving effect to
such assignment, such Notes to constitute the applicable Note for all purposes
of this Agreement and of the other Loan Documents. Notwithstanding any
provision of this Section, the consent of either Borrower shall not be required
for any assignment that occurs when an Event of Default shall have occurred and
be continuing.

 

(d)           Each
Administrative Agent shall, on behalf of the relevant Borrower, maintain at its
address referred to in Section 10.2 a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the
recordation of the names and addresses of the relevant Lenders and the
Commitment of, and the principal amount of the Loans owing to, each relevant
Lender from time to time.  The entries
in the Register shall be conclusive, in the absence of manifest error, and each
Borrower, each other Loan Party, each Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of
the Loans and any Notes evidencing the Loans recorded therein for all purposes
of this Agreement.  Any assignment of
any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide).  Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be registered
on the Register only upon surrender for registration of assignment or transfer
of the Note evidencing such Loan, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new Notes shall be issued to the
designated Assignee.

 

(e)           Upon
its receipt of (x) an Assignment and Acceptance executed by an Assignor,
an Assignee and any other Person whose consent is required by
Section 10.6(c), and (y) such forms, certificates or other evidence,
if any, with respect to U.S. federal withholding tax pursuant to
Section 2.26(d), together with payment to the

 

109

 

relevant Administrative Agent of a registration and
processing fee of $3,500 (provided that (A) no such processing fee
shall be payable if the Assignee is a Lender Affiliate of the Assignor within
the definition of clause (a) or (b) of the definition of Lender Affiliate,
and (B) only one such fee shall be required in connection with a
simultaneous assignment to Lender Affiliates of the Assignee within the
definition of clause (c) of the definition of Lender Affiliate), such
Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) record the information contained therein in the
Register on the effective date determined pursuant thereto.

 

(f)            For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section concerning assignments relate only to absolute
assignments and that such provisions do not prohibit assignments creating
security interests, including any pledge or assignment by a Lender to any
Federal Reserve Bank in accordance with applicable law.

 

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

 

10.7         Adjustments; Set-off.

 

(a)           Notwithstanding
anything to the contrary in any Loan Document, if any Lender (for purposes of
this sentence, a “Benefitted Lender”) shall at any time prior to any
date on which the Commitments are terminated and the Loans and/or Reimbursement
Obligations become due and payable pursuant to Section 8 (an “Acceleration”)
receive any payment of all or part of the Obligations owing to such Benefitted
Lender by either Borrower, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender
(for the purposes of this sentence, an “Other Lender”), if any, in respect of
the Obligations owing to such Other Lender by such Borrower (in each case
except to the extent that this Agreement provides for payments to be allocated
to the Lenders under a particular Facility) then such Benefitted Lender shall
purchase for cash from the Other Lenders a participating interest in such
portion of the Obligations owing to each such Other Lender, or shall provide
such Other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral or proceeds with each of the Lenders
ratably (based upon the respective Aggregate Exposure Percentages of the
Lenders immediately prior to receipt by such Benefitted Lender of such payment
or collateral); 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)           If
at the time of an Acceleration (i) the percentage which (x) the
Canadian Swingline Extensions of Credit then outstanding constitutes of
(y) the Canadian Swingline Commitment in effect immediately prior to such
Acceleration is greater than (ii) the percentage which (x) the
aggregate then outstanding principal amount of

 

110

 

Canadian Revolving Loans constitutes of (y) the
aggregate Canadian Revolving Commitments in effect immediately prior to such
Acceleration, or if at such time the percentage referred to in clause (ii)
is greater than the percentage referred to in clause (i), the Canadian
Revolving Lenders and the Canadian Swingline Lender shall purchase in cash from
each other participating interests in respect of the Obligations arising out of
the Canadian Revolving Credit Facility and the Canadian Swingline Facility in
such amounts so that, after giving effect thereto, the percentage which each
such Canadian Lender holds of the aggregate then outstanding amount of the
Canadian Swingline Extensions of Credit and Canadian Revolving Loans shall be
equal to the percentage which (x) such aggregate then outstanding amount
constitutes of (y) the sum of the Canadian Swingline Commitment and the
aggregate Canadian Revolving Commitments in effect immediately prior to such
Acceleration.  At the time of an
Acceleration, the U.S. Revolving Lenders shall purchase in cash from the U.S.
Swingline Lender participating interests in respect of the U.S. Swingline
Extensions of Credit in such amounts so that, after giving effect thereto, each
such U.S. Lender shall hold its U.S. Revolving Percentage of the U.S. Swingline
Extensions of Credit.  Notwithstanding
anything to the contrary in any Loan Document, if any Lender (for purposes of
this sentence, a “Benefitted Lender”) shall at any time after an
Acceleration receive any payment of all or part of the Obligations owing to
such Benefitted Lender by the Borrowers, or receive any collateral or proceeds
of collateral in respect thereof (whether voluntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 8(f), or
otherwise and notwithstanding whether (i) such payment was is received from, or
made on the account of, any Person that is not obligated on the Obligations of
any Other Lender (as defined below) or (ii) such collateral or proceeds of
collateral secures the Obligations of any Other Lender, as defined below), in a
greater proportion than any such payment or collateral received by any other
Lender (for the purposes of this sentence, an “Other Lender”), if any, in
respect of the Obligations owing to such Lender by the Borrowers (after giving
effect to the adjustments provided for in the preceding sentence), then such
Benefitted Lender shall purchase for cash from the Other Lenders a
participating interest in such portion of the Obligations owing to each such
Other Lender, or shall provide such Other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds with each of the Lenders ratably (based upon the respective Aggregate
Exposure Percentages of the Lenders immediately prior to receipt by such
Benefitted Lender of such payment or collateral); 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.

 

(c)           In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrowers, any such notice
being expressly waived by each Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by such Borrowers hereunder
(whether at the stated maturity, by acceleration or otherwise), to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any

 

111

 

time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of such Borrower, as the
case may be.  Each Lender agrees
promptly to notify the Borrowers and the Administrative Agents 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 each Borrower and each 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 Borrowers, the Agents and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Borrowers, either Agent or any Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

 

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

 

10.12       Submission To Jurisdiction; Waivers.  Each 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 Minnesota, the
courts of the United States for the District of Minnesota, 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 Borrower at its address set
forth in

 

112

 

Section 10.2 or at such other address of which
the relevant 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       Acknowledgements.  Each Borrower hereby acknowledges that:

 

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

 

(b)           no
Agent nor any Lender has any fiduciary relationship with or duty to either
Borrower arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between Agents and Lenders, on one
hand, and the Borrowers, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

 

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

 

10.14       Releases of Guarantees and Liens

 

(a)           Notwithstanding
anything to the contrary contained herein or in any other Loan Document, each
Administrative Agent and each Collateral Agent is hereby irrevocably authorized
by each relevant Lender (without requirement of notice to or consent of any
such Lender except as expressly required by Section 10.1 or any Lender
Affiliate or any other counterparty to any Specified Hedge Agreement) to take
any action requested by the relevant Borrower having the effect of releasing
any Collateral or guarantee obligations (i) to the extent necessary to
permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or that is
required by the Security Documents or (ii) under the circumstances
described in paragraph (b) below.

 

(b)           At
such time as the Loans, the Reimbursement Obligations and the other obligations
under the Loan Documents (other than obligations under or in respect of Hedge
Agreements) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding (or cash collateral shall have
been deposited with the relevant Issuing Bank in the amount of not less than
the face amount of each outstanding Letter of Credit), the Collateral shall
(without the requirement of notice or consent of any Lender or any Lender
Affiliate or any other counterparty to any Specified Hedge Agreement) be
released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive

 

113

 

such termination) of each Administrative Agent and
each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.

 

10.15       Confidentiality.  Each Agent and each Lender agrees to keep confidential all
non-public information provided to it by any Loan Party pursuant to this
Agreement consisting of financial statements or other information delivered
pursuant to Section 6.1 or 6.2, information concerning potential
acquisitions or dispositions and information that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to any Agent,
any other Lender or any Lender Affiliate, (b) subject to an agreement to
comply with the provisions of this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any Hedge Agreement (or
any professional advisor to such counterparty), (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly
disclosed, or (h) in connection with the exercise of any remedy hereunder
or under any other Loan Document.

 

Notwithstanding anything herein to the contrary, “non-public
information” shall not include, and each Agent and each Lender may disclose to
any and all Persons, without limitation of any kind, any information with
respect to the “tax treatment” and “tax structure” (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to such Agent or such Lender relating to such
tax treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to the tax treatment or tax structure of the Loans, Letters of
Credit and transactions contemplated hereby.

 

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

 

10.17       Effect of Existing Credit Agreement
and Notes.  Effective as
of the Closing Date and after giving effect to the amendments to the Existing
Credit Agreement set forth in Section 1.2, this Agreement amends and restates
the Existing Credit Agreement, and the Notes amend and restate the relevant
“Notes”, if any, issued under the Existing Credit Agreement (the “Existing
Notes”), in their respective entireties, provided that the obligations of the
Borrowers incurred under the Existing Credit Agreement and the Existing Notes,
if any, shall continue under this Agreement and the relevant Notes,
respectively, and shall not in any circumstances be terminated, extinguished or
discharged hereby or thereby but shall hereafter be governed by the terms of
this Agreement.  Effective as of the
Closing Date, all references, if any, to the word “Credit Agreement” in any of
the Canadian Mortgages or in any of the Quebec Security Documents, shall mean
and be a reference to this Agreement.

 

114

 

10.18       Independence of Covenants.  All covenants of the Borrowers hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of an Event of Default or Default if such action
is taken or condition exists.

 

10.19       Currency Indemnity.  If, for the purposes of obtaining judgment
in any court in any jurisdiction with respect to this Agreement or any other
Loan Document, it becomes necessary to convert into the currency of such
jurisdiction (the “Judgment Currency”) any amount due under this Agreement or
under any other Loan Document in any currency other than the Judgment Currency
(the “Currency Due”), then conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which judgment is given.  For this purpose, “rate of exchange” means the
rate at which either Administrative Agent is able, on the relevant date, to
purchase the Currency Due with the Judgment Currency in accordance with its
normal practice at its office in Minneapolis,
Minnesota.  In the event that
there is a change in the rate of exchange prevailing between the Business Day
before the day on which the judgment is given and the date of receipt by such
Administrative Agent of the amount due, the relevant Borrower will, on the date
of receipt by the relevant Administrative Agent, pay such additional amounts,
if any, or be entitled to receive reimbursement of such amount, if any, as may
be necessary to ensure that the amount received by such Administrative Agent on
such date is the amount in the Judgment Currency which when converted at the
rate of exchange prevailing on the date of receipt by such Administrative Agent
is the amount then due under this Agreement or such other Loan Document in the
Currency Due.  If the amount of the
Currency Due which the relevant Administrative Agent is so able to purchase is
less than the amount of the Currency Due originally due to it, the relevant
Borrower shall indemnify and save the relevant Administrative Agent and the
relevant Lenders harmless from and against all loss or damage arising as a
result of such deficiency.  This indemnity
shall constitute an obligation separate and independent from the other
obligations contained in this Agreement and the other Loan Documents, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by any Agent or any Lender from time to
time and shall continue in full force and effect notwithstanding any judgment
or order for a liquidated sum in respect of an amount due under this Agreement
or any other Loan Document or under any judgment or order.

 

10.20       Permitted Liens.  Any reference in this Agreement or any other Loan Document to a
Lien permitted pursuant to this Agreement (including, in particular, pursuant
to Section 7.3) or otherwise permitted in writing by the Lenders (each, a
“Permitted Lien”) is not intended to subordinate or postpone, or as any
agreement to subordinate or postpone, any Lien created by any of the Security
Documents to any Permitted Lien.

 

[The remainder of this
page is intentionally left blank.]

 

115

 

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.

 

	
   

  	
  INTERNATIONAL MULTIFOODS

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory J. Keup

  
	
   

  	
   

  	
  Name: 
  Gregory J. Keup

  
	
   

  	
   

  	
  Title:  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROBIN HOOD MULTIFOODS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Testa

  
	
   

  	
   

  	
  Name:  Steve
  Testa

  
	
   

  	
   

  	
  Title:  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  U.S. Administrative Agent, as Canadian

  Administrative Agent, as U.S. Issuing Lender,

  as U.S. Swingline Lender, as a Lender and as

  U.S. Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Draxler

  
	
   

  	
   

  	
  Name:  David
  Draxler

  
	
   

  	
   

  	
  Title:  Vice
  President

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-1

 

	
   

  	
  CANADIAN IMPERIAL BANK OF

  COMMERCE, as Canadian Swingline Lender,

  as a Lender and as Canadian Issuing Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam Marra

  
	
   

  	
   

  	
  Name:  Sam
  Marra

  
	
   

  	
   

  	
  Title: 
  Manager, Commercial Credit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Ng

  
	
   

  	
   

  	
  Name: 
  Patrick Ng

  
	
   

  	
   

  	
  Title: 
  Manager, Commercial Credit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  199 Bay Street

  	
   

  	
   

  
	
  Commerce Court West, 3rd Floor

  	
   

  	
   

  
	
  Toronto, Ontario, M5L 1A2

  	
   

  	
   

  
	
  Attention: Patrick NG

  	
   

  	
   

  
	
  Facsimile: (416) 861-9295

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-2

 

 

	
   

  	
  THE BANK OF NOVA SCOTIA, as Canadian

  Funding Agent, as a Lender and as Canadian

  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Evans

  
	
   

  	
   

  	
  Name:  Brian
  Evans

  
	
   

  	
   

  	
  Title: 
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen Coulson

  
	
   

  	
   

  	
  Name: 
  Kathleen Coulson

  
	
   

  	
   

  	
  Title: 
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  40 King Street West, 62nd floor

  	
   

  	
   

  
	
  Toronto, ON M5W 2X6

  	
   

  	
   

  
	
  Attention: Managing Director, Consumer Products

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: (416) 866-2009

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  720 King Street West, 4th floor

  	
   

  	
   

  
	
  Toronto, ON M5V 2T3

  	
   

  	
   

  
	
  Attn: Loan Administration & Agency Services

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: (416) 866-5991

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-3

 

	
   

  	
  THE BANK OF TOKYO-MITSUBISHI, LTD., 

  Chicago Branch as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick McCue

  
	
   

  	
   

  	
  Name: 
  Patrick McCue

  
	
   

  	
   

  	
  Title:  Vice
  President & Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  601 Carlson Parkway

  	
   

  	
   

  
	
  Suite 370

  	
   

  	
   

  
	
  Minnetonka, MN 55305

  	
   

  	
   

  
	
  Attention: 
  Patrick McCue

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  952/473-5152

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-4

 

	
   

  	
  COOPERATIEVE CENTRALE RAIFFEISEN-

  BOERENLEENBANK B.A., “RABOBANK

  INTERNATIONAL”, NEW YORK BRANCH,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brad Peterson

  
	
   

  	
   

  	
  Name:  Brad
  Peterson

  
	
   

  	
   

  	
  Title: 
  Executive Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian Reece

  
	
   

  	
   

  	
  Name:  Ian
  Reece

  
	
   

  	
   

  	
  Title: 
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  300 South Wacker Drive

  	
   

  	
   

  
	
  35th Floor

  	
   

  	
   

  
	
  Chicago, Illinois 60606

  	
   

  	
   

  
	
  Attention: 
  Brad Peterson

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  312/408-8240

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-5

 

	
   

  	
  LASALLE BANK NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Pricco

  
	
   

  	
   

  	
  Name:  Peter
  Pricco

  
	
   

  	
   

  	
  Title: 
  Commercial Banking Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  50 South Sixth Street

  	
   

  	
   

  
	
  Suite 1400

  	
   

  	
   

  
	
  Minneapolis, MN 55402

  	
   

  	
   

  
	
  Attention: 
  Peter Pricco

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  612-752-9881

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-6

 

	
   

  	
  THE BANK OF NEW YORK,

  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John-Paul Marotta

  
	
   

  	
   

  	
  Name: 
  John-Paul Marotta

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  One Wall Street,

  	
   

  	
   

  
	
  19th Floor

  	
   

  	
   

  
	
  New York, NY 10286

  	
   

  	
   

  
	
  Attention: 
  John-Paul Marotta

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  212/635-1208

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-7

 

	
   

  	
  GREENSTONE FARM CREDIT SERVICES,

  ACA/FLCA, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alfred S. Compton, Jr.

  
	
   

  	
   

  	
  Name:  Alfred
  S. Compton, Jr.

  
	
   

  	
   

  	
  Title: 
  VP/Sr. Lending Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  P.O. Box 22067

  	
   

  	
   

  
	
  Lansing, MI 48909

  	
   

  	
   

  
	
  Attention: 
  Al Compton

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  517/319-1240

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-8

 

	
   

  	
  WELLS FARGO BANK NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth E. LaChance

  
	
   

  	
   

  	
  Name: 
  Kenneth E. LaChance

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MAC N9305-114

  	
   

  	
   

  
	
  Sixth & Marquette Avenue

  	
   

  	
   

  
	
  Minneapolis, MN 55479

  	
   

  	
   

  
	
  Attention: 
  Kenneth LaChance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  612/667-4144

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-9

 

	
   

  	
  FCS OF MINNESOTA VALLEY, PCA, dba

  FCS OF MINNESOTA VALLEY, PCA dba

  FCS COMMERCIAL FINANCE GROUP,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R. Torrison

  
	
   

  	
   

  	
  Name: 
  Jeffrey R. Torrison

  
	
   

  	
   

  	
  Title: 
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  600 South Highway 169

  	
   

  	
   

  
	
  Suite 850

  	
   

  	
   

  
	
  Minneapolis, MN 55426

  	
   

  	
   

  
	
  Attention: 
  Jamey Grafing

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  952/513-9956

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-10

 

	
   

  	
  FARM CREDIT SERVICES OF AMERICA,

  PCA, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce P. Rouse

  
	
   

  	
   

  	
  Name:  Bruce
  P. Rouse

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5015 South 118th Street

  	
   

  	
   

  
	
  Omaha, NE 68137

  	
   

  	
   

  
	
  Attention: 
  Bruce Rouse

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:402/348-3324

  	
   

  	
   

  
	
   

  	
   

  	
   

  

[Signature Page to
Amended and Restated Credit Agreement]

 

S-11

 

	
   

  	
  MIZUHO CORPORATE BANK, LTD.,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Gallagher

  
	
   

  	
   

  	
  Name:  Robert
  Gallagher

  
	
   

  	
   

  	
  Title:  VP
  & Team Leader, Corp. Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Officer = A. Zarzhevsky, Ph. 212-282-3988)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1251 Avenue of the Americas

  	
   

  	
   

  
	
  New York, NY 10020

  	
   

  	
   

  
	
  Attention: 
  Alexander Zarzhevsky

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  212/282-9705

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-12

 

	
   

  	
  PNC BANK, N.A.,
 as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sharon Geffel

  
	
   

  	
   

  	
  Name:  Sharon
  Geffel

  
	
   

  	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  One PNC Plaza

  	
   

  	
   

  
	
  249 Fifth Avenue

  	
   

  	
   

  
	
  Pittsburgh, PA 15222

  	
   

  	
   

  
	
  Attention: 
  Sharon L. Geffel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 
  412/768-9259

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-13

 

	
   

  	
  SUNTRUST BANK

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Lapresi

  
	
   

  	
   

  	
  Name: 
  Michael Lapresi

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for
  notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  303 Peachtree
  Street

  	
   

  	
   

  
	
  Third Floor

  	
   

  	
   

  
	
  Atlanta, GA
  30302

  	
   

  	
   

  
	
  Attention:  Dana Cain

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:  404/230-5305

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-14

 

	
   

  	
  JPMORGAN CHASE BANK,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ B.B. Wuthrich 

  
	
   

  	
   

  	
  Name:  B.B.
  Wuthrich

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  Toronto Branch, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Drew McDonald

  
	
   

  	
   

  	
  Name:  Drew
  McDonald

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  270 Park Avenue, 4th Floor

  	
   

  	
   

  
	
  New York, NY 10017

  	
   

  	
   

  
	
  Attn: Buddy Wuthrich

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: 212-270-5127

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-15

 

	
   

  	
  BANK OF MONTREAL
       (Toronto Branch)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Wright

  
	
   

  	
   

  	
  Name:  R.
  Wright

  
	
   

  	
   

  	
  Title: 
  Vice-President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF MONTREAL

  
	
   

  	
   

  	
  (Chicago Branch)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lee M. Brodne

  
	
   

  	
   

  	
  Name:  Lee M.
  Brodne

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-16

 

	
   

  	
  LAURENTIAN BANK OF CANADA,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alain Goyette

  
	
   

  	
   

  	
  Name:  Alain
  Goyette

  
	
   

  	
   

  	
  Title: 
  Senior Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corporate banking

  	
   

  	
   

  
	
  1981 McGrill College

  	
   

  	
   

  
	
  Suite 1980

  	
   

  	
   

  
	
  Montreal, Quebec

  	
   

  	
   

  
	
  Canada

  	
   

  	
   

  
	
  H3A 3K3

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Phone: 
  514-284-4500 #4732

  	
   

  	
   

  
	
  Fax:     
  514-284-4551

  	
   

  	
   

  
	
  Email: 
  goyetta@banquelaurentienne.ca

  	
   

  	
   

  

 

[Signature Page to
Amended and Restated Credit Agreement]

 

S-17

 

Annex A-1

 

PRICING GRID FOR REVOLVING LOANS,
CANADIAN SWINGLINE LOANS,

U.S. SWINGLINE LOANS, TERM LOANS AND COMMITMENT FEES

 

	
  Consolidated

  Leverage Ratio

  	
   

  	
  Applicable Margin

  for Eurodollar Loans

  	
   

  	
  Applicable Margin

  for ABR, U.S.

  Base Rate or

  C$ Prime Loans

  	
   

  	
  Applicable Margin for

  Bankers’ Acceptances

  	
   

  	
  Commitment

  Fee Rate

  	
   

  
	
  >  4.00 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.50

  	
  %

  
	
  <  4.00 to 1:00 and

  >  3.25 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  0.375

  	
  %

  
	
  <  3.25 to 1.00 and

  >  3.00 to 1.00

  	
   

  	
  2.125

  	
  %

  	
  1.125

  	
  %

  	
  2.125

  	
  %

  	
  0.375

  	
  %

  
	
  <  3.00 to
  1.00 and

  >  2.75 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  0.300

  	
  %

  
	
  <  2.75 to 1.00 and

  >  2.25 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.300

  	
  %

  
	
  <  2.25 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  1.50

  	
  %

  	
  0.250

  	
  %

  

 

Changes in the Applicable Margin resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the “Adjustment Date”) that is three Business Days after the date on
which financial statements are delivered to the Lenders pursuant to
Section 6.1(b) and shall remain in effect until the next change to be
effected pursuant to this paragraph; provided that if the Consolidated
Leverage Ratio reflected in the annual financial statements delivered to the
Lenders pursuant to Section 6.1(a) requires a change in the Applicable
Margin as a result of a change in the Consolidated Leverage Ratio from that
reflected in the quarterly financial statements delivered to the Lenders
pursuant to Section 6.1(b) for the period ending on the same date, such
change in the Applicable Margin shall be retroactively applied so that it shall
be deemed to have taken effect as of the date that is three Business Days after
the date on which such quarterly financial statements were delivered to the
Lenders (and if, prior to the date upon which it shall be determined that any
such retroactive change shall be necessary, either Borrower shall have made an
interest or commitment fee payment for a period which includes the period of
such retroactive change:  (a) if
such change results in an increase in the Applicable Margin, the applicable
Borrower shall be immediately obligated to pay to the applicable Administrative
Agent, on behalf of the applicable Lenders, an amount reflecting such adjusted
Applicable Margin or (b) if such change results in a decrease in the
Applicable Margin, the applicable Borrower shall be entitled to reduce the next
related interest and/or commitment fee payment to the extent necessary to reflect
such adjusted Applicable Margin). If any financial statements referred to above
are not delivered within the time periods specified in Section 6.1, then,
until the date that is three Business Days after the date on which such
financial statements are delivered, the highest rate set forth in each column
of this Pricing Grid shall apply, provided that nothing in this sentence shall
be construed as limiting any remedies otherwise available to any Agent or any
Lender upon the occurrence of such failure to comply.  Each determination of 

 

A-1-1

 

the Consolidated Leverage Ratio pursuant to this Pricing Grid shall be
made in a manner consistent with the determination thereof pursuant to
Section 7.1(a).

