Document:

Exhibit 10.1

 

[EXECUTION COPY]

 

 

 

CREDIT AGREEMENT

 

Dated as of April 6, 2005,

 

among

 

STILE U.S. ACQUISITION CORP., 

as the US Borrower,

 

STILE ACQUISITION CORP.,

as the Canadian Borrower,

 

STILE CONSOLIDATED CORP.,

as Guarantor,

 

The Several Lenders

from Time to Time Parties Hereto

 

and

 

THE BANK OF NOVA SCOTIA,

as Administrative Agent and as 

Canadian Administrative Agent

 

 

THE BANK OF NOVA SCOTIA,

as Joint Lead Arranger and Joint Bookrunner

 

DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arranger, Joint Bookrunner

and Co-Syndication Agent

UBS SECURITIES LLC,

as Joint Bookrunner and Co-Syndication Agent

 

BANK OF MONTREAL and SUNTRUST BANK,

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Defined
  Terms

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND
  TERMS OF CREDIT

  	
  53

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Commitments
  and Swingline Commitments

  	
  53

  
	
  2.2.

  	
  Minimum
  Amount of Each Borrowing; Maximum Number of Borrowings

  	
  57

  
	
  2.3.

  	
  Notice of
  Borrowing

  	
  57

  
	
  2.4.

  	
  Disbursement
  of Funds

  	
  59

  
	
  2.5.

  	
  Repayment of
  Loans; Evidence of Debt

  	
  61

  
	
  2.6.

  	
  Conversions
  and Continuations

  	
  63

  
	
  2.7.

  	
  Pro Rata
  Borrowings

  	
  65

  
	
  2.8.

  	
  Interest

  	
  65

  
	
  2.9.

  	
  Interest
  Periods

  	
  66

  
	
  2.10.

  	
  Increased
  Costs, Illegality, etc

  	
  67

  
	
  2.11.

  	
  Compensation

  	
  70

  
	
  2.12.

  	
  Change of
  Lending Office

  	
  70

  
	
  2.13.

  	
  Notice of
  Certain Costs

  	
  71

  
	
  2.14.

  	
  Bankers’
  Acceptances

  	
  71

  
	
  2.15.

  	
  Incremental
  Term Loans

  	
  73

  
	
  2.16.

  	
  Adjustment
  of the Commitments

  	
  74

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF
  CREDIT

  	
  76

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Letters of
  Credit

  	
  76

  
	
  3.2.

  	
  Letter of
  Credit Requests

  	
  77

  
	
  3.3.

  	
  Letter of
  Credit Participations

  	
  78

  
	
  3.4.

  	
  Agreement to
  Repay Letter of Credit Drawings

  	
  80

  
	
  3.5.

  	
  Increased
  Costs

  	
  81

  
	
  3.6.

  	
  Successor
  Letter of Credit Issuer

  	
  82

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FEES;
  COMMITMENTS

  	
  83

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Fees

  	
  83

  
	
  4.2.

  	
  Voluntary
  Reduction of Revolving Credit Commitments

  	
  85

  
	
  4.3.

  	
  Mandatory
  Termination of Commitments

  	
  85

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  PAYMENTS

  	
  86

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Voluntary
  Prepayments

  	
  86

  
	
  5.2.

  	
  Mandatory
  Prepayments

  	
  87

  
	
  5.3.

  	
  Method and
  Place of Payment

  	
  91

  
	
  5.4.

  	
  Net Payments

  	
  91

  
	
  5.5.

  	
  Computations
  of Interest and Fees

  	
  94

  
	
  5.6.

  	
  Limit on
  Rate of Interest

  	
  95

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  CONDITIONS
  PRECEDENT TO INITIAL CREDIT EVENT

  	
  96

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Credit
  Documents

  	
  96

  
	
  6.2.

  	
  Collateral

  	
  98

  
	
  6.3.

  	
  Legal
  Opinions

  	
  99

  
	
  6.4.

  	
  Representations
  and Warranties; No Default

  	
  99

  
	
  6.5.

  	
  Senior
  Subordinated Loan Facility

  	
  99

  
	
  6.6.

  	
  [Intentionally
  Omitted.]

  	
  99

  
	
  6.7.

  	
  Equity
  Contributions

  	
  99

  
	
  6.8.

  	
  Closing
  Certificates

  	
  99

  
	
  6.9.

  	
  Corporate
  Proceedings of Each Credit Party

  	
  100

  
	
  6.10.

  	
  Corporate
  Documents

  	
  100

  
	
  6.11.

  	
  Fees

  	
  100

  
	
  6.12.

  	
  Related Agreements

  	
  100

  
	
  6.13.

  	
  Solvency
  Certificate

  	
  100

  
	
  6.14.

  	
  Governmental
  Authorizations and Consents

  	
  100

  
	
  6.15.

  	
  Historical
  Financial Statements

  	
  100

  
	
  6.16.

  	
  Pro Forma
  Financial Statements

  	
  100

  
	
  6.17.

  	
  Acquisition

  	
  101

  
	
  6.18.

  	
  Insurance

  	
  101

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CONDITIONS
  PRECEDENT TO ALL CREDIT EVENTS

  	
  101

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  No Default;
  Representations and Warranties

  	
  101

  
	
  7.2.

  	
  Notice of
  Borrowing; Letter of Credit Request

  	
  101

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  REPRESENTATIONS,
  WARRANTIES AND AGREEMENTS

  	
  102

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Corporate
  Status

  	
  102

  
	
  8.2.

  	
  Corporate Power
  and Authority

  	
  102

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  8.3.

  	
  Authorization;
  No Violation

  	
  102

  
	
  8.4.

  	
  Litigation

  	
  103

  
	
  8.5.

  	
  Margin
  Regulations

  	
  103

  
	
  8.6.

  	
  Governmental
  Approvals

  	
  103

  
	
  8.7.

  	
  Investment
  Company Act

  	
  103

  
	
  8.8.

  	
  True and Complete
  Disclosure

  	
  103

  
	
  8.9.

  	
  Financial
  Statements; Financial Condition

  	
  103

  
	
  8.10.

  	
  Tax Returns
  and Payments

  	
  104

  
	
  8.11.

  	
  Compliance
  with ERISA

  	
  104

  
	
  8.12.

  	
  Subsidiaries

  	
  105

  
	
  8.13.

  	
  Patents, etc

  	
  105

  
	
  8.14.

  	
  Environmental
  Laws

  	
  105

  
	
  8.15.

  	
  Properties

  	
  106

  
	
  8.16.

  	
  Solvency

  	
  106

  
	
  8.17.

  	
  Public
  Utility Holding Company Act

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE
  COVENANTS

  	
  106

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Information
  Covenants

  	
  106

  
	
  9.2.

  	
  Books,
  Records and Inspections

  	
  109

  
	
  9.3.

  	
  Maintenance
  of Insurance

  	
  109

  
	
  9.4.

  	
  Payment of
  Taxes

  	
  110

  
	
  9.5.

  	
  Consolidated
  Corporate Franchises

  	
  110

  
	
  9.6.

  	
  Compliance
  with Statutes, Regulations, etc

  	
  110

  
	
  9.7.

  	
  ERISA;
  Canadian Benefit Matters

  	
  110

  
	
  9.8.

  	
  Good Repair

  	
  112

  
	
  9.9.

  	
  Transactions
  with Affiliates

  	
  112

  
	
  9.10.

  	
  End of
  Fiscal Years

  	
  112

  
	
  9.11.

  	
  Additional
  Guarantors and Grantors

  	
  112

  
	
  9.12.

  	
  Pledges of
  Additional Stock and Evidence of Indebtedness

  	
  113

  
	
  9.13.

  	
  Use of
  Proceeds

  	
  114

  
	
  9.14.

  	
  Changes in
  Business

  	
  115

  
	
  9.15.

  	
  Further
  Assurances

  	
  115

  
				

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  9.16.

  	
  Maintenance
  of Rating of Facilities

  	
  115

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE
  COVENANTS

  	
  115

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Limitation
  on Indebtedness

  	
  116

  
	
  10.2.

  	
  Limitation
  on Liens

  	
  119

  
	
  10.3.

  	
  Limitation
  on Fundamental Changes

  	
  120

  
	
  10.4.

  	
  Limitation
  on Sale of Assets

  	
  122

  
	
  10.5.

  	
  Limitation
  on Investments

  	
  123

  
	
  10.6.

  	
  Limitation
  on Dividends

  	
  125

  
	
  10.7.

  	
  Limitations
  on Debt Payments and Amendments; Unpaid Refinancing Amount

  	
  126

  
	
  10.8.

  	
  Limitations
  on Sale Leasebacks

  	
  126

  
	
  10.9.

  	
  Consolidated
  Total Debt to Consolidated EBITDA Ratio

  	
  126

  
	
  10.10.

  	
  Consolidated
  EBITDA to Consolidated Interest Expense Ratio

  	
  127

  
	
  10.11.

  	
  Designated
  Senior Indebtedness

  	
  128

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF
  DEFAULT

  	
  128

  
	
   

  	
   

  	
   

  
	
  11.1.

  	
  Payments

  	
  128

  
	
  11.2.

  	
  Representations,
  etc

  	
  128

  
	
  11.3.

  	
  Covenants

  	
  128

  
	
  11.4.

  	
  Default
  Under Other Agreements

  	
  128

  
	
  11.5.

  	
  Bankruptcy,
  etc

  	
  129

  
	
  11.6.

  	
  ERISA

  	
  129

  
	
  11.7.

  	
  Guarantee

  	
  130

  
	
  11.8.

  	
  Security
  Agreements

  	
  130

  
	
  11.9.

  	
  Mortgages

  	
  130

  
	
  11.10.

  	
  Other
  Security Documents

  	
  130

  
	
  11.11.

  	
  Judgments

  	
  131

  
	
  11.12.

  	
  Change of
  Control

  	
  131

  
	
  11.13.

  	
  Subordination

  	
  131

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  THE
  ADMINISTRATIVE AGENT

  	
  132

  
	
   

  	
   

  	
   

  
	
  12.1.

  	
  Appointment

  	
  132

  
	
  12.2.

  	
  Delegation
  of Duties

  	
  132

  
				

 

iv

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  12.3.

  	
  Exculpatory
  Provisions

  	
  132

  
	
  12.4.

  	
  Reliance by
  Administrative Agent

  	
  132

  
	
  12.5.

  	
  Notice of
  Default

  	
  133

  
	
  12.6.

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
  133

  
	
  12.7.

  	
  Indemnification

  	
  134

  
	
  12.8.

  	
  Administrative
  Agent in its Individual Capacity

  	
  134

  
	
  12.9.

  	
  Successor
  Agent

  	
  134

  
	
  12.10.

  	
  Withholding
  Tax

  	
  135

  
	
  12.11.

  	
  Canadian
  Administrative Agent

  	
  135

  
	
  12.12.

  	
  Other
  Agents; Arrangers and Bookrunners

  	
  135

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  MISCELLANEOUS

  	
  135

  
	
   

  	
   

  	
   

  
	
  13.1.

  	
  Amendments
  and Waivers

  	
  135

  
	
  13.2.

  	
  Notices

  	
  136

  
	
  13.3.

  	
  No Waiver;
  Cumulative Remedies

  	
  138

  
	
  13.4.

  	
  Survival of
  Representations and Warranties

  	
  138

  
	
  13.5.

  	
  Payment of
  Expenses

  	
  138

  
	
  13.6.

  	
  Successors
  and Assigns; Participations and Assignments

  	
  139

  
	
  13.7.

  	
  Replacements
  of Lenders under Certain Circumstances

  	
  144

  
	
  13.8.

  	
  Adjustments;
  Set-off

  	
  144

  
	
  13.9.

  	
  Counterparts

  	
  145

  
	
  13.10.

  	
  Severability

  	
  145

  
	
  13.11.

  	
  Integration

  	
  145

  
	
  13.12.

  	
  GOVERNING
  LAW

  	
  145

  
	
  13.13.

  	
  Submission
  to Jurisdiction; Waivers

  	
  145

  
	
  13.14.

  	
  Acknowledgments

  	
  146

  
	
  13.15.

  	
  WAIVERS OF
  JURY TRIAL

  	
  146

  
	
  13.16.

  	
  Confidentiality

  	
  147

  
	
  13.17.

  	
  Québec
  Security

  	
  147

  
	
  13.18.

  	
  Language

  	
  147

  
	
  13.19.

  	
  Judgment
  Currency

  	
  147

  
	
  13.20.

  	
  National
  Security Laws

  	
  148

  
				

 

v

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1(a)

  	
   

  	
  Existing
  Letters of Credit

  
	
  Schedule
  1.1(b)

  	
   

  	
  Mortgaged
  Properties

  
	
  Schedule 1.1(c)

  	
   

  	
  Commitments
  and Addresses of Lenders

  
	
  Schedule
  1.1(d)

  	
   

  	
  Excluded
  Subsidiaries

  
	
  Schedule 8.11(b)

  	
   

  	
  Canadian
  Pension Plan Matters

  
	
  Schedule 8.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 10.1

  	
   

  	
  Closing Date
  Indebtedness

  
	
  Schedule 10.2

  	
   

  	
  Closing Date
  Liens

  
	
  Schedule 10.5

  	
   

  	
  Closing Date
  Investments

  

 

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of
  Assignment and Acceptance

  
	
  Exhibit B-1

  	
   

  	
  Form of US
  Guarantee

  
	
  Exhibit B-2

  	
   

  	
  Form of
  Canadian Guarantee

  
	
  Exhibit B-3

  	
   

  	
  Form of
  Chilean Guarantee

  
	
  Exhibit B-4

  	
   

  	
  Form of
  Mexican Guarantee

  
	
  Exhibit B-5

  	
   

  	
  Form of
  Irish Guarantee

  
	
  Exhibit B-6

  	
   

  	
  Form of UK
  Guarantee

  
	
  Exhibit C-1

  	
   

  	
  Form of US
  Security Agreement

  
	
  Exhibit C-2

  	
   

  	
  Form of
  Canadian Security Agreement

  
	
  Exhibit C-3

  	
   

  	
  Forms of
  Québec Security Documents

  
	
  Exhibit C-4

  	
   

  	
  Form of
  Irish Debenture

  
	
  Exhibit C-5

  	
   

  	
  Form of
  Mexican Security Agreement

  
	
  Exhibit C-6

  	
   

  	
  Form of UK
  Debenture

  
	
  Exhibit C-7

  	
   

  	
  Form of US
  Pledge Agreement

  
	
  Exhibit C-8

  	
   

  	
  Form of
  Canadian Pledge Agreement

  
	
  Exhibit C-9

  	
   

  	
  Form of
  Chilean Pledge Agreement

  
	
  Exhibit C-10

  	
   

  	
  Form of
  French Pledge Agreement

  
	
  Exhibit C-11

  	
   

  	
  Form of
  Irish Pledge Agreements

  
	
  Exhibit C-12

  	
   

  	
  Form of
  Mexican Pledge Agreement

  
	
  Exhibit C-13

  	
   

  	
  Form of UK Pledge
  Agreements

  
	
  Exhibit D

  	
   

  	
  Form of
  Joinder Agreement

  
	
  Exhibit E-1

  	
   

  	
  Form of US
  Letter of Credit Request

  
	
  Exhibit E-2

  	
   

  	
  Form of
  Canadian Letter of Credit Request

  
	
  Exhibit F-1

  	
   

  	
  Form of
  Closing Certificate

  
	
  Exhibit F-2

  	
   

  	
  Form of
  Credit Party Closing Certificate

  
	
  Exhibit G-1

  	
   

  	
  Form of
  Promissory Note (Term Loans)

  
	
  Exhibit G-2

  	
   

  	
  Form of
  Promissory Note (New Term Loans)

  
	
  Exhibit G-3

  	
   

  	
  Form of
  Promissory Note (Revolving Credit and Swingline Loans)

  
	
  Exhibit H-1

  	
   

  	
  Form of
  Borrowing Request

  
	
  Exhibit H-2

  	
   

  	
  Form of
  Canadian Borrowing Request

  

 

vi

 

	
  Exhibit I

  	
   

  	
  Form of
  Acknowledgment of Subordination

  

 

vii

 

THIS CREDIT
AGREEMENT, dated as of April 6, 2005, is among STILE U.S. ACQUISITION CORP., a
Delaware corporation (the “US Borrower”), STILE ACQUISITION CORP., a
corporation organized under the laws of Ontario (the “Canadian Borrower”
and, together with the US Borrower, the “Borrowers”), STILE CONSOLIDATED
CORP., a corporation formed under the federal laws of Canada (“Holdings”),
the lending institutions from time to time parties hereto (each a “Lender”
and, collectively, the “Lenders”), THE BANK OF NOVA SCOTIA, as the
Administrative Agent, as the Canadian Administrative Agent and as Joint Lead
Arranger and Joint Bookrunner, DEUTSCHE BANK SECURITIES INC., as Joint Lead
Arranger and Joint Bookrunner and as Co-Syndication Agent, UBS SECURITIES LLC,
as Joint Bookrunner and Co-Syndication Agent, and BANK OF MONTREAL and SUNTRUST
BANK, as Co-Documentation Agents.

 

Pursuant to or
in connection with the Acquisition Agreement (such term and each other
capitalized term used but not defined in this introductory statement having the
meaning provided in Section 1), (a) the Canadian Borrower will
acquire (the “Acquisition”) all of the issued and outstanding capital
stock of Masonite International Corporation, a corporation governed by the laws
of Ontario, and shall subsequently be amalgamated with Masonite International
Corporation in accordance with applicable law, (b) affiliates of KKR will make
the KKR Equity Contribution, (c) on the Closing Date, the Management Investors
will acquire equity interests in Stile Holding Corp., a corporation continued
under the federal laws of Canada and the direct parent of Holdings (“Parent”)
in an aggregate amount that, when combined with the KKR Equity Amount, equals
not less than 20.0% of the aggregate pro forma capitalization of Parent on the
Closing Date (such equity interests, the “Rollover Equity Contribution”,
and, together with the KKR Equity Contribution, the “Equity Contributions”),
(d) the Borrowers will borrow Senior Subordinated Term Loans in an aggregate
principal amount of $770,000,000 under the Senior Subordinated Loan Facility. The
aggregate principal amount of the Senior Subordinated Term Loans shall be
sufficient, together with the Equity Contributions and the proceeds from the
credit facilities hereunder, to consummate the Acquisition.

 

In connection
with the foregoing, each Borrower has requested the Lenders to extend credit in
the form of (a) Term Loans made available to the Borrowers on the Closing Date,
(b) US Revolving Credit Loans made available to the US Borrower at any time and
from time to time prior to the Revolving Credit Maturity Date, and (c) Canadian
Revolving Credit Loans made available to the Canadian Borrower or the US
Borrower at any time and from time to time prior to the Revolving Credit
Maturity Date. Each Borrower has requested (a) the Letter of Credit Issuers to
issue Letters of Credit at any time and from time to time prior to the L/C
Maturity Date, and (b) that the letters of credit issued pursuant to the
Existing Credit Agreement and identified on Schedule 1.1(a) hereto (the
“Existing Letters of Credit”) be deemed to be Letters of Credit for all
purposes under this Agreement. Each Borrower has requested the applicable
Swingline Lender to extend credit in the form of Swingline Loans at any time
and from time to time prior to the Swingline Maturity Date.

 

The parties
hereto hereby agree as follows:

 

SECTION 1. Definitions

 

 

1.1. Defined
Terms. (a)  As used herein, the following terms shall have the
meanings specified in this Section 1.1 (it being understood that
defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular):

 

“ABR”
shall mean, 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%. If
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the ABR shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. 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 Loan”
shall mean any Loan bearing interest at a rate determined by reference to the
ABR.

 

“Acknowledgment
of Subordination” shall mean the Acknowledgment of Subordination, dated as
of the date of this Agreement, by and between The Bank of Nova Scotia, in its
capacity as administrative agent under the Subordinated Loan Facility, and the
Administrative Agent, substantially in the form of Exhibit I, as the
same may be amended, supplemented or otherwise modified from time to time.

 

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

 

“Acquired
Entity or Business” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”.

 

“Acquisition”
shall have the meaning provided in the preamble to this Agreement.

 

“Acquisition
Agreement” shall mean the Second Amended and Restated Combination
Agreement, dated February 17, 2005 between Stile Acquisition Corp. and Masonite
International Corporation (amending and restating that certain Amended and
Restated Combination Agreement dated January 16, 2005 amending and restating
that certain Combination Agreement dated December 22, 2004), and all other
material documents and instruments entered into in connection therewith, each
as in effect on the date of this Agreement.

 

“Adjusted
Canadian Total Revolving Credit Commitment” shall mean at any time the
Canadian Total Revolving Credit Commitment less the aggregate Canadian
Revolving Credit Commitments of all Defaulting Lenders.

 

2

 

“Adjusted
US Total Revolving Credit Commitment” shall mean at any time the US Total
Revolving Credit Commitment less the aggregate US Revolving Credit Commitments
of all Defaulting Lenders.

 

“Adjusted
Total Term Loan Commitment” shall mean at any time the Total Term Loan
Commitment less the Term Loan Commitments of all Defaulting Lenders.

 

“Adjustment Date” shall have the meaning provided in Section
2.16.

 

“Administrative
Agent” shall mean The Bank of Nova Scotia, as the administrative agent for
the Lenders under this Agreement and the other Credit Documents (and any
successor administrative agent appointed in accordance with the terms of this
Agreement). All references herein to the term “Administrative Agents” shall be
deemed to refer to both the Administrative Agent and the Canadian
Administrative Agent, as the context requires.

 

“Administrative
Agent’s Office” shall mean (a) in respect of all Credit Events for the
account of the US Borrower, the office of the Administrative Agent located at
720 King Street West, 3rd Floor, Toronto, Ontario M5V 2T3, or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto and (b) in respect of all Credit Events for
the account of the Canadian Borrower, the office of the Canadian Administrative
Agent located at 720 King Street West, 3rd Floor, Toronto, Ontario
M5V 2T3, or such other office in Canada as the Canadian Administrative Agent
may hereafter designate in writing as such to the other parties hereto and all
references to the term “Canadian Administrative Agent’s Office” shall mean the
office referred to in this clause (b).

 

“Administrative
Questionnaire” shall have the meaning provided in Section 13.6(b).

 

“Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control another Person (other than an
individual) if the first Person possesses, directly or indirectly, the power
(a) to vote 10% or more of the equity interests having ordinary voting
power for the election of directors (or comparable governing body) of such
other Person or (b) to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agents”
shall mean the Administrative Agent, the Canadian Administrative Agent, the
Joint Lead Arrangers and Joint Bookrunners, the Co-Syndication Agents and the
Co-Documentation Agents.

 

“Aggregate
Canadian Revolving Credit Outstandings” shall have the meaning provided in Section 5.2(b)(ii).

 

“Aggregate
US Revolving Credit Outstandings” shall have the meaning provided in Section 5.2(b)(i).

 

“Agreement”
shall mean this Credit Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

 

3

 

“Amortization
Amount” shall have the meaning provided in Section 5.2(c).

 

“Applicable
ABR Margin” shall mean at any date, (a) with respect to each ABR Loan and
Cdn ABR Loan that is a Term Loan, 1.00% per
annum and (b) with respect to each ABR Loan, Cdn ABR Loan and
Canadian Prime Loan that is a Revolving Credit Loan or Swingline Loan, the
applicable percentage per annum
set forth below based upon the Status in effect on such date:

 

	
  Status

  	
   

  	
  Applicable ABR Margin for

  Revolving Credit and 

  Swingline Loans

  (including ABR Loans, Cdn ABR

  Loan and Canadian Prime Loans)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status

  	
   

  	
  1.50

  	
  %

  
	
  Level II Status

  	
   

  	
  1.25

  	
  %

  
	
  Level III Status

  	
   

  	
  1.00

  	
  %

  
	
  Level IV Status

  	
   

  	
  0.75

  	
  %

  

 

Notwithstanding
the foregoing, the term “Applicable ABR Margin” shall mean, with respect to
each ABR Loan, Cdn ABR Loan and Canadian Prime Loan that is a Revolving Credit
Loan or Swingline Loan, 1.50% per annum
during the period from and including the Closing Date to but excluding the
Initial Financial Statement Delivery Date.

 

“Applicable
Amount” shall mean on any date (the “Reference Date”) (A) the
sum of, without duplication, (i) (x) for purposes of Sections 10.5(g),
(h) and (i), $200,000,000, (y) for purposes of Section 10.6(c),
$10,000,000 with respect to any period ending on or prior to December 31, 2005,
and $50,000,000 thereafter and (z) for purposes of Section 10.7(a),
$50,000,000 and (ii) an amount equal to (x) the cumulative amount of
Excess Cash Flow for all fiscal years completed after the Closing Date and
prior to the Reference Date minus (y) the portion of such Excess Cash
Flow that has been (or will be) applied after the Closing Date and on or prior
to the Reference Date to the prepayment of Loans in accordance with Section 5.2(a)(ii);
provided that, in the case of Sections 10.6(c) and 10.7(a)
only, the amount in clause (ii) shall only be available if the
Consolidated Total Debt to Consolidated EBITDA Ratio for the Test Period most
recently ended is less than 5.00:1.00, determined on a pro forma basis after
giving effect to any dividend or prepayment, repurchase or redemption actually
made pursuant to Sections 10.6(c) or 10.7(a), plus
(B) the amount of any capital contributions or equity issuances (for greater
certainty, other than the Equity Contributions) made or received in cash to or
by Holdings from and including the Business Day immediately following the
Closing Date through and including the Reference Date, including contributions
with proceeds from the issuance of equity securities of Holdings or Parent, in
each case to the extent such proceeds shall have been actually received by
Holdings or either Borrower through the capital contribution of such proceeds
to Holdings or such Borrower (but excluding the amount of equity issuances the
Net Cash Proceeds of which are used to prepay Subordinated Indebtedness as set
forth in clause (i) of Section 10.7), minus (C) in
each of the preceding clauses  (A)(i)(x), (A)(i)(y), (A)(i)(z),
(A)(ii) and (B), the portion of such amount used since the
Closing Date and prior to such date to make Investments pursuant to Section 10.5(g),
10.5(h) or 10.5(i), pay dividends pursuant to 

 

4

 

Section 10.6(c)
and/or make prepayments, repurchases and redemptions pursuant to clause (ii)
of Section 10.7(a), as applicable, in each case without duplication
of any deduction in respect thereof from Excess Cash Flow for any period
included in such Applicable Amount.

 

“Applicable
LIBOR Margin” shall mean at any date (a) with respect to each LIBOR Loan
that is a Term Loan, 2.00% per annum, and
(b) with respect to each LIBOR Loan that is a Revolving Credit Loan, the
applicable percentage per annum
set forth below based upon the Status in effect on such date:

 

	
  Status

  	
   

  	
  Applicable LIBOR Margin for

  Revolving Credit 

  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III Status

  	
   

  	
  2.00

  	
   

  
	
  Level IV Status

  	
   

  	
  1.75

  	
   

  

 

Notwithstanding
the foregoing, the term “Applicable LIBOR Margin” shall mean, with respect to
each LIBOR Loan that is a Revolving Credit Loan, 2.50% per annum during the period from and
including the Closing Date to but excluding the Initial Financial Statement
Delivery Date.

 

“Applicable
Stamping Fee” shall mean, with respect to each accepted or advanced BA Loan
by a Lender on any date, the applicable percentage per annum set forth below
based on the Status in effect on such date:

 

 

	
  Status

  	
   

  	
  Applicable Stamping Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III Status

  	
   

  	
  2.00

  	
  %

  
	
  Level IV Status

  	
   

  	
  1.75

  	
  %

  

 

Notwithstanding
the foregoing, the term “Applicable Stamping Fee” shall mean 2.50% per annum
during the period from and including the Closing Date to but excluding the
Initial Financial Statement Delivery Date.

 

“Approved
Fund” shall have the meaning provided in Section 13.6.

 

“Asset Sale
Prepayment Event” shall mean any sale, transfer or other disposition of any
business unit, asset or other property of Holdings or any of the Restricted
Subsidiaries not in the ordinary course of business (including any sale,
transfer or other disposition of any capital stock of any Subsidiary of
Holdings owned by Holdings or a Restricted Subsidiary). Notwithstanding the
foregoing, the term “Asset Sale Prepayment Event” shall not include any
transaction permitted by Section 10.4, other than transactions
permitted by Section 10.4(b).

 

5

 

“Assignment
and Acceptance” shall mean an assignment and acceptance substantially in
the form of Exhibit A.

 

“Authorized
Officer” shall mean the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer or any other senior officer of Holdings, the
US Borrower or the Canadian Borrower, as the case may be, designated as such in
writing to the Administrative Agent by Holdings, the US Borrower or the
Canadian Borrower, as applicable.

 

“Available
Canadian Commitment” shall mean an amount equal to the excess, if any, of
(a) the Dollar Equivalent of the amount of the Canadian Total Revolving
Credit Commitment over (b) the Dollar Equivalent of the sum of
(i) the aggregate principal amount of all Canadian Revolving Credit Loans
(but not Canadian Swingline Loans) then outstanding and (ii) the aggregate
Canadian Letters of Credit Outstanding at such time.

 

“Available
US Commitment” shall mean an amount equal to the excess, if any, of
(a) the amount of the US Total Revolving Credit Commitment over
(b) the sum of (i) the aggregate principal amount of all US Revolving
Credit Loans (but not US Swingline Loans) then outstanding and (ii) the
aggregate US Letters of Credit Outstanding at such time.

 

“BA
Discount Proceeds” shall mean, with respect to any BA Loan, an amount
calculated on the date of acceptance and purchase or advance of such BA Loan by
multiplying (a) the face or principal amount of such BA Loan by (b) the
quotient of one divided by the sum of one plus the product of (i) the BA
Discount Rate applicable to such BA Loan multiplied by (ii) a fraction, the
numerator of which is the term of such BA Loan measured in days (commencing on
the date of acceptance and purchase or advance and ending on, but excluding,
the maturity date thereof) and the denominator of which is 365; with such
quotient being rounded up or down to the nearest fifth decimal place, with
..000005 being rounded up.