 

A-1-2

 

SCHEDULE
1.3A

Mortgaged Property

 

	
  Part A

  	
   

  	
  Part B

  
	
  1500 Sedalia Road, Sedalia, Missouri

  	
   

  	
  2 Sherwood Forest Lane, Port Colborne, Ontario

  
	
  2410 S. Scheidt Lane, Bonner Springs, Kansas

  	
   

  	
  6630 Hutchinson Street, Montreal, Quebec

  
	
  451 West Avenue, Lockport, New York

  	
   

  	
  2110 Notre-Dame St. West, Montreal, Quebec

  
	
  325 S. Gateway Boulevard, Elyria, Ohio

  	
   

  	
  4370 Harvester Road, Burlington, Ontario

  
	
  1250 Laskey Road, Toledo, Ohio

  	
   

  	
  80 Second Avenue, Simcoe, Ontario

  
	
   

  	
   

  	
  1535 Inkster Boulevard, Winnipeg, Manitoba

  
	
   

  	
   

  	
  95, 33rd Street East, Saskatoon,
  Saskatchewan

  
	
   

  	
   

  	
  701 Broad Street East, Dunnville, Ontario

  
	
   

  	
   

  	
  R.R. #3 Vanessa, Delhi Township, Delhi, Ontario

  

 

 

EXHIBIT
C-1

 

 

 

 

AMENDED
AND RESTATED U.S. GUARANTEE

AND
COLLATERAL AGREEMENT

 

made by

 

INTERNATIONAL
MULTIFOODS CORPORATION

 

and
certain of its Subsidiaries

 

in favor
of

 

U.S.
BANK NATIONAL ASSOCIATION,

 

as
Collateral Agent

Dated as of August 8,
2003

 

 

 

 

Table of
Contents

	
  SECTION 1.

  	
  DEFINED TERMS

  
	
  1.1.

  	
  Definitions

  
	
  1.2.

  	
  Other Definitional
  Provisions.

  
	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  
	
  2.1.

  	
  Guarantee

  
	
  2.2.

  	
  Right
  of Contribution

  
	
  2.3.

  	
  No Subrogation

  
	
  2.4.

  	
  Amendments,
  etc. with respect to the Borrower Obligations

  
	
  2.5.

  	
  Guarantee Absolute
  and Unconditional

  
	
  2.6.

  	
  Reinstatement

  
	
  2.7.

  	
  Payments

  
	
  2.8.

  	
  Revocation

  
	
   

  	
   

  
	
  SECTION 3.

  	
  GRANT OF SECURITY INTEREST

  
	
   

  	
   

  
	
  SECTION
  4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
  4.1.

  	
  Title

  
	
  4.2.

  	
  Perfected First Priority
  Liens

  
	
  4.3.

  	
  Jurisdiction
  of Organization, Chief Executive Office

  
	
  4.4.

  	
  Inventory
  and Equipment

  
	
  4.5.

  	
  Farm Products

  
	
  4.6.

  	
  Investment
  Property

  
	
  4.7.

  	
  Receivables

  
	
  4.8.

  	
  Contracts

  
	
  4.9.

  	
  Intellectual
  Property

  
	
   

  	
   

  
	
  SECTION 5.

  	
  COVENANTS

  
	
  5.1.

  	
  Delivery
  of Instruments, Certificated Securities and Chattel Paper

  
	
  5.2.

  	
  Maintenance of Insurance

  
	
  5.3.

  	
  Payment
  of Obligations

  
	
  5.4.

  	
  Maintenance
  of Perfected Security Interest; Further Documentation

  
	
  5.5.

  	
  Changes
  in Locations

  
	
  5.6.

  	
  Notices

  
	
  5.7.

  	
  Investment
  Property

  
	
  5.8.

  	
  Receivables

  
	
  5.9.

  	
  Contracts

  
	
  5.10.

  	
  Intellectual
  Property

  
	
   

  	
   

  
	
  SECTION 6.

  	
  REMEDIAL
  PROVISIONS

  
	
  6.1.

  	
  Certain
  Matters Relating to Receivables.

  
	
  6.2.

  	
  Communications
  with Obligors, Grantors Remain Liable.

  
	
  6.3.

  	
  Pledged Stock; Pledged
  Notes.

  
			

 

i

 

	
  6.4.

  	
  Proceeds
  to be Turned Over To Collateral Agent

  
	
  6.5.

  	
  Application
  of Proceeds

  
	
  6.6.

  	
  Code
  and Other Remedies

  
	
  6.7.

  	
  Registration
  Rights

  
	
  6.8.

  	
  Deficiency

  
	
   

  	
   

  
	
  SECTION
  7.

  	
  THE COLLATERAL
  AGENT

  
	
  7.1.

  	
  Collateral
  Agent’s Appointment as Attorney-in-Fact, etc

  
	
  7.2.

  	
  Duty
  of Collateral Agent

  
	
  7.3.

  	
  Execution of
  Financing Statements

  
	
  7.4.

  	
  Authority of Collateral
  Agent

  
	
   

  	
   

  
	
  SECTION 8.

  	
  MISCELLANEOUS

  
	
  8.1.

  	
  Amendments
  in Writing

  
	
  8.2.

  	
  Notices

  
	
  8.3.

  	
  No
  Waiver by Course of Conduct, Cumulative Remedies

  
	
  8.4.

  	
  Enforcement
  Expenses; Indemnification

  
	
  8.5.

  	
  Successors
  and Assigns

  
	
  8.6.

  	
  Set-Off

  
	
  8.7.

  	
  Counterparts

  
	
  8.8.

  	
  Severability

  
	
  8.9.

  	
  Section
  Headings

  
	
  8.10.

  	
  Integration

  
	
  8.11.

  	
  GOVERNING
  LAW

  
	
  8.12.

  	
  Submission To
  Jurisdiction, Waivers

  
	
  8.13.

  	
  Acknowledgements

  
	
  8.14.

  	
  Additional Loan Parties

  
	
  8.15.

  	
  Releases.

  
	
  8.16.

  	
  WAIVER OF JURY TRIAL

  
	
  8.17.

  	
  Grantors’ Obligations

  
	
  8.18.

  	
  Existing
  Guarantee and Collateral Agreement

  
	
  8.19.

  	
  Judgment
  Currency

  
			

 

SCHEDULES

 

Schedule 1             Notice
Addresses

Schedule 2             Investment
Property

Schedule 3             Perfection
Matters

Schedule 4             Jurisdictions
of Organization and Chief Executive Offices

Schedule 4.6          Third
Party Record Ownership of Investment Property

Schedule 4.8          Contracts
with Governmental Authorities

Schedule 5             Inventory
and Equipment Locations

Schedule 6             Intellectual
Property

Schedule 7             Contracts

 

ii

 

AMENDED AND RESTATED U.S. GUARANTEE AND COLLATERAL AGREEMENT

 

AMENDED AND RESTATED U.S. GUARANTEE AND COLLATERAL
AGREEMENT, dated as of August 8, 2003, made by each of the signatories hereto
(together with any other entity that may become a party hereto as provided
herein, the “Loan Parties”), in favor of U.S. BANK NATIONAL ASSOCIATION,
as U.S. collateral agent, U.S. administrative agent and as Canadian
administrative agent (in each such capacity, together with any successors and
assigns in any such capacity, the “Collateral Agent”) for the Secured
Parties referred to below.

 

Reference is made to the Existing Credit Agreement, as
defined in the Credit Agreement referred to below.  On or prior to the date of this Agreement, all outstanding
amounts upon the “U.S. Tranche A Term Loans”, the “U.S. Tranche B Term Loans”
and the “Canadian Term Loans” have been paid in full by the relevant Borrower
(as defined in the Credit Agreement), and following such payment, the only
loans and commitments to extend credit accommodations outstanding under the
Existing Credit Agreement were the “U.S. Revolving Facility” and the “Canadian
Revolving Facility” (each as defined in the Existing Credit Agreement).
Further, on the date of this Agreement, the Canadian Revolving Facility and the
U.S. Revolving Facility are being assigned to the Canadian Revolving Lenders or
the U.S. Revolving Lenders (as defined in the Credit Agreement), respectively,
pursuant to the Global Assignment and Acceptance (as defined in the Credit
Agreement), provided that, with respect to the Canadian Revolving
Facility and U.S. Revolving Facility of any lenders under the Existing Credit
Agreement that declined to execute the Global Assignment and Acceptance, such
facilities are being paid in full and reduced to zero on the date hereof, as
specified in the Credit Agreement.

 

Further, pursuant to a letter addressed to the
Borrowers dated concurrently herewith, Canadian Imperial Bank of Commerce has
resigned as “U.S. Administrative Agent”, “Canadian Administrative Agent” and
the “Collateral Agent” under the Existing Credit Agreement and the “Loan
Documents” as defined therein.  
Pursuant to the Credit Agreement, the Lenders (as defined in the Credit
Agreement) have appointed U.S. Bank National Association as the U.S.
Administrative Agent, the Canadian Administrative Agent and the U.S. Collateral
Agent, and The Bank of Nova Scotia as the Canadian Collateral Agent, under the
Existing Credit Agreement and the other Loan Documents as defined in the
Existing Credit Agreement.

 

As more particularly set forth in Section 8.18, this
Amended and Restated U.S. Guaranty and Collateral Agreement amends and restates
the Existing U.S. Guaranty and Collateral Agreement in its entirety.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Amended and Restated Credit
Agreement, dated concurrently herewith (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among INTERNATIONAL
MULTIFOODS CORPORATION, a Delaware corporation (the “U.S. Borrower”),
ROBIN HOOD MULTIFOODS INC., an Ontario corporation and a Subsidiary of the U.S.
Borrower (the “Canadian Borrower” and, together with the U.S. Borrower,
the “Borrowers”), the banks and other financial institutions from time
to time 

 

 

parties thereto (the “Lenders”), The Bank of Nova Scotia, as
Canadian funding agent for the Lenders (in such capacity, the “Canadian Funding
Agent”), U.S. Bank National Association, as administrative agent for the U.S.
Lenders (in such capacity, the “U.S. Administrative Agent”) and as
administrative agent for the Canadian Lenders (in such capacity, the “Canadian
Administrative Agent”) and certain other parties, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;

 

WHEREAS, the Borrowers are members of an affiliated
group of companies that includes each other Loan Party;

 

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

 

WHEREAS, the Borrowers and the other Loan Parties are
engaged in related businesses, and each Loan Party 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 Borrowers
under the Credit Agreement that the Loan Parties shall have executed and
delivered this Agreement to the Collateral Agent for the ratable benefit of the
Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers thereunder, each Loan Party hereby agrees with the
Collateral Agent, for the ratable benefit of the Secured Parties, 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 which are defined in the Uniform Commercial Code in effect in
the State of Minnesota on the date hereof are used herein as so defined:  Accounts, Certificated Security, Chattel
Paper, Commercial Tort Claims, Documents, Equipment, Farm Products,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.

 

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

 

“Agreement”:   this Amended and Restated U.S. Guarantee
and Collateral Agreement, as the same may be amended, supplemented or otherwise
modified from time to time and together with any replacements or substitutions
with respect thereto.

 

“Borrower Obligations”:  (a) in the case of each of the U.S.
Subsidiary Guarantors, the collective reference to the U.S. Borrower
Obligations and the Canadian 

 

2

 

Borrower Obligations, and (b) in the case of each
of the Canadian Subsidiary Guarantors and the U.S. Borrower, the Canadian
Borrower Obligations.

 

“Canadian Borrower
Obligation Guarantors” or “CBO Guarantors”:  the collective reference to each Loan Party
other than the Canadian Borrower.

 

“Canadian Borrower
Obligations”:  the collective
reference to the unpaid principal of and interest on the Canadian Loans and
Canadian Reimbursement Obligations and all other obligations and liabilities of
the Canadian Borrower (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the maturity of the
Canadian Loans and Canadian 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 Canadian Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent, either Administrative Agent, any other
Agent or any Lender (or, in the case of any Specified Hedge Agreement entered
into by the Canadian Borrower, any Lender Affiliate or any other counterparty
thereto), 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 Canadian Letter of Credit, any Specified Hedge Agreement entered
into by the Canadian Borrower or any other document made, delivered or given in
connection with any of the foregoing, 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 Collateral Agent, either Administrative Agent,
any other Agent or to the Lenders that are required to be paid by the Canadian
Borrower pursuant to the terms of any of the foregoing agreements).

 

“Collateral”:  as defined in Section 3.

 

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

 

“Contracts”:  the contracts and agreements listed in Schedule 7,
as the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to damages arising thereunder
and (iii) all rights of any Grantor to perform and to exercise all
remedies thereunder.

 

“Copyright Licenses”:  any written agreement naming any Grantor as
licensor or licensee now or hereafter in effect (including, without limitation,
those listed in Schedule 6), granting any right under any copyright
arising under the laws of the United States or Canada, including, without
limitation, the grant of rights to reproduce, distribute, perform, display,
exploit and sell materials derived from any such copyright.

 

3

 

“Copyrights”:  (i) all copyright rights owned by any
Grantor arising under the laws of the United States or Canada, whether as
author, assignee, transferee or otherwise; (ii) all copyrights owned by
any Grantor arising under the laws of the United States or Canada, whether
registered or unregistered and whether published or unpublished, and all
registrations, supplemental registrations, and applications for registration in
the United States Copyright Office or in any similar office or agency in
Canada, including, without limitation, those listed on Schedule 6;
and (iii) all rights owned by any Grantor 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.

 

“Existing Collateral
and Guaranty Agreement”:  as defined
in Section 8.18 hereof.

 

“Foreign Intellectual
Property”:  intellectual property of
any Grantor which arises under or is governed by laws of a country (or a
political subdivision thereof) other than the United States or Canada.

 

“Foreign Subsidiary”:  any Subsidiary organized under the laws of
any jurisdiction outside of the United States.

 

“Foreign Subsidiary
Voting Stock”:  the voting Capital
Stock of any Foreign Subsidiary.

 

“General Intangibles”:  all “general intangibles” as such term is
defined in Section 9-102 of the Uniform Commercial Code in effect in the
State of Minnesota on the date hereof and, in any event, excluding all Foreign
Intellectual Property and Restricted Intellectual Property and otherwise
including, without limitation, with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and portions thereof, to
which such Grantor is a party or under which such Grantor has any right, title
or interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise
all remedies thereunder, in each case to the extent the terms thereof (after
giving effect to any consent that has been obtained, it being understood that
such Grantor is not obligated to obtain any such consent) do not prohibit the
grant by such Grantor of a security interest pursuant to this Agreement in its
right, title and interest therein without the consent of any other party
thereto and do not give any other party thereto the right to terminate its
obligations thereunder; provided, that the foregoing limitation shall
not affect, limit, restrict or impair the grant by such Grantor of a security
interest pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due or other right to payment under any such contract,
agreement, instrument or indenture.

 

4

 

“Grantor”:  each Loan Party other than the Canadian
Borrower and the Canadian Subsidiary Guarantors.

 

“Guarantor Group”:  as defined in Section 2.2

 

“Guarantors”:  the collective reference to the CBO
Guarantors and the USBO Guarantors and “Guarantor” means any one of them.

 

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property owned or hereafter
acquired by any Grantor, whether arising under United States or Canadian laws
or otherwise, specifically excluding all Foreign Intellectual Property and
Restricted Intellectual Property and otherwise including, without limitation,
the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks and the Trademark Licenses, all trade secrets, all confidential or
proprietary information and all rights to sue at law or in equity for any
infringement or other impairment thereof, including all rights owned by any
Grantor to receive all proceeds and damages therefrom.

 

“Intercompany Note”:  any promissory note evidencing loans made by
any Grantor to the U.S. Borrower or any of its Subsidiaries.

 

“Investment Property”:  the collective reference to (i) all
“investment property” as such term is defined in Section 9-102 of the
Minnesota UCC (other than any Foreign Subsidiary Voting Stock or other Capital
Stock excluded from the definition of “Pledged Stock”) and (ii) whether or
not constituting “investment property” as so defined, all Pledged Notes and all
Pledged Stock.

 

“Issuers”:  the collective reference to each issuer of
any Investment Property.

 

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

 

“Patent License”:  all agreements, whether written or oral now
or hereafter in effect, 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 of the United States or Canada, including, without limitation, any of
the foregoing referred to in Schedule 6.

 

“Patents”:  (i) all letters patent owned by any
Grantor of the United States or Canada, all reissues and extensions thereof
owned by any Grantor, including, without limitation, any of the foregoing
referred to in Schedule 6, (ii) all applications for letters
patent owned by any Grantor of the United States or Canada and all divisions,
continuations and continuations-in-part thereof and the inventions claimed
therein owned by any Grantor, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights
owned by any Grantor 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 and all other
promissory notes issued to or held 

 

5

 

by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary
course of business).

 

“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
Subsidiary of the U.S. Borrower that may be issued or granted to, or held by, any
Grantor while this Agreement is in effect; provided that in no event
shall (x) more than 66% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary be required to be pledged hereunder,
(y) the U.S. Borrower (or, following the Canadian Restructuring
Transaction, any other Grantor) be required to pledge its ownership interest in
the Foreign Subsidiary Voting Stock of the Canadian Borrower (or, following the
Canadian Restructuring Transaction, of the ultimate Canadian parent of the
successor to the Canadian Borrower contemplated by the Canadian Restructuring
Transaction) pursuant to this Agreement (which Foreign Subsidiary Voting Stock
shall be pledged pursuant to the Canadian Pledge Agreement (or, following the
Canadian Restructuring Transaction, a securities pledge agreement substantially
in the form of the Canadian Pledge Agreement) or (z) any Capital Stock in
International Multifoods Charitable Foundation or Inversions 91060, C.A. be
required to be pledged hereunder.

 

“Proceeds”:  all “proceeds” as such term is defined in
Section 9-102 of the Uniform Commercial Code in effect in the State of
Minnesota on the date hereof 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).

 

“Restricted
Intellectual Property”: 
non-material intellectual property licensed to any Grantor (other than
any such intellectual property licensed pursuant to the Acquisition Documentation
(as defined in the Existing Credit Agreement)), to the extent that
(a) such Grantor does not have the right under the applicable license or
under applicable law to grant a security interest therein or comply with the
obligations herein related to such property, or (b) doing so would impair
the value of such property or otherwise subject such Grantor to material
penalties or liability.

 

“Retiring Collateral
Agent”:  as defined in Section 8.18
hereof.

 

“Secured Obligations”:  the obligations secured by the security
interests granted pursuant to Section 3 of this Agreement, which
obligations consist of the U.S. Borrower Obligations, the Canadian Borrower
Obligations and the obligations of each Grantor under Section 2 hereof (it
being understood that the Canadian Borrower and the Canadian Subsidiary
Guarantors grant no security interests in this Agreement, in any of their 

 

6

 

personal property, such security interests being
granted pursuant to the Canadian Collateral Agreement).

 

“Secured Parties”:  the collective reference to (i) the
Lenders and their respective successors, indorsees, transferees and assigns,
(ii) the Administrative Agents and their respective successors and assigns
in such capacities, (iii) any Lender Affiliate or any other counterparty
party to any Specified Hedge Agreement, (iv) the Collateral Agent and its
successors and assigns in such capacity and (v) any other Agent and its
successors and assigns in such capacity.

 

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

 

“Trademark License”:  any agreement, whether written or oral, now
or hereafter in effect, providing for the grant by or to any Grantor of any
right to use any trademark arising under the laws of the United States or
Canada, including, without limitation, any of the foregoing referred to in Schedule 6.

 

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

 

“U.S. Borrower
Obligation Guarantors” or “USBO Guarantors”:  the collective reference to each Loan Party
other than the U.S. Borrower, the Canadian Borrower and the Canadian Subsidiary
Guarantors.

 

“U.S. Borrower
Obligations”:  the collective
reference to the unpaid principal of and interest on the U.S. Loans and U.S.
Reimbursement Obligations and all other obligations and liabilities of the U.S.
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the U.S.
Loans and U.S. 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 U.S. Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Collateral Agent, either Administrative Agent or any Lender (or, in the case of
any Specified Hedge Agreement entered into by the U.S. Borrower, any Lender
Affiliate or any other counterparty thereto), 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 U.S. Letter of Credit,
any Specified Hedge 

 

7

 

Agreement entered into by the U.S. Borrower or any
other document made, delivered or given in connection with any of the
foregoing, 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
Collateral Agent, either Administrative Agent, any other Agent or to the
Lenders that are required to be paid by the U.S. Borrower pursuant to the terms
of any of the foregoing agreements).

 

“Vehicles”:  all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title law
of any state and, in any event including, without limitation, all tires and
other appurtenances to any of the foregoing.

 

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 USBO Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Collateral Agent, for the ratable benefit of the
Secured Parties, the prompt and complete payment and performance by the U.S.
Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the U.S. Borrower Obligations and each of the CBO Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantees to
the Collateral Agent, for the ratable benefit of the Secured Parties, the
prompt and complete payment and performance by the Canadian Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the Canadian
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, state and provincial 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 

 

8

 

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

 

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

 

(e)           No
payment made by either Borrower, any of the Guarantors, any other guarantor or
any other Person or received or collected by the Collateral Agent, either
Administrative Agent or any Lender from either 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 its respective Borrower Obligations up to the
maximum liability of such Guarantor hereunder until its respective Borrower
Obligations are paid in full, no Letter of Credit constituting part of the
relevant Borrower Obligations shall be outstanding and the relevant Commitments
are terminated.

 

2.2.          Right of Contribution.  Each Subsidiary Guarantor hereby agrees that
to the extent that another Subsidiary Guarantor that guarantees the same
Borrower Obligations (all Subsidiary Guarantors which guarantee the same
Borrower Obligations being referred to collectively as a “Guarantor Group”)
shall have paid more than its proportionate share (based upon the respective
net worths of the members of the applicable Guarantor Group at the time of
payment) of any payment made hereunder, such overpaying Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor that guarantees the same Borrower Obligations hereunder
which has not paid its proportionate share (based upon the respective net
worths of the members of the applicable Guarantor Group at the time of payment)
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 Collateral Agent, the Administrative Agents
and the Lenders, and each Subsidiary Guarantor shall remain liable to the
Collateral Agent, the Administrative Agents and the Secured Parties 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 Collateral Agent, either
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent, either Administrative
Agent or any Lender against the Borrowers or any Guarantor or any collateral
security or guarantee or right of offset held by the 

 

9

 

Collateral Agent, either 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 Borrowers or any
Guarantor in respect of payments made by such Guarantor hereunder, until all
amounts owing to the Collateral Agent, either Administrative Agent and the
Lenders by the Borrowers on account of the Borrower Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are 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 Collateral Agent, either 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 Collateral Agent in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Collateral 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 Obligations made by the Collateral Agent, either Administrative Agent
or any Lender may be rescinded by the Collateral Agent, such 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 Collateral Agent, either 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 Agents (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 Collateral Agent, either Administrative Agent or any Lender for the
payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released.  None of the Collateral
Agent, either Administrative Agent or 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
Collateral Agent, either 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 Borrowers and any of the
Guarantors, on the one hand, and the Collateral Agent, the Administrative
Agents 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 either of the Borrowers or any of the
Guarantors with respect to the Borrower Obligations.  

 

10

 

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 Collateral Agent, either Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than the defense of payment or
performance in full) which may at any time be available to or be asserted by
either of the Borrowers or any other Person against the Collateral Agent,
either Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrowers or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrowers 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 Collateral Agent, either 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 Borrowers, 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 Collateral Agent, either Administrative Agent or any Lender
to make any such demand, to pursue such other rights or remedies or to collect
any payments from the Borrowers, any 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 Borrowers, 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
Collateral Agent, either Administrative Agent or any Lender against any
Guarantor.  For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.

 

2.6.          Reinstatement. 
The guarantee of each Guarantor 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 of such
Guarantor is rescinded or must otherwise be restored or returned by the
Collateral Agent, either Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either
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,
either Borrower or any Guarantor or any substantial part of its property, 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 Collateral Agent without set-off or counterclaim in Dollars, at the
relevant Funding Office specified in the Credit Agreement.

 

2.8.          Revocation. 
Notwithstanding any other provision hereof, any Guarantor may revoke the
guarantee of such Guarantor contained in this Section 2 prospectively as to
future transactions by written notice to that effect actually received by the
relevant Administrative Agent.  No such
revocation shall release, impair or affect in any manner any liability
hereunder with respect to Borrower Obligations created, contracted, assumed or
incurred prior to receipt by the relevant Administrative Agent of written notice
of revocation, or Borrower Obligations 

 

11

 

created, contracted, assumed or incurred after receipt of such notice
pursuant to any contract entered into by any Secured Party prior to receipt of
such notice, or any renewals or extensions thereof, theretofore or thereafter
made, or any interest accrued or accruing on such Borrower Obligations, or all
other costs, expenses and attorneys’ fees arising from such Borrower
Obligations.

 

SECTION 3.  GRANT OF SECURITY INTEREST

 

Each Grantor hereby assigns and transfers to the
Collateral Agent, and hereby grants to the Collateral Agent, for the ratable
benefit of the Secured Parties, 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 the Secured
Obligations:

 

(a)           all
Accounts;

 

(b)           all
Chattel Paper;

 

(c)           all
Contracts;

 

(d)           all
Deposit Accounts;

 

(e)           all
Documents;

 

(f)            all
Equipment;

 

(g)           all
General Intangibles;

 

(h)           all
Instruments;

 

(i)            all
Intellectual Property;

 

(j)            all
Inventory;

 

(k)           all
Investment Property

 

(l)            all
Letter-of-Credit Rights;

 

(m)          all
Vehicles;

 

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

 

(o)           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.

 

12

 

Notwithstanding the foregoing, in no event shall the Collateral include
any fixed or capital assets that are subject to a Lien permitted by Section
7.3(g) of the Credit Agreement, to the extent any document or instrument
evidencing or governing such Lien or the Indebtedness secured thereby prohibits
the grant of junior Liens on such assets, nor shall any such assets constitute
Equipment or Vehicles for any other purposes hereof.

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

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

 

4.1.          Title, No
Other Liens.  Except for the
security interest granted to the Collateral Agent for the ratable benefit of
the Secured Parties 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 such as have been filed in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are permitted by the Credit Agreement.

 

4.2.          Perfected First Priority Liens.  The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Collateral Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral described in said
Schedule in favor of the Collateral Agent in which (x) a security interest
may be perfected by filing under the applicable Uniform Commercial Code or
(y) in which a security interest may be perfected by taking the other
actions described on Schedule 3, for the ratable benefit of the
Secured Parties, as collateral security for the Secured Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
(other than buyers in the ordinary course of business, and subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or effecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing) and
(b) are prior to all other Liens on the Collateral in existence on the
date hereof except for Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law.

 

4.3.          Jurisdiction of Organization,
Chief Executive Office. 
On the date hereof, such Grantor’s jurisdiction of organization and the
location of such Grantor’s chief executive office or sole place of business or
principal residence, as the case may be, are specified on Schedule 4.

 

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

 

13

 

4.5.          Farm Products. 
None of the Collateral constitutes, or is the Proceeds of, Farm
Products.

 

4.6.          Investment Property.

 

(a)           The
shares of Pledged Stock pledged by such Grantor hereunder constitute all the
issued and outstanding shares of all classes of the Capital Stock of each
Issuer which is a Subsidiary of the U.S. Borrower owned by such Grantor or, in
the case of Foreign Subsidiary Voting Stock, 66% of the outstanding Foreign
Subsidiary Voting Stock of each such Issuer.

 

(b)           All
the shares of the Pledged Stock have been duly and validly issued and are fully
paid and nonassessable.

 

(c)           To
the knowledge of such Grantor, each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

(d)           Such
Grantor is the record (except as set forth on Schedule 4.6) and
beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest created by
this Agreement and except for Liens permitted by Section 7.3(a) of the
Credit Agreement.

 

4.7.          Receivables.

 

(a)           No
amount payable to such Grantor in excess of $500,000 under or in connection
with any Receivable is evidenced by any Instrument or Chattel Paper which has
not been delivered to the Collateral Agent.

 

(b)           None
of the obligors on any Receivables having a value in excess of $500,000 is a
Governmental Authority with respect to which all requirements of applicable law
have not been fulfilled as to perfect and make fully effective the Lien thereon
created hereby.

 

(c)           The
amounts represented by such Grantor to the Lenders from time to time as owing
to such Grantor in respect of the Receivables will at such times be accurate.

 

4.8.          Contracts.

 

(a)           No
consent of any party (other than such Grantor) to any Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Agreement.

 

14

 

(b)           Each
Contract is in full force and effect and constitutes a valid and legally
enforceable obligation of the parties thereto, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.

 

(c)           No
consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Contracts by any party
thereto other than those which have been duly obtained, made or performed, are
in full force and effect and do not subject the scope of any such Contract to
any material adverse limitation, either specific or general in nature.

 

(d)           Neither
such Grantor nor (to the best of such Grantor’s knowledge) any of the other
parties to the Contracts is in default in the performance or observance of any
of the terms thereof in any manner that, in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

(e)           To
the knowledge of such Grantor, the right, title and interest of such Grantor
in, to and under the Contracts are not subject to any defenses, offsets,
counterclaims or claims.

 

(f)            Such
Grantor has delivered to the Collateral Agent a complete and correct copy of
each Contract, including all amendments, supplements and other modifications
thereto.

 

(g)           No
amount payable to such Grantor under or in connection with any Contract is
evidenced by any Instrument or Chattel Paper which has not been delivered to
the Collateral Agent.

 

(h)           Except
as set forth on Schedule 4.8, none of the parties to any Contract
is a Governmental Authority.

 

4.9.          Intellectual Property.

 

(a)           Schedule 6
lists all Intellectual Property owned by such Grantor in its own name on the
date hereof, other than (i) licenses for (A) computer software, or
(B) patents, copyrights, trademarks, service marks, technology, know-how
and/or processes which are embedded in equipment or fixtures,
(ii) copyrights, trademarks, service marks, trade dress, technology,
know-how, inventions and/or processes for which no steps have been taken to
obtain registrations or patents, and (iii) co-pack and joint promotion
contracts.

 

(b)           On
the date hereof, all material Intellectual Property is (i) valid,
subsisting, unexpired and enforceable and has not been abandoned and
(ii) does not infringe the intellectual property rights of any other
Person, except to the extent that any of the foregoing could not reasonably be
expected to have a material adverse effect on the value of any material
Intellectual Property.

 

15

 

(c)           On
the date hereof, none of the material Intellectual Property is the subject of
any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor, except (i) as set forth in Schedule 6
or (ii) agreements with Affiliates of such Grantor.

 

(d)           No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.

 

(e)           No
action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof which both (i) seeks to limit, cancel or
question the validity of any Intellectual Property or such Grantor’s ownership
interest therein, and (ii) which, if adversely determined, would have a
material adverse effect on the value of any material Intellectual Property.

 

(f)            For
the purposes of Sections 4.9(b)-4.9(e), the term Intellectual Property
shall not include:  (i) licenses
for (A) computer software, or (B) patents, copyrights, trademarks,
service marks, technology, know-how and/or processes which are embedded in
equipment or fixtures, (ii) copyrights, trademarks, service marks, trade
dress, technology, know-how, inventions and/or processes for which no steps
have been taken to obtain registrations or patents, (iii) except with
respect to Section 4.9(b)(ii), any pending applications for any
Copyrights, Trademarks or Patents, (iv) any of the following that are not
registered:  corporate names, company
names, business names or fictitious business names or (v) co-pack or joint
promotion agreements.

 

SECTION
5.  COVENANTS

 

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

 

5.1.          Delivery of Instruments,
Certificated Securities and Chattel Paper.  If any amount payable under or in connection
with any of the Collateral in which such Grantor has an interest shall be or
become evidenced by any Instrument, Certificated Security or Chattel Paper
having a value in excess of $500,000, such Instrument, Certificated Security or
Chattel Paper shall be immediately delivered to the Collateral Agent, duly
indorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.

 

5.2.          Maintenance of Insurance.

 

(a)           Such
Grantor will maintain, with financially sound and reputable companies,
insurance policies (i) insuring the Inventory and Equipment and Vehicles
against loss by fire, explosion, theft, water, wind and other casualties as are
customarily insured against by operators of the same or similar businesses in
the same or similar localities and (ii) insuring such Grantor, the
Collateral Agent, the Administrative Agents and the Lenders against liability
for personal injury and property damage relating to such 

 

16

 

Inventory and Equipment and Vehicles, such policies to
be in such form and amounts and having such coverage as are customarily insured
against by operators of the same or similar businesses in the same or similar
localities.

 

(b)           All
such insurance shall (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 Collateral Agent of written notice thereof,
(ii) name the Collateral Agent as insured party or loss payee, as its
interest may appear, (iii) if reasonably requested by the Collateral
Agent, include mortgagee’s interest coverage and (iv) be reasonably satisfactory
in all other respects to the Collateral Agent.

 

(c)           Each
of the Borrowers shall deliver to the Collateral Agent, the Administrative
Agents and the Lenders an updated insurance certificate with respect to such
insurance substantially concurrently with each delivery of such Borrower’s
audited annual financial statements and such additional information with
respect thereto as the Collateral Agent may from time to time reasonably
request.

 

5.3.          Payment of Obligations.  Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves in
conformity with GAAP with respect thereto have been provided on the books of
such Grantor and such proceedings could not reasonably be expected to result in
the sale, forfeiture or loss of any material portion of the Collateral or any
interest therein.

 

5.4.          Maintenance of Perfected
Security Interest; Further Documentation.

 

(a)           Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest to the extent required by and having at least the
priority described in Section 4.2 (other than by reason of the action or
inaction of the Collateral Agent or any Lender) and shall defend such security
interest against the claims and demands of all Persons whomsoever, other than
the holders of Liens permitted by the Credit Agreement.

 

(b)           Such
Grantor will furnish to the Collateral Agent, the Administrative Agents and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral of such Grantor as the Collateral Agent may
reasonably request.

 

(c)           At
any time and from time to time, upon the written request of the Collateral
Agent, and at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and 

 

17

 

powers herein granted, including, without limitation,
(i) the filing of any financing or continuation statements under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction,
and any filings, if any, required to be made in the United States Patent and
Trademark Office, the United States Copyright Office and in any similar offices
in Canada with respect to the security interests created hereby, (ii) in
the case of Investment Property, Deposit Accounts, Letter-of-Credit Rights and
any other relevant Collateral, taking any actions necessary to enable the
Collateral Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto; provided, however,
that, so long as the Collateral Agent shall not have otherwise requested at a
time when an Event of Default shall have occurred and be continuing, such
Grantor shall not be required to take any such action under this clause
(ii) with respect to (w) Deposit Accounts, (x) money market accounts,
(y) Investment Property constituting commodity contracts or (z) any
other Collateral referred to in this clause (ii) until the value of such
other Collateral exceeds $250,000 with respect to any individual item of
Collateral or $1,000,000 in the aggregate for all such items of Collateral, and
(iii) using commercially reasonable efforts to deliver a landlord waiver from
any landlord with respect to any real property leased to the U.S. Borrower or
any of its Subsidiaries, as may be required by the Collateral Agent provided,
however, that, so long as the Collateral Agent shall not have otherwise
requested at a time when an Event of Default shall have occurred and be
continuing, such Guarantor shall not be required to take any such action under
this clause (iii), and (iv) the delivery to the Collateral Agent of physical
possession or, or the notation of the Collateral Agent’s Lien upon, titles with
respect to Vehicles,  provided, however,
that, so long as the Collateral Agent shall not have otherwise requested at a
time when an Event of Default shall have occurred and be continuing, such
Guarantor shall not be required to take any such action under this clause (iv).

 

5.5.          Changes in Locations. Name. etc.  Such Grantor will not, except upon 15 days’
prior written notice to the Collateral Agent and delivery to the Collateral
Agent of all additional executed financing statements and other documents
reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein:

 

(i)            change
its jurisdiction of organization or the location of its chief executive office
or sole place of business or principal residence from that referred to in
Section 4.3; or

 

(ii)           change
its name to such an extent that any financing statement filed by the Collateral
Agent in connection with this Agreement would become misleading for purposes
under the applicable Uniform Commercial Code;

 

provided, however, that such 15 day period shall be reduced to two
Business Days in the case of any such change effected as part of the Canadian
Restructuring Transaction.

 

5.6.          Notices.  Such
Grantor will advise the Collateral Agent, the Administrative Agents and the
Lenders promptly, in reasonable detail, of

 

18

 

(a)           any
Lien (other than security interests created hereby or Liens permitted under the
Credit Agreement) on any of the Collateral which would adversely affect the
ability of the Collateral Agent to exercise any of its remedies hereunder; and

 

(b)           of
the occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

 

5.7.          Investment Property.

 

(a)           If
such Grantor shall become entitled to receive or shall receive any certificate
(including, without limitation, any certificate representing a dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization),
option or rights in respect of the Capital Stock of any Issuer, whether in
addition to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Stock, or otherwise in respect thereof, such Grantor
shall accept the same as the agent of the Secured Parties, hold the same in
trust for the Secured Parties and deliver the same forthwith to the Collateral
Agent in the exact form received, duly indorsed by such Grantor to the
Collateral Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Grantor and with, if the
Collateral Agent so requests, signature guaranteed, to be held by the
Collateral Agent, subject to the terms hereof, as additional collateral
security for the Secured Obligations. 
Subject to Section 6.3(a) hereof, any sums paid upon or in respect of
the Investment Property upon the liquidation or dissolution of any Issuer, and,
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect
to the Investment Property pursuant to the recapitalization or reclassification
of the capital of any Issuer or pursuant to the reorganization thereof or
otherwise, the sums or property so paid or distributed shall, in each case
unless otherwise subject to a perfected security interest in favor of the
Collateral Agent or not required by the Loan Documents to be subject to such
perfected security interest (in which event such sums or property may be
retained by such Grantor), be delivered to the Collateral Agent to be held by
it hereunder as additional collateral security for the Secured
Obligations.  If any sums of money or property
so paid or distributed in respect of the Investment Property and required
hereby to be delivered to the Collateral Agent shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Collateral Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Secured Obligations.

 

(b)           Without
the prior written consent of the Collateral Agent, such Grantor will not
(i) vote to enable, or take any other action to permit, any Issuer of
Pledged Stock to issue any Capital Stock of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any Capital Stock of any nature of any such Issuer, unless, in the case of an
issuance of Capital Stock, such Grantor (x) provides the Collateral Agent
with five days’ prior notice of such issuance and (y) promptly after such
issuance, complies with Section 5.7(a), (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Investment Property or 

 

19

 

Proceeds thereof (except pursuant to a transaction not
prohibited by the Credit Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement and except
as permitted by the Credit Agreement or (iv) except such as reflect
customary securities law restrictions, enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Investment Property or Proceeds thereof.

 

(c)           In
the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as
such terms are applicable to it, (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in
Section 5.7(a) with respect to the Investment Property issued by it and
(iii) the terms of Sections 6.3(c) 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 Investment Property issued by
it.

 

5.8.          Receivables.

 

(a)           Other
than in the ordinary course of business consistent with its past practice, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Receivable, (iv) allow any credit or discount
whatsoever on any Receivable or (v) amend, supplement or modify any
Receivable in any manner that could adversely affect the value thereof.

 

(b)           Such
Grantor will deliver to the Collateral Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.

 

5.9.          Contracts.

 

(a)           Such
Grantor will perform and comply in all material respects with all its
obligations under the Contracts.

 

(b)           Such
Grantor will not amend, modify, terminate or waive any provision of any
Contract in any manner which could reasonably be expected to materially
adversely affect the value of such Contract as Collateral.

 

(c)           Such
Grantor will exercise promptly and diligently each and every material right
which it may have under each Contract (other than any right of termination).

 

20

 

(d)           Such
Grantor will deliver to the Collateral Agent a copy of each material demand,
notice or document received by it relating in any way to any Contract that
questions the validity or enforceability of such Contract.

 

5.10.        Intellectual Property.

 

(a)           Such
Grantor (either itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark, (iii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (iv) in the United
States and Canada, not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the Collateral Agent, for the
ratable benefit of the Secured Parties, shall obtain a perfected security
interest in such mark (or in the applicable license to use such mark if such
mark is licensed to such Grantor) pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way; provided, however, any decision made by a Grantor in its
reasonable business judgment to discontinue a product line or product, or
modify or update the branding of a product line or product, such that such
Grantor ceases to use (or limits its use of) a Trademark shall not be claimed a
violation of this Section 5.10(a).

 

(b)           To
the extent determined by it in its reasonable business judgment to be advisable,
such Grantor (either itself or through licensees) will not do any act, or omit
to do any act, whereby any material Patent may become forfeited, abandoned or
dedicated to the public.

 

(c)           To
the extent determined by it in its reasonable business judgment to be
advisable, such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired.  Such Grantor will
not (either itself or through licensees) do any act whereby any material
portion of the Copyrights may fall into the public domain.

 

(d)           Such
Grantor (either itself or through licensees) will not do any act that uses any
material Intellectual Property to infringe the intellectual property rights of
any other Person that would reasonably be likely to have a Material Adverse
Effect.

 

(e)           Such
Grantor will notify the Collateral Agent, the Administrative Agents and the
Lenders promptly if it knows, or has reason to know, that any application or
registration relating to any material Copyright, Patent or Trademark may become
forfeited, abandoned or dedicated to the public, or of any material adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and 

 

21

 

Trademark Office, the United States Copyright Office
or any court or tribunal in the United States or Canada) regarding such
Grantor’s ownership of, or the validity of, any material Copyright, Patent or
Trademark or such Grantor’s right to register the same or to own and maintain
the same.

 

(f)            Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Copyright,
Patent or Trademark with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in Canada, such
Grantor shall report such filing to the Collateral Agent together with the
delivery of financial statements in accordance with Section 6.1(a) of the
Credit Agreement.  Upon request of the
Collateral Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Collateral
Agent may reasonably request to evidence the security interest granted under
this Agreement in any Copyright, Patent or Trademark (other than the Foreign
Intellectual Property) and the goodwill of such Grantor relating thereto or
represented thereby.

 

(g)           To
the extent determined by it in its reasonable business judgment to be advisable,
such Grantor will 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 any similar office or agency in
Canada to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material Copyrights,
Patents and Trademarks, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability.  Such Grantor shall not abandon or fail to
pay any maintenance fee or annuity due and payable on any material Copyright,
Patent or Trademark, or fail to file any required affidavit or renewal in support
thereof, without first providing the Collateral Agent:  (i) sufficient written notice, of at
least 90 days, to allow the Collateral Agent to pay timely any such maintenance
fees or annuities which may become due on any of such Copyrights, Patents or
Trademarks, or to file any affidavit or renewal with respect thereto, and
(ii) a separate written power of attorney or other authorization to pay
such maintenance fees or annuities, or to file such affidavit or renewal,
should such be necessary or desirable.

 

(h)           In
the event that any material Copyright, Patent or Trademark is or is about to be
infringed, misappropriated or diluted by a third party, such Grantor shall
promptly notify the Collateral Agent after it learns thereof and shall take
such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Copyright, Patent or Trademark, such as suing for
infringement, misappropriation or dilution, seeking injunctive relief where
appropriate and recovering any and all damages for such infringement, misappropriation
or dilution.

 

22

 

SECTION
6.  REMEDIAL PROVISIONS

 

6.1.          Certain Matters Relating to
Receivables.

 

(a)           At
any time and from time to time (but,
so long as no Event of Default shall have occurred and be continuing, no more
often than once during any calendar year), upon the Collateral Agent’s request
and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Collateral Agent
to furnish to the Collateral Agent reports showing reconciliations and aging
of, and trial balances for, the Receivables.

 

(b)           The
Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Collateral Agent’s direction and control, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default.  If required by the Collateral Agent at any
time after the occurrence and during the continuance of an Event of Default,
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 Collateral
Agent if required, in a Collateral Account maintained under the sole dominion
and control of the Collateral Agent, subject to withdrawal by the Collateral
Agent for the account of the Administrative Agent and 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 Collateral Agent, the Administrative Agents
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)           At
the Collateral Agent’s request after the occurrence and during the continuance
of an Event of Default, each Grantor shall deliver to the Collateral Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.

 

6.2.          Communications with Obligors, Grantors
Remain Liable.

 

(a)           The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables and parties to the Contracts to verify with
them to the Collateral Agent’s satisfaction the existence, amount and terms of
any Receivables or Contracts.

 

(b)           Upon
the request of the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall notify obligors on
the Receivables and parties to the Contracts that the Receivables and the
Contracts have been assigned to the Collateral Agent for the ratable benefit of
the Secured Parties and that payments in respect thereof shall be made directly
to the Collateral Agent.

 

23

 

(c)           Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables and Contracts to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto.  None of
the Collateral Agent, either Administrative Agent or any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the Collateral Agent, either Administrative Agent or any Lender of
any payment relating thereto, nor shall the Collateral Agent, either
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) or Contract, 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 Stock; Pledged Notes.