 

“BA
Discount Rate” shall mean:

 

(a)           with respect to an
issue of Bankers’ Acceptances to be accepted by a Schedule I Lender hereunder,
the CDOR at or about 10:00 a.m. (Toronto time) on the date of issuance and
acceptance of such Bankers’ Acceptances for bankers’ acceptances having a
comparable face value and an identical maturity date to the face value and
maturity date of such Bankers’ Acceptances; and

 

(b)           with respect to an
issue of Bankers’ Acceptances or a BA Equivalent Loan to be accepted or advanced
by a Canadian Lender which is not a Schedule I Lender, the lesser of:

 

(i)            the
rate determined by the Canadian Administrative Agent as being the arithmetic
average (rounded upwards to the nearest multiple of 0.01%) of the discount
rates, calculated on the basis of a year of 365 days, of the Schedule II/III
Reference Lenders determined in accordance with their normal practices at or
about 10:00 a.m. (Toronto time) on the date of issue and acceptance of
such Bankers’ Acceptances or advance of such BA Equivalent Loan for bankers’
acceptances having a comparable face amount and an identical maturity date to
the face or principal amount and maturity date of such Bankers’ Acceptances or
BA Equivalent Loan; and

 

6

 

(ii)           the
rate established in (a) above plus 0.10% per annum.

 

“BA Equivalent
Loans” shall mean, in relation to a Loan by way of BA Loans, an advance in
Canadian Dollars made by a Non-Acceptance Lender pursuant to Section 2.14(i).

 

“BA Loans”
shall mean the acceptance and purchase of Bankers’ Acceptances and
BA Equivalent Loans; provided that reference to the amount or
principal amount of a BA Loan shall mean the full face amount of the applicable
Bankers’ Acceptances or Discount Notes issued in connection therewith.

 

“Bankers’
Acceptance” shall mean a Draft denominated in Canadian Dollars drawn by the
Canadian Borrower and accepted and purchased by a Canadian Lender as provided
in Section 2.14 and includes a depository bill issued in accordance
with the Depository Bills and Notes Act (Canada).

 

“Bankruptcy
Code” shall have the meaning provided in Section 11.5.

 

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

 

“Borrowers”
shall have the meaning provided in the preamble to this Agreement.

 

“Borrowing”
shall mean and include (a) the incurrence of Swingline Loans from either
Swingline Lender on a given date, (b) the incurrence of one Type of Term
Loan on the Closing Date (or resulting from conversions on a given date after
the Closing Date) having, in the case of LIBOR Term Loans, the same Interest
Period (provided that ABR Loans incurred pursuant to Section 2.10(b)
shall be considered part of any related Borrowing of LIBOR Term Loans) and
(c) the incurrence of one Type of Revolving Credit Loan on a given date
(or resulting from conversions on a given date) having, in the case of LIBOR
Revolving Credit Loans or BA Loans, the same Interest Period (provided
that ABR Loans, Cdn ABR Loans or Canadian Prime Loans incurred pursuant to Section 2.10(b)
or 2.10(c) shall be considered part of any related Borrowing of LIBOR
Revolving Credit Loans or BA Loans, as the case may be).

 

“Business
Day” shall mean any day excluding Saturday, Sunday and any day that shall
be in The City of New York, New York or Toronto, Ontario a legal holiday or a
day on which banking institutions are authorized by law or other governmental
actions to close; provided, however, that when used in connection
with a LIBOR Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

 

“Canadian
Administrative Agent” shall mean The Bank of Nova Scotia, a Schedule I bank
under the Bank Act (Canada), as
the Canadian administrative agent for the Lenders under this Agreement and the
other Credit Documents, together with any of its permitted successors appointed
pursuant to Section 12.

 

“Canadian
Benefit Plans” shall mean all material employee benefit plans, programs,
policies, practices or other arrangements of any nature or kind whatsoever that
are not Canadian Pension Plans and are maintained or contributed to by any
Credit Party, or under which 

 

7

 

any Credit Party has any liability or
contingent liability, in relation to employees or former employees that it may
have in Canada.

 

“Canadian
Borrower” shall have the meaning provided in the preamble to this
Agreement.

 

“Canadian
Borrowing” shall mean a Borrowing by the Canadian Borrower.

 

“Canadian
Dollar Borrowing” shall mean a Borrowing denominated in Canadian Dollars.

 

“Canadian
Dollar Equivalent” shall mean, on any date of determination, (a) with
respect to any amount denominated in Canadian Dollars, such amount, and (b)
with respect to any amount denominated in Dollars, the equivalent in Canadian
Dollars of such amount, determined by the Canadian Administrative Agent using
the Exchange Rate.

 

“Canadian
Dollars” and “C$” shall mean the lawful money of Canada.

 

“Canadian
Guarantee” shall mean the Canadian Guarantee, made by Holdings, the
Canadian Borrower (with respect to Credit Parties other than itself) and each
Canadian Subsidiary Guarantor, respectively, in favor of the Canadian
Administrative Agent for the ratable benefit of the Secured Parties,
substantially in the form of Exhibit B-2, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Canadian
Insolvency Laws” shall have the meaning provided in Section 11.5.

 

“Canadian
L/C Fronting Fee” shall have the meaning provided in Section 4.1(e).

 

“Canadian
Lenders” shall mean each Lender that has a Canadian Revolving Credit
Commitment or that holds Canadian Revolving Credit Loans; provided that
(a) as of the Closing Date, any such Lender shall be a Canadian Resident and
(b) as of the Closing Date, the relevant Canadian Lender or its Related
Affiliate, if any, shall also be a “United States person” as contemplated by Section 2.1(b)(ii).

 

“Canadian
Letter of Credit” shall have the meaning provided in Section 3.1(a).

 

“Canadian
Letter of Credit Commitment” shall mean $50,000,000 as the same may be
reduced from time to time pursuant to Section 3.1(c).

 

“Canadian
Letter of Credit Exposure” shall mean, with respect to any Canadian Lender,
at any time, the sum of (a) the Dollar Equivalent of the amount of any Unpaid
Drawings in respect of which such Canadian Lender has made (or is required to
have made) payments to the Canadian Letter of Credit Issuer pursuant to Section 3.4(a)
at such time and (b) the Dollar Equivalent of such Canadian Lender’s Canadian
Revolving Credit Commitment Percentage of the Canadian Letters of Credit
Outstanding at such time (excluding the portion thereof consisting of Unpaid
Drawings in respect of which the Canadian Lenders have made (or are required to
have made) payments to the Canadian Letter of Credit Issuer pursuant to Section 3.4(a)).

 

8

 

“Canadian
Letter of Credit Fee” shall have the meaning provided in Section 4.1(d).

 

“Canadian
Letter of Credit Issuer” shall mean The Bank of Nova Scotia or any
successor pursuant to Section 3.6. The Canadian Letter of Credit
Issuer may, in its discretion, arrange for one or more Canadian Letters of
Credit to be issued by one or more Affiliates of the Canadian Letter of Credit
Issuer each of which is a Canadian Resident, and in each such case the term
“Canadian Letter of Credit Issuer” shall include any such Affiliate with
respect to Canadian Letters of Credit issued by such Affiliate. In the event
that there is more than one Canadian Letter of Credit Issuer at any time,
references herein and in the other Credit Documents to the Canadian Letter of
Credit Issuer shall be deemed to refer to the Canadian Letter of Credit Issuer
in respect of the applicable Canadian Letter of Credit or to all Canadian
Letter of Credit Issuers, as the context requires.

 

“Canadian
Letters of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate Stated Amount of outstanding Canadian Letters of
Credit and (b) the aggregate amount of all Unpaid Drawings in respect all
Canadian Letters of Credit.

 

“Canadian
Letter of Credit Request” shall have the meaning provided in Section 3.2.

 

“Canadian
Pension Plans” shall mean each plan which is a registered pension plan for
the purposes of the Tax Act established, maintained or contributed to by either
Borrower or any of its Subsidiaries, or under which either Borrower or any of
its Subsidiaries has any liability or contingent liability, in relation to any
employees or former employees that it may have in Canada.

 

“Canadian
Pledge Agreement” shall mean the Canadian Pledge Agreement entered into by
Holdings, the Canadian Borrower and each Canadian Subsidiary Guarantor,
respectively, and the Collateral Agent, for the ratable benefit of the Secured
Parties, substantially in the form of Exhibit C-8, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Canadian
Prime Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Canadian Prime Rate.

 

“Canadian
Prime Rate” shall mean the higher of (a) the rate of interest per annum determined from time to time by
the Canadian Administrative Agent as being its reference rate then in effect
for determining interest rates on C$ denominated commercial loans made in
Canada, and (b) the one-month CDOR plus 1% per annum. If the Canadian
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the CDOR for
any reason, including the inability or failure of the Canadian Administrative
Agent to obtain sufficient quotations in accordance with the terms of the
definition thereof, the Canadian Prime Rate shall be determined without regard
to clause (b) of the preceding sentence until the circumstances giving
rise to such inability no longer exist. Any change in the Canadian Prime Rate
due to a change in the Canadian Administrative Agent’s reference rate or the
CDOR shall be effective as of the opening of business on the effective day

 

9

 

of such change in the Canadian Administrative
Agent’s reference rate or the CDOR, respectively.

 

“Canadian
Resident” shall mean, at any time, a Person who at that time is (a) not a
non-resident of Canada for purposes of the Tax Act or (b) an authorized foreign
bank deemed to be resident in Canada for purposes of the Tax Act in respect of
all amounts paid or credited to such Person under the Canadian Revolving Credit
Commitment, Canadian Letter of Credit Commitment or Canadian Swingline
Commitment pursuant to this Agreement.

 

“Canadian
Revolving Credit Commitment” shall mean, (a) with respect to each Lender
that is a Lender on the date hereof, the amount set forth opposite such
Lender’s name on Schedule 1.1(c) as such Lender’s “Canadian
Revolving Credit Commitment” and (b) in the case of any Lender that
becomes a Lender after the date hereof, the amount specified as such Lender’s
“Canadian Revolving Credit Commitment” in the Assignment and Acceptance
pursuant to which such Lender assumed a portion of the Canadian Total Revolving
Credit Commitment, in each case as the same may be changed from time to time
pursuant to the terms hereof. The Canadian Total Revolving Credit Commitment as
of the Closing Date is $250,000,000.

 

“Canadian
Revolving Credit Commitment Percentage” shall mean at any time, for each
Canadian Lender, the percentage obtained by dividing (a) such Lender’s
Canadian Revolving Credit Commitment by (b) the Canadian Total Revolving Credit
Commitment; provided that at any time when the Canadian Total Revolving
Credit Commitment shall have been terminated, each Canadian Lender’s Canadian
Revolving Credit Commitment Percentage shall be its Canadian Revolving Credit
Commitment Percentage as in effect immediately prior to such termination.

 

“Canadian
Revolving Credit Exposure” shall mean, with respect to any Canadian Lender
at any time, the sum of (a) the aggregate principal amount of the Dollar
Equivalent of the Canadian Revolving Credit Loans of such Lender then
outstanding, (b) such Lender’s Canadian Swingline Exposure at such time and (c)
such Lender’s Canadian Letter of Credit Exposure at such time.

 

“Canadian
Revolving Credit Loan” shall have the meaning provided in Section 2.1(b)(ii).

 

“Canadian
Security Agreement” shall mean (a) each Canadian Security Agreement entered
into by Holdings or any Canadian Subsidiary Guarantor, respectively, and the
Collateral Agent, for the ratable benefit of the Secured Parties, each
substantially in the form of Exhibit C-2 with respect to Holdings
and each Canadian Subsidiary Guarantor organized under the laws of Canada or
any province or territory thereof, and (b) each Québec Deed of Hypothec, Québec
Debenture and Québec Pledge of Debenture entered into by any Canadian
Subsidiary Guarantor, each substantially in the form included in Exhibit C-3
with respect to Holdings and each Canadian Subsidiary Guarantor, in each case,
if such Canadian Subsidiary Guarantor is organized under the laws of Québec, or
has a principal place of business, chief executive of file or domicile or any
property located in the province of Québec, as the same may be amended,
supplemented or otherwise modified from time to time.

 

10

 

“Canadian
Security Documents” shall mean, collectively, (a) the Canadian
Guarantees, (b) the Canadian Security Agreements, (c) the Canadian Pledge
Agreements, (d) any Mortgage over Mortgaged Property in Canada of Holdings, the
Canadian Borrower or any Canadian Subsidiary Guarantor and (e) any security
document governed by Canadian law entered into by Parent, Holdings, the
Canadian Borrower or any Canadian Subsidiary Guarantor pursuant to Section 9.11,
9.12 or 9.15.

 

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

 

“Canadian
Subsidiary Guarantors” shall mean each Canadian Subsidiary of Holdings that
is a party to the Canadian Guarantee or becomes a party thereto after the
Closing Date pursuant to Section 9.11 or otherwise.

 

“Canadian
Swingline Commitment” shall mean $22,500,000.

 

“Canadian
Swingline Exposure” shall mean, at any time as to any Lender, the product
of (x) the aggregate principal amount of all Canadian Swingline Loans then
outstanding multiplied  by (y) such Lender’s Canadian Revolving
Credit Commitment Percentage.

 

“Canadian
Swingline Loans” shall have the meaning provided in Section 2.1 (c).

 

“Canadian
Term Loan Commitment” shall mean (a) in the case of each Lender that is a
Lender on the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(c) as such Lender’s “Canadian Term Loan Commitment” and (b) in the case
of any Lender that becomes a Lender after the date hereof, the amount specified
as such Lender’s “Canadian Term Loan Commitment” in the Assignment and
Acceptance pursuant to which such Lender assumed a portion of the Total Term
Loan Commitment, in each case as the same may be changed from time to time
pursuant to the terms hereof. The aggregate amount of the Canadian Term Loan
Commitments as of the Closing Date is $587,000,000.

 

“Canadian
Term Loan Repayment Amount” shall have the meaning provided in Section 2.5(b)(ii).

 

“Canadian
Term Loan Repayment Date” shall have the meaning provided in Section 2.5(b)(ii).

 

“Canadian
Term Loans” shall have the meaning provided in Section 2.1(a).

 

“Canadian
Total Revolving Credit Commitment” shall mean the sum of the Canadian
Revolving Credit Commitments of all the Lenders.

 

“Capital
Expenditures” shall mean, for any period, the aggregate of all expenditures
(whether paid in cash or accrued as liabilities and including in all events all
amounts expended or capitalized under Capital Leases, but excluding any amount
representing capitalized interest) by Holdings and its Restricted Subsidiaries
during such period that, in conformity with GAAP, are or are required to be
included as additions during such period to property, plant or equipment
reflected in the consolidated balance sheet of Holdings and its 

 

11

 

Subsidiaries; provided that the term
“Capital Expenditures” shall not include (a) expenditures made in
connection with the replacement, substitution, restoration or repair of assets
(i) to the extent financed from insurance proceeds paid on account of the
loss of or damage to the assets being replaced, restored or repaired or
(ii) with awards of compensation arising from the taking by eminent domain
or condemnation of the assets being replaced, (b) the purchase price of
equipment that is purchased simultaneously with the trade-in of existing
equipment to the extent that the gross amount of such purchase price is reduced
by the credit granted by the seller of such equipment for the equipment being
traded in at such time, (c) the purchase of plant, property or equipment
made within two years of the sale of any asset to the extent purchased with the
proceeds of such sale or (d) expenditures that constitute any part of
Consolidated Lease Expense.

 

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

 

“capital
stock” means, with respect to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s capital, whether now outstanding or issued
hereafter.

 

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

 

“Casualty
Event” shall mean, with respect to any property of any Person, any loss of
or damage to, or any condemnation or other taking by a Governmental Authority
of, such property for which such Person or any of its Restricted Subsidiaries
receives insurance proceeds, or proceeds of a condemnation award or other
compensation.

 

“Cdn ABR”
shall mean, for any day, a rate per annum
equal to the higher of (a) the rate of interest per annum determined from time
to time by the Canadian Administrative Agent as its reference rate of interest
then in effect for determining interest rates on commercial loans denominated
in Dollars made by it in Canada and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If the Canadian Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Canadian Administrative Agent to
obtain sufficient quotations in accordance with the terms of the definition
thereof, the Cdn ABR shall be determined without regard to clause (b) of
the preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Cdn ABR due to a change in the Canadian
Administrative Agent’s reference 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 Canadian Administrative Agent’s reference rate or the Federal Funds
Effective Rate, respectively.

 

“Cdn ABR
Loans” shall mean any Loan bearing interest at a rate determined by
reference to the Cdn ABR.

 

12

 

“Cdn L/C
Participants” shall have the meaning provided in Section 3.3(b).

 

“Cdn L/C
Participation” shall have the meaning provided in Section 3.3(b).

 

“CDOR”
shall mean, as of any day with respect to a BA Loan and the Interest
Period selected by the Canadian Borrower for such BA Loan, or otherwise as
applicable, the average interest rate equal to:

 

(a)           the average of the
annual rates for Canadian Dollar bankers’ acceptances for a term equal to such
Interest Period (or a term as closely possible comparable to such Interest
Period) or such other specified period quoted (at approximately 10:00 a.m.
Toronto time on such day) on the Reuters Monitor Money Rates Service, CDOR page
“Canadian Interbank Bid BA Rates”; and

 

(b)           if such rate is not
available on such day, the rate for such date will be the annual discount rate
(rounded upward to the nearest whole multiple of 1/100 of 1%) as of
10:00 a.m. (Toronto time) on such day at which the Canadian Administrative
Agent is then offering to purchase Canadian Dollar bankers’ acceptances for a
term approximately equal to such Interest Period (or a term as closely possible
comparable to such Interest Period), or such other specified period, accepted
by it.

 

“Change of
Control” shall mean and be deemed to have occurred if (a) (i) the
Sponsor and the Management Investors shall at any time not own, in the
aggregate, directly or indirectly, beneficially and of record, at least 35% of
the voting power of the outstanding Voting Stock of Holdings (other than as the
result of one or more widely distributed offerings of common stock of Parent or
Holdings, in each case whether by Parent, Holdings, the Sponsor or Management
Investors) and/or (ii) any person, entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
or “offeror” (within the meaning of Section 89(1) of the Securities Act
(Ontario)), other than Sponsor, shall at any time have acquired direct or
indirect beneficial ownership of a percentage of the voting power of the
outstanding Voting Stock of Holdings that exceeds the percentage of the voting
power of such Voting Stock then beneficially owned, in the aggregate, by the
Sponsor and the Management Investors, unless, in the case of either clause (i)
or (ii) above, the Sponsor and the Management Investors have, at such
time, the right or the ability by voting power, contract or otherwise to elect
or designate for election at least a majority of the Board of Directors of
Holdings; and/or (b) at any time Continuing Directors shall not constitute
at least a majority of the Board of Directors of Holdings; and/or (c) at any
time, Holdings shall cease to directly own, beneficially and of record, 100% of
the issued and outstanding Voting Stock and other equity interests of either
Borrower; and/or (d) a Change of Control (as defined in the Senior Subordinated
Loan Agreement, any Refinancing Notes Indenture or any Exchange Notes
Indenture) shall have occurred.

 

“Chilean
Guarantee” shall mean the Guarantee Agreement, made by Masonite Chile
Holdings S.A. in favor of the Administrative Agent for the benefit of the
Lenders and the other secured parties named therein, substantially in the form
of Exhibit B-3, and any guarantee governed by Chilean law entered into
by a Subsidiary pursuant to Section 9.11, in each case, as the same may
be amended, supplemented or otherwise modified from time to time.

 

13

 

“Chilean
Pledge Agreement” shall mean the Stock Pledge Agreement entered into by
Masonite Chile Holdings S.A. and the Collateral Agent, for the ratable benefit
of the Secured Parties, substantially in the form of Exhibit C-9, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Chilean
Security Documents” shall mean, collectively, (a) the Chilean
Guarantee, (b)  the Chilean Pledge Agreement and (c) any security document
governed by Chilean law entered into by Holdings, either Borrower or any
Subsidiary Guarantor pursuant to Section 9.11, 9.12 or 9.15.

 

“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are US Revolving Credit Loans, Canadian
Revolving Credit Loans, US Term Loans, Canadian Term Loans, New Term Loans (of
each Series) or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a US Revolving Credit Commitment, a
Canadian Revolving Credit Commitment, a US Term Loan Commitment, a Canadian
Term Loan Commitment or a New Term Loan Commitment.

 

“Closing
Date” shall mean the date of the initial Borrowing hereunder.

 

“Closing
Date Material Adverse Change” shall mean any change, effect, event or
occurrence with respect to the condition (financial or otherwise), properties,
assets, liabilities, obligations (whether absolute, accrued, conditional or
otherwise), businesses, operations or results of operations or prospects of the
Borrowers and their Subsidiaries that is, or would reasonably be expected to
be, material and adverse to Borrowers and their Subsidiaries on a consolidated
basis (other than a change, effect, event or occurrence caused by or arising
from (a) changes in the markets in which the Borrowers and their Subsidiaries
operate (other than changes in reaction to the announcement of the
Transactions) or (b) macroeconomic factors, interest rates, general financial
market conditions, war, terrorism or hostilities, except, in each case, to the
extent any change, effect, event or occurrence has had a disproportionate
effect on the Borrowers and their Subsidiaries as compared to other Persons in
the industry in which the Borrowers and their Subsidiaries operate).

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued thereunder. Section references
to the Code are to the Code, as in effect at the date of this Agreement, and
any subsequent provisions of the Code, amendatory thereof, supplemental thereto
or substituted therefor.

 

“Co-Documentation
Agents” shall mean Bank of Montreal and SunTrust Bank, together with their
affiliates, as the co-documentation agents under this Agreement and the other
Credit Documents.

 

“Collateral”
shall have the meaning provided in the Security Agreements or any Mortgage, as
applicable.

 

“Collateral
Agent” shall have the meaning provided in the Security Agreements, the
Pledge Agreements or any Mortgage, as applicable.

 

14

 

“Commitment
Decrease Amount” shall have the meaning provided in Section 2.16.

 

“Commitment
Fee Rate” shall mean, with respect to the Available US Commitment and the
Available Canadian Commitment on any day, the rate per annum set forth below opposite the Status in effect on
such day:

 

	
  Status

  	
   

  	
  Commitment Fee Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status

  	
   

  	
  0.50

  	
  %

  
	
  Level II Status

  	
   

  	
  0.50

  	
  %

  
	
  Level III Status

  	
   

  	
  0.375

  	
  %

  
	
  Level IV Status

  	
   

  	
  0.375

  	
  %

  

 

Notwithstanding
the foregoing, the term “Commitment Fee Rate” shall mean 0.50%, during the
period from and including the Closing Date to but excluding the Initial
Financial Statement Delivery Date.

 

“Commitment
Increase Amount” shall have the meaning provided in Section 2.16.

 

“Commitments”
shall mean, with respect to each Lender, such Lender’s Term Loan Commitment, US
Revolving Credit Commitment, Canadian Revolving Credit Commitment or New Term
Loan Commitment.

 

“Confidential
Information” shall have the meaning provided in Section 13.16.

 

“Confidential
Information Memorandum” shall mean the Confidential Information Memorandum
of the Borrowers dated March 2005, delivered to the Lenders in connection with
this Agreement.

 

“Consolidated
Earnings” shall mean, for any period, “income (loss) before income taxes
and non-controlling interests” of Holdings and its Restricted Subsidiaries on a
consolidated basis, excluding (a) extraordinary items for such period,
determined in a manner consistent with the manner in which such amount was
determined in accordance with the audited financial statements referred to in Section
9.1(a), (b) the cumulative effect of a change in accounting principles
during such period to the extent included in Consolidated Earnings, (c) in the
case of any period that includes a period ending prior to or during the fiscal
year ending December 31, 2005, Transaction Expenses, and (d) any expenses or
charges or amortization thereof incurred in connection with any Permitted
Acquisition, issuance or repayment of debt, equity securities or any
refinancing transaction or any amendment or other modification of any debt
instrument. There shall be excluded from Consolidated Earnings for any period
the purchase accounting effects of adjustments in component amounts required or
permitted by GAAP and related authoritative pronouncements (including the
effects of such adjustments pushed down to Holdings and its Subsidiaries), as a
result of the Transactions, any acquisition consummated prior to the Closing
Date, any Permitted Acquisitions, or the amortization or write-off of any
amounts thereof.

 

15

 

“Consolidated
EBITDA” shall mean, for any period, the sum, without duplication, of the
amounts for such period of:

 

(a)           Consolidated Earnings plus

 

(b)           to the extent already
deducted in arriving at Consolidated Earnings, and without duplication, the
following:

 

(i)                                     interest
expense, any fees or charges related to Receivables Transactions, amortization
of deferred financing costs, and any losses on hedging obligations or other
derivative instruments entered into for the purpose of hedging interest rate
risk, net of interest income and gains on such hedging obligations,

 

(ii)                                  depreciation
expense,

 

(iii)                               amortization
expense,

 

(iv)                              extraordinary
losses and unusual or non-recurring charges, including severance, relocation
costs, curtailments or modifications to pension and post-retirement employee
benefit plans, costs related to labor disruptions or strikes, direct costs of
extreme weather conditions such as hurricanes (it being agreed that the
aggregate amount of such costs related to labor disruptions or strikes and
direct costs of extreme weather conditions shall be $1,800,000 for the third
fiscal quarter of fiscal year 2004), inventory provisions and write-downs and
one-time compensation charges,

 

(v)                                 non-cash
charges related to stock-based awards expense (including charges related to
effect of the increase in the value of the Predecessor Company stock on
restricted stock units and deferred stock units prior to the occurrence of the
Transactions),

 

(vi)                              other
non-cash charges (provided that if any such non-cash charges represent
an accrual or reserve for potential cash items in any future period, the cash
payment in respect thereof in such future period shall be subtracted from
Consolidated EBITDA to such extent, and excluding amortization of a prepaid
cash item that was paid in a prior period),

 

(vii)                           losses
on asset sales, disposals or abandonments,

 

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

 

16

 

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

 

(x)                                   any
impairment charge or asset write-off related to intangible assets, long-lived
assets, and investments in debt and equity securities pursuant to GAAP,

 

(xi)                                foreign
withholding taxes paid or accrued in such period,

 

(xii)                             costs
of surety bonds incurred during such period in connection with financing
activities,

 

(xiii)                          loss
from the early extinguishment of Indebtedness,

 

(xiv)                         any
deductions attributable to minority interests,

 

(xv)                            all
taxes upon capital and/or assets and not in the nature of income taxes,
including franchise taxes and provincial capital taxes, and

 

(xvi)                         all
losses from investments recorded using the equity method for such period,

 

less
to the extent included in arriving at Consolidated Earnings, the sum of the
following amounts for such period of:

 

(c)           extraordinary gains and
non-recurring gains,

 

(d)           non-cash gains
(excluding any such non-cash gain to the extent it represents the reversal of
an accrual or reserve for potential cash item in any prior period),

 

(e)           gains on asset sales,

 

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

 

(g)           all gains from
investments recorded using the equity method for such period,

 

in each case,
as determined on a consolidated basis for Holdings and its Restricted
Subsidiaries in accordance with GAAP, provided that, to the extent
included in Consolidated Earnings,

 

(i)            there
shall be excluded in determining Consolidated EBITDA currency transaction gains
and losses related to currency remeasurements (including the net loss or gain
resulting from Hedge Agreements for currency exchange risk),

 

(ii)           (x)  there shall be included in determining
Consolidated EBITDA for any period (A) the Acquired EBITDA of any Person,
property, business or asset (other than an Unrestricted Subsidiary) acquired to
the extent not subsequently sold, transferred or otherwise disposed of (but not
including the Acquired EBITDA of any 

 

17

 

related
Person, property, business or assets to the extent not so acquired) by Holdings
or any Restricted Subsidiary during such period (each such Person, property,
business or asset acquired and not subsequently so disposed of, an “Acquired
Entity or Business”), and the Acquired EBITDA of any Unrestricted
Subsidiary that is converted into a Restricted Subsidiary during such period
(each, a “Converted Restricted Subsidiary”), in each case based on the
actual Acquired EBITDA of such Acquired Entity or Business or Converted
Restricted Subsidiary for such period (including the portion thereof occurring
prior to such acquisition or conversion) and (B) for the purposes of the
definition of the term “Permitted Acquisition” and Sections 10.3, 10.9
and 10.10, an adjustment in respect of each Acquired Entity or Business
equal to the amount of the Pro Forma Adjustment with respect to such Acquired
Entity or Business for such period (including the portion thereof occurring
prior to such acquisition or conversion) as specified in the Pro Forma
Adjustment Certificate delivered to the Lenders and the Administrative Agent,
and

 

(y)  for purposes of determining
the Consolidated Total Debt to Consolidated EBITDA Ratio only, there shall be
excluded in determining Consolidated EBITDA for any period the Disposed EBITDA
of any Person, property, business or asset (other than an Unrestricted
Subsidiary) sold, transferred or otherwise disposed of, closed or classified as
discontinued operations by Holdings or any Restricted Subsidiary during such
period (each such Person, property, business or asset so sold or disposed of, a
“Sold Entity or Business”), and the Disposed EBITDA of any Restricted
Subsidiary that is converted into an Unrestricted Subsidiary during such period
(each, a “Converted Unrestricted Subsidiary”), in each case based on the
actual Disposed EBITDA of such Sold Entity or Business or Converted
Unrestricted Subsidiary for such period (including the portion thereof
occurring prior to such sale, transfer, disposition or conversion),

 

(iii)          there
shall be included in determining Consolidated EBITDA (x) for any period that
includes a period ending prior to or during the fiscal year ending December 31,
2005, the estimated cost savings that would have been achieved had the supply
contract, dated March 28, 2002, between Masonite International Corporation and
Craftmaster been terminated at the beginning of such period and (y) for any period
that includes a period ending prior to or during the fiscal year ending
September 30, 2005, the estimated cost savings that would have been achieved
had doorskins purchased by Florida Made from Craftmaster instead been
manufactured by Masonite International Corporation during such period (it being
agreed that such cost savings relating to the contracts in (x) and (y), in the
aggregate, for each of the fiscal quarters in fiscal year 2004 would have been
$2,550,000 and for the first fiscal quarter in fiscal year 2005 would have been
$1,250,000).

 

Notwithstanding
anything to the contrary contained herein, for any period ending prior to one
year after the end of the first fiscal quarter ending after the Closing Date,
pro forma adjustments may be made to Consolidated EBITDA to give effect to the
Transactions and related projected net cost savings or additional net costs
consistent with the provisions set forth in the definition of the term “Pro
Forma Adjustment” as if such provisions were applicable thereto (provided
that any such pro forma increase to Consolidated EBITDA shall be without
duplication for net cost 

 

18

 

savings or
additional net costs actually realized during such period and already included
in Consolidated EBITDA for any Test Period during such period).

 

“Consolidated
EBITDA to Consolidated Interest Expense Ratio” shall mean, as of any date
of determination, the ratio of (a) Consolidated EBITDA for the relevant
Test Period to (b) Consolidated Interest Expense for such Test Period.