 

(a)           Unless
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have given notice to the relevant Grantor of the Collateral 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 or other Investment Property and all payments made in respect
of the Pledged Notes, in each case whether or not paid in the normal course of
business of the relevant Issuer and whether or not consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate or other organizational rights with respect to the
Investment Property; provided, however, that no vote shall be
cast or corporate or other organizational right exercised or other action taken
which, in the Collateral Agent’s reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Credit Agreement, this Agreement or any other Loan
Document.

 

(b)           If
an Event of Default shall occur and be continuing and the Collateral Agent shall
give notice of its intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Collateral Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and make application thereof to the Secured Obligations as
provided in Section 6.5 hereof, and (ii) subject to obtaining requisite
consents which shall be promptly obtained by the relevant Grantor or Grantors,
any or all of the Investment Property shall be registered in the name of the
Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining
to such Investment Property 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
Investment Property as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other 

 

24

 

organizational structure of any Issuer, or upon the
exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Collateral Agent may determine), all
without liability except to account for property actually received by it, but
the Collateral 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.

 

(c)           Each
Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Collateral 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, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.

 

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

 

6.5.          Application of Proceeds.  At such intervals as may be agreed upon by
the Borrowers and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent’s election, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, and any proceeds of the
guarantee set forth in Section 2, in payment of the Secured Obligations
(or, in the case of the proceeds of the guarantee set forth in Section 2, in
payment of the relevant Borrower Obligations) in the following order:

 

First,
to pay incurred and unpaid fees and expenses of the Collateral Agent under the
Loan Documents, including, without limitation, all reasonable costs and
expenses of every kind incurred in connection with 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 Collateral Agent, the Administrative Agents and the
Lenders hereunder, including, without limitation, reasonable attorneys’ fees
and disbursements;

 

25

 

Second,
to the Collateral Agent, for application by it towards payment of amounts then
due and owing and remaining unpaid in respect of the Secured Obligations or
relevant Borrower Obligations, as the case may be, pro rata among the Lenders
according to the amounts of the Secured Obligations or relevant Borrower
Obligations, as the case may be, then due and owing and remaining unpaid to the
Lenders;

 

Third,
to the Collateral Agent, for application by it towards prepayment of the Secured
Obligations or relevant Borrower Obligations, as the case may be, pro rata
among the Lenders according to the amounts of the Secured Obligations or
relevant Borrower Obligations, as the case may be, then held by the Lenders,
but in the absence of an Event of Default, only to the extent the Borrowers are
required to make such prepayment pursuant to the Credit Agreement or as the
Borrowers may otherwise agree; and

 

Fourth,
any balance of such Proceeds remaining after the Secured Obligations or
relevant Borrower Obligations, as the case may be, shall have been paid in full
in cash or other immediately available funds, no relevant Letters of Credit
shall be outstanding and the relevant Commitments shall have been terminated
shall be paid over to the Borrowers 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 Collateral Agent, on behalf of the Administrative Agents and
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 Secured Obligations, all rights and remedies of a
secured party under the Minnesota UCC or any other applicable law.  Without limiting the generality of the
foregoing, the Collateral 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) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part 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 Collateral Agent, either
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 Collateral Agent or any Lender shall
have the right upon any such public sale or sales, and, 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
Collateral Agent’s request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere.  The Collateral Agent shall apply the
Proceeds of any action taken by it pursuant to this Section 6.6 in the
manner provided in Section 6.5 hereof. 
To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Collateral Agent, either
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder.  If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such

 

26

 

notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.

 

6.7.          Registration Rights.

 

(a)           If
the Collateral Agent shall determine to exercise its right to sell any or all
of the Pledged Stock pursuant to Section 6.6, and if in the opinion of the
Collateral Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to cooperate
with the Collateral Agent to effect the registration of such Pledged Stock.

 

(b)           Each Grantor recognizes that the Collateral
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 Collateral 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.

 

(c)           Each
Grantor agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of all or any portion of
the Pledged Stock pursuant to this Section 6.7 valid and binding and in
compliance with any and all other applicable Requirements of Law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable
injury to the Collateral Agent, the Administrative Agents and the Lenders, that
the Collateral Agent, the Administrative Agents and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred and is continuing under the Credit Agreement.

 

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
Secured Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent, either Administrative Agent or any Lender to collect such
deficiency.

 

27

 

SECTION
7.  THE COLLATERAL AGENT

 

7.1.          Collateral Agent’s Appointment as
Attorney-in-Fact, etc.

 

(a)           Each Grantor hereby irrevocably
constitutes and appoints the Collateral 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 Collateral 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:

 

(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 under any Receivable or Contract 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
Collateral Agent for the purpose of collecting any and all such moneys due
under any Receivable or Contract 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 Collateral
Agent may reasonably request to
evidence the Collateral Agent’s and the Lenders’ security interest in such
Intellectual Property and the goodwill 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 Collateral
Agent or as the Collateral 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 

 

28

 

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 Collateral
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 Collateral Agent shall in its sole
reasonable 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 Collateral Agent were the absolute owner thereof for
all purposes, and do, at the Collateral Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the
Collateral Agent reasonably deems necessary to protect, preserve or realize
upon the Collateral and the Collateral Agent’s, the Administrative Agents’ and
the Lenders’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this
Section 7.1(a) to the contrary notwithstanding, the Collateral 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.

 

(b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement.

 

(c)           The
expenses of the Collateral Agent incurred in connection with actions undertaken
as provided in this Section 7.1, together with interest thereon at a rate
per annum equal to the highest rate per annum at which interest would then be
payable on any category of past due ABR Loans under the Credit Agreement, from
the date of payment by the Collateral Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Collateral Agent on
demand.

 

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

 

7.2.          Duty of Collateral Agent.  The Collateral 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 Minnesota UCC or otherwise,
shall be to deal with it in the same manner as the Collateral Agent deals with
similar property for its own account. 
None of the Collateral Agent, either Administrative Agent, any Lender
nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the 

 

29

 

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 Collateral Agent, the Administrative Agents
and the Lenders hereunder are solely to protect the Collateral Agent’s, the
Administrative Agents’ and the Lenders’ interests in the Collateral and shall
not impose any duty upon the Collateral Agent, either Administrative Agent or
any Lender to exercise any such powers. 
The Collateral Agent, the Administrative Agents 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.

 

7.3.          Execution of Financing Statements.  Pursuant to any applicable law, each Grantor
authorizes the Collateral 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 Collateral Agent reasonably determines appropriate to perfect
the security interests of the Collateral Agent under this Agreement.  Each Grantor authorizes the Administrative
Agent to use the collateral description “all personal property [except for]” in
any such financing statements.

 

7.4.          Authority of Collateral Agent.  Each Grantor acknowledges that the rights
and responsibilities of the Collateral Agent under this Agreement with respect
to any action taken by the Collateral Agent or the exercise or non-exercise by
the Collateral 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 Collateral 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 Collateral Agent
and the Grantors, the Collateral 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 Collateral Agent or any Loan Party 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. 
None of the Collateral Agent, either Administrative Agent or any Lender
shall by any act (except by a written instrument pursuant to Section 8.1),
delay, 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 Collateral Agent, either 

 

30

 

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 Collateral Agent, either 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 Collateral Agent, such 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.

 

(a)           Each
Guarantor agrees to pay or reimburse the Collateral Agent, each Lender and each
Administrative Agent for all of its costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender and of counsel to the
Collateral Agent and each Administrative Agent.

 

(b)           Each
Guarantor agrees to pay, and to save the Collateral Agent, the Administrative
Agents and the Lenders harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.

 

(c)           Each
Guarantor agrees to pay, and to save the Collateral 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 Borrowers
would be required to do so pursuant to Section 10.5 of the Credit
Agreement.

 

(d)           The
agreements in this Section 8.4 shall survive repayment of the Secured
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 Loan Party and shall
inure to the benefit of the Collateral Agent, the Administrative Agents and the
Lenders and their successors and assigns; provided that no Loan Party
may assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.

 

8.6.          Set-Off.  In
addition to any rights and remedies of the Secured Parties provided by law,
each Secured Party shall have the right, without prior notice to the Loan
Parties, any such notice being expressly waived by each Loan Party to the
extent permitted by applicable law, upon any amount becoming due and payable by
such Loan Party hereunder or under any other 

 

31

 

Loan Document (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Secured Party or any branch or agency thereof
to or for the credit or the account of such Loan Party, as the case may
be.  Each Secured Party agrees promptly
to notify the Borrowers and the Administrative Agents after any such setoff and
application made by such Secured Party, provide that the failure to give such
notice shall not affect the validity of such setoff 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.

 

8.10.        Integration. 
This Agreement and the other Loan Documents represent the agreement of
the Loan Parties, the Collateral Agent, Administrative Agents and the Lenders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Agent,
either Administrative Agent or any Lender relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

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

 

8.12.        Submission To Jurisdiction, Waivers.  Each Loan Party 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 Minnesota, the
courts of the United States of America for the District of Minnesota, and
appellate courts from any thereof, unconditionally.

 

(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 

 

32

 

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 Loan Party at its address
referred to in Section 8.2 or at such other address of which the
Collateral 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 Loan Party 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)           none
of the Collateral Agent, either Administrative Agent or any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or in
connection with this Agreement or any of the other Loan Documents, and the relationship
between the Loan Parties, on the one hand, and the Collateral Agent, the
Administrative Agents 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 Loan Parties and the Lenders.

 

8.14.        Additional Loan Parties.  Each Subsidiary of the Borrowers that is
required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall (a) to the extent such Subsidiary is a U.S.
Subsidiary Guarantor, become a Guarantor, a Grantor and a Loan Party for all
purposes of this Agreement and (b) to the extent such Subsidiary is a
Canadian Subsidiary Guarantor, become a CBO Guarantor and a Loan Party for all
purposes under this Agreement, in either case 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 Secured
Obligations (other than Secured Obligations in respect of Specified Hedge
Agreements) shall have been paid in full, the Commitments have been 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 

 

33

 

to survive such termination) of the Collateral Agent
and each Loan Party 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 Loan Parties. 
At the request and sole expense of any Loan Party following any such
termination, the Collateral Agent shall deliver to such Loan Party any
Collateral held by the Collateral Agent hereunder, and execute and deliver to
such Loan Party such documents as such Loan Party shall reasonably request to evidence
such termination.

 

(b)           If
any of the Collateral shall be sold, transferred or otherwise disposed of by
any Loan Party in a transaction permitted by the Credit Agreement, then the
Collateral Agent, at the request and sole expense of such Loan Party, shall
execute and deliver to such Loan Party 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 Borrowers, a Subsidiary Guarantor shall be released from
its obligations hereunder in the event that all the Capital Stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a
transaction permitted by the Credit Agreement; provided that the
Borrowers shall have delivered to the Collateral Agent, at least five Business
Days prior to the date of the proposed release, a written request for release
identifying the relevant Subsidiary 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
Borrowers stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

 

8.16.        WAIVER OF JURY TRIAL.  EACH PARTY HERETO 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.

 

8.17.        Grantors’ Obligations.  Notwithstanding anything herein to the
contrary, (i) each Grantor’s obligations hereunder with respect to
Collateral is limited to Collateral in which such Grantor has an interest; and
(ii) any reports or other deliveries required by a Grantor hereunder shall
be effective if made by one of the Borrowers or by any other Grantor hereunder.

 

8.18.        Existing Guarantee and
Collateral Agreement. 
This Agreement amends and restates in its entirety the U.S. Guarantee
and Collateral Agreement, dated as of November 13, 2001 (the “Existing
Guarantee and Collateral Agreement”), made by International Multifoods,
Inc., The Boston Sea Party Restaurants, Inc., Davenport Industrial Supply Co.,
Fantasia Confections, Inc., Lucan Feed Services, Inc., Minetco-Minnesota
International Export Trading Company, Inc., Multifoods Bakerty Distributors,
Inc., Multifoods Bakery International, Inc., Multifoods Distribution
Management, Inc., Better Brands, Inc., Multifoods Distribution Group, Inc.,
Multifoods Merchandising, Inc., The Pickaway Grain Company, Multifoods Ltd., Gourmet
Baker, Inc., 980964 Ontario Limited, Sea-Pac Corp., and Windmill Holdings
Corp., in favor of Canadian Imperial Bank of Commerce, as collateral agent (the
“Retiring Collateral Agent”), for which Existing Guarantee and
Collateral Agreement the Lenders have appointed the Collateral Agent as
successor collateral agent pursuant to the Credit Agreement, provided that the
obligations of the Loan Parties under the Existing Guarantee and Collateral
Agreement shall 

 

34

 

continue under this Agreement, and shall not in any event be
terminated, extinguished or annulled, but shall hereafter be governed by this
Agreement.

 

8.19.        Judgment Currency.  If, for the purposes of obtaining judgment in any court in any
jurisdiction with respect to this Agreement, it becomes necessary to convert
into the currency of such jurisdiction (the “Judgment Currency”) any amount due
under this Agreement in any currency other than the Judgment Currency (the
“Currency Due”), then conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which judgment is given.  For this purpose, “rate of exchange” means
the rate at which the Collateral Agent is able, on the relevant date, to
purchase the Currency Due with the Judgment Currency in accordance with its
normal practice at its office in Minneapolis,
Minnesota.  In the event that
there is a change in the rate of exchange prevailing between the Business Day
before the day on which the judgment is given and the date of receipt by the
Collateral Agent of the amount due, the relevant Loan Party will, on the date
of receipt by the Collateral Agent, pay such additional amounts, if any, or be
entitled to receive reimbursement of such amount, if any, as may be necessary
to ensure that the amount received by the Collateral Agent on such date is the
amount in the Judgment Currency which when converted at the rate of exchange
prevailing on the date of receipt by the Collateral Agent is the amount then
due under this Agreement in the Currency Due. 
If the amount of the Currency Due which the Collateral Agent is so able
to purchase is less than the amount of the Currency Due originally due to it,
the relevant Loan Party shall indemnify and save the Collateral Agent and the Secured
Parties harmless from and against all loss or damage arising as a result of
such deficiency.  This indemnity shall
constitute an obligation separate and independent from the other obligations
contained in this Agreement, shall give rise to a separate and independent
cause of action, shall apply irrespective of any indulgence granted by the
Collateral Agent from time to time and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due under this Agreement or under any judgment or order.

 

35

 

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

 

	
   

  	
  INTERNATIONAL MULTIFOODS CORPORATION,

  
	
   

  	
  as a CBO Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BOSTON SEA PARTY RESTAURANTS, INC.

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FANTASIA CONFECTIONS, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LUCAN FEED SERVICE, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  

 

36

 

	
   

  	
  MULTIFOODS INC., a Minnesota corporation,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MULTIFOODS BAKERY DISTRIBUTORS, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MULTIFOODS BAKERY INTERNATIONAL, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MULTIFOODS LTD.,

  
	
   

  	
  as a CBO Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOURMET BAKER INC.,

  
	
   

  	
  as a CBO Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  

 

37

 

	
   

  	
  980964 ONTARIO LIMITED,

  
	
   

  	
  as a CBO Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SEA-PAC CORP.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WINDMILL HOLDINGS CORP.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARTHA WHITE FOODS, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MULTIFOODS BRANDS, INC.,

  
	
   

  	
  as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  

 

38

 

	
   

  	
  MULTIFOODS INC., a Delaware

  corporation, as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MULTIFOODS MANUFACTURING,

  INC., as a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE PICKAWAY GRAIN COMPANY, as

  a Guarantor and as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  

 

39

 

EXHIBIT
C-2

 

AMENDED AND RESTATED CANADIAN COLLATERAL AGREEMENT

 

AMENDED AND RESTATED CANADIAN COLLATERAL AGREEMENT,
dated as of August 8, 2003, made by each of the signatories hereto (together
with any other entity that may become a party hereto as provided herein, the “Grantors”),
in favor of THE BANK OF NOVA SCOTIA, as Canadian collateral agent (in such capacity,
together with any successors and assigns in such capacity, the “Collateral
Agent”) for the Secured Parties referred to below.

 

Reference is made to the Existing Credit Agreement, as
defined in the Credit Agreement referred to below.  On or prior to the date of this Agreement, all outstanding
amounts upon the “U.S. Tranche A Term Loans”, the “U.S. Tranche B Term Loans”
and the “Canadian Term Loans” have been paid in full by the relevant Borrower
(as defined in the Credit Agreement), and following such payment, the only
loans and commitments to extend credit accommodations outstanding under the
Existing Credit Agreement were the “U.S. Revolving Facility” and the “Canadian
Revolving Facility” (each as defined in the Existing Credit Agreement).
Further, on the date of this Agreement, the Canadian Revolving Facility and the
U.S. Revolving Facility are being assigned to the Canadian Revolving Lenders or
the U.S. Revolving Lenders (as defined in the Credit Agreement), respectively,
pursuant to the Global Assignment and Acceptance (as defined in the Credit
Agreement), provided that, with respect to the Canadian Revolving
Facility and U.S. Revolving Facility of any lenders under the Existing Credit
Agreement that declined to execute the Global Assignment and Acceptance, such
facilities are being paid in full and reduced to zero on the date hereof, as
specified in the Credit Agreement.

 

Further, pursuant to a letter addressed to the
Borrowers dated concurrently herewith, Canadian Imperial Bank of Commerce has
resigned as “U.S. Administrative Agent”, “Canadian Administrative Agent” and
the “Collateral Agent” under the Existing Credit Agreement and the “Loan
Documents” as defined therein.  
Pursuant to the Credit Agreement, the Lenders (as defined in the Credit
Agreement) have appointed U.S. Bank National Association as the U.S.
Administrative Agent, the Canadian Administrative Agent and the U.S. Collateral
Agent, and The Bank of Nova Scotia as the Canadian Collateral Agent, under the
Existing Credit Agreement and the other Loan Documents as defined in the
Existing Credit Agreement.

 

As more particularly set forth in Section 7.18, this
Amended and Restated Canadian Collateral Agreement amends and restates the
Existing Canadian Collateral Agreement in its entirety.

 

WITNESSETH:

 

WHEREAS, pursuant to the Amended and Restated Credit
Agreement, dated concurrently herewith (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”),  among
INTERNATIONAL MULTIFOODS CORPORATION, a Delaware corporation (the “U.S.
Borrower”), ROBIN HOOD MULTIFOODS INC., an Ontario corporation and a
Subsidiary of the U.S. Borrower (the “Canadian Borrower” and, together
with the U.S. Borrower, the “Borrowers”), the banks and other financial
institutions from time to time parties thereto (the “Lenders”), The Bank
of Nova Scotia, as Canadian Funding Agent for the 

 

 

Lenders, U.S. Bank National Association, as administrative agent for
the U.S. Lenders (in such capacity, the “U.S. Administrative Agent”) and
as administrative agent for the Canadian Lenders (in such capacity, the “Canadian
Administrative Agent”) and certain other parties, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;

 

WHEREAS, the Borrowers are members of an affiliated
group of companies that includes each other Loan Party;

 

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

 

WHEREAS, the Borrowers and the other Loan Parties are
engaged in related businesses, and each Loan Party 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 Borrowers
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;

 

NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers thereunder, each Grantor hereby agrees with the
Collateral Agent, for the ratable benefit of the Secured Parties, 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 which are
defined in the Personal Property Security
Act in effect in the Province of Ontario on the date hereof are used
herein as so defined:  Accounts,
Securities, Chattel Paper, Goods, Documents of Title, Equipment, Consumer
Goods, Instruments, Inventory and Money.

 

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

 

“Agreement”:  this Amended and Restated Canadian
Collateral Agreement, as the same may be amended, supplemented or otherwise
modified from time to time and together with any replacements or substitutions
with respect thereto.

 

“Canadian Borrower
Obligation Guarantors” or “CBO Guarantors”:  the collective reference to each Grantor
other than the Canadian Borrower.

 

2

 

“Canadian Borrower
Obligations”:  the collective
reference to the unpaid principal of and interest on the Canadian Loans and
Canadian Reimbursement Obligations and all other obligations and liabilities of
the Canadian Borrower (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the maturity of the
Canadian Loans and Canadian 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 Canadian Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent, either Administrative Agent, any other
Agent or any Lender (or, in the case of any Specified Hedge Agreement entered
into by the Canadian Borrower, any Lender Affiliate or any other counterparty
thereto), 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 Canadian Letter of Credit, any Specified Hedge Agreement entered
into by the Canadian Borrower or any other document made, delivered or given in
connection with any of the foregoing, 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 Collateral Agent, either Administrative Agent,
any other Agent or to the Lenders that are required to be paid by the Canadian
Borrower pursuant to the terms of any of the foregoing agreements).

 

“Collateral”:  as defined in Section 2.

 

“Collateral Account”:  any collateral account established by the
Collateral Agent as provided in Section 5.1 or 5.4.

 

“Contracts”:  the contracts and agreements listed in Schedule 7,
as the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to damages arising thereunder
and (iii) all rights of any Grantor to perform and to exercise all
remedies thereunder.

 

“Copyright Licenses”:  any written agreement naming any Grantor as
licensor or licensee now or hereafter in effect (including, without limitation,
those listed in Schedule 6), granting any right under any copyright
arising under the laws of the United States or Canada, including, without
limitation, the grant of rights to reproduce, distribute, perform, display,
exploit and sell materials derived from any such copyright.

 

“Copyrights”:  (i) all copyright rights owned by any
Grantor arising under the laws of the United States or Canada, whether as
author, assignee, transferee or otherwise; (ii) all copyrights owned by
any Grantor arising under the laws of the United States or Canada, whether
registered or unregistered and whether published or unpublished, and all
registrations, supplemental registrations, and applications for registration in
the United States Copyright Office or in any similar office or agency in
Canada, including, without 

 

3

 

limitation, those listed on Schedule 6;
and (iii) all rights owned by any Grantor to obtain all renewals thereof.

 

“Deposit Account”:  any demand, time, savings, passbook or like
account maintained with a depositary institution.

 

“Existing Canadian
Collateral Agreement”:  as defined
in Section 7.18 hereof.

 

“Foreign Intellectual
Property”:  intellectual property of
any Grantor which arises under or is governed by laws of a country (or a
political subdivision thereof) other than the United States or Canada.

 

“Intangible”:  all “intangibles” as such term is defined in
Section 1(1) of the PPSA in effect in the Province of Ontario on the date
hereof and, in any event, excluding all Foreign Intellectual Property and
Restricted Intellectual Property and otherwise including, without limitation,
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time
to time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such
Grantor to damages arising thereunder and (iii) all rights of such Grantor
to perform and to exercise all remedies thereunder, in each case to the extent
the terms thereof (after giving effect to any consent that has been obtained,
it being understood that such Grantor is not obligated to obtain any such
consent) do not prohibit the grant by such Grantor of a security interest
pursuant to this Agreement in its right, title and interest therein without the
consent of any other party thereto and do not give any other party thereto the
right to terminate its obligations thereunder; provided, that the
foregoing limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due or other right to
payment under any such contract, agreement, instrument or indenture.

 

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property owned or hereafter
acquired by any Grantor, whether arising under United States or Canadian laws
or otherwise, specifically excluding all Foreign Intellectual Property and Restricted
Intellectual Property and otherwise including, without limitation, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks and the Trademark Licenses, all trade secrets, all confidential or
proprietary information and all rights to sue at law or in equity for any
infringement or other impairment thereof, including all rights owned by any
Grantor to receive all proceeds and damages therefrom.