 

“Consolidated
Interest Expense” shall mean, for any period, the cash interest expense
(including that attributable to Capital Leases in accordance with GAAP) accrued
for such period, net of cash interest income, of Holdings and its Restricted
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Holdings and its Restricted Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Hedge
Agreements (other than currency swap agreements, currency future or option
contracts, commodities price protection or hedging agreements and other similar
agreements), but excluding, however, amortization of deferred financing costs
and any other amounts of non-cash interest, all as calculated on a consolidated
basis in accordance with GAAP; provided that (i) except as provided
in clause (ii) below, there shall be excluded from Consolidated
Interest Expense for any period the cash interest expense (or cash interest
income) of all Unrestricted Subsidiaries for such period to the extent
otherwise included in Consolidated Interest Expense and (ii) for purposes
of the definition of the term “Permitted Acquisition” and Sections 10.3,
10.9 and 10.10, there shall be included in determining
Consolidated Interest Expense for any period the cash interest expense (or
income) of any Acquired Entity or Business acquired during such period and of
any Converted Restricted Subsidiary converted during such period, in each case
based on the cash interest expense (or income) of such Acquired Entity or
Business or Converted Restricted Subsidiary for such period (including the
portion thereof occurring prior to such acquisition or conversion) assuming any
Indebtedness incurred or repaid in connection with any such acquisition or
conversion had been incurred or prepaid on the first day of such period. Notwithstanding
anything to the contrary contained herein, for purposes of determining
Consolidated Interest Expense for any period ending prior to the first
anniversary of the Closing Date, Consolidated Interest Expense shall be an
amount equal to actual Consolidated Interest Expense from the Closing Date
through the date of determination multiplied by a fraction the numerator of
which is 365 and the denominator of which is the number of days from the
Closing Date through the date of determination.

 

“Consolidated
Lease Expense” shall mean, for any period, all rental expenses of Holdings
and its Restricted Subsidiaries during such period under operating leases for
real or personal property (including in connection with Permitted Sale
Leasebacks), excluding real estate taxes, insurance costs and common area
maintenance charges and net of sublease income, other than (a) obligations
under vehicle leases entered into in the ordinary course of business, (b) all
such rental expenses associated with assets acquired pursuant to a Permitted
Acquisition to the extent that such rental expenses relate to operating leases
in effect at the time of (and immediately prior to) such acquisition and
(c) Capitalized Lease Obligations, all as determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from Consolidated
Lease Expense for any period the rental expenses of all Unrestricted
Subsidiaries for such period to the extent otherwise included in Consolidated
Lease Expense.

 

19

 

“Consolidated
Net Income” shall mean, for any period, the consolidated net income (or
loss) after the deduction of income taxes of Holdings and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated
Total Debt” shall mean, as of any date of determination, (a) the sum of (i)
all Indebtedness of Holdings and its Restricted Subsidiaries for borrowed money
outstanding on such date, (ii) all Indebtedness outstanding under any
Receivables Transactions other than Exempt Receivables Transactions and (iii) all
Capitalized Lease Obligations of the Borrowers and the Restricted Subsidiaries
outstanding on such date, all calculated on a consolidated basis in accordance
with GAAP, minus (b) the aggregate amount of cash included in the
consolidated balance sheet of Holdings and its Restricted Subsidiaries as at
such date to the extent the use thereof for application to payment of
Indebtedness is not prohibited by law or any contract to which Holdings or any
of its Restricted Subsidiaries is a party, minus (c) the cash expected
to be received and the Indebtedness or Capital Lease Obligations of Holdings
and its Restricted Subsidiaries expected to be retired, extinguished, or
assumed by the buyer as the result of the sale or disposal of any Sold Entity
or Business (to the extent such cash has not yet been received and such
Indebtedness or Capital Lease Obligations have not been retired).

 

“Consolidated
Total Debt to Consolidated EBITDA Ratio” shall mean, as of any date of
determination, the ratio of (a) Consolidated Total Debt as of the last day
of the relevant Test Period to (b) Consolidated EBITDA for such Test
Period.

 

“Consolidated
Working Capital” shall mean, at any date, the excess of (a) the sum of all
amounts (other than cash, cash equivalents and bank overdrafts) that would, in
conformity with GAAP, be set forth opposite the caption “total current assets”
(or any like caption) on a consolidated balance sheet of Holdings and its
Restricted Subsidiaries at such date over (b) the sum of all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total
current liabilities” (or any like caption) on a consolidated balance sheet of
Holdings and its Restricted Subsidiaries on such date, but excluding (i) the
current portion of any Funded Debt, (ii) without duplication of clause (i)
above, all Indebtedness consisting of Loans and Letter of Credit Exposure to
the extent otherwise included therein and (iii) the current portion of
deferred income taxes.

 

“Continuing
Director” shall mean, at any date, an individual (a) who is a member
of the Board of Directors of Holdings or either Borrower on the date hereof,
(b) who, as at such date, has been a member of such Board of Directors for
at least the 12 preceding months, (c) who has been nominated to be a member
of such Board of Directors, directly or indirectly, by a Sponsor or Persons
nominated by a Sponsor or (d) who has been nominated to be a member of
such Board of Directors by a majority of the other Continuing Directors then in
office.

 

“Converted
Restricted Subsidiary” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”.

 

“Converted
Unrestricted Subsidiary” shall have the meaning provided in the definition
of the term “Consolidated EBITDA”.

 

20

 

“Co-Syndication
Agents” shall mean Deutsche Bank Securities Inc. and UBS Securities LLC,
together with their affiliates, as co-syndication agents under this Agreement
and the other Credit Documents.

 

“Credit
Documents” shall mean this Agreement, the Security Documents, each Letter
of Credit, each Joinder Agreement and any promissory notes issued by either
Borrower hereunder.

 

“Credit
Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance of a Letter of Credit.

 

“Credit
Party” shall mean each of Holdings, the US Borrower, the Canadian Borrower,
the US Subsidiary Guarantors, the Canadian Subsidiary Guarantors, the Foreign
Subsidiary Guarantors and each other Subsidiary of Holdings that is a party to
a Credit Document.

 

“Debt
Incurrence Prepayment Event” shall mean any issuance or incurrence by
Holdings, either Borrower or any of the Restricted Subsidiaries of any
Indebtedness (including any issuance by either Borrower of Permitted Additional
Notes to the extent the Net Cash Proceeds are not used to finance a Permitted
Acquisition but excluding any other Indebtedness permitted to be issued or
incurred under Section 10.1 other than Section 10.1(a)(xiv)(C)).

 

“Default”
shall mean any event, act or condition that with notice or lapse of time, or
both, would constitute an Event of Default.

 

“Defaulting
Lender” shall mean any Lender with respect to which a Lender Default is in
effect.

 

“Discount
Note” shall mean a non-interest-bearing promissory note or depository note
(within the meaning of the Depository Bills
and  Notes Act (Canada)) denominated in Canadian Dollars issued
by the Canadian Borrower to a Non-Acceptance Lender to evidence a
BA Equivalent Loan.

 

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

 

“dividends”
shall have the meaning provided in Section 10.6.

 

“Dollar
Borrowing” shall mean a Borrowing denominated in Dollars.

 

“Dollars”
and “$” shall mean dollars in lawful currency of the United States of
America.

 

21

 

“Dollar
Equivalent” shall mean, on any date of determination, (a) with respect to
any amount denominated in Dollars, such amount, and (b) with respect to any
amount denominated in Canadian Dollars, the equivalent in Dollars of such
amount, determined by the Administrative Agent using the Exchange Rate.

 

“Draft”
shall have the meaning provided in Section 2.14(f).

 

“Drawing”
shall have the meaning provided in Section 3.4(b).

 

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

 

“Environmental
Law” shall mean any applicable federal, state, provincial, territorial,
foreign or local statute, law, rule, regulation, ordinance, code and rule of
common law now or hereafter in effect and in each case as amended, and any
binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment relating
to the protection of the environment, including ambient air, surface water,
groundwater, land surface and subsurface strata and natural resources such as
wetlands, or health or safety (to the extent relating to human exposure to
Hazardous Materials), or Hazardous Materials, including the Canadian
Environmental Protection Act, 1999, the Fisheries Act, the Transportation of
Dangerous Goods Act, 1992, the Environmental Protection Act (Ontario), the
Ontario Water Resources Act, the Environment Quality Act (Québec), the
Hazardous Products Act, the Canada Shipping Act, and the Canada Wildlife Act.

 

“Equity
Contributions” shall have the meaning provided in the preamble to this
Agreement.

 

“Equity
Issuance Event” shall mean any issuance or sale or other disposition by
Holdings or any of the Restricted Subsidiaries of any capital stock after the
Closing Date other than any such issuance, sale or other disposition that is
(x) to a Borrower, a Restricted Subsidiary or any members of management,
directors or consultants of a Borrower, any direct or indirect parent of a
Borrower or a Borrower’s Subsidiaries, (y) used to finance any Permitted
Acquisition or (z) pursuant to a Plan or Canadian Pension Plan.

 

22

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time. Section references to ERISA are to ERISA as in effect at the
date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.

 

“ERISA
Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) that together with either Borrower or a Subsidiary would be deemed to be
a “single employer” within the meaning of Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the Code.

 

“Event of
Default” shall have the meaning provided in Section 11.

 

“Excess
Cash Flow” shall mean, for any period, an amount equal to (a) the sum,
without duplication, of (i) Consolidated Net Income for such period, (ii) an
amount equal to the amount of all non-cash charges to the extent deducted in
arriving at such Consolidated Net Income, (iii) decreases in Consolidated
Working Capital for such period (other than decreases resulting from
acquisitions or dispositions during such period) and (iv) an amount equal to
the aggregate net non-cash loss on the sale, lease, transfer or other
disposition of assets by the Borrowers and the Restricted Subsidiaries during
such period (other than sales in the ordinary course of business) to the extent
deducted in arriving at such Consolidated Net Income minus (b) the sum,
without duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the amount
of Capital Expenditures made in cash during such period, except to the extent
that such Capital Expenditures were financed with the proceeds of Indebtedness
of either Borrower or its Restricted Subsidiaries, (iii) the aggregate amount
of all prepayments of Revolving Credit Loans and Swingline Loans made during
such period to the extent accompanying reductions of the US Total Revolving
Credit Commitments or the Canadian Total Revolving Credit Commitments, as
applicable, except to the extent financed with the proceeds of other
Indebtedness of either Borrower or the Restricted Subsidiaries, (iv) the
aggregate amount of all principal payments of Indebtedness of the Borrowers or
the Restricted Subsidiaries (including any Term Loans and the principal
component of payments in respect of Capitalized Lease Obligations but excluding
Revolving Credit Loans, Swingline Loans and voluntary prepayments of Term Loans
pursuant to Section 5.1) made during such period (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), except to the extent
financed with the proceeds of other Indebtedness of either Borrower or its
Restricted Subsidiaries, (v) an amount equal to the aggregate net non-cash gain
on the sale, lease, transfer or other disposition of assets by the Borrowers
and the Restricted Subsidiaries during such period (other than sales in the
ordinary course of business) to the extent included in arriving at such
Consolidated Net Income, (vi) increases in Consolidated Working Capital for
such period (other than increases resulting from acquisitions or dispositions
during such period), (vii) payments by either Borrower and its Restricted
Subsidiaries during such period in respect of long-term liabilities of such
Borrower and its Restricted Subsidiaries other than Indebtedness,
(viii) the amount of Investments and acquisitions made during such period
pursuant to Section 10.5 (other than Section 10.5(b)) to the
extent that such Investments and acquisitions were financed with internally
generated cash flow of the Borrowers and the Restricted Subsidiaries,
(ix) the amount of dividends paid during such period pursuant to clause (c)
of the proviso to Section 10.6 to the 

 

23

 

extent such
dividends were financed with internally generated cash flow of Holdings and the
Restricted Subsidiaries and in any event not to exceed the relevant amount set
forth in clause (A)(i)(y) of the definition of “Applicable Amount” in
the aggregate for all such periods, (x) the aggregate amount of
expenditures actually made by the Borrowers and the Restricted Subsidiaries in
cash during such period (including expenditures for the payment of financing
fees) to the extent that such expenditures are not expensed during such period
and to the extent such expenditures were financed with internally generated
cash flow of Holdings and the Restricted Subsidiaries and (xi) the
aggregate amount of any premium, make-whole or penalty payments actually paid
in cash by the Borrowers and the Restricted Subsidiaries during such period
that are required to be made in connection with any prepayment of Indebtedness.

 

“Exchange
Notes” shall mean the Senior Subordinated Exchange Notes or the Senior
Exchange Notes, as applicable.

 

“Exchange
Notes Indenture” shall mean any indenture to be entered into relating to
the applicable Exchange Notes or any portion thereof, as the same may be
amended, modified or supplemented from time to time to the extent permitted by Section
10.7(b).

 

“Exchange
Rate” shall mean on any day the rate at which Canadian Dollars may be
exchanged into Dollars, computed by the Canadian Administrative Agent at the
Bank of Canada noon spot rate, after 12:00 noon (Toronto time) on such day;
provided that if at the time of any such determination, for any reason, no such
spot rate is being quoted, the Canadian Administrative Agent, after
consultation with Holdings, may use any reasonable method it deems appropriate
to determine such rate, and such determination shall be conclusive absent
manifest error.

 

“Exempt
Receivables Transactions” shall mean sales of accounts receivable from The
Home Depot, Inc., The Home Depot U.S.A., Inc., Home Depot of Canada Inc.,
Lowe’s Companies, Inc., their respective Affiliates and any other Person,
including pursuant to (a) the Receivables Purchase Facility and (b) the
Supplier Agreement, dated as of April 7, 2004 (the “Orbian Facility”),
by and between Masonite International Corporation, an Ontario corporation, and
Citibank, N.A.; provided that such sales are substantially consistent
with sales of receivables under the Receivables Purchase Facility or the Orbian
Facility as in effect on the date hereof.

 

“Existing
Credit Agreement” shall mean the Amended and Restated Credit Agreement,
dated as of July 31, 2002, among Premdor U.S. Holdings, Inc. and Masonite
International Corporation, as borrowers, SunTrust Bank, as administrative
agent, and the lenders and other agents party thereto from time to time, as
amended, supplemented or otherwise modified prior to the date hereof.

 

“Existing
Letters of Credit” shall have the meaning provided in the preamble to this
Agreement.

 

“Federal
Funds Effective Rate” shall mean, for any day, the weighted average of the per annum 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 

 

24

 

Business Day, the average of the quotations
for the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.

 

“Fees”
shall mean all amounts payable pursuant to, or referred to in, Section 4.1.

 

“Final Date”
shall mean (a) for purposes of Section 4.1(a)(i), the date on which
the US Revolving Credit Commitments shall have terminated, no US Revolving
Credit Loans shall be outstanding and the US Letters of Credit Outstanding
shall have been reduced to zero and (b) for purposes of Section 4.1(a)(ii),
the date on which the Canadian Revolving Credit Commitments shall have
terminated, no Canadian Revolving Credit Loans shall be outstanding and the
Canadian Letters of Credit Outstanding shall have been reduced to zero.

 

“Foreign
Asset Sale” shall have the meaning provided in Section 5.2(h).

 

“Foreign
Plan” shall mean any employee benefit plan, program, policy, arrangement or
agreement maintained or contributed to by either Borrower or any of its
Subsidiaries with respect to employees employed outside the United States.

 

“Foreign
Pledge Agreements” shall mean, collectively, (a) the UK Pledge Agreements,
(b) the Irish Pledge Agreements, (c) the Chilean Pledge Agreement, (d) the
French Pledge Agreement, (e) the Mexican Pledge Agreement, (f) any pledge
agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) pursuant to Section 9.12 and (f) any other pledge agreement
entered into by a Foreign Subsidiary (other than a Canadian Subsidiary) to
secure any of the Obligations.

 

“Foreign
Security Agreements” shall mean, collectively, (a) the UK Debenture, (b)
the Irish Debenture, (c) the Mexican Security Agreement, (d) any security
agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) pursuant to Section 9.11 and (e) any other security
agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) to secure any of the Obligations.

 

“Foreign
Security Documents” shall mean, collectively, (a) the Foreign Subsidiary
Guarantees, (b) the Foreign Pledge Agreements, (c) the Foreign Security
Agreements, (d) any Mortgage over Mortgaged Property of a Foreign Subsidiary
(other than a Canadian Subsidiary), (e) any security document entered into by a
Foreign Subsidiary (other than a Canadian Subsidiary) pursuant to Section 9.11,
9.12 or 9.15 and (f) any other security document entered into by
a Foreign Subsidiary (other than a Canadian Subsidiary) to secure any of the
Obligations.

 

“Foreign
Subsidiary” shall mean each Subsidiary of either Borrower that is not a US
Subsidiary.

 

“Foreign
Subsidiary Guarantees” shall mean, collectively, (a) the UK Guarantee, (b)
the Irish Guarantee, (c) the Chilean Guarantee, (d) the Mexican Guarantee, (e)
any guarantee agreement entered into by a Foreign Subsidiary (other than a
Canadian Subsidiary) pursuant to Section 9.11 and (f) any other
guarantee agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) to guarantee any of the Obligations.

 

25

 

“Foreign
Subsidiary Guarantors” shall mean, collectively, each
Foreign Subsidiary (other than a Canadian Subsidiary) that is a party to a
Foreign Subsidiary Guarantee or becomes a party thereto after the Closing Date
pursuant to Section 9.11 or otherwise.

 

“French
Pledge Agreement” shall mean the Contrat
de nantissement de compte d’instruments financiers, entered into by
and among the Canadian Borrower, Masonite International Corporation, the
Collateral Agent, and Premdor S.A.S. for the ratable benefit of the Secured
Parties, substantially in the form of Exhibit C-10, as the same may be
amended, supplemented or otherwise modified from time to time.

 

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

 

“GAAP”
shall mean generally accepted accounting principles in Canada as in effect from
time to time; provided, however, that if there occurs after the
date hereof any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 10, the Lenders and the Borrowers
shall negotiate in good faith amendments to the provisions of this Agreement
that relate to the calculation of such covenant with the intent of having the
respective positions of the Lenders and the Borrowers after such change in GAAP
conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, the
covenants in Section 10 shall be calculated as if no such change in
GAAP has occurred.

 

“Governmental
Authority” shall mean any nation or government, any state, province,
territory or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

 

“Guarantee
Agreements” shall mean, collectively, the US Guarantee, the Canadian
Guarantees and the Foreign Subsidiary Guarantees.

 

“Guarantee
and Collateral Exception Amount” shall mean, at any time,
(a) $200,000,000 minus (b) the sum of (i) the aggregate
amount of Indebtedness incurred or assumed prior to such time pursuant to Section 10.1(a)(x)
or (a)(xi) that is outstanding at such time and that was used to
acquire, or was assumed in connection with the acquisition of, capital stock
and/or assets in respect of which guarantees, pledges and security have not
been given pursuant to Sections 9.11 and 9.12, (ii) the
sum of (A) the aggregate New Term Loan Commitments at such time and (B) the
aggregate principal amount of New Term Loans outstanding at such time and
(iii) any Indebtedness incurred by any Restricted Subsidiary that is not a
Subsidiary Guarantor; provided that if such amount is a negative number, the
Guarantee and Collateral Exception Amount shall be zero.

 

26

 

“Guarantee
Obligations” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or any such property or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such Indebtedness of the ability of the primary obligor to make
payment of such Indebtedness or (d) otherwise to assure or hold harmless the
owner of such Indebtedness against loss in respect thereof; provided, however,
that the term “Guarantee Obligations” shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the Indebtedness in respect of which such
Guarantee Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith. The
term “Guarantee” when used as a verb shall mean to provide or incur a
Guarantee Obligation and when used as a noun shall have a correlative meaning.

 

“Guarantors”
shall mean (a) Holdings, (b) the US Borrower (with respect to the Obligations
of Credit Parties other than itself), (c) the Canadian Borrower (with respect
to the Obligations of Credit Parties other than itself) and (d) the US
Subsidiary Guarantors, the Canadian Subsidiary Guarantors and the Foreign
Subsidiary Guarantors, other than the immaterial Subsidiaries listed on Schedule
1.1(d).

 

“Hazardous
Materials” shall mean (a) any petroleum or petroleum products, radioactive
materials, asbestos, urea formaldehyde foam insulation, urea  formaldehyde 
or phenol formaldehyde resin, polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances”, “hazardous waste”, “hazardous materials”,
“extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”,
“toxic pollutants”, “contaminants”, or “pollutants”, or words of similar
import, under any applicable Environmental Law; and (c) any other chemical,
material or substance, which is prohibited, limited or regulated by, or that
may give rise to liability under, any Environmental Law.

 

“Hedge
Agreements” shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity price protection agreements or other
commodity price hedging agreements, and other similar agreements entered into
by Holdings, either Borrower or any Restricted Subsidiary (in each case not for
speculative purposes) in order to protect Holdings or any of its Restricted
Subsidiaries against fluctuations in interest rates, currency exchange rates or
commodity prices.

 

“Historical
Audited Financial Statements” shall mean as of the Closing Date, the
audited financial statements of the Predecessor Company and its consolidated
Subsidiaries, in each case for the three most recently completed fiscal years,
consisting of balance sheets and the 

 

27

 

related consolidated statements of income,
stockholders’ equity and cash flows for such fiscal years.

 

“Historical
Unaudited Financial Statements” shall mean as of the Closing Date, the
unaudited financial statements of the Predecessor Company and its consolidated
Subsidiaries for each fiscal quarter subsequent to the most recent Historical
Audited Financial Statement and ended 45 days before the Closing Date,
consisting of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows of the Predecessor Company.

 

“Holdings”
shall have the meaning provided in the preamble to this Agreement.

 

“Increased
Amount Date” shall have the meaning provided in Section 2.15.

 

“Indebtedness”
of any Person shall mean (a) all indebtedness of such Person for borrowed
money, (b) the deferred purchase price of assets or services that in accordance
with GAAP would be included as liabilities in the balance sheet of such Person,
(c) the face amount of all letters of credit issued for the account of
such Person and, without duplication, all drafts drawn thereunder, (d) all
Indebtedness of a second Person secured by any Lien on any property owned by
such first Person, whether or not such Indebtedness has been assumed, (e) all
Capitalized Lease Obligations of such Person, (f) all obligations of such
Person under interest rate swap, cap or collar agreements, interest rate future
or option contracts, currency swap agreements, currency future or option
contracts and other similar agreements, (g) all Receivables Facility
Outstandings and (h) without duplication, all Guarantee Obligations of such
Person; provided that Indebtedness shall not include trade payables and accrued
expenses, in each case payable directly or through a bank clearing arrangement
and arising in the ordinary course of business.

 

“Initial
Financial Statement Delivery Date” shall mean the date on which
Section 9.1 Financials are delivered to the Lenders under Section 9.1
for the fiscal quarter ended September 30, 2005.

 

“Interest
Period” shall mean, with respect to any Term Loan or Revolving Credit Loan,
the interest period applicable thereto, as determined pursuant to Section 2.9.

 

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

 

28

 

“Irish
Debenture” means the Irish law governed debenture entered into by the
Foreign Subsidiaries listed in Schedule 1 thereto and the Collateral Agent, for
the ratable benefit of the Secured Parties, substantially in the form of Exhibit
C-4, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Irish
Guarantee” means the Irish Guarantee and Indemnity, made by Masonite
Ireland, Masonite Europe and Masonite Components in favor of the Administrative
Agent for the benefit of the Lenders and the other secured parties named
therein, substantially in the form of Exhibit B-5, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Irish
Pledge Agreements” means, collectively, (a) the Irish law governed deed of
charge and memorandum of deposit entered into by Castlegate Entry Systems Inc.,
3061275 Nova Scotia Company, Crown Door Corporation and the Collateral Agent,
for the ratable benefit of the Secured Parties and (b) the Irish law governed
deed of charge and memorandum of deposit entered into by Masonite Ireland,
3061275 Nova Scotia Company, Crown Door Corporation and the Collateral Agent,
for the ratable benefit of the Secured Parties, in each case substantially in
the form of Exhibit C-11, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Irish
Security Documents” means, collectively, (a) the Irish Debenture, (b) the
Irish Pledge Agreements, (c) the Irish Guarantee (d) any Mortgage over
Mortgaged Property in Ireland of Holdings, either Borrower or any Subsidiary
Guarantor and (e) any security document governed by Irish law entered into by
Holdings, either Borrower or any Subsidiary Guarantor pursuant to Section 9.11,
9.12 or 9.15.

 

“Joinder
Agreement” shall mean an agreement substantially in the form of Exhibit D.

 

“Joint Lead
Arrangers” shall mean The Bank of Nova Scotia and Deutsche Bank Securities
Inc., together with their affiliates, as joint lead arrangers under this
Agreement and the other Credit Documents.

 

“Joint
Bookrunners” shall mean The Bank of Nova Scotia, Deutsche Bank Securities Inc.
and UBS Securities LLC, together with their affiliates, as joint bookrunners
under this Agreement and the other Credit Documents.

 

“Joint
Ventures” shall mean any Person in which the US Borrower, the Canadian
Borrower or a Restricted Subsidiary maintains an equity investment, but which
is not a Subsidiary of the US Borrower or the Canadian Borrower.

 

“Judgment
Currency” shall have the meaning set forth in Section 13.19.

 

“Judgment
Currency Conversion Date” shall have the meaning set forth in Section 13.19.

 

“KKR”
shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR
Associates, L.P.

 

29

 

“KKR Equity
Amount” shall mean an amount equal to not less than approximately 95% of
the Equity Contribution.

 

“KKR Equity
Contribution” shall mean the contribution by affiliates of KKR of an amount
of cash equal to not less than the KKR Equity Amount to Parent, in exchange for
the issuance to KKR of approximately 95% of the issued and outstanding equity
interests of Parent.

 

“L/C
Maturity Date” shall mean the date that is five Business Days prior to the
Revolving Credit Maturity Date.

 

“L/C
Participants” shall mean the Cdn L/C Participants or the US L/C
Participants and each is an “L/C Participant”.

 

“L/C
Participation” shall mean a US L/C Participation or a Cdn L/C
Participation.

 

“Lender”
shall have the meaning provided in the preamble to this Agreement.

 

“Lender
Default” shall mean (a) the failure (which has not been cured) of a Lender
to make available its portion of any Borrowing or to fund its portion of any
unreimbursed payment under Section 3.3 required to be made
available or funded by it hereunder or (b) a Lender having notified the
Administrative Agent and/or either Borrower that it does not intend to comply
with the obligations under Section 2.1(b), 2.1(d) or 3.3,
in the case of either clause (a) or clause (b) above,
as a result of the appointment of a receiver or conservator with respect to
such Lender at the direction or request of any regulatory agency or authority.

 

“Letter of
Credit” shall have the meaning provided in Section 3.1(a).

 

“Letter of
Credit Exposures” shall mean US Letter of Credit Exposures and Canadian
Letter of Credit Exposures, as applicable.

 

“Letter of
Credit Issuers” shall mean a collective reference to the US Letter of
Credit Issuer and the Canadian Letter of Credit Issuer and each is a “Letter
of Credit Issuer.”

 

“Letter of
Credit Request” shall mean a US Letter of Credit Request and a Canadian
Letter of Credit Request, as applicable.

 

“Level I
Status” shall mean, on any date, the Consolidated Total Debt to
Consolidated EBITDA Ratio is greater than or equal to 5.00 to 1.00 as of such
date.

 

“Level II
Status” shall mean, on any date, the circumstance that Level I Status
does not exist and the Consolidated Total Debt to Consolidated EBITDA Ratio is
greater than or equal to 4.50 to 1.00 as of such date.

 

“Level III
Status” shall mean, on any date, the circumstance that neither Level I
Status nor Level II Status exists and the Consolidated Total Debt to
Consolidated EBITDA Ratio is greater than or equal to 4.00 to 1.00 as of such
date.

 

30

 

“Level IV
Status” shall mean, on any date, the circumstance that the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than 4.00 to 1.00 as of such
date.

 

“LIBOR Loan”
shall mean any LIBOR Term Loan or LIBOR Revolving Credit Loan.

 

“LIBOR”
shall mean, in the case of any LIBOR Term Loan or LIBOR Revolving Credit Loan,
with respect to each day during each Interest Period pertaining to such LIBOR
Loan, (a) the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m. (London
time), on the date that is two Business Days prior to the commencement of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in dollars (as set forth by any service selected
by the Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period (or, to the extent that
an interest rate is not so ascertainable, the rate per annum determined by the Administrative Agent to be the
average of the rates per annum at
which deposits in dollars are offered for such Interest Period to major banks
in the London interbank market in London, England by the Administrative Agent
at approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period) multiplied by (b) (x) 1.0
in the case of Canadian Revolving Credit Loans and (y) the Statutory Reserve
Rate in the case of US Revolving Credit Loans.

 

“LIBOR
Revolving Credit Loan” shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to LIBOR.

 

“LIBOR Term
Loan” shall mean any Term Loan bearing interest at a rate determined by
reference to LIBOR.

 

“Lien”
shall mean any mortgage, pledge, security interest, hypothecation, assignment,
lien (statutory or other) or similar encumbrance (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof).

 

“Loan”
shall mean any Revolving Credit Loan, Swingline Loan, Term Loan or New Term
Loan made by any Lender hereunder.

 

“Management
Investors” shall mean the management, officers and employees of Holdings or
any Restricted Subsidiaries on the Closing Date who are or become investors in
Parent.

 

“Mandatory
Borrowings” shall mean Mandatory US Borrowings and Mandatory Canadian
Borrowings, as applicable.

 

“Mandatory
Canadian Borrowing” shall have the meaning provided in Section 2.1(d)(ii).

 

“Mandatory
US Borrowing” shall have the meaning provided in Section 2.1(d)(i).

 

31

 

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

 

“Material
Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of Holdings and
its Subsidiaries, taken as a whole, that would materially adversely affect (a)
the ability of Holdings, the Borrowers and the other Credit Parties, taken as a
whole, to perform their obligations under this Agreement or any of the other
Credit Documents or (b) the rights and remedies of the Administrative Agents
and the Lenders under this Agreement or any of the other Credit Documents.

 

“Material
Subsidiary” shall mean, at any date of determination, each Restricted
Subsidiary of Holdings (a) whose total assets at the last day of the Test
Period ending on the last day of the most recent fiscal period for which
Section 9.1 Financials have been delivered were equal to or greater than
5% of the consolidated total assets of Holdings and its Restricted Subsidiaries
at such date or (b) whose gross revenues for such Test Period were equal
to or greater than 5% of the consolidated gross revenues of Holdings and its
Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP.

 

“Maturity
Date” shall mean the Term Loan Maturity Date, the New Term Loan Maturity
Date or the Revolving Credit Maturity Date.

 

“Maximum
Amount” shall have the meaning provided in Section 5.2(i).