 

“Intercompany Note”:  any promissory note evidencing loans made by
any Grantor to the U.S. Borrower or any of its Subsidiaries.

 

“Issuers”:  the collective reference to each issuer of
any Securities.

 

4

 

“Patent License”:  all agreements, whether written or oral now
or hereafter in effect, 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 of the United States or Canada, including, without limitation, any of
the foregoing referred to in Schedule 6.

 

“Patents”:  (i) all letters patent owned by any
Grantor of the United States or Canada, all reissues and extensions thereof
owned by any Grantor, including, without limitation, any of the foregoing
referred to in Schedule 6, (ii) all applications for letters
patent owned by any Grantor of the United States or Canada and all divisions,
continuations and continuations-in-part thereof and the inventions disclosed or
claimed therein owned by any Grantor, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights
owned by any Grantor 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 and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary
course of business).

 

“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
Subsidiary of the U.S. Borrower that may be issued or granted to, or held by,
any Grantor while this Agreement is in effect.

 

“PPSA”:  the Personal
Property Security Act or any other Canadian federal or provincial
statute pertaining to the granting, perfecting, priority or ranking of security
interests, liens or hypotecs on personal property, and any successor statutes together
with any regulations thereunder, in each case as in effect from time to time.

 

“Proceeds”:  all “proceeds” as such term is defined in
the PPSA in effect in the Province of Ontario on the date hereof and, in any
event, shall include, without limitation, all dividends or other income from
Securities, collections thereon or distributions or payments with respect
thereto.

 

“Receiver”:  a receiver, a manager or a receiver and
manager.

 

“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).

 

“Restricted
Intellectual Property”: 
non-material intellectual property licensed to any Grantor (other than
any such intellectual property licensed pursuant to the Acquisition
Documentation (as defined in the Existing Credit Agreement)), to the extent
that (a) such Grantor does not have the right under the applicable license
or under applicable law to grant a security interest therein or comply with the
obligations herein related to such property, or (b) doing so would impair
the value of such property or otherwise subject such Grantor to material
penalties or liability.

 

5

 

“Retiring Collateral
Agent”:  as defined in Section 7.18
hereof.

 

“Secured Obligations”:  the obligations secured by the security
interests granted pursuant to Section 2 of this Agreement, which obligations
consist of (i) the Canadian Borrower Obligations and (ii) the
obligations of each Canadian Subsidiary Guarantor under Section 2 of the
U.S. Guarantee and Collateral Agreement.

 

“Secured Parties”:  the collective reference to (i) the
Lenders and their respective successors, indorsees, transferees and assigns,
(ii) the Administrative Agents and their respective successors and assigns
in such capacities, (iii) any Lender Affiliate or any other counterparty
party to any Specified Hedge Agreement, (iv) the Collateral Agent and its
successors and assigns in such capacity and (v) any other Agent and its
successors and assigns.

 

“Securities”:  the collective reference to (i) all
“security” as such term is defined in Section 1(1) of the PPSA in effect
in the Province of Ontario and (ii) whether or not constituting “a
security” as so defined, all Pledged Notes and all Pledged Stock.

 

“Trademark License”:  any agreement, whether written or oral, now
or hereafter in effect, providing for the grant by or to any Grantor of any
right to use any trademark arising under the laws of the United States or
Canada, including, without limitation, any of the foregoing referred to in Schedule 6.

 

“Trademarks”:  (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks and logos arising under the laws of the United
States or Canada owned by any Grantor and other source or business identifiers,
and all goodwill associated therewith or symbolized thereby, now existing or
hereafter adopted or acquired, all registrations and recordings thereof owned
by any Grantor, and all applications in connection therewith owned by any
Grantor, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States or Canada, or otherwise, and all
common-law rights owned by any Grantor related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and
(ii) all rights owned by any Grantor 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 province and, in any event including, without limitation, all tires and
other appurtenances to any of the foregoing.

 

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.

 

6

 

(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.

 

GRANT
OF SECURITY INTEREST

 

2.1           Each
Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants
to the Collateral Agent, for the ratable benefit of the Secured Parties, 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 the Secured Obligations:

 

(a)           all
Accounts;

 

(b)           all
Chattel Paper;

 

(c)           all
Contracts;

 

(d)           all
Deposit Accounts;

 

(e)           all
Documents of Title;

 

(f)            all
Equipment;

 

(g)           all
Intangibles;

 

(h)           all
Instruments;

 

(i)            all
Intellectual Property;

 

(j)            all
Inventory;

 

(k)           all
Securities;

 

(l)            all
Vehicles;

 

(m)          all
Goods;

 

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

 

(o)           to
the extent not otherwise included, all Proceeds 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.

 

7

 

Notwithstanding the foregoing, in no event shall the Collateral include
any fixed or capital assets that are subject to a Lien permitted by Section
7.3(g) of the Credit Agreement, to the extent any document or instrument
evidencing or governing such Lien or the Indebtedness secured thereby prohibits
the grant of junior Liens on such assets, nor shall any such assets constitute
Equipment of Vehicles for any other purposes hereof.

 

2.2           Attachment.  Each Grantor confirms that value has been
given by the Secured Parties to each Grantor, that such Grantor has rights in
the Collateral owned by such Grantor (other than after acquired property) and
that the Grantors and the Collateral Agent have not agreed to postpone the time
for attachment of the Liens created by this Agreement to any of the Collateral.

 

SECTION
3.

 

REPRESENTATIONS
AND WARRANTIES

 

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

 

3.1           Title;
No Other Liens.  Except for the
security interest granted to the Collateral Agent for the ratable benefit of
the Secured Parties 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 such as have been filed in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are permitted by the Credit Agreement.

 

3.2           Perfected
First Priority Liens.  The security
interests granted pursuant to this Agreement (a) upon completion of the
filings and other actions specified on Schedule 3 (which, in the
case of all filings and other documents referred to on said Schedule, have been
delivered to the Collateral Agent in completed and duly executed form) will
constitute valid perfected security interests in all of the Collateral
described in said Schedule in favor of the Collateral Agent in which (x) a
security interest may be perfected by filing under the appropriate PPSA, or
(y) in which a security interest may be perfected by taking the other
actions described in Schedule 3, for the ratable benefit of the
Secured Parties, as collateral security for the Secured Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
(other than buyers in the ordinary course of business, and subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or effecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing) and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for Liens permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law.

 

8

 

3.3           Jurisdiction
of Organization; Chief Executive Office. 
On the date hereof, such Grantor’s jurisdiction of organization and the
location of such Grantor’s chief executive office or sole place of business or
principal residence, as the case may be, are specified on Schedule 4.

 

3.4           Inventory
and Equipment.  On the date hereof,
the Inventory and the Equipment (other than mobile goods) are kept at the
locations listed on Schedule 5.

 

3.5           Consumer
Goods.  None of the Collateral
constitutes Consumer Goods.

 

3.6           Pledged
Stock.  (a) The shares of
Pledged Stock pledged by such Grantor hereunder constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Issuer which is
a Subsidiary of the U.S. Borrower owned by such Grantor.

 

(b)           All
the shares of the Pledged Stock have been duly and validly issued and are fully
paid and nonassessable.

 

(c)           To
the knowledge of such Grantor, each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.

 

(d)           Such
Grantor is the record (except as set forth on Schedule 3.6) and
beneficial owner of, and has good and marketable title to, the Securities
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except the security interest created by this
Agreement and except for Liens permitted by Section 7.3(a) of the Credit
Agreement.

 

3.7           Receivables.  (a) No amount payable to such Grantor
in excess of the Canadian Dollar Equivalent of $500,000 under or in connection
with any Receivable is evidenced by any Instrument or Chattel Paper which has
not been delivered to the Collateral Agent.

 

(b)           None
of the obligors on any Receivables having a value in excess of the Canadian
Dollar Equivalent of $500,000 is a Governmental Authority with respect to which
all requirements of applicable law have not been fulfilled as to perfect and
make fully effective the Lien thereon created hereby.

 

(c)           The
amounts represented by such Grantor to the Lenders from time to time as owing
to such Grantor in respect of the Receivables will at such times be accurate.

 

3.8           Contracts.  (a) No consent of any party (other than
such Grantor) to any Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement.

 

(b)           Each
Contract is in full force and effect and constitutes a valid and legally
enforceable obligation of the parties thereto, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws 

 

9

 

relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.

 

(c)           No
consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Contracts by any party
thereto other than those which have been duly obtained, made or performed, are
in full force and effect and do not subject the scope of any such Contract to
any material adverse limitation, either specific or general in nature.

 

(d)           Neither
such Grantor nor (to the best of such Grantor’s knowledge) any of the other
parties to the Contracts is in default in the performance or observance of any
of the terms thereof in any manner that, in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

(e)           To
the knowledge of such Grantor, the right, title and interest of such Grantor
in, to and under the Contracts are not subject to any defenses, offsets,
counterclaims or claims.

 

(f)            Such
Grantor has delivered to the Collateral Agent a complete and correct copy of
each Contract, including all amendments, supplements and other modifications
thereto.

 

(g)           No
amount payable to such Grantor under or in connection with any Contract is
evidenced by any Instrument or Chattel Paper which has not been delivered to
the Collateral Agent.

 

(h)           Except
as set forth on Schedule 3.8, none of the parties to any Contract
is a Governmental Authority.

 

3.9           Intellectual
Property.  (a) Schedule 6
lists all Intellectual Property owned by such Grantor in its own name on the
date hereof, other than (i) licenses for (A) computer software, or
(B) patents, copyrights, trademarks, service marks, technology, know-how
and/or processes which are embedded in equipment or fixtures,
(ii) copyrights, trademarks, service marks, trade dress, technology,
know-how, inventions and/or processes for which no steps have been taken to
obtain registrations or patents and (iii) co-pack and joint promotion
agreements.

 

(b)           On
the date hereof, all material Intellectual Property (i) is valid,
subsisting, unexpired and enforceable and, has not been abandoned and
(ii) does not infringe the intellectual property rights of any other
Person, except to the extent that any of the foregoing could not reasonably be
expected to have a material adverse effect on the value of any material
Intellectual Property.

 

(c)           On
the date hereof, none of the material Intellectual Property is the subject of
any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor, except (i) as set forth in Schedule 6,
or (ii) agreements with Affiliates of such Grantor.

 

10

 

(d)           No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.

 

(e)           No
action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof which both (i) seeks to limit, cancel or
question the validity of any Intellectual Property or such Grantor’s ownership
interest therein, and (ii) which, if adversely determined, would have a
material adverse effect on the value of any material Intellectual Property.

 

(f)            For
the purposes of Section 3.9(b)-3.9(e), the term Intellectual Property
shall not include (i) rights licensed to such Grantor pursuant to licenses
for (A) computer software, or (B) patents, copyrights, trademarks,
service marks, technology, know-how and/or processes which are embedded in
equipment or fixtures, (ii) copyrights, trademarks, service marks, trade
dress, technology, know-how, inventions and/or processes for which no steps
have been taken to obtain registration or patents, (iii) except with
respect to Section 3.9(b)(ii), any pending applications for any
Copyrights, Trademarks or Patents, (iv) any of the following that are not
registered:  corporate names, company
names, business names or fictitious business names or (v) co-pack or joint
promotion agreements.

 

SECTION 4.

 

COVENANTS

 

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

 

4.1           Delivery
of Instruments, Securities and Chattel Paper.  If any amount payable under or in connection with any of the
Collateral in which such Grantor has an interest shall be or become evidenced
by any Instrument, Security or Chattel Paper having a value in excess of the
Canadian Dollar Equivalent of $500,000, such Instrument, Security or Chattel
Paper shall be immediately delivered to the Collateral Agent, duly indorsed in
a manner satisfactory to the Collateral Agent, to be held as Collateral
pursuant to this Agreement.

 

4.2           Maintenance
of Insurance.  (a) Such Grantor
will maintain, with financially sound and reputable companies, insurance
policies (i) insuring the Inventory and Equipment and Vehicles against
loss by fire, explosion, theft, water, wind and other casualties as are
customarily insured against by operators of the same or similar businesses in
the same or similar localities and (ii) insuring such Grantor, the
Collateral Agent, the Administrative Agents and the Lenders against liability
for personal injury and property damage relating to such Inventory and
Equipment and Vehicles, such policies to be in such form and amounts and having
such coverage as are customarily insured against by operators of the same or
similar business in the same or similar localities.

 

11

 

(b)           All
such insurance shall (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 Collateral Agent of written notice thereof,
(ii) name the Collateral Agent as insured party or loss payee, as its
interest may appear, (iii) if reasonably requested by the Collateral
Agent, include mortgagee’s interest coverage and (iv) be reasonably
satisfactory in all other respects to the Collateral Agent.

 

(c)           The
Canadian Borrower shall deliver to the Collateral Agent, the Administrative
Agents and the Lenders an updated insurance certificate with respect to such
insurance substantially concurrently with each delivery of the audited annual
financial statements and such additional information with respect thereto as
the Collateral Agent may from time to time reasonably request.

 

4.3           Payment
of Obligations.  Such Grantor will
pay and discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or
profits therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect
to the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion
of the Collateral or any interest therein.

 

4.4           Maintenance
of Perfected Security Interest, Further Documentation.  (a) Such Grantor shall maintain the
security interest created by this Agreement as a perfected security interest to
the extent required by and having at least the priority described in
Section 3.2 (other than by reason of the action or inaction of the
Collateral Agent or any Lender) and shall defend such security interest against
the claims and demands of all Persons whomsoever (other than the holders of
Liens permitted by the Credit Agreement).

 

(b)           Such
Grantor will furnish to the Collateral Agent, the Administrative Agents and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral of such Grantor as the Collateral Agent may reasonably
request.

 

(c)           At
any time and from time to time, upon the written request of the Collateral
Agent, and at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and documents
and take such further actions as the Collateral Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, including, without limitation,
(i) the filing of any financing or financing change statements under the
PPSA (or other similar laws) in effect in any jurisdiction, and any filings, if
any, required to be made in the United States Patent and Trademark Office, the
United States Copyright Office and in any similar offices in Canada with
respect to the security interests created hereby and (ii) in the case of
Securities, Deposit Accounts, and any other relevant Collateral, taking any
actions 

 

12

 

necessary to enable the Collateral Agent to obtain
possession and control with respect thereto; provided, however,
that, so long as the Collateral Agent shall not have otherwise requested at a
time when an Event of Default shall have occurred and be continuing, such Grantor
shall not be required to take any such action under this clause (ii) with
respect to (w) Deposit Accounts, (x) money market accounts,
(y) Securities constituting commodity contracts or (z) any other
Collateral referred to in this clause (ii) until the value of such other
Collateral exceeds the Canadian Dollar Equivalent of $250,000 with respect to
any individual item of Collateral or the Canadian Dollar Equivalent of
$1,000,000 in the aggregate for all such items of Collateral.

 

4.5           Changes
in Locations, Name, etc.  Such
Grantor will not, except upon 15 days’ prior written notice to the Collateral
Agent and delivery to the Collateral Agent of all additional executed financing
statements and other documents reasonably requested by the Collateral Agent to
maintain the validity, perfection and priority of the security interests
provided for herein:

 

(i)            change
its jurisdiction of organization or the location of its chief executive office
or sole place of business or principal residence from that referred to in
Section 3.3; or

 

(ii)           change
its name to such an extent that any financing statement filed by the Collateral
Agent in connection with this Agreement would become misleading;

 

provided, however, that such 15 day period shall be reduced to two
Business Days in the case of any such change effected as part of the Canadian
Restructuring Transaction.

 

4.6           Notices.  Such Grantor will advise the Collateral
Agent, the Administrative Agents and the Lenders promptly, in reasonable
detail, of

 

(a)           any
Lien (other than security interests created hereby or Liens permitted under the
Credit Agreement) on any of the Collateral which would adversely affect the
ability of the Collateral Agent to exercise any of its remedies hereunder; and

 

(b)           of
the occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

 

4.7           Securities.  (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Secured Parties, hold the same in trust for the
Secured Parties and deliver the same forthwith to the Collateral Agent in the
exact form received, duly indorsed by such Grantor to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Collateral Agent so
requests, signature guaranteed, to be held by the Collateral Agent, subject to
the terms hereof, as 

 

13

 

additional collateral security for the Secured Obligations.  Subject to Section 5.3(a), any sums paid
upon or in respect of the Securities upon the liquidation or dissolution of any
Issuer, and in case any distribution of capital shall be made on or in respect
of the Securities or any property shall be distributed upon or with respect to
the Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof or otherwise,
the sums or property so paid or distributed shall, in each case unless
otherwise subject to a perfected security interest in favor of the Collateral
Agent or not required by the Loan Documents to be subject to a perfected
security interest (in which event such sums or property may be retained by such
Grantor), be delivered to the Collateral Agent to be held by it hereunder as
additional collateral security for the Secured Obligations.  If any sums of money or property so paid or
distributed in respect of the Securities and required hereby to be delivered to
the Collateral Agent shall be received by such Grantor, such Grantor shall,
until such money or property is paid or delivered to the Collateral Agent, hold
such money or property in trust for the Secured Parties, segregated from other
funds of such Grantor, as additional collateral security for the Secured
Obligations.

 

(b)           Without
the prior written consent of the Collateral Agent, such Grantor will not
(i) vote to enable, or take any other action to permit, any Issuer of
Pledged Stock to issue any Capital Stock of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any Capital Stock of any nature of any such Issuer, unless, in the case of an
issuance of Capital Stock, such Grantor (x) provides the Collateral Agent
with five days’ prior notice of such issuance and (y) promptly after such
issuance, complies with Section 4.7(a), (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Securities or Proceeds thereof (except pursuant to a transaction not prohibited
by the Credit Agreement), (iii) create, incur or permit to exist any Lien
or option in favor of, or any claim of any Person with respect to, any of the
Securities or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement and except as permitted by the
Credit Agreement or (iv) except such that reflect customary securities law
restrictions, enter into any agreement or undertaking restricting the right or
ability of such Grantor or the Collateral Agent to sell, assign or transfer any
of the Securities or Proceeds thereof.

 

(c)           In
the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 4.7(a)
with respect to the Securities issued by it and (iii) the terms of
Sections 5.3(c) and 5.7 shall apply to it, mutatis mutandis,
with respect to all actions that may be required of it pursuant to
Section 5.3(c) or 5.7 with respect to the Securities issued by it.

 

4.8           Receivables.  (a) Other than in the ordinary course
of business consistent with its past practice, such Grantor will not
(i) grant any extension of the time of payment of any Receivable,
(ii) compromise or settle any Receivable for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on
any Receivable or (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value thereof.

 

14

 

(b)           Such
Grantor will deliver to the Collateral Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the validity
or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.

 

4.9           Contracts.  (a) Such Grantor will perform and
comply in all material respects with all its obligations under the Contracts.

 

(b)           Such
Grantor will not amend, modify, terminate or waive any provision of any
Contract in any manner which could reasonably be expected to materially
adversely affect the value of such Contract as Collateral.

 

(c)           Such
Grantor will exercise promptly and diligently each and every material right
which it may have under each Contract (other than any right of termination).

 

(d)           Such
Grantor will deliver to the Collateral Agent a copy of each material demand,
notice or document received by it relating in any way to any Contract that questions
the validity or enforceability of such Contract.

 

4.10         Intellectual
Property.  (a) Such Grantor
(either itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark, (iii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (iv) in the United
States and Canada, not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the Collateral Agent, for the
ratable benefit of the Secured Parties, shall obtain a perfected security
interest in such mark (or in the applicable license to use such mark if such
mark is licensed to such Grantor) pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way; provided, however, any decision made by a Grantor in its
reasonable business judgment to discontinue a product line or product, or
modify or update the branding of a product line or product, such that such
Grantor ceases to use (or limits its use of) a Trademark shall not be claimed a
violation of this Section 4.10(a).

 

(b)           To
the extent determined by it in its reasonable business judgment to be
advisable, such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited, abandoned
or dedicated to the public.

 

(c)           To
the extent determined by it in its reasonable business judgment to be
advisable, such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired.  Such Grantor will
not (either itself or 

 

15

 

through licensees) do any act whereby any material
portion of the Copyrights may fall into the public domain.

 

(d)           Such
Grantor (either itself or through licensees) will not do any act that uses any
material Intellectual Property to infringe the intellectual property rights of
any other Person that would reasonably be likely to have a Material Adverse
Effect.

 

(e)           Such
Grantor will notify the Collateral Agent, the Administrative Agents and the
Lenders promptly if it knows, or has reason to know, that any application or
registration relating to any material Copyright, Patent or Trademark may become
forfeited, abandoned or dedicated to the public, or of any material adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in the United States or Canada) regarding such Grantor’s
ownership of, or the validity of, any material Copyright, Patent or Trademark
or such Grantor’s right to register the same or to own and maintain the same.

 

(f)            Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Copyright,
Patent or Trademark with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in Canada, such
Grantor shall report such filing to the Collateral Agent together with the
delivery of the financial statements in accordance with Section 6.1(a) of
the Credit Agreement.  Upon request of
the Collateral Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Collateral
Agent may reasonably request to evidence the security interest granted under
this Agreement in any Copyright, Patent or Trademark (other than the Foreign
Intellectual Property) and the goodwill of such Grantor relating thereto or
represented thereby.

 

(g)           To
the extent determined by it in its reasonable business judgment to be
advisable, such Grantor will 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 any similar office
or agency in Canada to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
Copyrights, Patents and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.  Such Grantor shall
not abandon or fail to pay any maintenance fee or annuity due and payable on
any material Copyright, Patent or Trademark, or fail to file any required
affidavit or renewal in support thereof, without first providing the Collateral
Agent:  (i) sufficient written
notice, of at least 90 days, to allow the Collateral Agent to pay timely any
such maintenance fees or annuities which may become due on any of such
Copyrights, Patents or Trademarks, or to file any affidavit or renewal with
respect thereto, and (ii) a separate written power of attorney or other
authorization to pay such maintenance fees or annuities, or to file such
affidavit or renewal, should such be necessary or desirable.

 

16

 

(h)           In
the event that any material Copyright, Patent or Trademark is or is about to be
infringed, misappropriated or diluted by a third party, such Grantor shall
promptly notify the Collateral Agent after it learns thereof and shall take
such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Copyright, Patent or Trademark, such as suing for
infringement, misappropriation or dilution, seeking injunctive relief where
appropriate and recovering any and all damages for such infringement,
misappropriation or dilution.

 

SECTION
5.

 

REMEDIAL
PROVISIONS

 

5.1           Certain
Matters Relating to Receivables. 
(a) At any time and from time to time (but, so long as no Event of
Default shall have occurred and be continuing, no more often than once during
any calendar year), upon the Collateral Agent’s request and at the expense of
the relevant Grantor, such Grantor shall cause independent public accountants
or others satisfactory to the Collateral Agent to furnish to the Collateral
Agent reports showing reconciliations and aging of, and trial balances for, the
Receivables.

 

(b)           The
Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Collateral Agent’s direction and control, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default.  If required by the Collateral Agent at any
time after the occurrence and during the continuance of an Event of Default,
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 Collateral Agent if
required, in a Collateral Account maintained under the sole dominion and
control of the Collateral Agent, subject to withdrawal by the Collateral Agent
for the account of the Administrative Agent and the Lenders only as provided in
Section 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent, the Administrative Agents 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)           At
the Collateral Agent’s request after the occurrence and during the continuance
of an Event of Default, each Grantor shall deliver to the Collateral Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.