 

“Mexican
Guarantee” shall mean the Mexican Subsidiary Guarantee, made by Masonite
Mexico S.A. de C.V. in favor of the Administrative Agent for the benefit of the
Lenders and the other secured parties named therein, substantially in the form
of Exhibit B-4, and any guarantee governed by Mexican law entered into
by a Subsidiary pursuant to Section 9.11, in each case, as the same may
be amended, supplemented or otherwise modified from time to time.

 

“Mexican
Pledge Agreement” shall mean the Contrato de Prenda Sobre Acciones entered
into by Masonite Mexico S.A. de C.V., its shareholders and the Collateral
Agent, for the ratable benefit of the Secured Parties, substantially in the
form of Exhibit C-12, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Mexican
Security Agreement” shall mean the Contrato de Prenda Sin Transmisión de
Posesión entered into by Masonite Mexico S.A. de C.V. and the Collateral Agent,
for the ratable benefit of the Secured Parties, substantially in the form of Exhibit C-5,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Mexican
Security Documents” shall mean, collectively, (a) the Mexican
Guarantee, (b) the Mexican Security Agreement, (c) the Mexican Pledge
Agreement, (d) any Mortgage over Mortgaged Property in Mexico of Holdings,
either Borrower or any Subsidiary 

 

32

 

Guarantor and (e) any security document
governed by Mexican law entered into by Holdings, either Borrower or any
Subsidiary Guarantor pursuant to Section 9.11, 9.12 or 9.15.

 

“Minimum
Borrowing Amount” shall mean (a) with respect to a Dollar Borrowing of Term
Loans or Revolving Credit Loans, $1,000,000, (b) with respect to a Canadian
Dollar Borrowing of Canadian Revolving Credit Loans (other than BA Loans),
C$1,000,000, (c) with respect to a Borrowing of BA Loans, C$2,500,000, (d) with
respect to a Dollar Borrowing of Swingline Loans, $100,000 and (e) with respect
to a Canadian Dollar Borrowing of Canadian Swingline Loans, C$100,000.

 

“Minority
Investment” shall mean any Person (other than a Subsidiary) in which either
Borrower or any Restricted Subsidiary owns capital stock or other equity
interests.

 

“Moody’s”
shall mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation with its business.

 

“Mortgage”
shall mean a Mortgage, Debenture, Assignment of Leases and Rents, Security
Agreement and Financing Statement or other security document entered into by
the owner of a Mortgaged Property and the Collateral Agent for the ratable
benefit of the Lenders in respect of that Mortgaged Property, or, in the case
of Mortgaged Properties located outside the United States of America, in each
case in such form as agreed between the Borrowers and the Administrative Agent
or the Canadian Administrative Agent, as applicable, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Mortgaged
Property” shall mean, initially, each parcel of real estate and the
improvements thereto owned by a Credit Party and identified on Schedule 1.1(b),
and includes each other parcel of real property and improvements thereto with respect
to which a Mortgage is granted pursuant to Section 9.15.

 

“National
Security Laws” shall have the meaning provided in Section 13.20.

 

“Net Cash
Proceeds” shall mean, with respect to any Prepayment Event, any Equity
Issuance Event, or the issuance after the Closing Date of any Refinancing
Notes, (a) the gross cash proceeds (including payments from time to time
in respect of installment obligations, if applicable) received by or on behalf
of Holdings or any of the Restricted Subsidiaries in respect of such Prepayment
Event or issuance, less (b) the sum of:

 

(i)            in the case of any
Prepayment Event, the amount, if any, of all taxes paid or estimated to be
payable by Holdings or any of the Restricted Subsidiaries in connection with
such Prepayment Event,

 

(ii)           in the case of any
Prepayment Event, the amount of any reasonable reserve established in
accordance with GAAP against any liabilities (other than any taxes deducted
pursuant to clause (i) above) (x) associated with the assets
that are the subject of such Prepayment Event and (y) retained by Holdings
or any of the Restricted Subsidiaries; provided that the amount of any
subsequent reduction of such reserve (other than in connection with a payment
in respect of any such liability) shall be deemed to be Net Cash Proceeds of
such Prepayment Event occurring on the date of such reduction,

 

33

 

(iii)          in the case of any
Prepayment Event, the amount of any Indebtedness secured by a Lien on the
assets that are the subject of such Prepayment Event to the extent that the
instrument creating or evidencing such Indebtedness requires that such
Indebtedness be repaid upon consummation of such Prepayment Event,

 

(iv)          in the case of any
Asset Sale Prepayment Event, Casualty Event or Permitted Sale Leaseback, the
amount of any proceeds of such Asset Sale Prepayment Event, Casualty Event or
Permitted Sale Leaseback that Holdings or any Subsidiary has reinvested (or
intends to reinvest within the Reinvestment Period or has entered into a
binding commitment prior to the last day of the Reinvestment Period to
reinvest) in the business of Holdings or any of the Restricted Subsidiaries
(subject to Section 9.14); provided that any portion of such
proceeds that has not been so reinvested within such Reinvestment Period shall,
unless Holdings or a Subsidiary has entered into a binding commitment prior to
the last day of such Reinvestment Period to so reinvest such proceeds,
(x) be deemed to be Net Cash Proceeds of an Asset Sale Prepayment Event,
Casualty Event or Permitted Sale Leaseback occurring on the last day of such
Reinvestment Period and (y) be applied to the repayment of Term Loans in
accordance with Section 5.2(a)(i); and

 

(v)           in the case of any
Prepayment Event, any Equity Issuance Event, or the issuance of Refinancing
Notes, reasonable and customary fees, commissions, expenses, issuance costs,
discounts and other costs paid by Holdings, either Borrower or any of the
Restricted Subsidiaries, as applicable, in connection with such Prepayment
Event or issuance, as the case may be (other than those payable to Holdings,
either Borrower or any Subsidiary of Holdings), in each case only to the extent
not already deducted in arriving at the amount referred to in clause (a)
above.

 

“New Canadian
Term Loan Commitments” shall have the meaning provided in Section 2.15.

 

“New
Canadian Term Loans” shall have the meaning provided in Section 2.15.

 

“New Term
Loan Commitments” shall mean the New US Term Loan Commitments and the New
Canadian Term Loan Commitments, as applicable.

 

“New Term
Loan Lender” shall have the meaning provided in Section 2.15.

 

“New Term
Loans” shall have the meaning provided in Section 2.15.

 

“New Term
Loan Maturity Date” shall mean the date on which a New Term Loan matures.

 

“New US
Term Loan Commitments” shall have the meaning provided in Section 2.15.

 

“New US
Term Loans” shall have the meaning provided in Section 2.15.

 

34

 

“Non-Acceptance
Lender” shall mean a Canadian Lender that does not accept Bankers’
Acceptances.

 

“Non-Defaulting
Lender” shall mean and include each Lender other than a Defaulting Lender.

 

“Non-Excluded
Taxes” shall have the meaning provided in Section 5.4(a).

 

“Non-US
Lender” shall have the meaning provided in Section 5.4(a).

 

“Non-US
Participant” shall have the meaning provided in Section 5.4(c).

 

“Notice of
Borrowing” shall have the meaning provided in Section 2.3(a).

 

“Notice of
Conversion or Continuation” shall have the meaning provided in Section 2.6.

 

“Obligations”
shall mean the collective reference to (i) the due and punctual payment of (x)
the principal of and premium, if any, and interest at the applicable rate
provided under this Agreement (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (y) each payment required to be made by the
Borrowers under this Agreement in respect of any Letter of Credit or BA Loan,
when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral, and
(z) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrowers or any other Credit
Party to any of the Secured Parties under this Agreement and the other Credit
Documents, (ii) the due and punctual payment and performance of all covenants,
agreements, obligations and liabilities of the Borrowers and each other Credit
Party under or pursuant to this Agreement and the other Credit Documents and
(iii) the due and punctual payment and performance of all obligations of each
Credit Party under each Hedge Agreement that (x) is in effect on the Closing
Date with a counterparty that is a Lender or an affiliate of a Lender as of the
Closing Date or (y) is entered into after the Closing Date with any counterparty
that is a Lender or an affiliate of a Lender at the time such Hedge Agreement
is entered into.

 

“Parent”
shall have the meaning provided in the preamble to this Agreement.

 

“Participant”
shall have the meaning provided in Section 13.6(c)(i).

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

 

“Perfection
Certificate” shall mean a certificate of each of the US Borrower and the
Canadian Borrower in the form approved by the Administrative Agent.

 

35

 

“Permitted
Acquisition” shall mean the acquisition, by merger, amalgamation or
otherwise, by either Borrower or any of the Restricted Subsidiaries of assets
or capital stock or other equity interests, so long as (a) such
acquisition and all transactions related thereto shall be consummated in
accordance with applicable law; (b) such acquisition shall result in the
issuer of such capital stock or other equity interests becoming (i) a Restricted
Subsidiary and (ii) a Subsidiary Guarantor, to the extent required by Section 9.11;
(c) such acquisition shall result in the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the ratable benefit of the applicable
Lenders, being granted a security interest in any capital stock or any assets
so acquired, to the extent required by Sections 9.11, 9.12 and/or
9.15; (d) after giving effect to such acquisition, no Default or
Event of Default shall have occurred and be continuing; and (e) the
Borrowers shall be in compliance, on a pro forma basis after giving effect to
such acquisition (including any Indebtedness assumed or permitted to exist or
incurred pursuant to Sections 10.1(a)(x) and 10.1(a)(xi),
respectively, and any related Pro Forma Adjustment), with the covenants set
forth in Sections 10.9 and 10.10, as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Section as if such acquisition had occurred on the first day of such Test
Period; provided that with respect to acquisitions consummated during
the first three fiscal quarters of 2005, pro forma compliance with the
covenants set forth in Sections 10.9 and 10.10 shall mean
(x) a Consolidated Total Debt to Consolidated EBITDA Ratio of not greater
than 7.90 to 1.00 and (y) a Consolidated EBITDA to Consolidated Interest
Expense Ratio of not less than 1.50 to 1.00.

 

“Permitted
Additional Notes” shall mean either the Permitted Additional Senior Notes
or the Permitted Additional Senior Subordinated Notes, as applicable.

 

“Permitted
Additional Senior Notes”  shall mean
senior notes, issued by either Borrower, (i) the terms of which do
not provide for any scheduled repayment, mandatory redemption or sinking fund
obligation prior to the date on which the final maturity of the Senior Exchange
Notes or Senior Refinancing Notes, as applicable, occurs (as in effect on the
date of issuance of such Senior Exchange Notes or Senior Refinancing Notes, as
applicable) (other than customary offers to purchase upon a change of control,
asset sale or event of loss and customary acceleration rights after an event of
default), (ii) the covenants, events of default, subsidiary guarantees and
other terms of which (other than interest rate and redemption premiums), taken
as a whole, are not more restrictive to the Borrowers and the Subsidiaries than
those in the applicable Exchange Notes Indenture and Senior Exchange Notes or
the applicable Refinancing Notes Indenture and Senior Refinancing Notes and
(iii) of which no Subsidiary of either Borrower (other than a Guarantor)
is an obligor under such notes that is not an obligor under the Senior Exchange
Notes or Senior Refinancing Notes, as applicable.

 

“Permitted
Additional Senior Subordinated Notes” shall mean senior subordinated notes,
issued by either Borrower, (i) the terms of which (1) do not
provide for any scheduled repayment, mandatory redemption or sinking fund
obligation prior to the date on which the final maturity of the Senior Subordinated
Exchange Notes or Senior Subordinated Refinancing Notes, as applicable, occurs
(as in effect on the date of issuance of such Senior Subordinated Exchange
Notes or Senior Subordinated Refinancing Notes, as applicable) (other than
customary offers to purchase upon a change of control, asset sale or event of
loss and customary acceleration rights after an event of default) and (2) 
provide for subordination to the Obligations under the Credit Documents on
terms and conditions no less favorable to the Lenders than the terms and 

 

36

 

conditions set forth in the applicable
Exchange Notes Indenture or Refinancing Notes Indenture, (ii) the
covenants, events of default, subsidiary guarantees and other terms of which
(other than interest rate and redemption premiums), taken as a whole, are not
more restrictive to the Borrowers and the Subsidiaries than those in the
applicable Exchange Notes Indenture and Senior Subordinated Exchange Notes or
the applicable Refinancing Notes Indenture and Senior Subordinated Refinancing
Notes, and (iii) of which no Subsidiary of either Borrower (other than a
Guarantor) is an obligor under such notes that is not an obligor under the
Senior Subordinated Exchange Notes or Senior Subordinated Refinancing Notes, as
applicable.

 

“Permitted Investments” shall mean:

 

(a)           securities issued or unconditionally
guaranteed by the United States government or Canadian government or any agency
or instrumentality thereof, in each case having maturities of not more than 24
months from the date of acquisition thereof;

 

(b)           securities issued by any state of the
United States of America or any province or territory of Canada or any
political subdivision of any such state, province or territory or any public
instrumentality thereof or any political subdivision of any such state,
province or territory or any public instrumentality thereof having maturities
of not more than 24 months from the date of acquisition thereof and, at the
time of acquisition, having an investment grade rating generally obtainable
from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s
shall be rating such obligations, then from another nationally recognized
rating service);

 

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

 

(d)           commercial paper maturing no more
than 12 months after the date of creation thereof and, at the time of
acquisition, having a rating of at least A-2 or P-2 from either S&P or
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service);

 

(e)           domestic and LIBOR certificates of
deposit or bankers’ acceptances maturing no more than two years after the date
of acquisition thereof issued by any Lender or any other bank having combined
capital and surplus of not less than $250,000,000 in the case of Canadian or
United States banks and $100,000,000 (or the Dollar Equivalent thereof) in the
case of other banks;

 

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

 

(g)           marketable short-term money market
and similar securities having a rating of at least A-2 or P-2 from either
S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, an equivalent rating from another nationally recognized
rating service);

 

37

 

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

 

(i)            in the case of Investments by any
Restricted Foreign Subsidiary or Investments made in a country outside the
United States of America, other customarily utilized high-quality Investments
in the country where such Restricted Foreign Subsidiary is located or in which
such Investment is made.

 

“Permitted
Liens” shall mean (a) Liens for taxes, assessments or governmental charges
or claims not overdue by more than 60 days or which are being contested in
good faith and by appropriate proceedings; (b) Liens in respect of property or
assets of Holdings or any of the Subsidiaries imposed by law, such as
carriers’, warehousemen’s, mechanics’ landlords’, materialmen’s and repairmen’s
Liens and other similar Liens arising in the ordinary course of business, in
each case so long as such Liens arise in the ordinary course of business and do
not individually or in the aggregate have a Material Adverse Effect;
(c) Liens arising from judgments or decrees in circumstances not
constituting an Event of Default under Section 11.11; (d) Liens
incurred or deposits made in connection with workers’ compensation,
unemployment insurance, social security and similar legislation, or to secure
the performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business;
(e) ground leases in respect of real or immovable property on which
facilities owned or leased by Holdings or any of its Subsidiaries are located;
(f) easements, rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering in any material
respect with the business of Holdings and its Subsidiaries, taken as a whole;
(g) any interest or title of a lessor or secured by a lessor’s interest under
any lease permitted by this Agreement; (h) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (i) Liens on goods the
purchase price of which is financed by a documentary letter of credit issued
for the account of Holdings or any of its Subsidiaries; provided that such Lien
secures only the obligations of Holdings or such Subsidiaries in respect of
such letter of credit to the extent permitted under Section 10.1;
(j) leases or subleases granted to others not interfering in any material
respect with the business of Holdings and its Subsidiaries, taken as a whole;
(k) Liens created in the ordinary course of business in favor of banks and
other financial institutions over credit balances of any bank accounts of
Holdings and its Restricted Subsidiaries held at such banks or financial
institutions, as the case may be, to facilitate the operation of cash pooling
and/or interest set-off arrangements in respect of such bank accounts in the
ordinary course of business and (l) Liens in favor of the Crown reserved in any
original grant of real property.

 

“Permitted
Sale Leaseback” shall mean any Sale Leaseback consummated by either
Borrower or any of the Restricted Subsidiaries after the Closing Date; provided
that such Sale Leaseback is consummated for fair value as determined at the
time of consummation in good faith by (i) the relevant Borrower or Restricted
Subsidiary and (ii) in the case of any Sale Leaseback (or series of related
Sale Leasebacks) the aggregate proceeds of which exceed $20,000,000, the Board
of Directors (or comparable governing body) of the relevant Borrower or
Restricted Subsidiary (which such determination may take into account any
retained interest or 

 

38

 

other Investment of such Borrower or such
Restricted Subsidiary in connection with, and any other material economic terms
of, such Sale Leaseback).

 

“Person”
shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any Governmental
Authority.

 

“Plan”
shall mean any multiemployer, multiple-employer or single-employer plan, as
defined in Section 4001 of ERISA and subject to Title IV of ERISA, that is
or was within any of the preceding six plan years maintained or contributed to
by (or to which there is or was an obligation to contribute or to make payments
to) Holdings, either Borrower, a Subsidiary or an ERISA Affiliate.

 

“Pledge
Agreements” shall mean the US Pledge Agreement, the Canadian Pledge
Agreement and the Foreign Pledge Agreements.

 

“PPSA”
shall mean the Personal Property Security
Act (Ontario) and the regulations thereunder from time to time in
effect; provided, however, if the attachment, perfection, or priority of
the Canadian Administrative Agent’s Liens in any Collateral are governed by the
personal property security laws of any jurisdiction other than Ontario, “PPSA”
shall mean those personal property security laws in such other jurisdiction for
the purposes of the provisions of this Agreement relating to such attachment,
perfection or priority and for the definitions related to such provisions.

 

“Predecessor
Company” shall mean Masonite International Corporation, a corporation
governed by the laws of Ontario, as existing prior to the consummation of the
Acquisition.

 

“Prepayment
Event” shall mean any Asset Sale Prepayment Event, Debt Incurrence
Prepayment Event, Casualty Event or any Permitted Sale Leaseback.

 

“Prime Rate”
shall mean the rate of interest per annum
determined from time to time by the Administrative Agent as its reference rate
in effect at its principal office in New York City.

 

“Pro Forma
Adjustment” shall mean, for any Test Period that includes any of the six
consecutive fiscal quarters first ending following any Permitted Acquisition,
with respect to the Acquired EBITDA of the applicable Acquired Entity or
Business or the Consolidated EBITDA of the relevant Borrower affected by such
acquisition, the pro forma increase or decrease in such Acquired EBITDA or such
Consolidated EBITDA, as the case may be, projected by the relevant Borrower in
good faith as a result of reasonably identifiable and factually supportable net
cost savings or additional net costs, as the case may be, realizable during
such period by combining the operations of such Acquired Entity or Business
with the operations of the relevant Borrower and its Subsidiaries; provided
that so long as such net cost savings or additional net costs will be
realizable at any time during such six-quarter period, it may be assumed, for
purposes of projecting such pro forma increase or decrease to such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such net
cost savings or additional net costs will be realizable during such entire
period; provided  further that any such pro forma increase or
decrease to such Acquired EBITDA or such Consolidated EBITDA, as the 

 

39

 

case may be, shall be without duplication for
net cost savings or additional net costs actually realized during such period
and already included in such Acquired EBITDA or such Consolidated EBITDA, as
the case may be.

 

“Pro Forma
Adjustment Certificate” shall mean any certificate of an Authorized Officer
of either Borrower delivered pursuant to Section 9.1(h) or setting
forth the information described in clause (iv) to Section 9.1(d).

 

“Pro Forma
Financial Statements” shall mean the unaudited pro forma balance sheet of
Holdings and its consolidated Subsidiaries at December 31, 2004, and the
related unaudited pro forma consolidated statement of income of Holdings and
its consolidated Subsidiaries for the twelve months ended December 31, 2004, in
each case prepared giving effect to the Transactions as if they had occurred,
with respect to such balance sheet, on such date, and with respect to such
statement of income, on the first day of such twelve-month period.

 

“Qualified
PIK Securities” shall mean (1) any preferred capital stock or preferred
equity interest of Holdings (a) that does not provide for any cash
dividend payments or other cash distributions in respect thereof on or prior to
any Maturity Date and (b) that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event does not (i)(x) mature or
become mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (y) become convertible or exchangeable at the option of the
holder thereof for Indebtedness or preferred stock that is not Qualified PIK
Securities or (z) become redeemable at the option of the holder thereof
(other than as a result of a change of control event), in whole or in part, in
each case on or prior to the first anniversary of the latest Maturity Date and
(ii) provide holders thereunder with any rights upon the occurrence of a
“change of control” event prior to the repayment of the Obligations under the
Credit Documents and (2) any Indebtedness of Holdings which has payment terms
at least as favorable to Holdings and Lenders as described in clauses (1)(a)
and (b) above and is subordinated on customary terms and conditions (including
remedy standstills at all times prior to the latest Maturity Date) and has
other terms, other than with respect to interest rates, at least as favorable
to Holdings and Lenders as the terms of the Senior Subordinated Refinancing
Notes.

 

“Real
Estate” shall have the meaning provided in Section 9.1(f).

 

“Receivables
Facility Outstandings” shall mean, at any date of determination with
respect to any Receivables Transaction (other than Exempt Receivables
Transactions), the aggregate cash purchase price received by Holdings or any of
its Restricted Subsidiaries from the buyer in connection with its purchase of
accounts receivable under such Receivables Transaction (including any bills of
exchange) less the amount of collections received in respect of such accounts
receivable and paid to such buyer, excluding any amounts applied to purchase
fees or discounts or in the nature of interest, in each case as determined in
good faith and in a consistent and commercially reasonable manner by Holdings
and reasonably acceptable to the Administrative Agent.

 

“Receivables
Purchase Facility” shall mean the Trade Receivable Purchase Facility
Agreement, dated as of June 25, 2004, by and between Masonite Door Corporation
and SunTrust Bank, as amended.

 

40

 

“Receivables
Reduction Amount” shall mean, as of any date, (i) if the Consolidated Total
Debt to Consolidated EBITDA Ratio as of such date is less than or equal to
5.50:1.00, zero and (ii) if the Consolidated Total Debt to Consolidated EBITDA
Ratio as of such date is greater than 5.50:1.00, the aggregate amount of
Receivables Facility Outstandings under all Receivables Transactions (other
than Exempt Receivables Transactions) to which Holdings or any of the
Restricted Subsidiaries are a party as of such date.

 

“Receivables
Transactions” shall mean (a) the Exempt Receivables Transactions and (b)
any transaction providing for the sale or financing of accounts receivable of
Holdings or any of the Restricted Subsidiaries having limited recourse based on
the collectability of the accounts receivable sold or financed, with any such
sales or financing in the case of the preceding clause (b) being on customary
terms.

 

“Refinancing
Notes” shall mean the Senior Subordinated Refinancing Notes or the Senior
Refinancing Notes, as applicable.

 

“Refinancing
Notes Indenture” shall mean any indenture between either Borrower and a
trustee to be determined, pursuant to which Refinancing Notes will be issued,
as the same may be amended, modified or supplemented from time to time to the
extent permitted by Section 10.7(b).

 

“Register”
shall have the meaning provided in Section 13.6(b)(iv).

 

“Regulation D”
shall mean Regulation D of the Board as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.

 

“Regulation T”
shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.

 

“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

 

“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.

 

“Reinvestment
Period” shall mean the earlier of (x) 10 Business Days prior to the
occurrence of an obligation to make an offer to repurchase Refinancing Notes or
Exchange Notes (or any Permitted Additional Notes) pursuant to the asset sale
or event of loss provisions of the applicable Refinancing Notes Indenture or
Exchange Notes Indenture and (y) 15 months following the date of the
applicable Asset Sale Prepayment Event or Casualty Event.

 

“Related
Affiliate” shall mean with respect to any Lender with a Canadian Revolving
Credit Commitment, an Affiliate or lending office of such Lender designated by
it to make its Canadian Revolving Credit Commitment, Canadian Letters of Credit
and Canadian Revolving Credit Loans available to the Borrowers under this
Agreement.

 

“Related
Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors
of such Person and any 

 

41

 

Person that possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of such Person, whether through the ability to exercise voting power,
by contract or otherwise.

 

“Repayment
Amount” shall mean a US Term Loan Repayment Amount or Canadian Term Loan
Repayment Amount, as applicable.

 

“Repayment
Date” shall mean a US Term Loan Repayment Date or Canadian Term Loan
Repayment Date, as applicable.

 

“Reportable
Event” shall mean an event described in Section 4043 of ERISA and the
regulations thereunder.

 

“Required
Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding a majority of the sum of (i) the Adjusted US Total Revolving
Credit Commitment at such date, (ii) the Adjusted Canadian Total Revolving
Credit Commitment at such date, (iii) the Adjusted Total Term Loan Commitment
at such date, and (iv) the outstanding principal amount of Term Loans
(excluding Term Loans held by Defaulting Lenders) at such date or (b) if
the US Total Revolving Credit Commitment, the Canadian Total Revolving Credit
Commitment and the Total Term Loan Commitment have been terminated or for the
purposes of acceleration pursuant to Section 11, the holders
(excluding Defaulting Lenders) of a majority of the outstanding principal
amount of the Loans and Letter of Credit Exposures (excluding the Loans and
Letter of Credit Exposures of Defaulting Lenders) in the aggregate at such
date.

 

“Required
Term Loan Lenders” shall mean, at any date, Non-Defaulting Lenders having
or holding a majority of the sum of (a) the portion of the Adjusted Total
Term Loan Commitment that relates to Term Loan Commitments at such date and
(b) the outstanding principal amount of the Term Loans (excluding the Term
Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Requirement
of Law” shall mean, 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 assets or to which such Person or any of its
property or assets is subject.

 

“Restricted
Foreign Subsidiary” shall mean a Foreign Subsidiary that is a Restricted
Subsidiary.

 

“Restricted
Subsidiary” shall mean any Subsidiary of Holdings other than an
Unrestricted Subsidiary.

 

“Restricted
US Subsidiary” shall mean a US Subsidiary that is a Restricted Subsidiary.

 

“Revolving
Credit Commitment Percentage” shall mean the Canadian Revolving Credit
Commitment Percentage and the US Revolving Credit Commitment Percentage, as
applicable.

 

42

 

“Revolving
Credit Commitments” shall mean the US Revolving Credit Commitments and the
Canadian Revolving Credit Commitments, as applicable.

 

“Revolving
Credit Loans” shall have the meaning provided in Section 2.1(b)(i).

 

“Revolving
Credit Maturity Date” shall mean the date that is six years after the
Closing Date, or, if such date is not a Business Day, the next preceding
Business Day.

 

“Rollover
Equity Contribution” shall have the meaning provided in the preamble to
this Agreement.

 

“S&P”
shall mean Standard & Poor’s Ratings Services or any successor by
merger or consolidation with its business.

 

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

 

“Schedule I
Lender” shall mean any Lender named in Schedule I to the Bank Act (Canada).

 

“Schedule
II/III Reference Lenders” means Deutsche Bank AG, Canada Branch and other
specified Canadian Lenders that are banks named in Schedule II or Schedule III
to the Bank Act (Canada) and
approved by the Canadian Borrower and the Canadian Administrative Agent.

 

“SEC”
shall mean the Securities and Exchange Commission or any successor thereto.

 

“Section 9.1
Financials” shall mean the financial statements delivered, or required to
be delivered, pursuant to Section 9.1(a) or (b) together
with the accompanying officer’s certificate delivered, or required to be
delivered, pursuant to Section 9.1(d).

 

“Secured
Parties” shall mean (i) the Lenders, (ii) the Letter of Credit Issuers,
(iii) the Swingline Lenders, (iv) the Administrative Agent, (v) the Canadian
Administrative Agent, (vi) the other Agents, (vii) the Collateral Agent, (viii)
each counterparty to a Hedge Agreement the obligations under which constitute
Obligations, (ix) the beneficiaries of each indemnification obligation
undertaken by any Credit Party under any Credit Document and (x) any successors,
indorsees, transferees and assigns of each of the foregoing.

 

“Security
Agreements” shall mean, collectively, the US Security Agreement, the
Canadian Security Agreements and the Foreign Security Agreements.

 

“Security
Documents” shall mean, collectively, (a) the Guarantee Agreements,
(b) the Security Agreements, (c) the Pledge Agreements, (d) the
Mortgages, (e) each other 

 

43

 

Canadian Security Document, (f) each other
Foreign Security Document and (g) each other security agreement or other
instrument or document executed and delivered pursuant to Section 9.11,
9.12 or 9.15 or pursuant to any of the Security Documents to
secure any of the Obligations.

 

“Senior
Exchange Notes” shall mean (a) unsecured senior floating rate notes of
either Borrower (i) issued on or following the date that is 18 months
after the Closing Date as evidence of the same underlying indebtedness as the
Senior Subordinated Term Loans, (ii) in an aggregate principal amount not
to exceed $400,000,000 less the aggregate principal amount of Senior
Refinancing Notes outstanding immediately following the issuance thereof,
(iii) having a final maturity not earlier than the date that is six months
following the Term Loan Maturity Date, (iv) guaranteed by the Guarantors and no
other Persons, and (v) issued pursuant to an indenture substantially in the
form of the Exchange Notes Indenture annexed as Exhibit F to the Senior
Subordinated Loan Agreement as in effect on the date of this Agreement and
having terms and conditions substantially the same as the terms and conditions
(other than subordination terms and conditions) of such indenture, and
(b) any amendment, replacement or refinancing thereof consisting of
Permitted Additional Senior Notes; provided that any such amendment,
replacement or refinancing shall bear a rate of interest determined by the
Board of Directors of the US Borrower or the Canadian Borrower, as the case may
be, to be a market rate of interest at the date of such amendment, replacement
or refinancing and have other terms customary for similar issuances under
similar market conditions or otherwise be on terms reasonably acceptable to the
Administrative Agent.

 

“Senior
Refinancing Notes” shall mean (a) unsecured senior floating rate notes
of either Borrower (i) in an aggregate principal amount not to exceed
$400,000,000 less the aggregate principal amount of Senior Exchange
Notes outstanding immediately following the issuance thereof, (ii) bearing a
rate of interest determined by the Board of Directors of Holdings to be a
market rate of interest at the date of issuance thereof, (iii) having a
final maturity not earlier than the date that is six months following the Term
Loan Maturity Date and otherwise having terms customary for similar issuances
under similar market conditions or otherwise reasonably acceptable to the
Administrative Agent and (iv)  guaranteed by the Guarantors and no other
Persons and (b) any amendment, replacement or refinancing thereof
consisting of Permitted Additional Senior Notes; provided that any such
amendment, replacement or refinancing shall bear a rate of interest
determined by the Board of Directors of the US Borrower or the Canadian
Borrower, as the case may be, to be a market rate of interest at the date of
such amendment, replacement or refinancing and have other terms customary for
similar issuances under similar market conditions or otherwise be on terms
reasonably acceptable to the Administrative Agent.