 

5.2           Communications
with Obligors; Grantors Remain Liable. 
(a) The Collateral Agent in its own name or in the name of others
may at any time after the occurrence and during the continuance of an Event of
Default communicate with obligors under the Receivables and parties to the
Contracts to verify with them to the Collateral Agent’s satisfaction the
existence, amount and terms of any Receivables or Contracts.

 

17

 

(b)           Upon
the request of the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall notify obligors on
the Receivables and parties to the Contracts that the Receivables and the
Contracts have been assigned to the Collateral Agent for the ratable benefit of
the Secured Parties and that payments in respect thereof shall be made directly
to the Collateral Agent.

 

(c)           Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables and Contracts to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto.  None of the Collateral Agent, either
Administrative Agent or any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) or Contract by reason of
or arising out of this Agreement or the receipt by the Collateral Agent, either
Administrative Agent or any Lender of any payment relating thereto, nor shall
the Collateral Agent, either 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) or Contract, 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.

 

5.3           Pledged
Stock, Pledged Notes. 
(a) Unless an Event of Default shall have occurred and be
continuing and the Collateral Agent shall have given notice to the relevant
Grantor of the Collateral Agent’s intent to exercise its corresponding rights
pursuant to Section 5.3(b), each Grantor shall be permitted to receive all
cash dividends paid in respect of the Pledged Stock or other Securities and all
payments made in respect of the Pledged Notes, in each case whether or not paid
in the normal course of business of the relevant Issuer and whether or not
consistent with past practice, to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate or other organizational rights with
respect to the Securities; provided, however, that no vote shall
be cast or corporate or other organizational right exercised or other action
taken which, in the Collateral Agent’s reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

(b)           If
an Event of Default shall occur and be continuing and the Collateral Agent
shall give notice of its intent to exercise such rights to the relevant Grantor
or Grantors, (i) the Collateral Agent shall have the right to receive any
and all cash dividends, payments or other Proceeds paid in respect of the
Securities and make application thereof to the Secured Obligations as provided
in Section 5.5 hereof, and (ii) subject to obtaining requisite consents
which shall be promptly obtained by the relevant Grantor or Grantors, any or
all of the Securities shall be registered in the name of the Collateral Agent
or its nominee, and the Collateral Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such 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 Securities as if it
were the absolute owner thereof (including, 

 

18

 

without limitation, the right to exchange at its
discretion any and all of the Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
or other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Collateral Agent of any right, privilege or option pertaining to
such Securities, and in connection therewith, the right to deposit and deliver
any and all of the Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Collateral Agent may determine), all without liability except to account for
property actually received by it, but the Collateral 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.

 

(c)           Each
Grantor hereby authorizes and instructs each Issuer of any Securities pledged
by such Grantor hereunder to (i) comply with any instruction received by
it from the Collateral 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, and (ii) unless otherwise expressly permitted
hereby, pay any dividends or other payments with respect to the Securities
directly to the Collateral Agent.

 

5.4           Proceeds
to be Turned Over To Collateral Agent. 
In addition to the rights of the Collateral Agent, the Administrative
Agents and the Lenders specified in Section 5.1 with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, 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 Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral
Agent, if required).  All Proceeds
received by the Collateral Agent hereunder shall be held by the Collateral
Agent in a Collateral Account maintained under its sole dominion and
control.  All Proceeds while held by the
Collateral Agent in a Collateral Account (or by such Grantor in trust for the
Secured Parties) shall continue to be held as collateral security for all the
Secured Obligations and shall not constitute payment thereof until applied as
provided in Section 5.5.

 

5.5           Application
of Proceeds.  At such intervals as
may be agreed upon by the Canadian Borrower and the Collateral Agent, or, if an
Event of Default shall have occurred and be continuing, at any time at the
Collateral Agent’s election, the Collateral Agent may apply all or any part of
Proceeds constituting Collateral, whether or not held in any Collateral
Account, in payment of the Secured Obligations in the following order:

 

First,
to pay incurred and unpaid fees and expenses of the Collateral Agent under the
Loan Documents, including, without limitation, all reasonable costs and
expenses of every kind incurred in connection with 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 Collateral Agent, the Administrative Agents and the
Lenders and any Receiver hereunder, including, without limitation, reasonable
solicitor’s fees and disbursements;

 

19

 

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

 

Third,
to the Collateral Agent, for application by it towards prepayment of the Secured
Obligations, pro rata among the Lenders according to the amounts of the Secured
Obligations then held by the Lenders, but in the absence of an Event of
Default, only to the extent the Borrowers are required to make such prepayment
pursuant to the Credit Agreement or as the Borrowers may otherwise agree; and

 

Fourth,
any balance of such Proceeds remaining after the Secured Obligations shall have
been paid in full in cash or other immediately available funds, no Canadian
Letters of Credit shall be outstanding and the Canadian Commitments shall have
been terminated shall be paid over to the Canadian Borrower or to whomsoever
may be lawfully entitled to receive the same.

 

5.6           PPSA
and Other Remedies.  If an Event of
Default shall occur and be continuing, the Collateral Agent, on behalf of the
Administrative Agents and the Lenders, may (personally or by agent) 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 Secured Obligations, all rights and remedies of a secured party under the
PPSA as in effect in Ontario or any other applicable law.  Without limiting the generality of the
foregoing, the Collateral 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) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part 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 Collateral Agent, either
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 Collateral Agent or any Lender shall
have the right upon any such public sale or sales, and, 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.  Each Grantor
further agrees, at the Collateral Agent’s request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.

 

Additionally, the Collateral Agent upon the occurrence
and continuance of an Event of Default, may, without limiting any of the
foregoing remedies, on behalf of the Administrative Agents and the Lenders, at
such times as the Collateral Agent in its discretion may determine (personally
or by agent) do any one or more of the following:

 

(a)           Take
Possession.  Enter on any premises where
any Collateral is located and take possession of, disable or remove such
Collateral.

 

20

 

(b)           Carry
on Business.  Carry on, or concur in
the carrying on of, any or all of the business or undertaking of any of the
Grantors and enter on, occupy and use (without charge by any of the Grantors)
any of the premises, buildings, plant and undertaking of, or occupied or used
by, any Grantor.

 

(c)           Court-Approved
Disposition of Collateral.   Apply
to a court of competent jurisdiction for the sale or foreclosure of any or all
of the Collateral.

 

(d)           Borrow
and Grant Security Interests. 
Borrow money for the maintenance, preservation or protection of any
Collateral or for carrying on any of the business or undertaking of any Grantor
and grant Liens on any Collateral (in priority to the Liens created by this
Agreement or otherwise) as security for the money so borrowed.  Each Grantor will immediately on demand
reimburse the Collateral Agent for all such borrowings.

 

(e)           Appoint
Receiver.  Appoint by instrument in
writing one or more Receivers of any of the Grantors or any or all of the
Collateral with such rights, powers and authority (including any or all of the
rights, powers and authority of the Collateral Agent under this Agreement) as
may be provided for in the instrument of appointment or any supplemental
instrument, and remove and replace any such Receiver from time to time.  To the extent permitted by applicable law,
any Receiver appointed by the Collateral Agent will (for purposes relating to
responsibility for the Receiver’s acts or omissions) be considered to be the
agent of each of the relevant Grantors and not of the Collateral Agent, the
Administrative Agents or the Lenders.

 

(f)            Court-Appointed
Receiver.  Apply to a court of
competent jurisdiction for the appointment of a Receiver of the Grantor or of
any or all of the Collateral.

 

Without prejudice to the ability of the Collateral
Agent to dispose of the Collateral in any manner which is commercially reasonable,
the Grantors acknowledge that a disposition of Collateral by the Collateral
Agent which takes place substantially in accordance with the following
provisions will be deemed to be commercially reasonable:

 

(i)            Collateral
may be disposed of in whole or in part;

 

(ii)           Collateral
may be disposed of by public auction, public tender or private contract, with
or without advertising and without any other formality;

 

(iii)          any
purchaser or lessee of Collateral may be a customer of the Collateral Agent,
the Administrative Agents or the Lenders;

 

(iv)          a
disposition of Collateral may be on such terms and conditions as to credit or
otherwise as the Collateral Agent, in is sole discretion, may deem
advantageous; and

 

(v)           the
Collateral Agent may establish an upset or reserve bid or price in respect of
Collateral.

 

21

 

The Collateral Agent shall apply the Proceeds of any
action taken by it pursuant to this Section 5.6 in the manner provided in
Section 5.5.  To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Collateral Agent, either Administrative Agent or any Lender
arising out of the exercise by them of any rights hereunder.

 

5.7           Sale
of Securities.  (a) Each
Grantor recognizes that the Collateral Agent, in connection with any offer or
sale of any Securities forming part of the Collateral, may be required and is
hereby authorized to comply with any limitation or restriction as it may be
advised by counsel is necessary to comply with applicable law, including
compliance with procedures that may restrict the number of prospective bidders
and purchasers, requiring that prospective bidders and purchasers have certain
qualifications, and restricting prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account or
investment and not with a view to the distribution or resale of such
Securities.  Each Grantor further agrees
that compliance with any such limitation or restriction will not result in a
sale being considered or deemed not to have been made in a commercially
reasonable manner, and the Collateral Agent will not be liable or accountable
to the Grantors for any discount allowed by reason of the fact that such
Securities are sold in compliance with any such limitation or restriction.

 

(b)           Each
Grantor agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of all or any portion of
the Pledged Stock pursuant to this Section 5.7 valid and binding and in
compliance with any and all other applicable Requirements of Law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 5.7 will cause irreparable
injury to the Collateral Agent, the Administrative Agents and the Lenders, that
the Collateral Agent, the Administrative Agents and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 5.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred and is continuing under the Credit Agreement.

 

5.8           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 Secured Obligations and the fees and disbursements
of any solicitors employed by the Collateral Agent, either Administrative Agent
or any Lender to collect such deficiency.

 

5.9           Grant
of Licence.  For the purpose of
enabling the Collateral Agent to exercise its rights and remedies under
Section 5 when the Collateral Agent is entitled to exercise such rights
and remedies, and for no other purpose, each Grantor grants to the Collateral
Agent an irrevocable, non-exclusive licence (exercisable without payment of
royalty or other compensation to the Grantors) to use, assign or sublicence any
or all of the Intellectual Property, including in such licence reasonable
access to all media in which any of the licensed items may be recorded or
stored and to all computer programs used for the compilation or printout of the
same.

 

22

 

SECTION 6.

 

THE COLLATERAL AGENT

 

6.1           Collateral
Agent’s Appointment as Attorney-in-Fact, etc.  (a) Each Grantor hereby irrevocably constitutes and appoints
the Collateral 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 Collateral 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:

 

(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 under any Receivable or Contract 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
Collateral Agent for the purpose of collecting any and all such moneys due
under any Receivable or Contract 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 Collateral
Agent may reasonably request to evidence the Collateral Agent’s and the
Lenders’ security interest in such Intellectual Property and the goodwill 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 5.6 or 5.7, 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 Collateral
Agent or as the Collateral 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 

 

23

 

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 Collateral
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 Collateral Agent shall in its sole
reasonable 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 Collateral Agent were the
absolute owner thereof for all purposes, and do, at the Collateral Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts
and things which the Collateral Agent reasonably deems necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent’s, the
Administrative Agents’ and the Lenders’ security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.

 

Anything in this Section 6.1(a) to the contrary
notwithstanding, the Collateral Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 6.1(a)
unless an Event of Default shall have occurred and be continuing.

 

(b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement.

 

(c)           The
expenses of the Collateral Agent (or any Receiver) incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.

 

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

 

6.2           Duty
of Collateral Agent.  The Collateral
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in
the same manner as the Collateral Agent deals with similar property for its own
account.  None of the Collateral Agent,
either Administrative Agent, any Lender nor 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 

 

24

 

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 Collateral Agent, the Administrative Agents
and the Lenders hereunder are solely to protect the Collateral Agent’s, the
Administrative Agents’ and the Lenders’ interests in the Collateral and shall
not impose any duty upon the Collateral Agent, either Administrative Agent or
any Lender to exercise any such powers. 
The Collateral Agent, the Administrative Agents 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.

 

6.3           Execution
of Financing Statements.  Pursuant
to any applicable law, each Grantor authorizes the Collateral Agent to file or
record financing statements, financing change 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 Collateral
Agent reasonably determines appropriate to perfect the security interests of
the Collateral Agent under this Agreement. 
Each Grantor authorizes the Administrative Agent, where required, to use
the collateral description “all personal property [except for]” in any such
financing statements.

 

6.4           Authority
of Collateral Agent.  Each Grantor
acknowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral 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 Collateral 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
Collateral Agent and the Grantors, the Collateral 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 7.

 

MISCELLANEOUS

 

7.1           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.

 

7.2           Notices.  All notices, requests and demands to or upon
the Collateral Agent or any Loan Party 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 CBO Guarantor shall be
addressed to such CBO Guarantor at its notice address set forth on Schedule 1.

 

7.3           No
Waiver by Course of Conduct; Cumulative Remedies.  None of the Collateral Agent, either Administrative Agent or any
Lender shall by any act (except by a written instrument pursuant to
Section 7.1), delay, 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.  

 

25

 

No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent, either 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 Collateral Agent, either
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
Collateral Agent, such 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.

 

7.4           Enforcement
Expenses; Indemnification. 
(a) Each Grantor agrees to pay or reimburse the Collateral Agent,
any Receiver, each Lender and each Administrative Agent for all of its costs
and expenses incurred in enforcing or preserving any rights under this
Agreement and the other Loan Documents to which such Grantor is a party,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Collateral Agent and each Administrative Agent.

 

(b)           Each
Grantor agrees to pay, and to save the Collateral Agent, any Receiver, the
Administrative Agents and the Lenders harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

 

(c)           Each
CBO Guarantor agrees to pay, and to save the Collateral Agent, any Receiver 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
Borrowers would be required to do so pursuant to Section 10.5 of the
Credit Agreement.

 

(d)           The
agreements in this Section 7.4 shall survive repayment of the Secured
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

 

7.5           Successors
and Assigns.  This Agreement shall
be binding upon the successors and assigns of each Grantor and shall inure to
the benefit of the Collateral Agent, the Administrative Agents 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 Collateral Agent.

 

7.6           Set-Off.  In addition to any rights and remedies of
the Secured Parties provided by law, each Secured Party shall have the right,
without prior notice to the Grantors, any such notice being expressly waived by
each Grantor to the extent permitted by applicable law, upon any amount
becoming due and payable by such Grantor hereunder or under any other Loan
Document (whether at the stated maturity, by acceleration or otherwise), to set
off and 

 

26

 

appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Secured Party or any branch or agency thereof to or for
the credit or the account of such Grantor, as the case may be.  Each Secured Party agrees promptly to notify
the Canadian Borrower and the Administrative Agents after any such setoff and
application made by such Secured Party; provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

7.7           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.

 

7.8           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.

 

7.9           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.

 

7.10         Integration.  This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent, the
Administrative Agents and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Collateral Agent, either Administrative Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.

 

7.11         GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

7.12         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 Province of Ontario 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;

 

27

 

(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 Loan Party at its address
referred to in Section 7.2 or at such other address of which the
Collateral 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.

 

7.13         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)           none
of the Collateral Agent, either Administrative Agent or 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 Collateral Agent,
the Administrative Agents 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.

 

7.14         Additional
Loan Parties.  Each Subsidiary of
the Canadian Borrower that is required to become a party to this Agreement
pursuant to Section 6.9 of the Credit Agreement shall to the extent such
Subsidiary is a Canadian Subsidiary Guarantor, become a CBO Guarantor for all
purposes under the U.S. Guarantee and Collateral Agreement and a Grantor for all
purposes under this Agreement, in either case upon execution and delivery by
such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto
and the execution and delivery of an Assumption Agreement to the U.S. Guarantee
and Collateral Agreement in the form required thereunder.

 

7.15         Releases.
(a) At such time as the Canadian Loans, the Canadian Reimbursement
Obligations and the other Secured Obligations (other than Secured Obligations
in respect of Specified Hedge Agreements) shall have been paid in full, the
Canadian Commitments have been terminated and no Canadian 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 Collateral 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 Collateral
Agent shall deliver to such Grantor 

 

28

 

any Collateral held by the Collateral 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
Collateral Agent, at the request and sole expense of such Loan Party, shall
execute and deliver to such Loan Party 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 Canadian Borrower, a Subsidiary Guarantor shall be released
from its obligations hereunder in the event that all the Capital Stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a
transaction permitted by the Credit Agreement; provided that the
Canadian Borrower shall have delivered to the Collateral Agent, at least five
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Subsidiary 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 Canadian
Borrower stating that such transaction is in compliance with the Credit Agreement
and the other Loan Documents.

 

7.16         WAIVER OF JURY TRIAL.  EACH PARTY
HERETO 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.

 

7.17         Grantors’
Obligations.  Notwithstanding
anything herein to the contrary, (i) each Grantor’s obligations hereunder
with respect to Collateral is limited to Collateral in which such Grantor has
an interest; and (ii) any reports or other deliveries required by a
Grantor hereunder shall be effective if made by one of the Borrowers or by any
other Grantor hereunder.

 

7.18         Existing
Collateral Agreement.  This
Agreement amends and restates in its entirety the Canadian Collateral
Agreement, dated as of November 13, 2001 (the “Existing Canadian Collateral
Agreement”), made by the Grantors in favor of Canadian Imperial Bank of
Commerce, as collateral agent (the “Retiring Collateral Agent”), for
which Existing Canadian Collateral Agreement the Retiring Collateral Agent has
resigned as collateral agent and the Lenders have appointed the Collateral
Agent as the successor collateral agent pursuant to the Credit Agreement,
provided that the obligations of the Grantors under the Existing Canadian
Collateral Agreement shall continue under this Agreement, and shall not in any
event be terminated, extinguished or annulled, but shall hereafter be governed
by this Agreement.

 

7.19         Amalgamation.  Each Grantor acknowledges that if it
amalgamates with any other corporation or corporations, then (i) the Collateral
and the Security Interests will extend to and include all the property and
assets of the amalgamated corporation of such Grantor and to any property or
assets of such amalgamated corporation thereafter owned or acquired (in each
case to the extent the same falls within the definition of Collateral), and
(ii) the terms “Grantor”, “Canadian Borrower” and “Canadian Subsidiary
Guarantor”, as applicable, where used in this Agreement, will extend to and
include the amalgamated corporation of such Grantor.

 

29

 

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

 

	
   

  	
  ROBINHOOD MULTIFOODS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MULTIFOODS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GOURMET BAKER INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  980964 ONTARIO LIMITED

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

EXHIBIT
C-3

AMENDED AND RESTATED SECURITIES PLEDGE AGREEMENT

 

August 8, 2003

 

	
  TO:

  	
  Name of Agent:

  	
  U.S. BANK NATIONAL ASSOCIATION, 

  as U.S. Collateral Agent (in such capacity, and together with any successors
  and assigns in such capacity, the “Collateral Agent”)for the Secured
  Parties under the Credit Agreement (as each such term is defined below)

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  800 Nicollet Mall

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55402

  
	
   

  	
  Attention:

  	
  David Draxler

  
	
   

  	
  Facsimile:

  	
  (612) 303-2265

  

 

Reference is made to the Existing Credit Agreement, as
defined in the Credit Agreement.  On or
prior to the date of this Agreement, all outstanding amounts upon the “U.S.
Tranche A Term Loans”, the “U.S. Tranche B Term Loans” and the “Canadian Term
Loans” have been paid in full by the relevant Borrower (as defined in the
Existing Credit Agreement), and following such payment, the only loans and
commitments to extend credit accommodations outstanding under the Existing
Credit Agreement were the “U.S. Revolving Facility” and the “Canadian Revolving
Facility” (each as defined in the Existing Credit Agreement). Further, on the
date of this Agreement, the Canadian Revolving Facility and the U.S. Revolving
Facility are being assigned to the Canadian Revolving Lenders or the U.S.
Revolving Lenders (as defined in the Credit Agreement), respectively, pursuant
to the Global Assignment and Acceptance (as defined in the Credit Agreement), provided
that, with respect to the Canadian Revolving Facility and U.S. Revolving
Facility of any lenders under the Existing Credit Agreement that declined to
execute the Global Assignment and Acceptance, such facilities are being paid in
full and reduced to zero on the date hereof, as specified in the Credit
Agreement.

 

Further, pursuant to a letter addressed to the
Borrowers dated concurrently herewith, Canadian Imperial Bank of Commerce has
resigned as “U.S. Administrative Agent”, “Canadian Administrative Agent” and
the “Collateral Agent” under the Existing Credit Agreement and the “Loan
Documents” as defined therein.  
Pursuant to the Credit Agreement, the Lenders (as defined in the Credit
Agreement) have appointed U.S. Bank National Association as the U.S.
Administrative Agent, the Canadian Administrative Agent and the U.S. Collateral
Agent, and The Bank of Nova Scotia as the Canadian Collateral Agent, under the
Existing Credit Agreement and the other Loan Documents as defined in the
Existing Credit Agreement.

 

As more particularly set forth in Section 28, this
Amended and Restated Securities Pledge Agreement amends and restates the
Existing Securities Pledge Agreement in its entirety.

 

RECITALS:

 

WHEREAS, pursuant to the Amended and Restated Credit
Agreement, dated concurrently herewith (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among INTERNATIONAL
MULTIFOODS CORPORATION, a Delaware corporation (the “U.S. Borrower”),
ROBIN HOOD MULTIFOODS INC., an Ontario corporation and a Subsidiary of the U.S.
Borrower (the “Canadian Borrower” and, together with the U.S. Borrower,
the “Borrowers”), the banks and other financial institutions from time
to time parties thereto (the “Lenders”), The Bank of Nova Scotia, as
Canadian funding agent for the Lenders (in such capacity, the “Canadian
Funding Agent”), U.S. Bank National Association, as administrative agent
for the U.S. Lenders (in such capacity, the “U.S. Administrative Agent”)
and as administrative agent for the Canadian Lenders (in such capacity, the “Canadian
Administrative Agent”) and certain other parties, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein; and

 

WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective extensions of credit to the Borrowers
under the Credit Agreement that the U.S. Borrower shall have executed and
delivered this Agreement to the Collateral Agent for the ratable benefit of the
Secured Parties;

 

For valuable consideration, the receipt and adequacy
of which are acknowledged by the U.S. Borrower, the U.S. Borrower agrees with
and in favour of the Collateral Agent, for its own benefit and for the benefit
of the other Secured Parties, as follows:

 

1.             Definitions.  In
this Agreement, capitalized terms which are not otherwise defined have the
meanings given to such terms in the Credit Agreement.  In addition:

 

“Books
and Records” means all books, records, files, papers, disks,
documents and other repositories of data recording in any form or medium,
evidencing or relating to the Collateral which are at any time owned by the
U.S. Borrower or to which the U.S. Borrower (or any Person on the U.S.
Borrower’s behalf) has access.