 

“Senior
Subordinated Exchange Notes” shall mean (a) unsecured subordinated
notes of either Borrower (i) issued on or following the date that is 18
months after the Closing Date as evidence of the same underlying indebtedness
as the Senior Subordinated Term Loans, (ii)  having a final maturity not
earlier than the date that is six months following the Term Loan Maturity Date,
(iii) subordinated and postponed in all material respects to the Obligations to
the same extent as the Senior Subordinated Term Loans, evidenced by an
acknowledgment of subordination or other intercreditor agreement in form and
substance reasonably satisfactory to the Administrative Agent, (iv) guaranteed
by the Guarantors and no other Persons and (v) issued 

 

44

 

pursuant to an indenture substantially in the
form of the Exchange Notes Indenture annexed as Exhibit F to the Senior
Subordinated Loan Agreement as in effect on the date of this Agreement and
having terms and conditions substantially the same as the terms and conditions
of such indenture, and (b) any amendment, replacement or refinancing
thereof consisting of Permitted Additional Senior Subordinated Notes; provided
that any such amendment, replacement or refinancing shall bear a rate of
interest determined by the Board of Directors of the US Borrower or the
Canadian Borrower, as the case may be, to be a market rate of interest at the
date of such amendment, replacement or refinancing and have other terms
customary for similar issuances under similar market conditions or otherwise be
on terms reasonably acceptable to the Administrative Agent.

 

“Senior
Subordinated Loan Agreement” shall mean the Senior Subordinated Loan
Agreement, dated as of the date of this Agreement, among the Borrowers,
Holdings, the lending institutions from time to time parties thereto, The Bank
of Nova Scotia, as the US administrative agent, the Canadian administrative
agent and joint lead arranger and joint bookrunner, Deutsche Bank Securities
Inc., as joint lead arranger and joint bookrunner and as co-syndication agent,
UBS Securities LLC, as joint bookrunner and co-syndication agent, and Bank of
Montreal and SunTrust Bank, as co-loan documentation agents, as the same may be
amended, modified or supplemented from time to time to the extent permitted
under the terms of this Agreement.

 

“Senior
Subordinated Loan Facility” shall mean (a) the unsecured Senior
Subordinated Loan Facility made available pursuant to the Senior Subordinated
Loan Agreement, and (b) any amendment thereto, or replacement or
refinancing thereof (including, for greater certainty, any replacement of
Senior Subordinated Term Loans for Exchange Notes evidencing the same
underlying indebtedness pursuant to the terms of the Senior Subordinated Loan
Agreement) which shall be unsecured and have terms not materially less
advantageous to the interests of the Lenders (including with respect to
amortization schedule, maturity date and extent of subordination, as
applicable) than the terms contemplated by the definitions of the terms “Senior
Subordinated Refinancing Notes” and “Senior Refinancing Notes”.

 

“Senior
Subordinated Refinancing Notes” shall mean (a) unsecured subordinated
notes of either Borrower (i)  having a final maturity not earlier than the
date that is six months following the Term Loan Maturity Date,
(ii) subordinated and postponed in all material respects to the
Obligations to the same extent as the Senior Subordinated Term Loans, evidenced
by an acknowledgment of subordination or other intercreditor agreement in form
and substance reasonably satisfactory to the Administrative Agent, (iii)
guaranteed by the Guarantors and no other Persons, and (iv) bearing a rate of
interest determined by the Board of Directors of Holdings to be a market rate
of interest at the date of issuance thereof and otherwise having terms
customary for similar issuances under similar market conditions or otherwise
reasonably acceptable to the Administrative Agent, and (b) any amendment,
replacement or refinancing thereof consisting of Permitted Additional Senior Subordinated
Notes; provided that any such amendment, replacement or refinancing
shall bear a rate of interest determined by the Board of Directors of the
US Borrower or the Canadian Borrower, as the case may be, to be a market rate
of interest at the date of such amendment, replacement or refinancing and have
other terms customary for similar issuances under similar market conditions or
otherwise be on terms reasonably acceptable to the Administrative Agent.

 

45

 

“Senior
Subordinated Term Loans” shall mean unsecured subordinated loans made
pursuant to the Senior Subordinated Loan Agreement.

 

“Series”
shall have the meaning as provided in Section 2.15.

 

“Sold
Entity or Business” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”.

 

“Solvent”
shall mean, with respect to each Borrower, that as of the Closing Date, both
(i) (a) the sum of such Borrower’s debt (including contingent liabilities) does
not exceed the present fair saleable value of such Borrower’s present assets;
(b) such Borrower’s capital is not unreasonably small in relation to its
business as contemplated on the Closing Date; and (c) such Borrower has not
incurred and does not intend to incur, or believe that it will incur, debts
including current obligations beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Borrower is
“solvent” (and is not “insolvent”, if applicable) within the meaning given that
term and similar terms under applicable laws relating to fraudulent transfers
and conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under GAAP).

 

“Specified
Subsidiary” shall mean, at any date of determination (a) any Material
Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets at
the last day of the Test Period ending on the last day of the most recent
fiscal period for which Section 9.1 Financials have been delivered were
equal to or greater than 10% of the consolidated total assets of the Borrowers
and their respective Subsidiaries at such date, (ii) whose gross revenues
for such Test Period were equal to or greater than 10% of the consolidated
gross revenues of the Borrowers and their respective Subsidiaries for such
period, in each case determined in accordance with GAAP and (c) each other
Subsidiary that, when combined with any other Subsidiary that is the subject of
an Event of Default under Section 11.5 would constitute a Specified
Subsidiary under clause (a) or (b) above.

 

“Sponsor”
shall mean KKR and its Affiliates.

 

“Stated
Amount” of any Letter of Credit shall mean the maximum amount from time to
time available to be drawn thereunder, determined without regard to whether any
conditions to drawing could then be met.

 

“Status”
shall mean, as to each Borrower as of any date, the existence of Level I
Status, Level II Status, Level III Status or Level IV Status, as the case
may be on such date. Changes in Status resulting from changes in the
Consolidated Total Debt to Consolidated EBITDA Ratio shall become effective
(the date of such effectiveness, the “Effective Date”) as of the first
day following the last day of the most recent fiscal year or period for which
(a) Section 9.1 Financials are delivered to the Lenders under Section 9.1
and (b) an officer’s certificate is delivered by such Borrower to the
Lenders setting forth, with respect to such Section 9.1 Financials, the
then-applicable Status, and shall remain in effect until the next change 

 

46

 

to be effected pursuant to this definition;
provided that (i) if either Borrower shall have made any payments in
respect of interest or commitment fees during the period (the “Interim Period”)
from and including the Effective Date to but excluding the day any change in
Status is determined based on the relevant Section 9.1 Financials as
provided above, then the amount of the next such payment due on or after such
day shall be increased or decreased by an amount equal to any underpayment or
overpayment so made by such Borrower during such Interim Period and
(ii) each determination of the Consolidated Total Debt to Consolidated
EBITDA Ratio pursuant to this definition shall be made with respect to the Test
Period ending at the end of the fiscal period covered by the relevant financial
statements.

 

“Statutory
Reserve Rate” shall mean for any day as applied to any LIBOR Loan, a
fraction (expressed as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages that are in effect on that day (including any marginal,
special, emergency or supplemental reserves), expressed as a decimal, as
prescribed by the Board and to which the Administrative Agent is subject, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. LIBOR Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.

 

“Subordinated
Indebtedness” shall mean Indebtedness of either Borrower or any Guarantor
that is by its terms subordinated in right of payment to the obligations of
such Borrower and such Guarantor, as applicable, under this Agreement,
including the Senior Subordinated Term Loans, the Senior Subordinated
Refinancing Notes, the Senior Subordinated Exchange Notes and the Permitted
Additional Senior Subordinated Notes.

 

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

 

“Subsidiary
Guarantor” shall mean a US Subsidiary Guarantor, a Canadian Subsidiary
Guarantor and a Foreign Subsidiary Guarantor, as applicable.

 

“Successor
Canadian Borrower” shall have the meaning provided in Section 10.3(b).

 

“Successor
US Borrower” shall have the meaning provided in Section 10.3(a).

 

47

 

“Swingline
Commitment” shall mean the US Swingline Commitment and the Canadian
Swingline Commitment, as applicable.

 

“Swingline
Lender” shall mean (a) with respect to US Swingline Loans, SunTrust Bank in
its capacity as lender of US Swingline Loans hereunder and (b) with respect to
Canadian Swingline Loans, The Bank of Nova Scotia in its capacity as lender of
Canadian Swingline Loans hereunder, and in each case its permitted assignees.

 

“Swingline
Loans” shall mean the US Swingline Loans and the Canadian Swingline Loans,
as applicable.

 

“Swingline
Maturity Date” shall mean, with respect to any Swingline Loan, the date
that is five Business Days prior to the Revolving Credit Maturity Date.

 

“Tax Act”
shall mean the Income Tax Act
(Canada), as amended, and any successor thereto, and any regulations
promulgated thereunder.

 

“Taxes”
shall mean any and all present or future taxes, duties, levies, imposts,
assessments, deductions, withholdings or other similar charges imposed by any
Governmental Authority whether computed on a separate, consolidated, unitary,
combined or other basis and any and all liabilities (including interest, fines,
penalties or additions to tax) with respect to the foregoing.

 

“Term Loan
Commitment” shall mean, with respect to each Lender, such Lender’s US Term
Loan Commitment and Canadian Term Loan Commitment.

 

“Term Loans”
shall mean the US Term Loans and the Canadian Term Loans, collectively.

 

“Term Loan
Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.

 

“Term Loan
Maturity Date” shall mean the date that is eight years after the Closing
Date, or, if such date is not a Business Day, the next preceding Business Day.

 

“Test
Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrowers then last ended.

 

“Total
Credit Exposure” shall mean, at any date, the sum of (a) the US Total
Revolving Credit Commitment at such date, (b) the Canadian Total Revolving
Credit Commitment at such date, (c) the Total Term Loan Commitment at such
date and (d) the outstanding principal amount of all Term Loans at such
date.

 

“Total Term
Loan Commitment” shall mean the sum of the Term Loan Commitments and New
Term Loan Commitments, if applicable, of all the Lenders.

 

48

 

“Transactions”
shall mean, collectively, the transactions contemplated by this Agreement and
the advance of the Senior Subordinated Term Loans, including the Acquisition
and the Equity Contributions.

 

“Transaction
Expenses” shall mean any fees or expenses incurred or paid by the Borrowers
or any of their respective Subsidiaries in connection with the Transactions,
this Agreement and the other Credit Documents and the transactions contemplated
hereby and thereby.

 

“Transferee”
shall have the meaning provided in Section 13.6(e).

 

“Type”
shall mean (a) as to any Term Loan, its nature as an ABR Loan or a LIBOR
Term Loan, (b) as to any US Revolving Credit Loan, its nature as an ABR Loan or
a LIBOR Revolving Credit Loan and (c) as to any Canadian Revolving Credit
Loan, its nature as a BA Loan, a Canadian Prime Loan, a Cdn ABR Loan or a LIBOR
Revolving Credit Loan.

 

“UK
Debenture” means the Debenture entered into by the Foreign Subsidiaries
listed in Schedule 1 thereto and the Collateral Agent, for the ratable benefit
of the Secured Parties, substantially in the form of Exhibit C-6, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“UK
Guarantee” shall mean the UK Guarantee, made by Bonlea Limited, Premdor
Crosby Limited, Premdor U.K. Holdings Limited and Masonite Europe Limited in
favor of the Administrative Agent for the benefit of the Lenders and the other
secured parties named therein, substantially in the form of Exhibit B-6,
and any guarantee governed by the laws of England and Wales entered into by a
Subsidiary pursuant to Section 9.11, in each case, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“UK Pledge
Agreements” means (a) the Deed of Charge and Memorandum of Deposit entered
into by the Canadian Borrower, Masonite International Corporation and the
Collateral Agent, for the ratable benefit of the Secured Parties and (b) the
Deed of Charge and Memorandum of Deposit entered into by Masonite Europe and
the Collateral Agent, for the ratable benefit of the Secured Parties, each
substantially in the form of Exhibit C-13, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“UK
Security Documents” means, collectively, (a) the UK Debenture, (b) the UK
Pledge Agreements, (c) the UK Guarantee, (d) any Mortgage over Mortgaged
Property in England or Wales of Holdings, either Borrower or any Subsidiary
Guarantor and any other security document governed by the laws of England and
Wales entered into by a Restricted Foreign Subsidiary to secure any of the
Obligations.

 

“Unfunded
Current Liability” of any Plan shall mean the amount, if any, by which the
Accumulated Benefit Obligation (as defined under Statement of Financial
Accounting Standards No. 87 (“SFAS 87”)) under the Plan as of the close of its
most recent plan year, determined in accordance with SFAS 87, exceeds the fair
market value of the assets allocable thereto and in relation to a Canadian
Pension Plan or Foreign Plan shall mean the amount, if any, by which (A) the
present value of the accrued benefits under the Canadian Pension Plan or
Foreign Plan as of the close of business of its most recent plan year,
determined in accordance 

 

49

 

with GAAP as in effect on the date
hereof,  being based upon the actuarial assumptions that would be used by
the actuary for the Canadian Pension Plan or Foreign Plan in the termination of
that Canadian Pension Plan or Foreign Plan, exceeds (B) the fair market value
of the assets allocable thereto.

 

“Unpaid
Drawing” shall have the meaning provided in Section 3.4(a).

 

“Unrestricted
Subsidiary” shall mean (a) any Subsidiary of Holdings that is formed
or acquired after the Closing Date; provided that at such time (or promptly
thereafter) Holdings designates such Subsidiary an Unrestricted Subsidiary in a
written notice to the Administrative Agent, (b) any Restricted Subsidiary
subsequently re-designated as an Unrestricted Subsidiary by Holdings in a
written notice to the Administrative Agent; provided that in the case of (a)
and (b), (x) such designation or re-designation shall be deemed to be an
Investment on the date of such designation or re-designation in an Unrestricted
Subsidiary in an amount equal to the sum of (i) Holdings direct or
indirect equity ownership percentage of the net worth of such designated or
re-designated Restricted Subsidiary immediately prior to such designation or
re-designation (such net worth to be calculated without regard to any guarantee
provided by such designated or re-designated Restricted Subsidiary) and
(ii) the aggregate principal amount of any Indebtedness owed by such
designated or re-designated Restricted Subsidiary to Holdings or any Restricted
Subsidiary immediately prior to such designation or re-designation, all
calculated, except as set forth in the parenthetical to clause (i), on a
consolidated basis in accordance with GAAP and (y) no Default or Event of
Default would result from such designation or re-designation and (c) each
Subsidiary of an Unrestricted Subsidiary; provided, however, that
(A) at the time of any written designation or re-designation by Holdings to the
Administrative Agent that any Unrestricted Subsidiary shall no longer
constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary shall cease
to be an Unrestricted Subsidiary to the extent no Default or Event of Default
would result from such designation or re-designation (it being understood and
agreed that the designation or re-designation of any Unrestricted Subsidiary as
a Restricted Subsidiary shall constitute the incurrence by such Restricted
Subsidiary on the date of such designation or re-designation of any
Indebtedness or Liens of such designated or re-designated Unrestricted
Subsidiary existing immediately prior to such designation or re-designation)
and (B) neither Borrower may be designated as an Unrestricted Subsidiary.

 

“U.S.
Bankruptcy Code” shall have the meaning provided in Section 11.5.

 

“US
Borrower” shall have the meaning provided in the preamble to this
Agreement.

 

“US
Guarantee” shall mean the US Guarantee, made by the US Borrower (with
respect to the Obligations of Credit Parties other than itself) and each US
Subsidiary Guarantor in favor of the Administrative Agent for the ratable
benefit of the Secured Parties, substantially in the form of Exhibit B-1,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“US L/C
Fronting Fee” shall have the meaning provided in Section 4.1(c).

 

50

 

“US L/C
Participant” shall have the meaning provided in Section 3.3(a).

 

“US L/C
Participation” shall have the meaning provided in Section 3.3(a).

 

“US Letter
of Credit” shall have the meaning provided in Section 3.1(a).

 

“US Letter
of Credit Commitment” shall mean $50,000,000, as the same may be reduced
from time to time pursuant to Section 3.1(c).

 

“US Letter
of Credit Exposure” shall mean, with respect to any Lender, at any time,
the sum of (a) the amount of any Unpaid Drawings in respect of which such
Lender has made (or is required to have made) payments to the US Letter of
Credit Issuer pursuant to Section 3.4(a) at such time and (b) such
Lender’s Revolving Credit Commitment Percentage of the US Letters of Credit
Outstanding at such time (excluding the portion thereof consisting of Unpaid
Drawings in respect of which the Lenders have made (or are required to have
made) payments to the US Letter of Credit Issuer pursuant to Section 3.4(a)).

 

“US Letter
of Credit Fee” shall have the meaning provided in Section 4.1(b).

 

“US Letter
of Credit Issuer” shall mean (a) in the case of the Existing Letters of
Credit, SunTrust or Bank of Montreal, as indicated on Schedule 1.1(a)
and (b) in the case of all other Letters of Credit, The Bank of Nova Scotia,
or, in each case, any successor pursuant to Section 3.6. The US
Letter of Credit Issuer may, in its discretion, arrange for one or more US
Letters of Credit to be issued by Affiliates of the US Letter of Credit Issuer,
and in each such case the term “US Letter of Credit Issuer” shall include any
such Affiliate with respect to US Letters of Credit issued by such Affiliate. In
the event that there is more than one US Letter of Credit Issuer at any time,
references herein and in the other Credit Documents to the US Letter of Credit
Issuer shall be deemed to refer to the US Letter of Credit Issuer in respect of
the applicable US Letter of Credit or to all US Letter of Credit Issuers, as
the context requires.

 

“US Letters
of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate Stated Amount of all outstanding US Letters
of Credit and (b) the aggregate amount of all Unpaid Drawings in respect
of all US Letters of Credit.

 

“US Letter
of Credit Request” shall have the meaning provided in Section 3.2.

 

“US Pledge
Agreement” shall mean the US Pledge Agreement, entered into by the US
Borrower, the other pledgors party thereto and the Collateral Agent for the
ratable benefit of the Secured Parties, substantially in the form of Exhibit
C-7, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“US
Revolving Credit Commitment” shall mean, (a) with respect to each Lender
that is a Lender on the date hereof, the amount set forth opposite such
Lender’s name on Schedule 1.1(c) as such Lender’s “US Revolving Credit
Commitment” and (b) in the case of any Lender that becomes a Lender after the
date hereof, the amount specified as such Lender’s “US Revolving Credit
Commitment” in the Assignment and Acceptance pursuant to which such Lender
assumed a portion of the US Total Revolving Credit Commitment, in each case of
the 

 

51

 

same may be changed from time to time
pursuant to terms hereof. The US Total Revolving Credit Commitment as of the
Closing Date is $100,000,000.

 

“US
Revolving Credit Commitment Percentage” shall mean at any time, for each
Lender, the percentage obtained by dividing (a) such Lender’s US Revolving
Credit Commitment by (b) the US Total Revolving Credit Commitment; provided
that at any time when the US Total Revolving Credit Commitment shall have been
terminated, each Lender’s US Revolving Credit Commitment Percentage shall be
its US Revolving Credit Commitment Percentage as in effect immediately prior to
such termination.

 

“US
Revolving Credit Exposure” shall mean, with respect to any Lender at any
time, the sum of (a) the aggregate principal amount of the US Revolving
Credit Loans of such Lender then outstanding, (b) such Lender’s US Swingline
Exposure at such time and (c) such Lender’s US Letter of Credit Exposure at
such time.

 

“US
Revolving Credit Loan” shall have the meaning provided in Section 2.1(b)(i).

 

“US
Security Agreement” shall mean the Security Agreement entered into by the
US Borrower, the US Subsidiary Guarantors and the Collateral Agent for the
ratable benefit of the Secured Parties, substantially in the form of Exhibit C-1,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“US Subsidiary”
shall mean each Subsidiary of Holdings that is organized under the laws of the
United States, any state or territory thereof, or the District of
Columbia.

 

“US
Subsidiary Guarantors” shall mean (a) each US Subsidiary (other than an
Unrestricted Subsidiary) on the Closing Date and (b) each US Subsidiary that
becomes a party to the US Guarantee after the Closing Date pursuant to Section 9.11
or otherwise.

 

“US
Swingline Commitment” shall mean $22,500,000.

 

“US
Swingline Exposure” shall mean, at any time as to any Lender, the product
of (x) the aggregate principal amount of all US Swingline Loans then
outstanding multiplied  by (y) such Lender’s US Revolving Credit
Commitment Percentage.

 

“US
Swingline Loans” shall have the meaning provided in Section 2.1(c).

 

“US Term
Loan Commitment” shall mean (a) in the case of each Lender that is a Lender
on the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(c) as such Lender’s “US Term Loan Commitment” and (b) in the case of
any Lender that becomes a Lender after the date hereof, the amount specified as
such Lender’s “US Term Loan Commitment” in the Assignment and Acceptance
pursuant to which such Lender assumed a portion of the Total Term Loan
Commitment, in each case as the same may be changed from time to time pursuant
to the terms hereof. The aggregate amount of the US Term Loan Commitments as of
the Closing Date is $588,000,000.

 

52

 

“US Term
Loan Repayment Amount” shall have the meaning provided in Section
2.5(b)(i).

 

“US Term
Loan Repayment Date” shall have the meaning provided in Section
2.5(b)(i).

 

“US Term
Loans” shall have the meaning provided in Section 2.1(a).

 

“US Total
Revolving Credit Commitment” shall mean the sum of the US Revolving Credit
Commitments of all the Lenders.

 

“Voting
Stock” shall mean, with respect to any Person, shares of such Person’s
capital stock having the right to vote for the election of directors (or
comparable governing body) of such Person under ordinary circumstances.

 

(b)           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 references are to Sections of this Agreement unless
otherwise specified. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”.

 

SECTION 2. Amount
and Terms of Credit

 

2.1. Commitments
and Swingline Commitments. (a)  Subject
to and upon the terms and conditions herein set forth, (x) each Lender
having a US Term Loan Commitment severally agrees to make a loan or loans (each
a “US Term Loan”) to the US Borrower in Dollars, which US Term Loans
shall not exceed for any such Lender the US Term Loan Commitment of such Lender
and (y) each Lender having a Canadian Term Loan Commitment severally agrees to
make a loan or loans (each a “Canadian Term Loan”) to the Canadian
Borrower in Dollars, which Canadian Term Loans shall not exceed for any such
Lender the Canadian Term Loan Commitment of such Lender; and such Term Loans
(i) shall be made on the Closing Date, (ii) may at the option of the
Borrowers be incurred and maintained as, and/or converted into, ABR Loans or
LIBOR Term Loans; provided that all such Term Loans made by each of the Lenders
pursuant to the same Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Term Loans of the same Type, (iii) may be
repaid or prepaid in accordance with the provisions hereof, but once repaid or
prepaid, may not be reborrowed, (iv) shall not exceed for any such Lender the
Term Loan Commitment of such Lender and (v) shall not exceed in the
aggregate the total of all Term Loan Commitments.

 

(b)  (i)  Subject to and upon the terms
and conditions herein set forth, each Lender having a US Revolving Credit
Commitment severally agrees to make a loan or loans denominated in Dollars
(each a “US Revolving Credit Loan” and, collectively, the “US
Revolving Credit Loans” and, together with the Canadian Revolving Credit
Loans, the “Revolving Credit Loans”) to the US Borrower, which US
Revolving Credit Loans (A) shall be made at any time and from time to time
after the Closing Date and prior to the Revolving Credit Maturity Date, (B) may,
at the option of the US Borrower, be incurred and maintained as, and/or
converted into, ABR Loans or LIBOR Revolving Credit Loans; provided that all US
Revolving Credit Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless 

 

53

 

otherwise specifically provided herein,
consist entirely of US Revolving Credit Loans of the same Type, (C) may be
repaid and reborrowed in accordance with the provisions hereof, (D) shall not,
for any such Lender at any time, after giving effect thereto and to the
application of the proceeds thereof, result in such Lender’s US Revolving
Credit Exposure at such time exceeding such Lender’s US Revolving Credit
Commitment at such time and (E) shall not, after giving effect thereto and to
the application of the proceeds thereof, result at any time in the aggregate
amount of the Lenders’ US Revolving Credit Exposures at such time exceeding the
difference of (x) the US Total Revolving Credit Commitment then in effect minus
(y) the Receivables Reduction Amount, if applicable, to the extent such  Receivables Reduction Amount has not been
applied to reduce the Canadian Total Revolving Credit Commitment pursuant to
clause (b)(ii) below (it being understood and agreed that the Receivables
Reduction Amount shall be allocated at any time between the US Total Revolving
Commitment pursuant to this clause (b)(i) and the Canadian Total
Revolving Credit Commitment pursuant to clause (b)(ii) below in such
respective amounts as shall be determined by the Borrowers in their sole
discretion.

 

(ii)  Subject to and upon the terms and conditions
herein set forth, each Canadian Lender having a Canadian Revolving Credit
Commitment severally agrees to make a loan or loans denominated in Canadian
Dollars or Dollars to the Canadian Borrower or a loan or loans denominated in
Dollars to the US Borrower (each a “Canadian Revolving Credit Loan” and,
collectively, the “Canadian Revolving Credit Loans”), which Canadian
Revolving Credit Loans (A) shall be made at any time and from time to time
on and after the Closing Date and prior to the Revolving Credit Maturity Date,
(B) shall be incurred and maintained (x) as Canadian Prime Loans or BA
Loans if denominated in Canadian Dollars or (y) as Cdn ABR Loans or LIBOR
Revolving Credit Loans if denominated in Dollars and made to the Canadian
Borrower, or (z) as ABR Loans or LIBOR Revolving Credit Loans if denominated in
Dollars and made to the US Borrower; provided that all Canadian
Revolving Credit Loans made by each of the Canadian Lenders pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Canadian Revolving Credit Loans of the same Type made to the same
Borrower, (C) may be repaid and reborrowed in accordance with the
provisions hereof, (D) shall not, for any such Canadian Lender at any
time, after giving effect thereto and to the application of the proceeds
thereof, result in such Canadian Lender’s Canadian Revolving Credit Exposure at
such time exceeding such Canadian Lender’s Canadian Revolving Credit Commitment
at such time, (E) shall not, after giving effect thereto and to the application
of the proceeds thereof, result at any time in the aggregate amount of the
Canadian Lenders’ Canadian Revolving Credit Exposures at such time exceeding
the difference of (x) the Canadian Total Revolving Credit Commitment then
in effect minus (y) the Receivables Reduction Amount, if applicable, to the
extent such  Receivables Reduction Amount
has not been applied to reduce the US Total Revolving Credit Commitment
pursuant to clause (b)(i) above (it being understood and agreed that the
Receivables Reduction Amount shall be allocated at any time between the US
Total Revolving Commitment pursuant to clause (b)(i) above and the
Canadian Total Revolving Credit Commitment pursuant to this clause (b)(ii)
in such respective amounts as shall be determined by the Borrowers in their
sole discretion), and (F) if made to the Canadian Borrower shall be made by a
Canadian Lender that is a Canadian Resident or a permitted assignee of such
Canadian Lender pursuant to Section 13.6(b)(ii). Each Canadian
Lender, if it is not a “United States person” (as such term is defined in
Section 7701(a)(30) of the Code), shall designate by notice in writing to
the Administrative Agent and the Canadian Administrative Agent on the Closing
Date, and otherwise from time to time, a Related Affiliate of such Lender that
is either a “United States 

 

54

 

person” (as such term is defined in
Section 7701(a)(30) of the Code) or is a Non-US Lender that has fulfilled
the requirements in Section 5.4(b), for the purposes of making
Canadian Revolving Credit Loans available to the US Borrower.

 

(iii)  Each Lender may at its option make any LIBOR
Revolving Credit Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that (A) any exercise of such
option shall not affect the obligation of the US Borrower or the Canadian Borrower,
as the case may be, to repay such Loan, (B) in exercising such option,
such Lender shall use its reasonable efforts to minimize any increased costs to
the US Borrower or the Canadian Borrower, as the case may be, resulting
therefrom (which obligation of the Lender shall not require it to take, or
refrain from taking, actions that it determines would result in increased costs
for which it will not be compensated hereunder or that it determines would be
otherwise disadvantageous to it and in the event of such request for costs for
which compensation is provided under this Agreement, the provisions of Section 3.5
shall apply) and (C) if a LIBOR Loan is made to the Canadian Borrower, it shall
be made by a Canadian Lender that is a Canadian Resident or a permitted
assignee of such Canadian Lender pursuant to Section 13.6(b)(ii). On
the Revolving Credit Maturity Date, all Revolving Credit Loans shall be repaid
in full.

 

(c)  Subject to and upon the terms and conditions
herein set forth, the applicable Swingline Lender in its individual capacity
agrees, at any time and from time to time on and after the Closing Date and
prior to the Swingline Maturity Date:

 

(i)  to make a loan or loans
(each a “US Swingline Loan” and, collectively, the “US Swingline
Loans”) to the US Borrower denominated in Dollars, which US Swingline Loans
(A) shall be ABR Loans, (B) shall have the benefit of the provisions
of Section 2.1(d)(i), (C) shall not exceed at any time
outstanding the US Swingline Commitment, (D) shall not, after giving
effect thereto and to the application of the proceeds thereof, result at any
time in the aggregate amount of the Lenders’ US Revolving Credit Exposures at
such time exceeding the difference of (x) the US Total Revolving Credit
Commitment then in effect minus (y) the Receivables Reduction Amount, if
applicable, to the extent such 
Receivables Reduction Amount has not been applied to reduce the Canadian
Total Revolving Credit Commitment pursuant to clause (b)(ii) above, and
(E) may be repaid and reborrowed in accordance with the provisions hereof.

 

(ii)  to make a loan or loans
(each a “Canadian Swingline Loan” and, collectively, the “Canadian
Swingline Loans”) denominated in Canadian Dollars or Dollars to the
Canadian Borrower or denominated in Dollars to the US Borrower, which Canadian
Swingline Loans (A) shall be (x) Canadian Prime Loans if denominated in
Canadian Dollars, (y) Cdn ABR Loans if denominated in Dollars and made to the
Canadian Borrower, or (z) ABR Loans if denominated in Dollars and made to the
US Borrower, (B) shall have the benefit of the provisions of Section
2.1(d)(ii), (C) shall not exceed at any time outstanding the Canadian
Swingline Commitment, (D) shall not, after giving effect thereto and to the
application of the proceeds thereof, result at any time in the aggregate amount
of the Lenders’ Canadian Revolving Credit Exposures at such time exceeding the
difference of (x) the Canadian Total Revolving Credit Commitment then in 

 

55

 

effect minus
(y) the Receivables Reduction Amount, if applicable, to the extent such  Receivables Reduction Amount has not been
applied to reduce the US Total Revolving Credit Commitment pursuant to clause
(b)(i) above, and (E) may be repaid and reborrowed in accordance with the
provisions hereof.

 

(iii) On the Swingline Maturity Date, each outstanding Swingline Loan
shall be repaid in full. Neither Swingline Lender shall make any Swingline Loan
after receiving a written notice from the US Borrower, the Canadian Borrower or
any Lender stating that a Default or Event of Default exists and is continuing
until such time as such Swingline Lender shall have received written notice of
(x) rescission of all such notices from the party or parties originally
delivering such notice or (y) the waiver of such Default or Event of
Default in accordance with the provisions of Section 13.1.

 

(d)  On any Business Day, the applicable Swingline
Lender may, in its sole discretion, give notice to the Lenders that:

 

(i)  all then-outstanding US
Swingline Loans shall be funded with a Borrowing of US Revolving Credit Loans,
in which case US Revolving Credit Loans constituting ABR Loans (each such
Borrowing, a “Mandatory US Borrowing”) shall be made on the immediately
succeeding Business Day by all Lenders pro
rata based on each Lender’s US Revolving Credit Commitment
Percentage, and the proceeds thereof shall be applied directly to such
Swingline Lender to repay such Swingline Lender for such outstanding US
Swingline Loans. Each Lender hereby irrevocably agrees to make such US
Revolving Credit Loans upon one Business Day’s notice pursuant to each
Mandatory US Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified to it in writing by the Swingline
Lender notwithstanding (A) that the amount of the Mandatory US Borrowing may
not comply with the minimum amount for each Borrowing specified in Section 2.2,
(B) whether any conditions specified in Section 7 are then
satisfied, (C) whether a Default or an Event of Default has occurred and is
continuing, (D) the date of such Mandatory US Borrowing or (E) any reduction in
the US Total Revolving Credit Commitment after any such US Swingline Loans were
made. In the event that, in the sole judgment of the Swingline Lender, any
Mandatory US Borrowing cannot for any reason be made on the date otherwise
required above (including as a result of the commencement of a proceeding under
the Bankruptcy Code in respect of either Borrower), each Lender hereby agrees
that it shall forthwith purchase from the Swingline Lender (without recourse or
warranty) such participation of the outstanding US Swingline Loans as shall be
necessary to cause the Lenders to share in such US Swingline Loans ratably
based upon their respective US Revolving Credit Commitment Percentages;
provided that all principal and interest payable on such US Swingline Loans
shall be for the account of the Swingline Lender until the date the respective
participation is purchased and, to the extent attributable to the purchased
participation, shall be payable to the Lender purchasing same from and after
such date of purchase; and

 

(ii)  all then-outstanding
Canadian Swingline Loans shall be funded with a Borrowing of Canadian Revolving
Credit Loans, in which case Canadian Revolving Credit Loans constituting
Canadian Prime Loans, Cdn ABR Loans or ABR Loans, as 

 

56

 

applicable
(each such Borrowing, a “Mandatory Canadian Borrowing”) shall be made on
the immediately succeeding Business Day by all Lenders pro rata based on each
Lender’s Canadian Revolving Credit Commitment Percentage, and the proceeds
thereof shall be applied directly to such Swingline Lender to repay such
Swingline Lender for such outstanding Canadian Swingline Loans. Each Lender
hereby irrevocably agrees to make such Canadian Revolving Credit Loans upon one
Business Day’s notice pursuant to each Mandatory Canadian Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified to it in writing by the Swingline Lender notwithstanding (A) that the
amount of the Mandatory Canadian Borrowing may not comply with the minimum
amount for each Borrowing specified in Section 2.2, (B) whether any
conditions specified in Section 7 are then satisfied, (C) whether a
Default or an Event of Default has occurred and is continuing, (D) the date of
such Mandatory Canadian Borrowing or (E) any reduction in the Canadian Total
Revolving Credit Commitment after any such Canadian Swingline Loans were made. In
the event that, in the sole judgment of the Swingline Lender, any Mandatory
Canadian Borrowing cannot for any reason be made on the date otherwise required
above (including as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of either Borrower), each Lender hereby agrees that it shall
forthwith purchase from the Swingline Lender (without recourse or warranty)
such participation of the outstanding Canadian Swingline Loans as shall be
necessary to cause the Lenders to share in such Canadian Swingline Loans
ratably based upon their respective Canadian Revolving Credit Commitment
Percentages; provided that all principal and interest payable on such Canadian
Swingline Loans shall be for the account of the Swingline Lender until the date
the respective participation is purchased and, to the extent attributable to
the purchased participation, shall be payable to the Lender purchasing same
from and after such date of purchase.

 

2.2. Minimum
Amount of Each Borrowing; Maximum Number of Borrowings. The aggregate
principal amount of each Borrowing of Term Loans or Canadian Revolving Credit
Loans (other than the BA Loans) shall be in a multiple of $1,000,000 or
C$1,000,000 (in the case of a Borrowing denominated in C$), the aggregate
principal amount of each Borrowing of BA Loans shall be a minimum of
C$2,500,000 and in a multiple of C$500,000, the aggregate principal amount of
US Revolving Credit Loans shall be in a multiple of $500,000 and Swingline
Loans shall be in a multiple of $10,000 or C$10,000 (in the case of a Borrowing
denominated in C$) and, in each case, shall not be less than the Minimum
Borrowing Amount with respect thereto (except that Mandatory Borrowings shall
be made in the amounts required by Section 2.1(d)). More than one
Borrowing may be incurred on any date; provided that at no time shall there be
outstanding more than 16 Borrowings of LIBOR Loans and BA Loans under this
Agreement.

 

2.3. Notice
of Borrowing. (a)  Each Borrower shall give the Administrative
Agent at the Administrative Agent’s Office (i) prior to 12:00 Noon (New
York time) at least three Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) of the Borrowing of Term Loans if all or
any of such Term Loans are to be initially LIBOR Loans, and (ii) prior
written notice (or telephonic notice promptly confirmed in writing) prior to
10:00 a.m. (New York time) on the date of the Borrowing of Term Loans if
all such Term Loans are to be ABR Loans. Such notice (together with each notice
of a Borrowing of Revolving 

 

57

 

Credit Loans pursuant to Section 2.3(b)
or 2.3(c) and each notice of a Borrowing of Swingline Loans pursuant to Section 2.3(d),
a “Notice of Borrowing”) shall be irrevocable and shall specify
(i) the aggregate principal amount of the Term Loans to be made pursuant
to such Borrowing, (ii) the date of the Borrowing (which shall be the
Closing Date) and (iii) whether the Term Loans shall consist of ABR Loans
and/or LIBOR Term Loans and, if the Term Loans are to include LIBOR Term Loans,
the Interest Period to be initially applicable thereto. The Administrative
Agent shall promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of the proposed Borrowing of Term Loans, of such
Lender’s proportionate share thereof and of the other matters covered by the
related Notice of Borrowing.

 

(b)  Whenever the US Borrower desires to incur US
Revolving Credit Loans or Canadian Revolving Credit Loans denominated in
Dollars hereunder (other than Mandatory Borrowings or Borrowings to repay
Unpaid Drawings), it shall give the applicable Administrative Agent at the
Administrative Agent’s Office, (i) prior to 12:00 Noon (New York time) at least
three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of LIBOR Revolving Credit Loans, and
(ii) prior written notice (or telephonic notice promptly confirmed in
writing) prior to 12:00 Noon (New York time) on the date of Borrowing of
Revolving Credit Loans if all such Revolving Credit Loans are to be ABR Loans. Each
such Notice of Borrowing, except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall specify (i) whether the Revolving Credit Loans
are Canadian Revolving Credit Loans or US Revolving Credit Loans, as
applicable, (ii) the aggregate principal amount of the Revolving Credit
Loans to be made pursuant to such Borrowing, (iii) the date of Borrowing (which
shall be a Business Day) and (iv) whether the respective Borrowing shall
consist of ABR Loans or LIBOR Revolving Credit Loans and, if LIBOR Revolving
Credit Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each applicable Lender written notice
(or telephonic notice promptly confirmed in writing) of each proposed Borrowing
of Revolving Credit Loans, of such Lender’s proportionate share thereof and of
the other matters covered by the related Notice of Borrowing.

 

(c)  Whenever the Canadian Borrower desires to
incur Canadian Revolving Credit Loans in Dollars or Canadian Dollars hereunder
(other than Mandatory Canadian Borrowings or Borrowings to repay Unpaid
Drawings), it shall give the Canadian Administrative Agent at the Canadian
Administrative Agent’s Office, (i) prior to 12:00 Noon (Toronto time) at least
three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing) of each Canadian Borrowing of BA Loans or LIBOR Loans, and
(ii) prior to 12:00 Noon (Toronto time) at least one Business Day’s prior
written notice (or telephonic notice promptly confirmed in writing) of each
Canadian Borrowing of Cdn ABR Loans or Canadian Prime Loans. Each such Notice
of Borrowing, except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall specify (i) the aggregate principal amount of
the Revolving Credit Loans to be made pursuant to such Borrowing, (ii) the date
of Borrowing (which shall be a Business Day) and (iii) whether the respective
Borrowing shall consist of BA Loans, LIBOR Loans, Canadian Prime Loans or Cdn
ABR Loans and, if BA Loans or LIBOR Loans, the Interest Period to be initially
applicable thereto. The Canadian Administrative Agent shall promptly give each
Canadian Lender written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing of Revolving Credit Loans, of such Lender’s
proportionate share thereof and of the other matters covered by the related
Notice of Borrowing.

 

58

 

(d)  Whenever either Borrower desires to incur
Swingline Loans hereunder, it shall give the applicable Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Swingline Loans prior to 2:30 p.m. (New York time) on the date of
such Borrowing. Each such notice shall be irrevocable and shall specify (i) the
aggregate principal amount of the Swingline Loans to be made pursuant to such
Borrowing and (ii) the date of Borrowing (which shall be a Business Day). The
applicable Administrative Agent shall promptly give the applicable Swingline
Lender written notice (or telephonic notice promptly confirmed in writing) of
each proposed Borrowing of Swingline Loans and of the other matters covered by
the related Notice of Borrowing.

 

(e)  Mandatory Borrowings shall be made upon the
notice specified in Section 2.1(d), with the applicable Borrower
irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of
Mandatory Borrowings as set forth in such Section.

 

(f)  Borrowings to reimburse Unpaid Drawings shall
be made upon the notice specified in Section 3.4(a).

 

(g)  Without in any way limiting the obligation of
the US Borrower or the Canadian Borrower, as the case may be, to confirm in
writing any notice it may give hereunder by telephone, the Administrative Agent
and the Canadian Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent and the Canadian Administrative Agent in
good faith to be from an Authorized Officer of the US Borrower or the Canadian
Borrower, as the case may be. In each such case, the US Borrower and the
Canadian Borrower each hereby waives the right to dispute the Administrative
Agent’s and the Canadian Administrative Agent’s record of the terms of any such
telephonic notice.

 

2.4. Disbursement
of Funds. (a)  No later than 12:00 Noon (New York time) on the
date specified in each Notice of Borrowing (including Mandatory Borrowings),
each Lender will make available its pro rata
portion, if any, of each Borrowing requested to be made on such date in the
manner provided below; provided that all Swingline Loans shall be made
available in the full amount thereof by the applicable Swingline Lender
promptly following receipt of the request therefor.

 

(b)  Each Lender shall make available all amounts
it is to fund to the US Borrower under any Borrowing in immediately available
Dollars to the Administrative Agent at the Administrative Agent’s Office and
the Administrative Agent will (except in the case of Borrowings made upon the
conversion of another Type of Borrowing, Mandatory Borrowings and Borrowings to
repay Unpaid Drawings) make available to the US Borrower by depositing to the
US Borrower’s account (as designated by it in a written notice to the
Administrative Agent from time to time) the aggregate of the amounts so made
available in Dollars. Each Lender shall make available all amounts it is to
fund to the Canadian Borrower under any Canadian Borrowing in immediately
available Dollars or Canadian Dollars, as applicable, to the Canadian
Administrative Agent at the Canadian Administrative Agent’s Office and the
Canadian Administrative Agent will (except in the case of Mandatory Borrowings
and Borrowings to repay Unpaid Drawings) make available to the Canadian
Borrower, by depositing to the Canadian Borrower’s account (as designated by it
in a written notice to the Canadian 

 

59

 

Administrative Agent from time to time) the
aggregate of the amounts so made available in Canadian Dollars or Dollars, as
applicable. Unless the Administrative Agent or the Canadian Administrative
Agent (in the case of Canadian Borrowings) shall have been notified by any
Lender prior to the date of any such Borrowing that such Lender does not intend
to make available to the Administrative Agent or the Canadian Administrative
Agent (in the case of Canadian Borrowings) its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) may assume that such
Lender has made such amount available to the Administrative Agent or the
Canadian Administrative Agent (in the case of Canadian Borrowings) on such date
of Borrowing, and the Administrative Agent and the Canadian Administrative
Agent (in the case of Canadian Borrowings), in reliance upon such assumption,
may (in its sole discretion and without any obligation to do so) make available
to the US Borrower or the Canadian Borrower, as the case may be, a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent or the Canadian Administrative Agent (in
the case of Canadian Borrowings) by such Lender and the Administrative Agent or
the Canadian Administrative Agent (in the case of Canadian Borrowings) has made
available same to the US Borrower or the Canadian Borrower, as the case may be,
the Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) shall be entitled to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s or the Canadian Administrative
Agent’s (in the case of Canadian Borrowings) demand therefor the Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian Borrowings)
shall promptly notify the US Borrower or the Canadian Borrower, as the case may
be, and the US Borrower or the Canadian Borrower, as the case may be, shall
immediately pay such corresponding amount to the Administrative Agent or the
Canadian Administrative Agent (in the case of Canadian Borrowings). The
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) shall also be entitled to recover from such Lender or the
US Borrower or the Canadian Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) to the US Borrower or
the Canadian Borrower, as the case may be, to the date such corresponding
amount is recovered by the Administrative Agent or the Canadian Administrative
Agent (in the case of Canadian Borrowings), at a rate per annum equal to (i) if paid by such
Lender, the Federal Funds Effective Rate (or, in the case of an amount owing in
respect of a Canadian Borrowing, the rate reasonably determined by the Canadian
Administrative Agent to be the cost to it of funding such amount) or (ii) if
paid by the US Borrower or the Canadian Borrower, as the case may be, the
then-applicable rate of interest or fees, calculated in accordance with Section 2.8,
for the respective Loans comprising the applicable Borrowing.

 

(c)  Nothing in this Section 2.4 shall
be deemed to relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights that the US Borrower or the Canadian
Borrower, as the case may be, may have against any Lender as a result of any
default by such Lender hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to fulfill its
commitments hereunder).

 

60

 

2.5. Repayment
of Loans; Evidence of Debt. (a)  Each Borrower shall repay to the
Administrative Agent or the Canadian Administrative Agent, for the ratable
benefit of the Lenders of US Term Loans and the Lenders of Canadian Term Loans,
as applicable, on the Term Loan Maturity Date, the then-unpaid Term Loans made
to such Borrower, in Dollars. The US Borrower shall repay to the Administrative
Agent in Dollars, for the benefit of the applicable Lenders, on the Revolving
Credit Maturity Date, the then-unpaid US Revolving Credit Loans and Canadian
Revolving Credit Loans made to the US Borrower. The Canadian Borrower shall
repay to the Canadian Administrative Agent in Dollars or Canadian Dollars, as
the case may be, for the benefit of the applicable Lenders, on the Revolving
Credit Maturity Date, the then-unpaid Canadian Revolving Credit Loans made to
the Canadian Borrower. Each Borrower shall repay to the Administrative Agent or
the Canadian Administrative Agent, as applicable, for the account of the
applicable Swingline Lender, on the Swingline Maturity Date, the then-unpaid
(i) US Swingline Loans in Dollars and (ii) Canadian Swingline Loans in Dollars
(to the extent Borrowed in Dollars) or Canadian Dollars (to the extent Borrowed
in Canadian Dollars).

 

(b)  (i) The US Borrower shall repay to the
Administrative Agent, in Dollars, for the ratable benefit of the Lenders of US
Term Loans, on each date set forth below (each a “US Term Loan Repayment
Date”), the principal amount of the US Term Loans equal to (x) the
outstanding principal amount of US Term Loans immediately after closing on the
Closing Date multiplied by (y) the percentage set forth below opposite such US
Term Loan Repayment Date (each a “US Term Loan Repayment Amount”):

 

	
  US Term Loan Repayment Date

  	
   

  	
  US Term Loan

  Repayment Amount Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2005

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2005

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2005

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2006

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2007

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2008

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2009

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2010

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2010

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2010

  	
   

  	
  0.25%

  	
   

  

 

 

61

 

 

	
  US Term Loan Repayment Date

  	
   

  	
  US Term Loan

  Repayment Amount Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2011

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2012

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  Term Loan

  Maturity Date 

  	
   

  	
  Remaining Principal Amount of all US Term Loans

  	
   

  

 

(ii)  The Canadian Borrower shall
repay to the Canadian Administrative Agent, in Dollars, for the ratable benefit
of the Lenders of the Canadian Term Loans, on each date set forth below (each a
“Canadian Term Loan Repayment Date”), the principal amount of the
Canadian Term Loans equal to (x) the outstanding principal amount of Canadian
Term Loans immediately after closing on the Closing Date multiplied by (y) the
percentage set forth below opposite such Canadian Term Loan Repayment Date
(each a “Canadian Term Loan Repayment Amount”):

 

	
  Canadian Term Loan

  Repayment Date 

  	
   

  	
  Canadian Term Loan

  Repayment Amount Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2005

  	
   

  	
  0.25%

  	
   

  
	
  September 30,
  2005

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2005

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2006

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2006

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2007

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2007

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2008

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2008

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2009

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2009

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2010

  	
   

  	
  0.25%

  	
   

  

 

 

62

 

	
  Canadian Term Loan

  Repayment Date 

  	
   

  	
  Canadian Term Loan

  Repayment Amount Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2010

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2010

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2010

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2011

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2011

  	
   

  	
  0.25%

  	
   

  
	
  March 31,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  June 30,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  September
  30, 2012

  	
   

  	
  0.25%

  	
   

  
	
  December 31,
  2012

  	
   

  	
  0.25%

  	
   

  
	
  Term Loan

  Maturity Date 

  	
   

  	
  Remaining Principal Amount of all Canadian Term Loans

  	
   

  

 

(c)  Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the US
Borrower and the Canadian Borrower, as the case may be, to the appropriate
lending office of such Lender resulting from each Loan made by such lending
office of such Lender from time to time, including the amounts of principal and
interest payable and paid to such lending office of such Lender from time to
time under this Agreement.

 

(d)  The Administrative Agent shall maintain the
Register pursuant to Section 13.6(b), and a subaccount for each
Lender, in which Register and subaccounts (taken together) shall be recorded
(i) the amount and currency of each Loan made hereunder, the Class and Type of
each Loan made and, if applicable, the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become
due and payable from the US Borrower and the Canadian Borrower, as the case may
be, to each Lender or either Swingline Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent and the Canadian Administrative
Agent hereunder from the US Borrower and the Canadian Borrower, as the case may
be, and each Lender’s share thereof.

 

(e)  The entries made in the Register and accounts
and subaccounts maintained pursuant to paragraphs (c) and (d) of
this Section 2.5 shall, to the extent permitted by applicable law,
be prima facie evidence of the existence and amounts of the obligations of the
US Borrower and the Canadian Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the US Borrower or the
Canadian Borrower to repay (with applicable interest) the Loans made to the US
Borrower or the Canadian Borrower by such Lender in accordance with the terms
of this Agreement.

 

2.6. Conversions
and Continuations. (a)  Each of the US Borrower and the Canadian
Borrower shall have the option on any Business Day to convert all or a portion
equal to at least the Minimum Borrowing Amount of the outstanding principal
amount of Term Loans or Revolving Credit Loans made to such Borrower (as
applicable) of one Type into a Borrowing or Borrowings of another Type in the
same currency and the US Borrower or the Canadian 

 

63

 

Borrower, as the case may be, shall have the
option on any Business Day to continue the outstanding principal amount of any
LIBOR Term Loans or LIBOR Revolving Credit Loans as LIBOR Term Loans or LIBOR
Revolving Credit Loans, respectively, or any BA Loans as BA Loans, as the case
may be, for an additional Interest Period; provided that (i) no partial
conversion of BA Loans or LIBOR Term Loans or LIBOR Revolving Credit Loans
shall reduce the outstanding principal amount of BA Loans or LIBOR Term Loans
or LIBOR Revolving Credit Loans made pursuant to a single Borrowing to less
than the Minimum Borrowing Amount, (ii) Cdn ABR Loans and ABR Loans may not be
converted into LIBOR Term Loans or LIBOR Revolving Credit Loans and Canadian
Prime Loans may not be converted into BA Loans if a Default or Event of Default
is in existence on the date of the conversion and the Administrative Agent has
or the Required Lenders have determined in its or their sole discretion not to
permit such conversion, (iii) BA Loans and LIBOR Loans may not be
continued as BA Loans or LIBOR Loans, respectively, for an additional Interest
Period if a Default or Event of Default is in existence on the date of the
proposed continuation and the Administrative Agent has or the Required Lenders
have determined in its or their sole discretion not to permit such
continuation, (iv) no conversion or continuation of BA Loans may be made on a
day other than the last day of the Interest Period applicable thereto and
(v) Borrowings resulting from conversions pursuant to this Section 2.6
shall be limited in number as provided in Section 2.2. Each such
conversion or continuation shall be effected by the US Borrower or the Canadian
Borrower, as the case may be, by giving the Administrative Agent or the
Canadian Administrative Agent at the applicable Administrative Agent’s Office
prior to 12:00 Noon (New York time) at least three Business Days’ (or one
Business Day’s notice in the case of a conversion into Cdn ABR Loans, ABR Loans
or Canadian Prime Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a “Notice of Conversion or Continuation”)
specifying the Term Loans or Revolving Credit Loans to be so converted or
continued, the Type of Term Loans or Revolving Credit Loans to be converted or
continued into and, if such Term Loans or Revolving Credit Loans are to be
converted into or continued as BA Loans or LIBOR Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent (or the Canadian
Administrative Agent, in the case of Canadian Borrowings) shall give each
Lender notice as promptly as practicable of any such proposed conversion or
continuation affecting any of its Term Loans or Revolving Credit Loans.

 

(b)  If any Default or Event of Default is in
existence at the time of any proposed continuation of any BA Loans or LIBOR
Loans, as the case may be, and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such
continuation, such BA Loans or LIBOR Loans shall be automatically converted on
the last day of the then-current Interest Period (i) in respect of LIBOR
Loans, into ABR Loans or Cdn ABR Loans (in the case of a Canadian Borrowing)
and (ii) in respect of BA Loans, into Canadian Prime Loans. If upon the
expiration of any Interest Period in respect of BA Loans or LIBOR Loans, the US
Borrower or the Canadian Borrower, as the case may be, has failed to elect a
new Interest Period to be applicable thereto as provided in paragraph (a)
above, the US Borrower or the Canadian Borrower, as the case may be, shall be
deemed to have elected to convert such Borrowing of BA Loans or LIBOR Loans, as
the case may be, into a Borrowing of Canadian Prime Loans or ABR Loans or Cdn
ABR Loans (in the case of a Canadian Borrowing), as the case may be, effective
as of the expiration date of such then-current Interest Period.

 

64

 

(c)  For the avoidance of doubt, the term
“conversion” as used in this Agreement shall mean the change in method by which
the interest payable on a Loan is calculated and shall not be interpreted to
mean the repayment and extinguishment of such Loan followed by the advance of a
new Loan.

 

2.7. Pro
Rata Borrowings. Each Borrowing of US Term Loans under this Agreement shall
be made by the Lenders pro rata
on the basis of their then-applicable US Term Loan Commitments. Each Borrowing
of Canadian Term Loans under this Agreement shall be made by the Lenders pro rata on the basis of their
then-applicable Canadian Term Loan Commitments. Each Borrowing of US Revolving
Credit Loans under this Agreement shall be granted by the Lenders pro rata on the basis of their
then-applicable US Revolving Credit Commitments. Each Borrowing of Canadian
Revolving Credit Loans under this Agreement shall be granted by the Canadian
Lenders (or their Related Affiliates if applicable) pro rata on the basis of their then-applicable Canadian
Revolving Credit Commitments. Each Borrowing of New Term Loans under this
Agreement shall be granted by the Lenders pro
rata on the basis of their then-applicable New Term Loan Commitments.
It is understood that no Lender shall be responsible for any default by any
other Lender in its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its commitments
hereunder.

 

2.8. Interest.
(a)   (i) The unpaid principal amount of each ABR Loan shall
bear interest from the date of the Borrowing thereof to but excluding the date
of conversion or repayment thereof at a rate per
annum that shall at all times be the Applicable ABR Margin plus the
ABR in effect from time to time, (ii) the unpaid principal amount of each Cdn
ABR Loan shall bear interest from the date of the Borrowing thereof to but
excluding the date of conversion or repayment thereof at a rate per annum that
shall at all times be the Applicable ABR Margin plus the Cdn ABR in effect from
time to time, and (iii) the unpaid principal amount of each Canadian Prime Loan
shall bear interest from the date of the Borrowing thereof to but excluding the
date of conversion or repayment thereof at a rate per annum that shall at all
times be the Applicable ABR Margin plus the Canadian Prime Rate in effect from
time to time.

 

(b)  (i) The unpaid principal amount of each
LIBOR Loan shall bear interest from the date of the Borrowing thereof to but
excluding the date of repayment thereof at a rate per annum that shall at all times be the Applicable LIBOR
Margin in effect from time to time plus the relevant LIBOR and (ii) the
Canadian Borrower shall pay to each Lender that accepts or advances a BA Loan,
as a condition of and at the time of such acceptance or advance, a fee at the
rate of the then Applicable Stamping Fee calculated on the basis of a year of
365 days on the face amount at maturity (or the principal amount in the
case of a BA Equivalent Loan) of such Bankers’ Acceptance for the period from
and including the date of acceptance (or advance in the case of a BA Equivalent
Loan) of such Bankers’ Acceptance for the period from and including the date of
acceptance to but excluding the maturity date of such Bankers’ Acceptance.

 

(c)  Any amount (whether of principal, interest or
Fees) not paid when due hereunder or under any other Credit Document (whether
at the stated maturity, by acceleration or otherwise) shall bear interest, to
the extent permitted by law (after as well as before judgment), payable on
demand, (i) in the case of principal, at the rate that would otherwise be
applicable thereto plus 2% per annum
and (ii) in all other cases, at a rate per
annum equal to the rate that 

 

65

 

would be applicable to an ABR Loan that is a
Term Loan plus 2% per annum,
in each case from and including the date of such non-payment to but excluding
the date on which such amount is paid in full.

 

(d)  Interest on each Loan shall accrue from and
including the date of any Borrowing to but excluding the date of any repayment
thereof and shall be payable (i) in respect of each Canadian Prime Loan, Cdn
ABR Loan and ABR Loan, quarterly in arrears on the last Business Day of each
fiscal quarter of the Borrowers, (ii) in respect of each LIBOR Loan, on the
last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on each date occurring at
three-month intervals after the first day of such Interest Period and
(iii) in respect of each Loan, on any prepayment (on the amount prepaid),
and in respect of each Loan (other than any Canadian Prime Loan, Cdn ABR Loan
or ABR Loan), on conversion into a Canadian Prime Loan, Cdn ABR Loan or ABR
Loan, at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.

 

(e)  All computations of interest hereunder shall
be made in accordance with Section 5.5.

 

(f)  The Administrative Agent, upon determining
the interest rate for any Borrowing of LIBOR Loans, shall promptly notify the
applicable Borrower and the relevant Lenders thereof. Each such determination
shall, absent clearly demonstrable error, be final and conclusive and binding
on all parties hereto.

 

2.9. Interest
Periods. (a) At the time the US Borrower or the Canadian Borrower, as
applicable, gives a Notice of Borrowing or Notice of Conversion or Continuation
in respect of the making of, or conversion into or continuation as, a Borrowing
of LIBOR Loans (in the case of the initial Interest Period applicable thereto)
or prior to 10:00 a.m. (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to a Borrowing of LIBOR Loans, the
US Borrower or the Canadian Borrower, as applicable, shall have the right to
elect by giving the Administrative Agent or the Canadian Administrative Agent
(in the case of the Canadian Borrower) written notice (or telephonic notice
promptly confirmed in writing) the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of the US Borrower or the
Canadian Borrower, as applicable, be a one, two, three, six or (if available to
all the Lenders making such loans as determined by such Lenders in good faith
based on prevailing market conditions) a nine or twelve month period; provided
that the initial Interest Period may be for a period less than one month if
agreed upon by the applicable Borrower and the Administrative Agent or Canadian
Administrative Agent, as applicable. Notwithstanding anything to the contrary
contained above:

 

(i)  the initial Interest Period
for any Borrowing of LIBOR Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of ABR Loans or Cdn ABR
Loans, as applicable) and shall end on the numerically corresponding day in the
calendar month that is one, two, three, six (or, if applicable as provided
above) nine or twelve months thereafter, and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day on which the
next preceding Interest Period expires;

 

66

 

(ii)  if any Interest Period
relating to a Borrowing of LIBOR Loans begins on the last Business Day of a
calendar month or begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period,
such Interest Period shall end on the last Business Day of the calendar month
at the end of such Interest Period;

 

(iii)  if any Interest Period
would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided that
if any Interest Period in respect of a LIBOR Loan would otherwise expire on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
immediately preceding Business Day; and

 

(iv)  neither Borrower shall be
entitled to elect any Interest Period in respect of any LIBOR Loan if such
Interest Period would extend beyond the applicable Maturity Date of such Loan.