 

“Canadian
Borrower Obligations” means the collective reference to the
unpaid principal of and interest on the Canadian Loans and Canadian Reimbursement
Obligations and all other obligations and liabilities of the Canadian Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Canadian Loans and
Canadian 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 Canadian Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Collateral Agent, either Administrative Agent, any other Agent or any Lender
(or, in the case of any Specified Hedge Agreement entered into by the Canadian
Borrower, any Lender Affiliate or any other counterparty thereto), 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
Canadian Letter of Credit, any Specified Hedge Agreement entered into by the
Canadian Borrower or any other document made, delivered or given in connection
with any of the foregoing, in each case whether on account of principal,
interest, reimbursement 

 

2

 

obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Collateral Agent, either Administrative Agent, any other Agent or to the
Lenders that are required to be paid by the Canadian Borrower pursuant to the
terms of any of the foregoing agreements).

 

“Collateral”
means the collateral described in Section 2 of this Agreement, including
the Pledged Securities and all Proceeds thereof.

 

“Default”
means an Event of Default under the Credit Agreement.

 

“Existing
Securities Pledge Agreement” has the meaning given to that
term in Section 28 hereof.

 

 

“Issuer”
means any Person listed under the heading “Issuer(s)” in Schedule A, and
includes any successor of any Issuer.

 

“Person”
will be broadly interpreted and includes an individual, a corporation, a
limited liability company, a partnership, a trust, a joint venture, an association,
an unincorporated organization, the government of a country or any political
subdivision thereof, any agency or department of any such government, a
regulatory agency or any other juridical entity and the heirs, executors,
administrators or other legal representatives of an individual.

 

“PPSA”
means the Personal Property Security Act
or any other Canadian federal or provincial statute pertaining to the granting,
perfecting, priority or ranking of security interests, liens or hypotecs on
personal property, and any successor statutes together with any regulations
thereunder, in each case as in effect from time to time.

 

“Pledged
Securities” means the securities listed in Schedule A,
which, in any event, shall at all times consist of 66% of all of the issued and
outstanding shares in the capital of the Canadian Borrower that are entitled to
vote in an election of the board of directors of the Canadian Borrower.

 

“Proceeds”
has the meaning given to that term in the PPSA.

 

“Retiring
Collateral Agent” has the meaning given to that term in
Section 28 hereof.

 

“Secured
Parties” means the collective reference to (i) the
Lenders and their respective successors, indorsees, transferees and assigns,
(ii) the Administrative Agents and their respective successors and assigns
in such capacities, (iii) any Lender Affiliate or any other counterparty
party to any Specified Hedge Agreement, (iv) the Collateral Agent and its
successors and assigns in such capacity, and (v) any other Agent and its
successors and assigns in such capacity.

 

“Secured
Obligations” means the obligations secured by the Security
Interests granted pursuant to this Agreement, which obligations consist of the
U.S. Borrower Obligations, the Canadian Borrower Obligations and the
obligations of the U.S. Borrower under Section 2 of the U.S. Guarantee and
Collateral Agreement.

 

3

 

“Security
Interest” means any mortgage, charge, pledge, hypothecation,
lien (statutory or otherwise), assignment, finance lease, title retention
agreement or arrangement, security interest or other encumbrance or adverse
claim of any nature, or any other security agreement or arrangement creating in
favour of any creditor a right in respect of a particular property.

 

“U.S.
Borrower Obligations” means the collective reference to the
unpaid principal of and interest on the U.S. Loans and U.S. Reimbursement
Obligations and all other obligations and liabilities of the U.S. Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the U.S. Loans and U.S.
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 U.S. Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Collateral Agent,
either Administrative Agent or any Lender (or, in the case of any Specified
Hedge Agreement entered into by the U.S. Borrower, any Lender Affiliate or any
other counterparty thereto), 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 U.S. Letter of Credit, any Specified
Hedge Agreement entered into by the U.S. Borrower or any other document made,
delivered or given in connection with any of the foregoing, 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 Collateral Agent, either
Administrative Agent or to the Lenders that are required to be paid by the U.S.
Borrower pursuant to the terms of any of the foregoing agreements).

 

2.             Grant of Security Interest.  As general and continuing collateral
security for the due payment and performance of the Secured Obligations, the
U.S. Borrower hereby assigns and pledges to and in favour of the Collateral
Agent (for the ratable benefit of the Secured Parties), and grants to the
Collateral Agent (for the ratable benefit of the Secured Parties) a continuing
security interest in:

 

(a)           the Pledged Securities, together with
any replacements thereof and substitutions therefor, and all certificates and
instruments evidencing or representing such securities;

 

(b)           all interest and dividends, whether
in cash, kind or stock, received or receivable upon or in respect of any of the
Pledged Securities and all moneys or other property payable or paid on account
of any return or repayment of capital in respect of any of the Pledged Securities
or otherwise distributed in respect thereof or which will in any way be charged
to, or payable or paid out of, the capital of any Issuer on account of the
Pledged Securities;

 

(c)           all other property that may at any
time be received or receivable by or otherwise distributed to the U.S. Borrower
in respect of, or in substitution for, or in exchange for, any of the
foregoing; and

 

4

 

(d)           all cash, securities and other
proceeds of the foregoing and all rights and interests of the U.S. Borrower in
respect thereof or evidenced thereby, including all moneys received from time
to time by the U.S. Borrower in connection with the sale or other disposition
of any of the Pledged Securities; provided, however, that, except
as a part of the Canadian Restructuring Transaction (so long as the U.S.
Borrower is in compliance with Section 6.10 of the Credit Agreement with
respect to the Canadian Restructuring Transaction), the U.S. Borrower will not
sell or otherwise dispose of any of the Pledged Securities or purport to do any
of the foregoing without the prior written consent of the Collateral Agent.

 

3.             Delivery of Pledged Securities.  The certificates representing the Pledged
Securities duly endorsed by the appropriate Person in blank for transfer or
accompanied by stock powers of attorney satisfactory to the Collateral Agent
will forthwith be delivered to and remain in the custody of the Collateral
Agent or its nominee, for the benefit of the Secured Parties.  If the constating documents of any Issuer
restrict the transfer of the securities of such Issuer, then the U.S. Borrower
will also deliver to the Collateral Agent a certified copy of a resolution of
the directors or shareholders of such Issuer consenting to the transfer(s)
contemplated by this Agreement, including any prospective transfer of the
Collateral by the Collateral Agent upon a realization on the security
constituted hereby in accordance with this Agreement.  All Pledged Securities may, at the option of the Collateral
Agent, be registered in the name of the Collateral Agent or its nominee.  If the Collateral Agent so requests, any
endorsement on any certificate representing any of the Pledged Securities will
also be guaranteed by a Canadian chartered bank.

 

4.             Attachment; No Obligation to
Advance.  The U.S.
Borrower confirms that value has been given by the Secured Parties to the U.S.
Borrower, that the U.S. Borrower has rights in the Collateral (other than
after-acquired property) and that the U.S. Borrower and the Collateral Agent
have not agreed to postpone the time for attachment of the Security Interests
created by this Agreement to any of the Collateral.  The Security Interests created by this Agreement will have effect
and be deemed to be effective whether or not the Secured Obligations or any
part thereof are owing or in existence before or after or upon the date of this
Agreement.  Neither the execution of
this Agreement nor any advance of funds shall oblige the Collateral Agent or
any of the Lenders to advance any funds or any additional funds.

 

5.             Representations and Warranties.  The U.S. Borrower represents and warrants to
the Collateral Agent, each Administrative agent and each Lender, that:

 

(a)           Title, No Other Security Interests.  Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, the U.S. Borrower 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 such as have been filed in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, pursuant to this Agreement or as are
permitted by the Credit Agreement.

 

(b)           Authority, Consents.  The U.S. Borrower has full power and
authority to grant to the Agent, for its own benefit and for the benefit of the
Secured Parties, the 

 

5

 

Security Interests created by this Agreement and to
execute, deliver and perform its obligations under this Agreement, and such
execution, delivery and performance does not contravene any of the U.S.
Borrower’s charter documents or by-laws or any agreement, instrument or
restriction to which the U.S. Borrower is a party or by which the U.S. Borrower
or any of the Collateral is bound. 
Except for any consent that has been obtained and is in full force and
effect, no consent of any Person (other than the U.S. Borrower) is required, or
purports to be required, for the execution, delivery and performance of this
Agreement.

 

(c)           Execution and Delivery;
Enforceability.  This Agreement has
been duly authorized, executed and delivered by the U.S. Borrower and is a
valid and binding obligation of the U.S. Borrower enforceable against the U.S.
Borrower in accordance with its terms, subject only to bankruptcy, insolvency,
liquidation, reorganization, moratorium and other similar laws generally
affecting the enforcement of creditors’ rights, and to general equitable
principles (whether considered at equity or in law), including the fact that
equitable remedies (such as specific performance and injunction) are
discretionary remedies.

 

(d)           Authorized and Issued Capital;
Valid Issue.  The authorized capital
of the Issuer(s) is unlimited.  The
issued capital of the Issuer consists of 746.5491 shares.  The Pledged Securities are validly issued,
fully paid and non-assessable.

 

(e)           No Required Disposition.  There is no existing agreement, option,
right or privilege capable of becoming an agreement or option pursuant to which
the U.S. Borrower would be required to sell or otherwise dispose of any of the
Pledged Securities.

 

6.             Survival of Representations and
Warranties.  All
agreements, representations, warranties and covenants made by the U.S. Borrower
in this Agreement are material, will be considered to have been relied on by
the Collateral Agent, the Administrative Agents and the Lenders and will
survive the execution and delivery of this Agreement or any investigation made
at any time by or on behalf of the Collateral Agent or any Administrative Agent
or any Lender and any disposition or payment of the Secured Obligations until
repayment and performance in full of the Secured Obligations and termination of
all rights of the U.S. Borrower that, if exercised, would result in the
existence of Secured Obligations.

 

7.             Covenants.  The U.S. Borrower covenants and agrees with
the Collateral Agent, the Administrative Agents and Lenders that from and after
the date of this Agreement until the Secured Obligations shall have been paid
in full, no Letter of Credit shall be outstanding and the Commitments shall
have terminated:

 

(a)           Further Documentation.  The U.S. Borrower will from time to time, at
the expense of the U.S. Borrower, promptly and duly authorize, execute and
deliver such further instruments and documents, and take such further action, as
the Collateral Agent may request for the purpose of obtaining or preserving the
full benefits of, and the rights and powers granted by, this Agreement
(including the filing of any financing statements or financing change
statements under any applicable legislation with respect to the Security
Interests created by this Agreement). 
The U.S. Borrower acknowledges that this 

 

6

 

Agreement has been prepared based on the existing laws
in the Province of Ontario and that a change in such laws, or the laws of other
jurisdictions, may require the execution and delivery of different forms of
security documentation.  Accordingly,
the U.S. Borrower agrees that the Collateral Agent will have the right to
require that this Agreement be amended, supplemented or replaced, and that the
U.S. Borrower will immediately on request by the Collateral Agent authorize,
execute and deliver any such amendment, supplement or replacement (i) to
reflect any changes in such laws, whether arising as a result of statutory
amendments, court decisions or otherwise, (ii) to facilitate the creation
and registration of appropriate security in all appropriate jurisdictions, or
(iii) if the U.S. Borrower merges or amalgamates with any other Person or
enters into any corporate reorganization, in each case in order to confer on
the Collateral Agent (for the benefit of the Secured Parties) Security
Interests similar to, and having the same effect as, the Security Interests
created by this Agreement.

 

(b)           Payment of Expenses,
Indemnification.  The U.S. Borrower
will pay on demand, and will indemnify and save the Collateral Agent harmless
from, any and all liabilities, costs and expenses (including legal fees and
expenses of a solicitor and any sales, goods and services or other similar
taxes payable to any governmental authority with respect to any such
liabilities, costs and expenses) (i) incurred by the Collateral Agent in
the preparation, registration, administration or enforcement of this Agreement,
or (ii) incurred by the Collateral Agent in performing or observing any of
the other covenants of the U.S. Borrower under this Agreement.

 

(c)           Limitations on Other Security
Interests.  The U.S. Borrower will
not create, incur or permit to exist, and will defend the Collateral against,
and will take such other action as is necessary to remove, any and all Security
Interests on and claims in respect of the Collateral other than the Security
Interests created by this Agreement or as permitted by the Credit Agreement,
and the U.S. Borrower will defend the right, title and interest of the Secured
Parties in and to the Collateral against the claims and demands of all Persons,
other than the holders of Security Interests permitted by the Credit Agreement.

 

(d)           Limitations on Dispositions of
Collateral.  The U.S. Borrower will
not, without the Collateral Agent’s prior written consent, sell or otherwise
dispose of any of the Collateral, except as a part of the Canadian
Restructuring Transaction (so long as the U.S. Borrower is in compliance with
Section 6.10 of the Credit Agreement with respect to the Canadian Restructuring
Transaction).

 

(e)           Notices.  The U.S. Borrower will advise the Collateral
Agent promptly, in reasonable detail, of (i) any Security Interest (other
than the Security Interests created by this Agreement and any Security Interest
permitted under the Credit Agreement) on, or claim asserted against, any of the
Collateral, (ii) the occurrence of any event, claim or occurrence that
could reasonably be expected to have a material adverse effect on the value of
the Collateral or on the Security Interests created by this Agreement,
(iii) any change in the location of the chief executive office of the U.S.
Borrower, (iv) any change in the name of the U.S. Borrower, and
(v) any merger or amalgamation of the U.S. Borrower with any other
Person.  The U.S. Borrower agrees not to
effect or permit any of

 

7

 

the changes referred to in clauses (iii) to
(v) above unless all filings have been made and all other actions taken
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid and perfected Security Interest in
respect of all of the Collateral.

 

(f)            Further Issuance of Shares in the
Canadian Borrower.  The U.S.
Borrower acknowledges that it is the intention of the parties hereto that in
addition to any Pledged Securities which may be listed from time to time on
Schedule A, the Collateral Agent will at all times have pledged in its
favour hereunder 66% of the issued and outstanding shares in the capital of the
Canadian Borrower that are entitled to vote in an election of the board of
directors of the Canadian Borrower. 
Accordingly, the U.S. Borrower covenants and agrees that in the event
any additional shares in the capital of the Canadian Borrower are issued with
the result that the Pledged Securities at any time fail to represent 66% of the
issued and outstanding shares in the capital of the Canadian Borrower, then, in
such circumstances, the U.S. Borrower shall pledge such additional shares in
the capital of the Canadian Borrower to and in favour of the Collateral Agent
so as to ensure that at all times the Collateral Agent has pledged in its
favour 66% of the issued and outstanding shares in the capital of the Canadian
Borrower.

 

8.             Pledged Securities.  If the U.S. Borrower shall become entitled
to receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Pledged
Securities of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Securities, or
otherwise in respect thereof, the U.S. Borrower shall accept the same as the
agent of the Secured Parties, hold the same in trust for the Secured Parties
and deliver the same forthwith to the Collateral Agent in the exact form
received, duly indorsed by the U.S. Borrower to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by the U.S. Borrower and with, if the Collateral Agent so
requests, signature guaranteed, to be held by the Collateral Agent, subject to
the terms hereof, as additional collateral security for the Secured
Obligations.  Subject to Section 9(a)
hereof, any sums paid upon or in respect of the Pledged Securities upon the
liquidation or dissolution of any Issuer, and, in case any distribution of
capital shall be made on or in respect of the Pledged Securities or any
property shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof or otherwise, the sums or
property so paid or distributed shall, in each case unless otherwise subject to
a perfected security interest in favor of the Collateral Agent or not required
by the Loan Documents to be subject to such a perfected security interest (in
which event such sums or property may be retained by the U.S. Borrower), be
delivered to the Collateral Agent to be held by it hereunder as additional
collateral security for the Secured Obligations.  If any sums of money or property so paid or distributed in
respect of the Pledged Securities and required hereby to be delivered to the
Collateral Agent shall be received by the U.S. Borrower, the U.S. Borrower
shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Secured Parties, segregated
from other funds of the U.S. Borrower, as additional collateral security for
the Secured Obligations.

 

8

 

9.             Pledged Securities.

 

(a)           Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the U.S. Borrower of the Collateral Agent’s intent to exercise its
corresponding rights pursuant to Section 9(b), the U.S. Borrower shall be
permitted to receive all cash dividends paid in respect of the Pledged
Securities whether or not paid in the normal course of business of the relevant
Issuer and whether or not consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate or
other organizational rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast or corporate or other organizational
right exercised or other action taken which, in the Collateral Agent’s
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.

 

(b)           If an Event of Default shall occur
and be continuing and the Collateral Agent shall give notice of its intent to
exercise such rights to the U.S. Borrower, (i) the Collateral 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 Secured Obligations as provided in Section 12 hereof, and
(ii) subject to obtaining requisite consents which shall promptly be
obtained by the U.S. Borrower, any or all of the Pledged Securities shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral 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 or other organizational structure of any Issuer, or upon the
exercise by the U.S. Borrower or the Collateral 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 Collateral Agent may determine), all
without liability except to account for property actually received by it, but
the Collateral Agent shall have no duty to the U.S. Borrower to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.

 

10.          Rights on Default.  If an Event of Default shall occur and be
continuing, the Collateral Agent on behalf of the Administrative Agents and the
Lenders may (personally or by agent), at such time or times as the Collateral
Agent in its discretion may determine (in addition to its rights under
Section 9 hereof), do any one or more of the following:

 

(a)           Rights under PPSA, etc.  Exercise all of the rights and remedies
granted to secured parties under the PPSA and any other applicable statute, or
otherwise available to the Collateral Agent at law or in equity.

 

9

 

(b)           Dispose of Collateral.  Realize on any or all of the Collateral and
sell, lease, assign, give options to purchase, or otherwise dispose of and
deliver any or all of the Collateral (or contract to do any of the above), in
one or more parcels at any public or private sale, at any exchange, broker’s
board or office of the Collateral Agent or elsewhere, on such terms and
conditions as the Collateral Agent may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery.

 

(c)           Court-Approved Disposition of
Collateral.  Apply to a court of
competent jurisdiction for the sale or foreclosure of any or all of the
Collateral.

 

(d)           Purchase by Collateral Agent.  At any public sale, and to the extent
permitted by law on any private sale, bid for and purchase any or all of the
Collateral offered for sale and, upon compliance with the terms of such sale,
hold, retain and dispose of such Collateral without any further accountability
to the U.S. Borrower or any other Person with respect to such holding,
retention or disposition, except as required by law.  In any such sale to the Collateral Agent, the Collateral Agent
may, for the purpose of making payment for all or any part of the Collateral so
purchased, use any claim for the Secured Obligations then due and payable to it
as a credit against the purchase price.

 

(e)           Transfer of Pledged Securities.  Transfer all or part of the Collateral into
the name of the Collateral Agent, any Administrative Agent or any Lender or
their nominee, with or without disclosing that the Pledged Securities are
subject to the Security Interests.

 

(f)            Vote Pledged Securities.  Vote any or all of the Pledged Securities
(whether or not transferred to the Collateral Agent, any Administrative Agent
or any Lender or their nominee) and give or withhold all consents, waivers and
ratifications in respect thereof and otherwise act with respect thereto as
though it were the outright owner thereof.

 

(g)           Exercise Other Rights.  Exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Securities as if it were the absolute owner thereof, including
the right to exchange at its discretion any and all of the Pledged Securities
upon the merger, consolidation, reorganization, recapitalization or other
readjustment of any Issuer or upon the exercise by any Issuer, Lender,
Administrative Agent or the Collateral Agent of any right, privilege or option
pertaining to any of the Pledged Securities, and in connection therewith, 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 it may determine, all without liability except to
account for property actually received by the Collateral Agent, the
Administrative Agents and the Lenders.

 

The Collateral Agent may exercise any or all of the
foregoing rights and remedies without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except as required
by applicable law) to or on the U.S. Borrower or any other Person, and the U.S.
Borrower by this Agreement waives each such demand, 

 

10

 

presentment, protest, advertisement and notice to the extent permitted
by applicable law.  None of the above
rights or remedies will be exclusive of or dependent on or merge in any other
right or remedy, and one or more of such rights and remedies may be exercised
independently or in combination from time to time.  Without prejudice to the ability of the Collateral Agent to
dispose of the Collateral in any manner which is commercially reasonable, the
U.S. Borrower acknowledges that a disposition of Collateral by the Collateral
Agent which takes place substantially in accordance with the following
provisions will be deemed to be commercially reasonable:

 

(i)            Collateral
may be disposed of in whole or in part;

 

(ii)           Collateral
may be disposed of by public auction, public tender or private contract, with
or without advertising and without any other formality;

 

(iii)          any
purchaser of Collateral may be a customer of the Collateral Agent, the
Administrative Agents or the Lenders;

 

(iv)          a
disposition of Collateral may be on such terms and conditions as to credit or
otherwise as the Collateral Agent, in is sole discretion, may deem
advantageous; and

 

(v)           the
Collateral Agent may establish an upset or reserve bid or price in respect of
Collateral.

 

11.          Sale of Pledged Securities.  The U.S. Borrower recognizes that the
Collateral Agent, in connection with any offer or sale of any Pledged
Securities, may be required and is hereby authorized to comply with any
limitation or restriction as it may be advised by counsel is necessary to
comply with applicable law, including compliance with procedures that may
restrict the number of prospective bidders and purchasers, requiring that
prospective bidders and purchasers have certain qualifications, and restricting
prospective bidders and purchasers to Persons who will represent and agree that
they are purchasing for their own account or investment and not with a view to
the distribution or resale of such Pledged Securities.  The U.S. Borrower further agrees that
compliance with any such limitation or restriction will not result in a sale
being considered or deemed not to have been made in a commercially reasonable
manner, and the Collateral Agent will not be liable or accountable to the U.S.
Borrower for any discount allowed by reason of the fact that such Pledged
Securities are sold in compliance with any such limitation or restriction.

 

12.          Application of Proceeds.  All Proceeds of Collateral received by the
Collateral Agent may be applied to discharge or satisfy any expenses (including
the expenses of enforcing the Collateral Agent’s rights under this Agreement),
Security Interests in favour of Persons other than the Collateral Agent,
borrowings, taxes and other outgoings affecting the Collateral or which are
considered advisable by the Collateral Agent to protect, preserve, repair,
process, maintain or enhance the Collateral or prepare it for sale or other
disposition, or to keep in good standing any Security Interests on the
Collateral ranking in priority to any of the Security Interests created by this
Agreement, or to sell, lease or otherwise dispose of the Collateral.  The balance of such Proceeds may, at the
sole discretion of the Collateral Agent, be held as collateral 

 

11

 

security for the Secured Obligations or be applied to such of the
Secured Obligations (whether or not the same are due and payable) in the
following order:

 

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

 

Second,
for application by it towards prepayment of the Secured Obligations, pro rata
among the Lenders according to the amounts of the Secured Obligations then held
by the Lenders, but in the absence of an Event of Default, only to the extent
the Borrowers are required to make such prepayment pursuant to the Credit
Agreement or as the Borrowers may otherwise agree; and

 

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

 

13.          Deficiency.  The U.S. Borrower shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any solicitors employed by the Collateral Agent, either
Administrative Agent or any Lender to collect such deficiency.