 

(b)  At the time the Canadian Borrower gives a
Notice of Borrowing or Notice of Conversion or Continuation in respect of the
making of, or conversion into or continuation as, a Borrowing of BA Loans or
prior to 12:00 noon (Toronto time) on the third Business Day prior to the
applicable date of making or continuation of such BA Loans, the Canadian
Borrower shall have the right to elect by giving the Canadian Administrative
Agent written notice (or telephonic notice promptly confirmed in writing) of
the Interest Period applicable to such Borrowing, which Interest Period shall,
at the option of the Canadian Borrower, be 30, 60, 90 or 180 days (in each
case subject to availability), or any other period with the consent of the
Canadian Administrative Agent. Notwithstanding anything to the contrary
contained above:

 

(i)  the initial Interest Period
for any Borrowing of BA Loans shall commence on the date of such Borrowing
(including the date of any continuation from a Borrowing of Canadian Prime
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

 

(ii)  the Canadian Borrower shall
not be entitled to elect any Interest Period in respect of any BA Loan if such
Interest Period would extend beyond the applicable Maturity Date of such BA
Loan;

 

(iii)  no BA Loan shall mature on
a day which is not a Business Day and if any Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day; and

 

(iv)  if the Canadian Borrower
fails to provide a Notice of Conversion or Continuation within the time period
required in Section 2.6(a) in respect of BA Loans, such BA Loans
shall automatically be converted into Canadian Prime Loans on the last day of
the Interest period applicable thereto.

 

2.10. Increased
Costs, Illegality, etc. (a)   In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in
the case of clauses (ii) and (iii) below, any 

 

67

 

Lender shall have reasonably determined
(which determination shall, absent clearly demonstrable error, be final and
conclusive and binding upon all parties hereto):

 

(i)  on any date for determining
the LIBOR for any Interest Period that (x) deposits in the principal amounts
of the Loans comprising such LIBOR Borrowing are not generally available in the
relevant market or (y) by reason of any changes arising on or after the Closing
Date affecting the interbank LIBOR market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR; or

 

(ii)  at any time, that such
Lender shall incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any LIBOR Loans (other than any such
increase or reduction attributable to Taxes) because of (x) any change since
the date hereof in any applicable law, governmental rule, regulation, guideline
or order (or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline or
order), such as, for example, without limitation, a change in official reserve
requirements, and/or (y) other circumstances affecting the interbank LIBOR
market or the position of such Lender in such market; or

 

(iii)  at any time, that the
making or continuance of any LIBOR Loan has become unlawful by compliance by
such Lender in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful), or has become impracticable
as a result of a contingency occurring after the date hereof that materially and
adversely affects the interbank LIBOR market;

 

then, and in
any such event, such Lender (or the Administrative Agent, in the case of clause (i)
above) shall within a reasonable time thereafter give notice (if by telephone,
confirmed in writing) to the applicable Borrower and to the Administrative
Agent of such determination (which notice the Administrative Agent shall
promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, (A) LIBOR Term Loans and LIBOR
Revolving Credit Loans shall no longer be available until such time as the
Administrative Agent notifies such Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent agrees to give at such time when
such circumstances no longer exist), (B) any Notice of Borrowing or Notice
of Conversion given by the US Borrower or the Canadian Borrower with respect to
LIBOR Term Loans or LIBOR Revolving Credit Loans that have not yet been
incurred shall be deemed rescinded by the US Borrower or the Canadian Borrower
and (C) any outstanding LIBOR Loans shall be converted, on the last day of
the then current Interest Period with respect thereto, to ABR Loans (in the
case of LIBOR Loans owing by the US Borrower) or Cdn ABR Loans (in the case of
LIBOR Loans owing by the Canadian Borrower), (y) in the case of clause (ii)
above, the US Borrower or the Canadian Borrower, as the case may be, shall pay
to such Lender, promptly after receipt of written demand therefor such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable
discretion shall determine) as shall be required to compensate such Lender for
such increased costs or reductions in amounts receivable hereunder (it being
agreed that a written notice as to 

 

68

 

the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the US Borrower or the Canadian Borrower, as
the case may be, by such Lender shall, absent clearly demonstrable error, be
final and conclusive and binding upon all parties hereto) and (z) in the
case of clause (iii) above, the US Borrower or the Canadian
Borrower, as the case may be, shall take one of the actions specified in Section 2.10(b)
as promptly as possible and, in any event, within the time period required by
law.

 

(b)  At any time that any LIBOR Loan is affected
by the circumstances described in Section 2.10(a)(ii) or (iii),
the US Borrower or the Canadian Borrower, as the case may be, may (and in the
case of a LIBOR Loan affected pursuant to Section 2.10(a)(iii)
shall) either (x) if the affected LIBOR Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the US
Borrower or the Canadian Borrower, as the case may be, was notified by a Lender
pursuant to Section 2.10(a)(ii) or (iii) or (y) if the
affected LIBOR Loan is then outstanding, upon at least three Business Days’
notice to the Administrative Agent, require the affected Lender to convert each
such LIBOR Revolving Credit Loan and LIBOR Term Loan into an ABR Loan or Cdn
ABR Loan, as applicable; provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated in the same
manner pursuant to this Section 2.10(b).

 

(c)  In the event that the Canadian Administrative
Agent shall have reasonably determined (which determination shall, absent
clearly demonstrable error, be final and conclusive and binding upon all
parties hereto) that there does not exist a normal market in Canada for the
purchase and sale of bankers’ acceptances, then, and in any such event, the
Canadian Administrative Agent shall within a reasonable time thereafter give
notice (if by telephone confirmed in writing) to the US Borrower, the Canadian
Borrower and each of the other Lenders of such determination. Thereafter BA
Loans shall no longer be available until such time as the Canadian
Administrative Agent notifies the US Borrower, the Canadian Borrower and the
Lenders that the circumstances giving rise to such notice by the Canadian Administrative
Agent no longer exist (which notice the Canadian Administrative Agent agrees to
give at such time when such circumstances no longer exist), and any Notice of
Borrowing or Notice of Conversion or Continuation given by the Canadian
Borrower with respect to BA Loans that have not yet been incurred shall be
deemed rescinded by the Canadian Borrower. Any maturing BA Loans shall
thereafter, and until contrary notice is provided by the Canadian
Administrative Agent, be continued as Canadian Prime Loans.

 

(d)  If, after the date hereof, the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, the National Association of Insurance
Commissioners, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the date hereof
regarding capital adequacy (whether or not having the force of law) of any such
authority, association, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender’s or its parent’s or
its Affiliate’s capital or assets as a consequence of such Lender’s commitments
or obligations hereunder to a level below that which such Lender or its parent
or its Related Affiliate could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s 

 

69

 

or its parent’s policies with respect to
capital adequacy), then from time to time, promptly after demand by such Lender
(with a copy to the Administrative Agent), the US Borrower or the Canadian Borrower,
as the case may be, shall pay to such Lender such additional amount or amounts
as will compensate such Lender or its parent for such reduction, it being
understood and agreed, however, that a Lender shall not be entitled to such
compensation as a result of such Lender’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as in
effect on the date hereof. Each Lender, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 2.10(d),
will give prompt written notice thereof to the applicable Borrower which notice
shall set forth in reasonable detail the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not,
subject to Section 2.13, release or diminish any of the US
Borrower’s or the Canadian Borrower’s, as the case may be, obligations to pay
additional amounts pursuant to this Section 2.10(d) upon receipt of
such notice.

 

(e)  It is understood that this Section 2.10
shall not apply to Taxes.

 

2.11. Compensation.
If (a) any payment of principal of any BA Loan or LIBOR Loan is made by
the US Borrower or the Canadian Borrower (or, with respect to Section 13.7,
is purchased by a replacement bank or institution), as the case may be, to or
for the account of a Lender other than on the last day of the Interest Period
for such BA Loan or LIBOR Loan as a result of a payment or conversion pursuant
to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 13.7,
as a result of acceleration of the maturity of the Loans pursuant to Section 11
or for any other reason, (b) any Borrowing of BA Loans or LIBOR Loans is
not made as a result of a withdrawn Notice of Borrowing, (c) any ABR Loan
is not converted into a LIBOR Loan as a result of a withdrawn Notice of
Conversion or Continuation, (d) any Canadian Prime Loan is not converted
into a BA Loan as a result of a withdrawn Notice of Conversion or Continuation,
(e) any BA Loan or LIBOR Loan is not continued as a BA Loan or LIBOR Loan,
as the case may be, as a result of a withdrawn Notice of Conversion or
Continuation or (f) any prepayment of principal of any BA Loan or LIBOR
Loan is not made as a result of a withdrawn notice of prepayment pursuant to Section 5.1
or 5.2, the US Borrower or the Canadian Borrower, as the case may be,
shall, after receipt of a written request by such Lender (which request shall
set forth in reasonable detail the basis for requesting such amount), pay to
the Administrative Agent or the Canadian Administrative Agent, as applicable,
for the account of such Lender any amounts required to compensate such Lender
for any additional losses, costs or expenses that such Lender may reasonably
incur as a result of such payment, failure to convert, failure to continue or
failure to prepay, including any loss, cost or expense (excluding loss of
anticipated profits) actually incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such BA Loan or LIBOR Loan.

 

2.12. Change
of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii),
2.10(b), 2.10(c), 3.5 or 5.4 with respect to such
Lender, it will, if requested by the US Borrower or the Canadian Borrower, as
the case may be, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
Loans affected by such event; provided that such designation is made on
such terms that such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Nothing in this Section 2.12
shall affect 

 

70

 

or postpone any of the obligations of the US
Borrower or the Canadian Borrower, as the case may be, or the right of any
Lender provided in Section 2.10, 3.5 or 5.4.

 

2.13. Notice
of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11,
3.5 or 5.4 is given by any Lender more than 180 days after
such Lender has knowledge (or should have had knowledge) of the occurrence of
the event giving rise to the additional cost, reduction in amounts, loss, tax
or other additional amounts described in such Sections, such Lender shall not
be entitled to compensation under Section 2.10, 2.11, 3.5
or 5.4, as the case may be, for any such amounts incurred or accruing
prior to the 181st day prior to the giving of such notice to the US Borrower or
the Canadian Borrower, as the case may be.

 

2.14. Bankers’
Acceptances. (a)  The Canadian Administrative Agent, promptly
following receipt of a Notice of Borrowing or Notice of Conversion or
Continuation, requesting BA Loans, shall advise each applicable Canadian Lender
of the face or principal amount and term of each BA Loan to be accepted (and
purchased) or advanced by it. The aggregate face or principal amount of BA
Loans to be accepted or advanced by a Canadian Lender shall be determined by
the Canadian Administrative Agent by reference to that Canadian Lender’s
applicable pro rata portion of the issue or advance of BA Loans, except that
the aggregate face amount of Bankers’ Acceptances to be accepted by the
applicable Canadian Lenders shall be increased or reduced by the Canadian
Administrative Agent in its sole discretion as may be necessary to ensure that
the face amount of the Bankers’ Acceptance to be accepted by each applicable
Canadian Lender would be C$100,000 or a whole multiple thereof. For greater
certainty, the foregoing requirement for a minimum face amount and a whole
multiple of C$100,000 shall not apply to BA Equivalent Loans.

 

(b)  On the date specified in a Notice of
Borrowing or Notice of Conversion or Continuation on which a BA Loan is to be
made, the Canadian Administrative Agent shall advise the Canadian Borrower as
to the Canadian Administrative Agent’s determination of the BA Discount Rate
for the BA Loans to be purchased or advanced, as the case may be.

 

(c)  The Canadian Borrower shall issue and each
Canadian Lender shall accept and subsequently purchase the Bankers’ Acceptance
accepted by it at the applicable BA Discount Rate. Subject to clause (d)
below, each Canadian Lender shall provide the Canadian Administrative Agent,
for the account of the Canadian Borrower, the BA Discount Proceeds less the
Applicable Stamping Fee payable by the Canadian Borrower with respect to the
Bankers’ Acceptance.

 

(d)  In the event the Canadian Borrower requests a
continuation of BA Loans for a further Interest Period, or requests conversion
from Canadian Prime Loans into BA Loans in accordance with Section 2.6,
the Canadian Administrative Agent shall make arrangements satisfactory to it to
ensure the BA Discount Proceeds from the replacement BA Loans are applied to
repay the face amount of the maturing BA Loans or the principal amount of such
loans to be converted (the “Maturing Amount”) and the Canadian Borrower
shall concurrently pay to the Canadian Administrative Agent any positive
difference between the Maturing Amount and such BA Discount Proceeds.

 

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(e)  Each Canadian Lender may from time to time
hold, sell, rediscount or otherwise dispose of any or all Bankers’ Acceptances
accepted and purchased by it.

 

(f)  In order to facilitate the issuance of
Bankers’ Acceptances pursuant to this Agreement, the Canadian Borrower hereby
authorizes each of the Canadian Lenders, and appoints each of the Canadian
Lenders as the Canadian Borrower’s attorney, to complete, sign and endorse
drafts or depository bills (as defined in the Depository
Bills and Notes Act (Canada) (each such executed draft or bill being
herein referred to as a “Draft”) on its behalf in handwritten form or by
facsimile or mechanical signature or otherwise in accordance with the
applicable Notice of Borrowing or Notice of Conversion or Continuation and,
once so completed, signed and endorsed to accept them as Bankers’ Acceptances
under this Agreement and then if applicable, purchase, discount or negotiate
such Bankers’ Acceptances in accordance with the provisions of this Agreement. Drafts
so completed, signed, endorsed and negotiated on behalf of the Canadian
Borrower by a Canadian Lender shall bind the Canadian Borrower as fully and
effectively as if so performed by an Authorized Officer of the Canadian
Borrower. Each draft of a Bankers’ Acceptance completed, signed or endorsed by
a Canadian Lender shall mature on the last day of the term thereof. All
Bankers’ Acceptances to be accepted by a particular Canadian Lender shall, at
the option of such Canadian Lender, be issued in the form of depository bills
made payable originally to and deposited with The Depository for Securities
Limited pursuant to the Depository Bills and
Notes Act (Canada).

 

(g)  Any Drafts to be used for Bankers’
Acceptances which are held by a Canadian Lender shall be held in safekeeping
with the same degree of care as if they were such Canadian Lender’s own
property being kept at the place at which they are to be held. The Canadian
Borrower may, by written notice to the Canadian Administrative Agent, designate
persons other than Authorized Officers authorized to give the Canadian
Administrative Agent instructions regarding the manner in which Drafts are to
be completed and the times at which they are to be issued; provided, however,
that receipt by the Canadian Administrative Agent of a Notice of Borrowing or
Notice of Conversion or Continuation requesting an advance or continuation
into, Bankers’ Acceptances shall be deemed to be sufficient authority from
Authorized Officers or such designated persons for each of the Canadian Lenders
to complete, and issue drafts in accordance with such notice. None of the
Canadian Administrative Agent or the Canadian Lenders nor any of their
respective directors, officers, employees or representatives shall be liable
for any action taken or omitted to be taken by any of them under this Section 2.14(g)
except for their own respective gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction.

 

(h)  The Canadian Borrower waives presentment for
payment and any other defense to the payment of any amounts due to a Canadian Lender
in respect of a Bankers’ Acceptance accepted and purchased by it pursuant to
this Agreement which might exist solely by reason of the Bankers’ Acceptance
being held, at the maturity thereof, by the Canadian Lender in its own right
and the Canadian Borrower agrees not to claim any days of grace if the Canadian
Lender as holder sues the Canadian Borrower on the Bankers’ Acceptance for
payment of the amount payable by the Canadian Borrower thereunder. Each
Bankers’ Acceptance shall mature and the face amount thereof shall be due and
payable on the last day of the Interest Period applicable thereto.

 

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(i)  Whenever the Canadian Borrower requests a
Loan under this Agreement by way of Bankers’ Acceptances, each Non-Acceptance
Lender shall, in lieu of accepting a Bankers’ Acceptance, make a BA Equivalent
Loan by way of Discount Note in an amount equal to the Non-Acceptance Lender’s pro rata portion of the BA Loan. All terms
of this Agreement applicable to Bankers’ Acceptances and Drafts shall apply
equally to Discount Notes evidencing BA Equivalent Loans with such changes as
may in the context be necessary. For greater certainty:

 

(i)  the term of a Discount Note
shall be the same as the Interest Period for Bankers’ Acceptances accepted on
the same date of the Borrowing in respect of the same BA Loan;

 

(ii)  an acceptance fee will be
payable in respect of a Discount Note and shall be calculated at the same rate
and in the same manner as the Applicable Stamping Fee in respect of a Bankers’
Acceptance; and

 

(iii)  the proceeds from a BA
Equivalent Loan shall be equal to the BA Discount Proceeds of the Discount
Note.

 

2.15. Incremental
Term Loans. The US Borrower may by written notice to the Administrative
Agent elect to request the establishment of one or more New US Term Loan
commitments (the “New US Term Loan Commitments”), in an aggregate amount
for all such New US Term Loan Commitments not in excess of the difference of
(x) $300,000,000 minus (y) the aggregate amount of New Canadian Term
Loan Commitments. The Canadian Borrower may by written notice to the Canadian
Administrative Agent elect to request the establishment of one or more New
Canadian Term Loan commitments (the “New Canadian Term Loan Commitments”),
in an aggregate amount for all such New Term Loan Commitments not in excess of
the difference of (x) $300,000,000 minus (y) the aggregate amount of New US
Term Loan Commitments. Each such notice shall specify the date (each, an “Increased
Amount Date”) on which the US Borrower or the Canadian Borrower, as the
case may be, proposes that the New Term Loan Commitments shall be effective,
which shall be a date not less than 10 Business Days after the date on which
such notice is delivered to Administrative Agent; provided that the US
Borrower or the Canadian Borrower, as the case may be, shall first offer the
Lenders the opportunity to provide all of such New Term Loan Commitments prior
to offering to any other Person that is an eligible assignee pursuant to Section 13.6(b);
provided  further that any Lender offered or approached to provide
all or a portion of any New Term Loan Commitments may elect or decline, in its
sole discretion, to provide such New Term Loan Commitment. Such New Term Loan
Commitments shall become effective as of such Increased Amount Date; provided
that (1) no Default or Event of Default shall exist on such Increased
Amount Date before or after giving effect to such New Term Loan Commitments and
to the making of any Series of New Term Loans pursuant thereto, as applicable;
(2) both before and after giving effect to the making of any Series of New
Term Loans, each of the conditions set forth in Section 7 shall be
satisfied; (3) the Borrowers and their Restricted Subsidiaries shall be in
pro forma compliance with the covenants set forth in Sections 10.9 and 10.10
as of the last day of the most recently ended fiscal quarter after giving
effect to such New Term Loan Commitments and any Investment to be consummated
in connection therewith; (provided that with respect to New Term Loan
Commitments to be established during the first three fiscal quarters of 2005,
pro forma 

 

73

 

compliance with the covenants set forth in Sections
10.9 and 10.10 shall mean (x) a Consolidated Total Debt to
Consolidated EBITDA Ratio of not greater than 7.90 to 1.00 and (y) a
Consolidated EBITDA to Consolidated Interest Expense Ratio of not less than
1.50 to 1.00); (4) such New Term Loan Commitments shall be effected pursuant
to one or more Joinder Agreements executed and delivered by the Borrowers, the
Administrative Agent and one or more New Term Loan Lenders, and each of which
shall be recorded in the Register and shall be subject to the requirements set
forth in Section 5.4(b); (5) the US Borrower and the Canadian
Borrower shall make any payments required pursuant to Section 2.11
in connection with the New Term Loan Commitments, as applicable; and (6) the US
Borrower and the Canadian Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably requested by Administrative Agent
in connection with any such transaction. Any New Term Loans made on an
Increased Amount Date that have terms and provisions that differ from Term
Loans outstanding on the date on which such New Term Loans are made shall be
designated as a separate series (a “Series”) of Term Loans for all
purposes of this Agreement.

 

On any
Increased Amount Date on which any New Term Loan Commitments of any Series are
effective, subject to the satisfaction of the foregoing terms and conditions,
(i) each Lender with a New Term Loan Commitment (each, a “New Term Loan
Lender”) of any Series shall make a Loan to the US Borrower and/or the
Canadian Borrower (a “New Term Loan”) in an amount equal to its New Term
Loan Commitment of such Series, and (ii) each New Term Loan Lender of any
Series shall become a Lender hereunder with respect to the New Term Loan
Commitment of such Series and the New Term Loans of such Series made pursuant
thereto.

 

The terms and
provisions of the New Term Loans and New Term Loan Commitments of any Series
shall be, except as otherwise set forth herein or in the Joinder Agreement,
identical to the Term Loans; provided, however, that (i) the
applicable New Term Loan Maturity Date of each Series shall be no earlier than
the final maturity of the Term Loans, (ii) as of the Increased Amount
Date, the average life to maturity of any New Term Loans shall be no shorter
than the average life to maturity of the Term Loans and (iii) the rate of
interest applicable to the New Term Loans of each Series and, subject to the
foregoing clause (ii), the schedule of required repayments of
principal thereof, shall be determined by the Borrowers and the applicable new
Lenders and shall be set forth in each applicable Joinder Agreement. Each
Joinder Agreement may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Credit Documents as may be necessary
or appropriate, in the opinion of the Administrative Agent, to effect the
provisions of this Section 2.15.

 

2.16. Adjustment
of the Commitments. (a)  At any time
prior to the Revolving Credit Maturity Date, upon giving not less than thirty
(30) days prior written notice to each Administrative Agent, the Borrowers may
request an increase to the US Total Revolving Credit Commitment and a
corresponding reduction to the Canadian Total Revolving Credit Commitment or an
increase to the Canadian Total Revolving Credit Commitment and a corresponding
reduction to the US Total Revolving Credit Commitment. Any such notice may also
include the request to increase the US Letter of Credit Commitment with a
corresponding reduction of the Canadian Letter of Credit Commitment or to
increase the Canadian Letter of Credit Commitment with a corresponding
reduction of the US Letter of Credit Commitment. Any such notice may request
increases or decreases of the Revolving Credit Commitments only in minimum
amounts of $10,000,000 and integral multiples of $5,000,000 (unless the requested

 

74

 

adjustment applies to the entire amount of
the relevant Revolving Credit Commitments). Upon receipt of any such notice,
the applicable Administrative Agent shall promptly communicate such request to
the Lenders having Revolving Credit Commitments. If, within twenty (20) days
following the giving of such notice by the applicable Administrative Agent, (i)
at least one (1) Lender having Revolving Credit Commitments with respect to the
Class that is being requested to increase its Revolving Credit Commitments
approves such increase in writing indicating the amount by which it is willing
to increase its Revolving Credit Commitment (the aggregate amount of Revolving
Credit Commitments represented by all such approvals, the “Commitment
Increase Amount”) and (ii) at least one (1) Lender having Revolving Credit
Commitments with respect to the Class that is being requested to decrease its
Revolving Credit Commitments approves such decrease in writing indicating the
amount it is willing to decrease its Revolving Credit Commitment (the aggregate
amount of Revolving Credit Commitments represented by all such approvals, the “Commitment
Decrease Amount”), then, effective upon the satisfaction of the conditions
in clause (b) below, such assigning Lenders shall assign to such
assignee Lenders, on a pro rata
basis in accordance with their respective Revolving Credit Commitments as in
effect immediately prior to such assignment, an amount of their respective
Revolving Credit Commitments in accordance with Section 13.6 in an
aggregate amount equal to the lesser of (x) the Commitment Increase Amount and
(y) the Commitment Decrease Amount; provided that all Obligations with
respect to assigned Revolving Credit Commitments owing to each such assigning
Lender shall be paid in full to such assigning Lenders by such assignee Lenders
concurrently with such assignment.

 

(b)  Subject to the satisfaction of the conditions
set forth in the next sentence, any adjustment provided for in this Section
2.16 and all corresponding assignments will be effective on the first
Business Day of the fiscal quarter of Holdings (any such date, an “Adjustment
Date”) following the expiry of said thirty-day notice period. Notwithstanding
anything herein to the contrary, no adjustment (or corresponding assignment) of
the Revolving Credit Commitments may be effective unless on the Adjustment
Date, (i) immediately after giving effect to such adjustment, (A) the aggregate
Revolving Credit Commitments does not exceed $350,000,000 and (B) if an
adjustment of the US Letter of Credit Commitment or Canadian Letter of Credit
Commitment is requested, the sum of the US Letter of Credit Commitment and the
Canadian Letter of Credit Commitment does not exceed $100,000,000 in the
aggregate, in each case as such amount may be reduced after giving effect to
any permanent reduction of the Revolving Credit Commitments pursuant to Section
4.2 or 4.3; (ii)(A) the aggregate amount of the Lenders’ US
Revolving Credit Exposures shall not exceed the difference of (x) US Total
Revolving Credit Commitment minus (y) the Receivables Reduction Amount, if
applicable, to the extent such Receivables Reduction Amount has not been
applied to reduce the Canadian Total Revolving Credit Commitment pursuant to Section
2.1 and (B) the aggregate amount of the Canadian Lenders’ Canadian
Revolving Credit Exposures shall not exceed the difference of (x) Canadian
Total Revolving Credit Commitment minus (y) the Receivables Reduction
Amount, if applicable, to the extent such Receivables Reduction Amount has not
been applied to reduce the US Total Revolving Credit Commitment pursuant to Section
2.1; and (iii) immediately prior to and after giving effect to such
adjustment, the conditions set forth in Section 7.1 are satisfied (as if
such adjustment were a Credit Event).

 

75

 

SECTION 3. Letters
of Credit

 

3.1. Letters
of Credit. (a) Subject to and upon the terms and conditions herein set
forth, at any time and from time to time after the Closing Date and prior to
the L/C Maturity Date, (i) the US Borrower may request that the US Letter
of Credit Issuer issue for the account of the US Borrower (or any Subsidiary of
the US Borrower (except any Foreign Subsidiary with respect to which such
issuance would violate applicable law) so long as the US Borrower is a joint
and several co-applicant with respect thereto) a standby letter of credit or
letters of credit denominated in Dollars (the “US Letters of Credit”),
and (ii) each of the Canadian Borrower and the US Borrower may request
that the Canadian Letter of Credit Issuer issue for the account of the Canadian
Borrower or US Borrower, as applicable (or any Subsidiary of the Canadian
Borrower or US Borrower, as applicable (except any Foreign Subsidiary with
respect to which such issuance would violate applicable law), so long as the
applicable Borrower is a joint and several co-applicant with respect thereto),
with respect to the Canadian Borrower, a standby letter of credit or letters of
credit denominated in Canadian Dollars or Dollars and with respect to the US
Borrower, a standby letter of credit or letters of credit denominated in
Dollars (all such letters of credit issued by the Canadian Letter of Credit
Issuer, the “Canadian Letters of Credit” and, together with the US
Letters of Credit, the “Letters of Credit” and each a “Letter of
Credit”) in such form as may be approved by the US Letter of Credit Issuer
or the Canadian Letter of Credit Issuer, as the case may be, in its reasonable
discretion.

 

(b)  Notwithstanding the foregoing, (i) no US
Letter of Credit shall be issued the Stated Amount of which, when added to the
US Letters of Credit Outstanding at such time, would exceed the US Letter of
Credit Commitment then in effect; (ii) no US Letter of Credit shall be
issued the Stated Amount of which would cause the aggregate amount of the
Lenders’ US Revolving Credit Exposures at such time to exceed the difference
between (x) the US Total Revolving Credit Commitment then in effect minus
(y) the Receivables Reduction Amount, if applicable, to the extent such
Receivables Reduction Amount has not been applied to reduce the Canadian Total
Revolving Credit Commitment pursuant to Section 2.1; (iii) no Canadian
Letter of Credit shall be issued the Dollar Equivalent of the Stated Amount of
which, when added to the Dollar Equivalent of the Canadian Letters of Credit
Outstanding at such time, would exceed the Canadian Letter of Credit Commitment
then in effect; (iv) no Canadian Letter of Credit shall be issued the
Dollar Equivalent of the Stated Amount of which would cause the aggregate
amount of the Canadian Revolving Credit Exposure at such time to exceed the
difference between (x) the Canadian Total Revolving Credit Commitment minus
(y) the Receivables Reduction Amount, if applicable, to the extent such
Receivables Reduction Amount has not been applied to reduce the US Total
Revolving Credit Commitment pursuant to Section 2.1; (v) each Letter of
Credit shall have an expiration date occurring no later than one year after the
date of issuance thereof, unless otherwise agreed upon by the Administrative
Agent or the Canadian Administrative Agent, as applicable, and the applicable
Letter of Credit Issuer; provided that any Letter of Credit may, upon
request of the US Borrower or the Canadian Borrower, as the case may be,
provide for the automatic renewal thereof for additional consecutive periods of
one year or less (which in no event shall extend beyond the L/C Maturity Date),
subject to any conditions specified in such Letter of Credit, and provided
further that in no event shall such expiration date occur later than the
L/C Maturity Date; (vi) no Letter of Credit shall be issued if it
would be illegal under any applicable law for the beneficiary of the Letter of
Credit to have a Letter of Credit issued in its favor; and (vii) no Letter
of Credit shall be issued by a Letter of Credit Issuer after it has 

 

76

 

received a written notice from the US
Borrower, the Canadian Borrower or any Lender or the Administrative Agent
stating that a Default or Event of Default has occurred and is continuing until
such time as such Letter of Credit Issuer shall have received a written notice
of (x) rescission of such notice from the party or parties originally
delivering such notice or (y) the waiver of such Default or Event of
Default in accordance with the provisions of Section 13.1.

 

(c)  Upon at least one Business Day’s prior
written notice (or telephonic notice promptly confirmed in writing) to the
Administrative Agent and the US Letter of Credit Issuer or to the Canadian
Administrative Agent and the Canadian Letter of Credit Issuer, as applicable
(which notice the applicable Administrative Agent shall promptly transmit to
each of the applicable Lenders), the US Borrower and the Canadian Borrower, as
the case may be, shall have the right, on any day, permanently to terminate or
reduce the US Letter of Credit Commitment or the Canadian Letter of Credit Commitment,
in each case in whole or in part; provided that, after giving effect to
such termination or reduction, the US Letters of Credit Outstanding shall not
exceed the US Letter of Credit Commitment and the Dollar Equivalent of the
Canadian Letters of Credit Outstanding shall not exceed the Canadian Letter of
Credit Commitment, as applicable.

 

(d)  The parties hereto agree that the Existing
Letters of Credit shall be deemed to be Letters of Credit for all purposes
under this Agreement, without any further action by the Borrowers.

 

3.2. Letter
of Credit Requests. (a)   Whenever the US Borrower desires that a
US Letter of Credit be issued for its account or for the account of any of its
Subsidiaries, it shall give the Administrative Agent and the US Letter of
Credit Issuer at least five (or such lesser number as may be agreed upon by the
Administrative Agent and the Letter of Credit Issuer) Business Days’ written
notice thereof. Each such notice shall be executed by the US Borrower and shall
be in the form of Exhibit E-1 (each a “US Letter of Credit
Request”).