 

14.          Collateral
Agent’s Appointment as Attorney-in-Fact.  The U.S. Borrower constitutes and appoints
the Collateral Agent and any officer or agent of the Collateral Agent, with
full power of substitution, as the U.S. Borrower’s true and lawful
attorney-in-fact with full power and authority in the place of the U.S.
Borrower and in the name of the U.S. Borrower or in its own name, from time to
time in the Collateral Agent’s discretion after an Event of Default has
occurred and for so long as such Event of Default is continuing, to take any
and all appropriate action and to execute any and all documents and instruments
as, in the opinion of such attorney acting reasonably, may be necessary or
desirable to accomplish the purposes of this Agreement.  These powers are coupled with an interest
and are irrevocable until this Agreement is terminated and the Security
Interests created by this Agreement are released.  Nothing in this Section affects the right of the Collateral Agent
as secured party, or any other Person on the Collateral Agent’s behalf, to sign
and file or deliver (as applicable) all such financing statements, financing
change statements, notices, verification agreements and other documents
relating to the Collateral and this Agreement as the Collateral Agent or such
other Person considers appropriate.

 

15.          Performance by Collateral Agent of
U.S. Borrower’s Liabilities.  If the U.S. Borrower fails to perform or comply with any of the
obligations of the U.S. Borrower under this Agreement, the Collateral Agent
may, but need not, perform or otherwise cause the performance or compliance of
such obligation; provided that such performance or compliance will not
constitute a waiver, remedy or satisfaction of such failure.  The expenses of the Collateral Agent
incurred in connection with any such performance or compliance will be payable
by the U.S. Borrower to the Collateral Agent immediately on demand, and until
paid, any such expenses will 

 

12

 

form part of the Secured Obligations and will be secured by the
Security Interests created by this Agreement.

 

16.          Interest.  If any amount payable to the Collateral
Agent under this Agreement is not paid when due, the U.S. Borrower will pay to
the Collateral Agent (for the ratable benefit of the Secured Parties),
immediately on demand, interest at a rate per annum equal to the highest rate
per annum at which interest would then be payable on any category of past due
ABR Loans under the Credit Agreement to the date reimbursed by the U.S.
Borrower.  All amounts payable by the
U.S. Borrower to the Collateral Agent under this Agreement, and all interest on
all such amounts, compounded monthly on the last Business Day of each month,
will form part of the Secured Obligations and will be secured by the Security
Interests created by this Agreement.

 

17.          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.

 

18.          Duty of Collateral Agent.  The Collateral Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account.  None of the Collateral Agent, either
Administrative Agent, any Lender nor 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 the U.S. Borrower 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 Collateral
Agent, the Administrative Agents and the Lenders hereunder are solely to
protect the Collateral Agent’s, the Administrative Agents’ and the Lenders’
interests in the Collateral and shall not impose any duty upon the Collateral
Agent, either Administrative Agent or any Lender to exercise any such
powers.  The Collateral Agent, the
Administrative Agents 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 the U.S. Borrower for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.

 

19.          No
Waiver by Course of Conduct:  Cumulative
Remedies.  None of the
Collateral Agent, either Administrative Agent or any Lender shall by any act
(except by a written instrument pursuant to Section 22), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default.  No failure to exercise, nor any delay in exercising, on the part
of the Collateral Agent, either 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 Collateral Agent, either
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
Collateral Agent, such Administrative Agent or such Lender would otherwise have
on any future occasion.  

 

13

 

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.

 

20.          Notices.  All notices, requests and demands to or upon
the Collateral Agent or the U.S. Borrower hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement.

 

21.          Release of Information.  The U.S. Borrower authorizes the Collateral
Agent to provide a copy of this Agreement and such other information as may be
requested of the Collateral Agent by Persons entitled thereto pursuant to any
applicable legislation, and otherwise with the consent of the U.S. Borrower.

 

22.          Waivers
and Indemnity.  To the
extent permitted by applicable law, the U.S. Borrower unconditionally and
irrevocably waives (i) all claims, damages and demands it may acquire
against the Collateral Agent or any Secured Party arising out of the exercise
by the Collateral Agent or any Secured Party of any rights or remedies under
this Agreement or at law, and (ii) all of the rights, benefits and
protections given by any present or future statute that imposes limitations on
the rights, powers or remedies of a secured party or on the methods of, or
procedures for, realization of security, including any “seize or sue” or
“anti-deficiency” statute or any similar provision of any other statute.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the Collateral Agent and the U.S.
Borrower.  The Collateral Agent and the
Secured Parties will not, by any act or delay, be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or in any breach
of any of the terms and conditions hereof. 
No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or the Secured Parties, any right, power or privilege
hereunder shall operate as a waiver thereof. 
No single or partial exercise of any right, power or privilege hereunder
will preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  A
waiver by the Collateral Agent or the Secured Parties of any right or remedy
hereunder on any one occasion will not be construed as a bar to any right or
remedy which the Collateral Agent or the Secured Parties would otherwise have
on any future occasion.  Neither the
taking of any judgment nor the exercise of any power of seizure or sale will
extinguish the liability of the U.S. Borrower to pay the Secured Obligations,
nor will the same operate as a merger or any covenant contained in this
Agreement or of any other liability, nor will the acceptance of any payment or
other security constitute or create any novation.  The U.S. Borrower agrees to indemnify the Collateral Agent and
the Secured Parties from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (except by reason of the gross
negligence or willful misconduct of the Collateral Agent or the other Secured
Parties or any of its agents or employees) which may be imposed on, incurred
by, or asserted against the Collateral Agent and arising by reason of any
action (including any action referred to in this Agreement) or inaction or
omission to do any act legally required by the U.S. Borrower.  This indemnification will survive the
satisfaction, release or extinguishment of the Secured Obligations and the
Security Interests created by this Agreement.

 

23.          Amalgamation.  The U.S. Borrower acknowledges that if it
amalgamates with any other corporation or corporations, then (i) the Collateral
and the Security Interests created by this Agreement will extend to and include
all of the Collateral immediately prior to such

 

14

 

amalgamation and to any securities in the capital of the Issuer
acquired by the amalgamated corporation on or after such amalgamation, subject
to the 66% limitation contained in the definition of “Pledged Securities” and
all other Collateral relating to or in respect of any of such securities and
(ii) the term “U.S. Borrower”, where used in this Agreement, will extend to and
include the amalgamated corporation.

 

24.          GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF
ONTARIO.

 

25.          Submission
To Jurisdiction:  Waivers.  The U.S. Borrower hereby irrevocably and
unconditionally:

 

(a)           submits for itself and its property
in any legal action or proceeding relating to this Agreement or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the Province of Ontario 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 the U.S. Borrower at its address referred to in
Section 10.2 of the Credit Agreement,

 

(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.

 

26.          Interpretation.  Unless otherwise expressly provided in this
Agreement, if any matter in this Agreement is subject to the consent or
approval of the Collateral Agent or is to be acceptable to the Collateral
Agent, such consent, approval or determination of acceptability will be in the
sole discretion of the Collateral Agent. 
If any provision in this Agreement refers to any action taken or to be
taken by the U.S. Borrower, or which the U.S. Borrower is prohibited from
taking, such provision will be interpreted to include any and all means, direct
or indirect, of taking, or not taking, such action.  The division of this Agreement into sections and paragraphs, and
the insertion of headings, is for convenience of reference only and will not
affect the construction or interpretation of this Agreement.  Unless the context otherwise requires, words
importing the singular include the plural and vice versa, and words importing
gender include all genders.  When used
in this Agreement, the word “including” (or includes) means “including (or

 

15

 

includes) without limitation”. 
Any reference in this Agreement to a “Section” means the relevant
Section of this Agreement.

 

27.          Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of the U.S. Borrower and shall inure to the benefit of
the Collateral Agent, the Administrative Agents and the Lenders and their
successors and assigns; provided that the U.S. Borrower may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Collateral Agent.

 

The U.S. Borrower acknowledges receipt of an executed
copy of this Agreement and, to the extent permitted by applicable law, waives
the right to receive a copy of any financing statement, financing change
statement or verification statement in respect of any registered financing
statement or financing change statement prepared, registered or issued in
connection with this Agreement.

 

28.          Existing Securities Pledge
Agreement.  This
Agreement amends and restates in its entirety the Securities Pledge Agreement,
dated as of November 13, 2001 (the “Existing Securities Pledge Agreement”),
made by the U.S. Borrower in favor of Canadian Imperial Bank of Commerce, as
collateral agent (the “Retiring Collateral Agent”), for which Existing
Securities Pledge Agreement the Retiring Collateral Agent has resigned as
collateral agent and the Lenders have appointed the Collateral Agent as
successor collateral agent pursuant to the Credit Agreement, provided that the
obligations of the U.S. Borrower under the Existing Securities Pledge Agreement
shall continue under this Agreement, and shall not in any event be terminated,
extinguished or annulled, but shall hereafter be governed by this Agreement.

 

[Remainder of page
intentionally left blank.]

 

16

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.

 

 

	
   

  	
   

  	
  INTERNATIONAL MULTIFOODS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  110 Cheshire Lane

  	
  By:

  	
   

  
	
   

  	
  Suite 300

  	
  Name:

  
	
   

  	
  Minnetonka, MN 55305

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Vice President and

  	
   

  
	
   

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
  952-594-3362

  	
   

  

 

17

 

SCHEDULE A

 

	
  Issuers

  	
   

  	
  Description of Securities

  
	
   

  	
   

  	
   

  
	
  Robin Hood Multifoods Inc.

  	
   

  	
  492.7224 of the common shares in the capital of the
  Issuer, initially represented by Share Certificate No. 2Exhibit 10.28

 

May 6, 2003

 

THIS AGREEMENT INCLUDES A GENERAL
RELEASE OF CLAIMS.

FEEL FREE TO TAKE 21 DAYS TO CONSIDER THIS AGREEMENT
BEFORE

SIGNING IT.  WE
ALSO ADVISE YOU TO CONSULT A LAWYER PRIOR TO

SIGNING THIS AGREEMENT.

YOU HAVE 7 DAYS AFTER YOU
SIGN THIS AGREEMENT TO REVOKE IT.

SEVERANCE AGREEMENT CONTAINING

GENERAL RELEASE OF
EMPLOYEE’S RIGHTS

                This
Severance Agreement Containing a General Release of my Rights (Agreement) is
entered into between myself, Robert M. Lallo, Holliston, MA 01746 (“Mr. Lallo”),
and the Abington Bancorp, Inc. (Abington Bancorp, Inc., together with its
direct and indirect subsidiaries is hereinafter referred to as “Abington
Savings Bank”), on the date on which I sign it.  In consideration of the covenants undertaken, the releases
contained in this Agreement, and the promises made in this Agreement, the
Abington Savings Bank  and I hereby
agree as follows:

1.                                       Employment Separation.  My employment with the Abington Savings Bank
will terminate on the  date on which
Abington Bancorp, Inc. files it Annual Report on Form 10-K for the year ended
December 31, 2002 with the Securities and Exchange Commission (“Separation
Date”), May 15, 2003.

2.                                       Severance Payment.  In return for the execution of this
Agreement and Release, the Abington Savings Bank agrees to pay me ten (10)
months of severance pay at my current rate of pay, less applicable withholding
taxes and other ordinary payroll deductions (“applicable deductions”).  These payments will be made in the normal
payroll cycles of Abington Savings Bank, commencing with the first payroll
cycle following the later of (i) the revocation period described in Section 15
below and (ii) the Separation Date (“Severance Payments”).

3.                                       Benefits
Eligibility.  In addition
to the severance payments described above, also in exchange for the execution
of this Agreement, for the period of time that I am receiving Severance
Payments, Abington Savings Bank will also make contributions towards my medical
insurance premiums so long as I am both eligible for and enrolled in the
Abington Savings Bank’s medical plan on my separation date.  The contributions which the Abington Savings
Bank will make toward my health insurance premiums will be for only so long as
I am receiving Severance Payments in accordance with this Agreement, and will
be in an amount equal to that which was made by the Abington Savings Bank on my
behalf while I was an employee.  I agree
and acknowledge that I shall remain responsible for the payment of my share of
the insurance premium for said medical insurance.  I agree that the Abington Savings Bank should deduct my portion
of the health insurance from my severance payments. The parties understand and
agree that I will be provided with COBRA notification upon conclusion of my
severance

 

1

 

                                                payments.

 

4.                                       Acknowledgment.  I acknowledge that the benefits provided
under this Agreement are more than I would have received in the absence of my
signing this Agreement and giving the Release contained within.  I understand that I am eligible to receive
any earned and unused vacation time that I have available under Abington
Savings Bank’s policy, regardless of whether or not I sign this Agreement.  I also understand that Abington Savings Bank
has agreed to pay me until the Separation Date, regardless of whether or not I
choose to enter into this Agreement.

5.                                       Confidentiality.

a.               To the extent
permitted by law, I shall not disclose to any third party secrets or any other
financial or business information relating to the Abington Savings Bank of a
kind which is not disclosed publicly in the ordinary course of business, except
if I am required to disclose such information pursuant to subpoena, to assist
in a lawful fraud investigation, or by other compulsory legal process.  If I receive a subpoena, other legal process
or a request which seeks information about the Abington Savings Bank I shall,
where permitted by law, immediately notify the Abington Savings Bank of that
fact prior to responding to such legal process or request.

b.              I shall not
disclose to any person other than my attorney and accountant the benefits
provided for in this Agreement, or the existence of or content of this
Agreement or any discussions concerning, regarding, relating to, or leading up
to this Agreement.  If I disclose
information related to this Agreement to my attorney or accountant, I shall
obtain from each of them their agreement to be bound by this confidentiality
provision prior to disclosing to them any information covered by this
confidentiality provision.

c.               I shall
immediately return to the Abington Savings Bank any and all property of the
Abington Savings Bank in my possession, custody or control, including without
limitation, any documents or other materials, regardless of format, which
pertain to the operations of Abington Savings Bank.

6.                                       Conduct.  I agree that I will not engage in any
conduct that is injurious to the reputation or interests of the Abington
Savings Bank, or any of the Abington Savings Bank Releasees as defined below,
including but not limited to disparaging the Abington Savings Bank or any
Abington Savings Bank  Releasees, unless
otherwise required by law. Abington Savings Bank agrees that it will not
undertake any action for the purpose of causing injury to my reputation or
interests, unless otherwise required by law.

7.                                       Return of Bank Property.  I acknowledge and agree that I have returned
all

 

2

 

                                                Abington Savings Bank property previously in my possession, including
but not limited to any equipment, keys, and credit cards, as well as any
documents and files (and any copies thereof).

8.             Provision
of Ongoing Transitional Services to the Bank.  I acknowledge and agree that throughout the
ten month period that I will be receiving severance payments as described in
this Agreement, I will provide the Abington Savings Bank with transitional
services on an as-needed basis as reasonably determined by the Abington Savings
Bank.  This means that, among other
things, I will be available to the Abington Savings Bank to provide advice,
counseling or other types of transitional services as may be requested by
Abington Savings Bank and as may be needed by Abington Savings Bank.  Abington Savings Bank agrees that the
consulting services to be provided pursuant to this paragraph 8 shall not be in
excess of an average of 10 hours per week (it being understood that such limit
shall not apply to any services to be provided under paragraph 9). The
severance payments included in this Agreement will, in addition to providing
consideration for other terms of this Agreement, also provide me compensation
for any and all transitional services that I may be asked to provide pursuant
to this Section.  I understand, however,
that nothing in this Section changes or alters in any way my employment
Separation Date as described above.

 

9.                                       Cooperation as to Accounting and Other Inquiries.  During the period
following the termination of my employment I agree to cooperate fully with
Abington Savings Bank in (x) any preparation, review, revision or restatement
of any financial statements or related books and records relating to the time
during which I was employed by Abington Savings Bank (the “Employment Period”)
and (y) the defense or prosecution of any investigations, inquiries, claims or
actions now in existence or which may be brought in the future against or on
behalf of Abington Savings Bank which relate to events or occurrences that
transpired during the Employment Period, including any actions, investigations
or proceedings involving Nasdaq, the Securities and Exchange Commission, or any
other regulatory authority.  My full
cooperation in connection with such claims or actions will include, but not be
limited to, being available to meet with counsel to prepare for discovery,
hearing, interview or trial and to act as a witness on behalf of Abington
Savings Bank at mutually convenient times. 
During the period following the termination of my employment I also
agree to cooperate fully with Abington Savings Bank in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relate to events or occurrences that
transpired during the Employment Period. 
Abington Savings Bank will reimburse you for any reasonable
out-of-pocket expenses incurred by you in connection with your performance of
your obligations pursuant to this Section 9, such reimbursement not to include
payment for any time you might spend performing such services.

10.                                 Successors and Assigns.  In the event that the Abington Savings Bank
should change form and/or be merged or consolidated into another organization,
the terms of this Agreement shall inure to the benefit of, and be assumed by,
the entity resulting from such change. 
This Agreement shall be binding upon and 

 

3

 

                                                inure to the
benefit of my successors and assigns, as well as those of the Abington Savings
Bank, but I may not assign this Agreement without the Abington Savings Bank’s
prior written consent.

11.           General
Waiver and Release of My Claims and Rights Up to the Date of This Agreement.  In exchange for the consideration described
in this Agreement, to the extent permitted by law, I hereby, on behalf of
myself, my Abington Savings Bank, and any affiliated corporations (parent
and/or subsidiary), divisions, or entities, either past or present, and each of
them, as well as each of their directors, founders executors, heirs,
administrators, assigns and anyone else claiming by, through or under me,
irrevocably and unconditionally give up, waive, release, acquit and forever
discharge Abington Savings Bank, and any affiliated corporations (parent and/or
subsidiary), divisions, or entities, either past or present, and each of them,
as well as each of their directors, founders, predecessors, successors,
assigns, agents, directors, officers, employees, former employees,
representatives, attorneys, related parties, assigns, and successors, past or
present, and all persons acting by, through, under or in concert with any of
them (collectively “Releases”), or any of them, from any and all charges,
complaints, claims, grievances, liabilities, obligations, promises, agreements,
controversies, damages, judgments, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys’ fees and costs
actually incurred), of any nature whatsoever, known or unknown, suspected or
unsuspected, and whether or not concealed or hidden (“Claim” or “Claims”),
which I now have, own, or hold, or claim to have, own, or hold, or which I at
any time heretofore had, owned, or held, or claimed to have, own or hold
against each or any of the Releasees arising out of any matter existing on, up
to, and including the date of this Agreement, including, without limiting the
generality of the foregoing, express or implied, those Claims arising out of or
in connection with my employment and cessation of employment with the Abington
Savings Bank, all Claims for breach of express or implied contract; all Claims
for wages; all Claims for wrongful termination of employment whether in
contract or tort; all Claims for defamation, libel, slander or intentional,
reckless, or negligent infliction of emotional distress; all Claims for breach
of any express or implied covenant of employment, including the covenant of
good faith and fair dealing; all Claims for interference with contractual or
advantageous relations, whether prospective or existing; all Claims for
discrimination under state or federal law; including without limitation M.G.L.
c. 151B, §1 et seq., as amended, Title VII of the Civil Rights Act of 1964, 42
U.S.C. §2000e et seq., as amended, the Age Discrimination in Employment Act, 29
U.S.C. §621 et seq., as amended, the Older Workers Protection Act of 1990, the
Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et seq., the Employee
Retirement Income Security Act of 1973, 29 U.S.C. §1001 et seq.; all Claims for
bonus, sick leave, holiday pay, severance pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, and all Claims for
attorneys’ fees and costs associated therewith.  However, nothing in this paragraph shall be construed to bar me
from enforcement of my rights under this Agreement or limit me in any way not
permitted by law.

 

4

 

12.                                 No Effect on Indemnification.  Abington Savings Bank has agreed that
nothing contained in this Agreement shall have any effect on such as I may have
under the indemnification provisions of the by-laws of each of Abington
Bancorp, Inc. and Abington Savings Bank.

13.                                 ADEA Waiver.  I expressly acknowledge and agree that, by
entering into this Agreement, I am waiving any and all rights or claims that I
may have arising under the Age Discrimination in Employment Act of 1967, as
amended, which have arisen on or before the date of execution of this
Agreement.  I further expressly
acknowledge and agree that:

a.               In return for
this Agreement, I will receive compensation beyond that to which I was already
entitled to receive before entering into this Agreement;

b.              I am hereby
advised in writing by this Agreement to consult with an attorney before signing
this Agreement;

c.               I was given a
copy of this Agreement on May 12, 2003, and informed that I had twenty-one (21)
days to consider signing it; and

d.              I was informed
that I have seven (7) days following the date of execution of this Agreement in
which to revoke the Agreement.

14.                                 No Law Violation.  I understand that the Abington Savings Bank
is offering me the option of entering into this Agreement on the terms and
conditions as set forth herein in order to assist me in my employment
transition, to recognize my years of service, to further an amicable separation
between me and Abington Savings Bank, and to resolve any and all disputes which
I may or may not have with the Abington Savings Bank and/or any of the Abington
Savings Bank Releasees.  This Agreement
does not mean that the Abington Savings Bank or any other Releasee has violated
or admits to having violated any law or admits to having acting in any way in
violation of any of my rights.  Abington
Savings Bank expressly denies any violation of any of its policies, procedures,
state or federal laws or regulations and/or any wrongdoing.

15.                                 When this Agreement Becomes
Effective.  I
understand that I have seven (7) days from the date I sign this Agreement to
revoke this Agreement by sending a letter, by certified mail, to James
McDonough, President and CEO, Abington Savings Bank, 97 Libbey Industrial
Parkway, Suite 400, Weymouth, MA 02338.  
This Agreement will become effective and enforceable seven (7) days
following my execution, unless it is revoked during the seven-day period.

16.                            Entire Agreement.  This is the complete Agreement between me and the Abington
Savings Bank and supersedes and replaces all prior negotiations and all
agreements proposed or otherwise, whether written or oral, concerning the
subject matters hereof.  Any
representation, promise or agreement not specifically included in this
Agreement shall not be binding upon or enforceable against either 

5

 

party.  This is a fully
integrated document which can be modified only in a writing signed by each
party.

17.                                 Applicable Law.  This Agreement shall be deemed to be made
and entered into in the Commonwealth of Massachusetts, and shall in all
respects be interpreted, enforced and governed under the laws of said
Commonwealth.  The language of all parts
of this Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the parties.

18.                                 Severability.  In case any one or more of the provisions of
this Agreement shall be found to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.  Further, any provision found to be invalid, illegal
or unenforceable shall be deemed, without further action on the part of the
parties hereto, to be modified, amended and/or limited to the minimum extent
necessary to render such clauses and/or provisions valid and enforceable.

19.                                 Counterparts.  This Agreement may be executed in counterparts,
and each counterpart shall have the efficacy of a signed original.  Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose.

20.                                 Headings. The Section
headings in this Agreement are for reference purposes only and shall not be
deemed to be part of this Agreement or to affect the meaning or interpretation
of this Agreement.

BY PLACING MY SIGNATURE
BELOW I CERTIFY THAT I HAVE READ AND ACCEPT ALL OF THE FOREGOING TERMS AND
CONDITIONS AS OF THIS 12TH DAY OF MAY, 2003.

 

	
  /s/

  	
  Robert M. Lallo

  
	
   

  	
  Robert M. Lallo

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ABINGTON BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ James P. McDonough, President

  

 

6

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