 

(b)  Whenever the Canadian Borrower desires that a
Canadian Letter of Credit be issued for its account or for the account of any
of its Subsidiaries, it shall give the Canadian Administrative Agent and the
Canadian Letter of Credit Issuer at least five (or such lesser number as may be
agreed upon by the Canadian Administrative Agent and the Canadian Letter of
Credit Issuer) Business Days’ written notice thereof. Each such notice shall be
executed by the Canadian Borrower and shall be in the form of Exhibit E-2
(each a “Canadian Letter of Credit Request”).

 

(c)  The making of each Letter of Credit Request
shall be deemed to be a representation and warranty by the US Borrower or the
Canadian Borrower, as the case may be, that the Letter of Credit may be issued
in accordance with, and will not violate the requirements of, Section 3.1(b).

 

3.3. Letter
of Credit Participations. (a)   Immediately upon the issuance by
the US Letter of Credit Issuer of any US Letter of Credit, the US Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Lender
that has a US Revolving Credit Commitment (each such other Lender, in its
capacity under this Section 3.3, a “US L/C Participant”),
and each such US L/C Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the US Letter of Credit
Issuer, without recourse or 

 

77

 

warranty, an undivided interest and
participation (each a “US L/C Participation”), to the extent of such US
L/C Participant’s US Revolving Credit Commitment Percentage in such US Letter
of Credit, each substitute letter of credit, each drawing made thereunder and
the obligations of the US Borrower under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto.

 

(b)  Immediately upon the issuance by the Canadian
Letter of Credit Issuer of any Canadian Letter of Credit, the Canadian Letter
of Credit Issuer shall be deemed to have sold and transferred to each other
Canadian Lender (each such other Lender, in its capacity under this Section 3.3,
a “Cdn L/C Participant”), and each such Cdn L/C Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Canadian Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation (each a “Cdn L/C Participation”), to the
extent of such Cdn L/C Participant’s Canadian Revolving Credit Commitment
Percentage in such Canadian Letter of Credit, each substitute letter of credit,
each drawing made thereunder and the obligations of the Canadian Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto.

 

(c)  US Letter of Credit Fees will be paid
directly to the Administrative Agent for the ratable account of the US L/C
Participants as provided in Section 4.1(b), and Canadian Letter of
Credit Fees will be paid directly to the Canadian Administrative Agent for the
ratable account of the Cdn L/C Participants as provided in Section 4.1(d).
The US L/C Participants shall have no right to receive any portion of any US
L/C Fronting Fees, and the Cdn L/C Participants shall have no right to receive
any portion of any Canadian L/C Fronting Fees.

 

(d)  In determining whether to pay under any
Letter of Credit, the relevant Letter of Credit Issuer shall have no obligation
relative to the applicable L/C Participants other than to confirm that any
documents required to be delivered under such Letter of Credit have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit. Any action taken or omitted to be taken by the relevant
Letter of Credit Issuer under or in connection with any Letter of Credit issued
by it, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.

 

(e)  In the event that any Letter of Credit Issuer
makes any payment under any Letter of Credit issued by it and the US Borrower
or the Canadian Borrower, as applicable, shall not have repaid such amount in
full to the relevant Letter of Credit Issuer pursuant to Section 3.4(a),
such Letter of Credit Issuer shall promptly notify the Administrative Agent or
the Canadian Administrative Agent, as applicable, and each applicable L/C
Participant of such failure, and each such L/C Participant shall promptly and
unconditionally pay to the Administrative Agent or the Canadian Administrative
Agent, as applicable, for the account of the relevant Letter of Credit Issuer,
the amount of such L/C Participant’s Revolving Credit Commitment Percentage of
such unreimbursed payment in Dollars or Canadian Dollars, as applicable, and in
immediately available funds; provided, however, that no L/C
Participant shall be obligated to pay to the Administrative Agent or the
Canadian Administrative Agent, as applicable, for the account of the relevant
Letter of Credit Issuer its Revolving Credit Commitment Percentage of such
unreimbursed amount arising from any wrongful payment made by such relevant
Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions 

 

78

 

constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the relevant Letter
of Credit Issuer so notifies, prior to 11:00 a.m. (New York time) on any
Business Day, any L/C Participant required to fund a payment under a Letter of
Credit, such L/C Participant shall make available to the Administrative Agent
or the Canadian Administrative Agent, as applicable, for the account of such
Letter of Credit Issuer such L/C Participant’s Revolving Credit Commitment
Percentage of the amount of such payment on such Business Day in immediately
available funds. If and to the extent such L/C Participant shall not have so
made its Revolving Credit Commitment Percentage of the amount of such payment
available to the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the account of the relevant Letter of Credit Issuer, such L/C
Participant agrees to pay to the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the account of such Letter of Credit
Issuer, forthwith on demand, such amount, together with interest thereon for
each day from such date until the date such amount is paid to the
Administrative Agent or the Canadian Administrative Agent, as applicable, for
the account of such Letter of Credit Issuer at the Federal Funds Effective
Rate, in the case of any amount for the account of the US Letter of Credit
Issuer, or the rate reasonably determined by the Canadian Letter of Credit
Issuer to be the cost to it of funding the payment under the applicable Letter
of Credit issued by it, in the case of any amount for the account of the
Canadian Letter of Credit Issuer. The failure of any L/C Participant to make
available to the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the account of the relevant Letter of Credit Issuer its
Revolving Credit Commitment Percentage of any payment under any Letter of
Credit shall not relieve any other L/C Participant of its obligation hereunder
to make available to the Administrative Agent or the Canadian Administrative
Agent, as applicable, for the account of such Letter of Credit Issuer its
Revolving Credit Commitment Percentage of any payment under such Letter of
Credit on the date required, as specified above, but no L/C Participant shall
be responsible for the failure of any other L/C Participant to make available
to the Administrative Agent or the Canadian Administrative Agent, as
applicable, such other L/C Participant’s Revolving Credit Commitment Percentage
of any such payment.

 

(f)  Whenever any Letter of Credit Issuer receives
a payment in respect of an unpaid reimbursement obligation as to which the
Administrative Agent or the Canadian Administrative Agent, as applicable, has
received for the account of such Letter of Credit Issuer any payments from the
L/C Participants pursuant to paragraph (e) above, such Letter of
Credit Issuer shall pay to the Administrative Agent or the Canadian
Administrative Agent, as applicable, and the Administrative Agent or the
Canadian Administrative Agent, as applicable, shall promptly pay to each L/C
Participant that has paid its Revolving Credit Commitment Percentage of such
reimbursement obligation, in Dollars or Canadian Dollars, as applicable, and in
immediately available funds, an amount equal to such L/C Participant’s share
(based upon the proportionate aggregate amount originally funded by such L/C
Participant to the aggregate amount funded by all applicable L/C Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective L/C Participations.

 

(g)  The obligations of the L/C Participants to
make payments to the Administrative Agent or the Canadian Administrative Agent
for the account of a Letter of Credit Issuer with respect to Letters of Credit
shall be irrevocable and not subject to counterclaim, set-off or other defense
or any other qualification or exception whatsoever and shall be made in 

 

79

 

accordance with the terms and conditions of
this Agreement under all circumstances, including under any of the following
circumstances:

 

(i)  any lack of validity or
enforceability of this Agreement or any of the other Credit Documents;

 

(ii)  the existence of any claim,
set-off, defense or other right that either Borrower may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Canadian Administrative Agent, any Letter of Credit
Issuer, any Lender or other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the US Borrower or
the Canadian Borrower, as applicable, and the beneficiary named in any such
Letter of Credit);

 

(iii)  any draft, certificate or
any other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

 

(iv)  the surrender or impairment
of any security for the performance or observance of any of the terms of any of
the Credit Documents; or

 

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

 

provided,
however, that no L/C Participant shall be obligated to pay to the
Administrative Agent or the Canadian Administrative Agent for the account of a
Letter of Credit Issuer its Revolving Credit Commitment Percentage of any
unreimbursed amount arising from any wrongful payment made by such Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer.

 

3.4. Agreement
to Repay Letter of Credit Drawings. (a) 
The US Borrower and the Canadian Borrower hereby agree to reimburse the
relevant Letter of Credit Issuer, by making payment in the currency in which
the relevant Letter of Credit was denominated to the Administrative Agent (in
the case of reimbursement made by the US Borrower) or the Canadian
Administrative Agent (in the case of reimbursement made by the Canadian
Borrower) in immediately available funds for any payment or disbursement made
by such Letter of Credit Issuer under any Letter of Credit (each such amount so
paid until reimbursed, an “Unpaid Drawing”) immediately after, and in
any event on the date of, such payment, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior
to 5:00 p.m. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date such
Letter of Credit Issuer is reimbursed therefor at a rate per annum that shall at all times be the
Applicable ABR Margin plus the ABR as in effect from time to time (in the case
of the US Letter of Credit Issuer) or the Applicable ABR Margin plus the
Canadian Prime Rate as in effect from time to time (in the case of the Canadian
Letter of Credit Issuer); provided that, notwithstanding anything
contained in this Agreement to the contrary, (i) unless the US Borrower
(or the Canadian Borrower) shall have notified the Administrative Agent (or the
Canadian Administrative Agent) and the relevant Letter 

 

80

 

of Credit Issuer prior to 10:00 a.m.
(New York time) on the Business Day next following the date of such drawing
that the US Borrower or the Canadian Borrower, as the case may be, intends to
reimburse the relevant Letter of Credit Issuer for the amount of such drawing
with funds other than the proceeds of Loans, the US Borrower or the Canadian
Borrower, as the case may be, shall be deemed to have given a Notice of
Borrowing requesting that, (A) with respect to US Letters of Credit, the
Lenders with US Revolving Credit Commitments make US Revolving Credit Loans
(which shall be ABR Loans) and (B) with respect to Canadian Letters of Credit,
the Lenders with Canadian Revolving Credit Commitments make Canadian Revolving
Credit Loans (which shall be Canadian Prime Rate Loans) on the date on which
such drawing is honored in an amount equal to the amount of such drawing and
(ii) the Administrative Agent or the Canadian Administrative Agent shall
promptly notify each relevant L/C Participant of such drawing and the amount of
its Revolving Credit Loan to be made in respect thereof, and each L/C
Participant shall be irrevocably obligated to make a Revolving Credit Loan to
the US Borrower or the Canadian Borrower, as applicable, in the manner deemed
to have been requested in the amount of its Revolving Credit Commitment
Percentage of the applicable Unpaid Drawing by 12:00 noon (New York time) on
such Business Day by making the amount of such Revolving Credit Loan available to
the Administrative Agent or the Canadian Administrative Agent, as applicable. Such
Revolving Credit Loans shall be made without regard to the Minimum Borrowing
Amount. The Administrative Agent or the Canadian Administrative Agent, as
applicable, shall use the proceeds of such Revolving Credit Loans solely for
purpose of reimbursing the relevant Letter of Credit Issuer for the related
Unpaid Drawing.

 

(b)  The obligations of the US Borrower and the
Canadian Borrower under this Section to reimburse the relevant Letter of
Credit Issuer with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment that the US Borrower, the Canadian Borrower or any other Person may
have or have had against such Letter of Credit Issuer, the Administrative
Agent, the Canadian Administrative Agent or any Lender (including in its
capacity as an L/C Participant), including any defense based upon the failure
of any drawing under a Letter of Credit (each a “Drawing”) to conform to
the terms of the Letter of Credit or any non-application or misapplication by
the beneficiary of the proceeds of such Drawing; provided that neither
the US Borrower nor the Canadian Borrower shall be obligated to reimburse such
Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer.

 

3.5. Increased
Costs. If after the date hereof, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
actual compliance by a Letter of Credit Issuer or any L/C Participant with any
request or directive made or adopted after the date hereof (whether or not
having the force of law), by any such authority, central bank or comparable
agency shall either (a) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against letters of credit issued by
such Letter of Credit Issuer, or any L/C Participant’s L/C Participation
therein, or (b) impose on such Letter of Credit Issuer or any L/C
Participant any other conditions affecting its obligations under this Agreement
in respect of Letters of Credit or L/C Participations therein or any Letter of
Credit or such L/C Participant’s 

 

81

 

L/C Participation therein, and the result of
any of the foregoing is to increase the cost to such Letter of Credit Issuer or
such L/C Participant of issuing, maintaining or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by such
Letter of Credit Issuer or such L/C Participant hereunder (other than any such
increase or reduction attributable to Taxes) in respect of Letters of Credit or
L/C Participations therein, then, promptly after receipt of written demand to
the US Borrower or the Canadian Borrower, as applicable, by such Letter of
Credit Issuer or such L/C Participant, as the case may be (a copy of which
notice shall be sent by such Letter of Credit Issuer or such L/C Participant to
the Administrative Agent (with respect to US Letters of Credit) and to the
Canadian Administrative Agent (with respect to Canadian Letters of Credit)),
the US Borrower or the Canadian Borrower, as applicable, shall pay to such
Letter of Credit Issuer or such L/C Participant such additional amount or
amounts as will compensate such Letter of Credit Issuer or such L/C Participant
for such increased cost or reduction, it being understood and agreed, however,
that a Letter of Credit Issuer or a L/C Participant shall not be entitled to
such compensation as a result of such Person’s compliance with, or pursuant to
any request or directive to comply with, any such law, rule or regulation as in
effect on the date hereof. A certificate submitted to the US Borrower or the
Canadian Borrower, as applicable, by the relevant Letter of Credit Issuer or a
L/C Participant, as the case may be (a copy of which certificate shall be
sent by such Letter of Credit Issuer or such L/C Participant to the
Administrative Agent (with respect to US Letters of Credit) and to the Canadian
Administrative Agent (with respect to Canadian Letters of Credit)) setting
forth in reasonable detail the basis for the determination of such additional
amount or amounts necessary to compensate such Letter of Credit Issuer or such
L/C Participant as aforesaid shall be conclusive and binding on the US Borrower
or the Canadian Borrower, as applicable, absent clearly demonstrable error.

 

3.6. Successor
Letter of Credit Issuer. Any Letter of Credit Issuer may resign as Letter
of Credit Issuer upon 30 days’ prior written notice to the Administrative
Agent, the Canadian Administrative Agent, the Lenders and the Borrowers. If the
US Letter of Credit Issuer shall resign as US Letter of Credit Issuer under
this Agreement, then the US Borrower shall appoint from among the Lenders with
US Revolving Credit Commitments a successor issuer of US Letters of Credit that
is willing so to act, whereupon such successor issuer shall succeed to the
rights, powers and duties of the US Letter of Credit Issuer, and the term “US
Letter of Credit Issuer” shall mean such successor issuer effective upon such
appointment. At the time such resignation shall become effective, the US
Borrower shall pay to the resigning US Letter of Credit Issuer all accrued and
unpaid fees pursuant to Sections 4.1(c) and (f). The
acceptance of any appointment as the US Letter of Credit Issuer hereunder by a
successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the US Borrower and the Administrative
Agent and, from and after the effective date of such agreement, such successor
Lender shall have all the rights and obligations of the previous US Letter of
Credit Issuer under this Agreement and the other Credit Documents with respect
to Letters of Credit issued by it from and after such date. If the Canadian
Letter of Credit Issuer shall resign as Canadian Letter of Credit Issuer under
this Agreement, then the Canadian Borrower shall appoint from among the
Canadian Lenders a successor issuer of Canadian Letters of Credit that is
willing so to act, whereupon such successor issuer shall succeed to the rights,
powers and duties of the Canadian Letter of Credit Issuer, and the term
“Canadian Letter of Credit Issuer” shall mean such successor issuer effective
upon such appointment. At the time such resignation shall become effective, the
Canadian Borrower shall pay to the resigning 

 

82

 

Canadian Letter of Credit Issuer all accrued
and unpaid fees pursuant to Sections 4.1(e) and (f). The
acceptance of any appointment as the Canadian Letter of Credit Issuer hereunder
by a successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Canadian Borrower and the Canadian
Administrative Agent and, from and after the effective date of such agreement,
such successor Lender shall have all the rights and obligations of the previous
Canadian Letter of Credit Issuer under this Agreement and the other Credit
Documents with respect to Letters of Credit issued by it from and after such
date. After the resignation of any Letter of Credit Issuer hereunder, the
resigning Letter of Credit Issuer shall remain a party hereto and shall
continue to have all the rights and obligations of a Letter of Credit Issuer
under this Agreement and the other Credit Documents with respect to Letters of
Credit issued by it prior to such resignation, but shall not be required to
issue additional Letters of Credit. After any retiring Letter of Credit
Issuer’s resignation as a Letter of Credit Issuer, the provisions of this
Agreement relating to such Letter of Credit Issuer shall inure to its benefit
as to any actions taken or omitted to be taken by it (a) while it was a
Letter of Credit Issuer under this Agreement or (b) at any time with
respect to Letters of Credit issued by such Letter of Credit Issuer.

 

SECTION 4. Fees;
Commitments

 

4.1. Fees.
(a)   (i)   The US Borrower agrees to pay to the
Administrative Agent in Dollars, for the account of each Lender having a US
Revolving Credit Commitment (in each case pro
rata according to the respective US Revolving Credit Commitments of
all such Lenders), a commitment fee for each day from and including the Closing
Date to but excluding the Final Date. Such commitment fee shall be payable
quarterly in arrears (x) on the last Business Day of each fiscal quarter
of the US Borrower and (y) on the Final Date (for the period ended on such
date for which no payment has been received pursuant to clause (x) above),
and shall be computed for each day during such period at a rate per annum equal to the Commitment Fee Rate
in effect on such day on the Available US Commitment in effect on such day.

 

(ii)  The Canadian Borrower
agrees to pay to the Canadian Administrative Agent in Dollars for the account
of each Canadian Lender with a Canadian Revolving Credit Commitment (in each
case pro rata according to the
respective applicable Canadian Revolving Credit Commitments of all such
Lenders), a commitment fee for each day from and including the Closing Date to
but excluding the Final Date. Such commitment fee shall be payable quarterly in
arrears (x) on the last Business Day of each fiscal quarter of the
Canadian Borrower and (y) on the Final Date (for the period ended on such
date for which no payment has been received pursuant to clause (x)
above), and shall be computed for each day during such period at a rate per annum equal to the Commitment Fee Rate
in effect on such day on the Available Canadian Commitment in effect on such
day.

 

(iii)  Notwithstanding the
foregoing, neither the US Borrower nor the Canadian Borrower shall be obligated
to pay any amounts to any Defaulting Lender pursuant to this Section 4.1.

 

(b)  The US Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the Lenders having a US
Revolving Credit Commitment (pro rata
on the basis of 

 

83

 

their respective US Letter of Credit
Exposure), a fee in respect of each US Letter of Credit (the “US Letter of
Credit Fee”), for the period from and including the date of issuance of
such US Letter of Credit to but excluding the termination date of such US
Letter of Credit computed at the per annum
rate for each day equal to the Applicable LIBOR Margin for Revolving Credit
Loans minus 0.125% per annum on
the average daily Stated Amount of such US Letter of Credit. Such US Letter of
Credit Fees shall be due and payable quarterly in arrears on the last Business
Day of each fiscal quarter of the US Borrower and on the date upon which the US
Total Revolving Credit Commitment terminates and the US Letters of Credit
Outstanding shall have been reduced to zero.

 

(c)  The US Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the US Letter of Credit
Issuer a fee in respect of each US Letter of Credit issued by it (the “US
L/C Fronting Fee”), for the period from and including the date of issuance
of such US Letter of Credit to but excluding the termination date of such US
Letter of Credit, computed at the rate for each day equal to 0.125% per annum on the average daily Stated
Amount of such US Letter of Credit. Such US L/C Fronting Fees shall be due and
payable quarterly in arrears on the last Business Day of each fiscal quarter of
the US Borrower and on the date upon which the US Total Revolving Credit
Commitment terminates and the US Letters of Credit Outstanding shall have been
reduced to zero.

 

(d)  The Canadian Borrower agrees to pay to the
Canadian Administrative Agent in Canadian Dollars for the account of the
Canadian Lenders pro rata on the
basis of their respective Canadian Letter of Credit Exposure, a fee in respect
of each Canadian Letter of Credit (the “Canadian Letter of Credit Fee”),
for the period from and including the date of issuance of such Canadian Letter
of Credit to but excluding the termination date of such Canadian Letter of
Credit computed at the per annum
rate for each day equal to the Applicable Stamping Fee for Revolving Credit
Loans minus 0.125% per annum on the average daily Stated Amount of such
Canadian Letter of Credit. Such Canadian Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each fiscal quarter of
the Canadian Borrower and on the date upon which the Canadian Total Revolving
Credit Commitment terminates and the Canadian Letters of Credit Outstanding
shall have been reduced to zero.

 

(e)  The Canadian Borrower agrees to pay to the
Canadian Administrative Agent in Canadian Dollars for the account of the
Canadian Letter of Credit Issuer a fee in respect of each Canadian Letter of
Credit issued by it (the “Canadian L/C Fronting Fee”), for the period
from and including the date of issuance of such Canadian Letter of Credit to
but excluding the termination date of such Canadian Letter of Credit, computed
at the rate for each day equal to 0.125% per
annum on the average daily Stated Amount of such Canadian Letter of
Credit. Such Canadian L/C Fronting Fees shall be due and payable quarterly in
arrears on the last Business Day of each fiscal quarter of the Canadian
Borrower and on the date upon which the Canadian Total Revolving Credit
Commitment terminates and the Canadian Letters of Credit Outstanding shall have
been reduced to zero.

 

(f)  Each of the US Borrower and the Canadian
Borrower agrees to pay directly to the applicable Letter of Credit Issuer in
Dollars (in the case of payments to the US Letter of Credit Issuer) or Canadian
Dollars (in the case of payments to the Canadian Letter of Credit Issuer) upon
each issuance of, drawing under, and/or amendment of, a Letter of Credit issued
by 

 

84

 

it in such amount as the applicable Letter of
Credit Issuer and the applicable Borrower shall have agreed upon for issuances
of, drawings under or amendments of, letters of credit issued by it.

 

(g)  The Borrowers agree to pay to the
Administrative Agent all fees required to be paid pursuant to the Agency Fee
Letter dated February 9, 2005, as amended.

 

4.2. Voluntary
Reduction of Revolving Credit Commitments. Upon at least one Business Day’s
prior written notice (or telephonic notice promptly confirmed in writing) to
the applicable Administrative Agent at such Administrative Agent’s Office
(which notice such Administrative Agent shall promptly transmit to each of the
Lenders), the applicable Borrower shall have the right, without premium or
penalty, on any day, permanently to terminate or reduce the Revolving Credit
Commitments in whole or in part; provided that (a) any such reduction
shall apply proportionately and permanently to reduce the US Revolving Credit
Commitment or the Canadian Revolving Credit Commitment, as the case may be, of
each of the Lenders, (b) any partial reduction pursuant to this Section 4.2
shall be in the amount of at least $5,000,000 and (c) after giving effect
to such termination or reduction and to any prepayments of the Loans made on
the date thereof in accordance with this Agreement, (i) the aggregate amount of
the Lenders’ US Revolving Credit Exposures shall not exceed the difference of
(x) US Total Revolving Credit Commitment minus (y) the Receivables Reduction
Amount, if applicable, to the extent such Receivables Reduction Amount has not
been applied to reduce the Canadian Total Revolving Credit Commitment pursuant
to Section 2.1 and (ii) the aggregate amount of the Canadian Lenders’
Canadian Revolving Credit Exposures shall not exceed the difference of
(x) Canadian Total Revolving Credit Commitment minus (y) the
Receivables Reduction Amount, if applicable, to the extent such Receivables
Reduction Amount has not been applied to reduce the US Total Revolving Credit
Commitment pursuant to Section 2.1.

 

4.3. Mandatory
Termination of Commitments. (a)  The US Term Loan Commitments and
the Canadian Term Loan Commitments shall terminate at 5:00 p.m.
(New York time) on the Closing Date.

 

(b)  The US Total Revolving Credit Commitment and
the Canadian Total Revolving Credit Commitment shall terminate at
5:00 p.m. (New York time) on the Revolving Credit Maturity Date.

 

(c)  The US Swingline Commitment and the Canadian
Swingline Commitment shall equal zero at 5:00 p.m. (New York time) on the
Swingline Maturity Date.

 

(d)  (i) The US Letter of Credit Commitment
and the Canadian Letter of Credit Commitment shall equal zero at 5:00 p.m.
(New York time) on the L/C Maturity Date.

 

(e)  If any prepayment of Term Loans would otherwise
be required pursuant to Section 5.2(a) but cannot be made because
there are no Term Loans outstanding, or because the amount of the required
prepayment exceeds the outstanding amount of Term Loans, then, on the date that
such prepayment is required, the Revolving Credit Commitments shall be
permanently reduced by an aggregate amount equal to the amount of the required
prepayment, or the excess of such amount over the outstanding amount of Term
Loans, as the case may be, and the US 

 

85

 

Borrower and the Canadian Borrower shall
comply with Section 5.2(b) after giving effect to such reduction.

 

SECTION 5. Payments

 

5.1. Voluntary
Prepayments. The US Borrower shall have the right to prepay Term Loans, US Revolving
Credit Loans, Canadian Revolving Credit Loans and Swingline Loans made to it,
and the Canadian Borrower shall have the right to prepay Term Loans, Canadian
Revolving Credit Loans and Swingline Loans made to it, in each case, without
premium or penalty, in whole or in part from time to time on the following
terms and conditions: (a) the applicable Borrower shall give the Administrative
Agent and the Canadian Administrative Agent at the applicable Administrative
Agent’s Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to make such prepayment, the amount of such prepayment
and (in the case of BA Loans and LIBOR Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by such Borrower no later
than (i) in the case of Term Loans or Revolving Credit Loans (other than
Revolving Credit Loans that are ABR Loans, Cdn ABR Loans or Canadian Prime
Loans), 10:00 a.m. (New York time) one Business Day prior to, (ii) in the
case of Revolving Credit Loans that are ABR Loans, Cdn ABR Loans or Canadian
Prime Loans, 10:00 a.m. on the same day as, or (iii) in the case of Swingline
Loans, 12:00 noon (New York time) on the same day as, the date of such
prepayment and shall promptly be transmitted by the Administrative Agent or the
Canadian Administrative Agent, as applicable, to each of the relevant Lenders
or either Swingline Lender, as the case may be; (b) each partial prepayment of
any Borrowing of Term Loans or Revolving Credit Loans shall be in a multiple of
$100,000 or C$100,000, as the case may be, and in an aggregate principal amount
of at least $1,000,000 or C$1,000,000, as the case may be, and each partial
prepayment of Swingline Loans shall be in a multiple of $10,000 (in the case of
Swingline Loans denominated in Dollars) and C$10,000 (in the case of Swingline
Loans denominated in Canadian Dollars) and in an aggregate principal amount of
at least $100,000 (in the case of Swingline Loans denominated in Dollars) and
C$100,000 (in the case of Swingline Loans denominated in Canadian Dollars); provided
that no partial prepayment of LIBOR Term Loans or LIBOR Revolving Credit Loans
made pursuant to a single Borrowing shall reduce the outstanding LIBOR Term
Loans or LIBOR Revolving Credit Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Term Loans or Revolving
Credit Loans and; (c) any prepayment of LIBOR Term Loans or LIBOR Revolving
Credit Loans pursuant to this Section 5.1 on any day other than the
last day of an Interest Period applicable thereto shall be subject to
compliance by the US Borrower or the Canadian Borrower, as the case may be,
with the applicable provisions of Section 2.11 and (d) BA Loans may
not be repaid on any day other than the last day of an Interest Period
applicable thereto except as may be otherwise provided in this Agreement. Each
prepayment in respect of US Term Loans pursuant to this Section 5.1
shall be (a) applied to US Term Loans in such manner as the US Borrower
may determine and (b) applied to reduce US Term Loan Repayment Amounts in
such order as the US Borrower may determine. Each prepayment in respect of
Canadian Term Loans pursuant to this Section 5.1 shall be
(a) applied to Canadian Term Loans in such manner as the Canadian Borrower
may determine and (b) applied to reduce Canadian Term Loan Repayment Amounts in
such order as the Canadian Borrower may determine. At the applicable Borrower’s
election in connection with any prepayment pursuant to this Section 5.1,
such prepayment shall not be applied to any Term Loan or Revolving Credit Loan
of a Defaulting Lender.

 

86

 

5.2. Mandatory
Prepayments. (a)   Term Loan Prepayments. (i)  
On each occasion that a Prepayment Event occurs, the Borrowers shall, within
one Business Day after the occurrence of a Debt Incurrence Prepayment Event and
within five Business Days after the occurrence of any other Prepayment Event,
prepay, in accordance with paragraph (c) below, the principal
amount of Term Loans in an amount equal to 100% of the Net Cash Proceeds from
such Prepayment Event.

 

(ii)  Not later than the date
that is ninety days after the last day of any fiscal year (commencing with the
fiscal year ending December 31, 2005), the Borrowers shall prepay, in
accordance with paragraph (c) below, the principal of Term Loans in
an amount equal to (x) 50% of Excess Cash Flow for such fiscal year (provided
that such percentage shall be reduced to 25% if the Consolidated Total Debt to
Consolidated EBITDA Ratio as of the end of such fiscal year is less than 5.00
to 1.00, and provided  further that such percentage shall be
reduced to 0% if the Consolidated Total Debt to Consolidated EBITDA Ratio as of
the end of such fiscal year is less than 4.00 to 1.00), minus (y) the
principal amount of Term Loans voluntarily prepaid pursuant to Section 5.1
during such fiscal year.

 

(b)  Repayment of Revolving Credit Loans.

 

(i)  Aggregate US Revolving
Credit Outstandings. If on any date the aggregate amount of the Lenders’ US
Revolving Credit Exposures (all the foregoing, collectively, the “Aggregate
US Revolving Credit Outstandings”) exceeds the difference of (x) 100%
of the US Total Revolving Credit Commitment as then in effect minus (y) the
Receivables Reduction Amount, if applicable, to the extent such Receivables
Reduction Amount has not been applied to reduce the Canadian Total Revolving
Credit Commitment pursuant to Section 2.1, the US Borrower shall
forthwith repay on such date the principal amount of US Swingline Loans and,
after all US Swingline Loans have been paid in full, US Revolving Credit Loans
in an aggregate amount for all such repayments equal to such excess. If, after
giving effect to the prepayment of all outstanding US Swingline Loans and US
Revolving Credit Loans, the Aggregate US Revolving Credit Outstandings exceed
the difference of (x) the US Total Revolving Credit Commitment then in
effect minus (y) the Receivables Reduction Amount, if applicable, to the extent
such Receivables Reduction Amount has not been applied to reduce the Canadian
Total Revolving Credit Commitment pursuant to Section 2.1, the US
Borrower shall pay to the Administrative Agent an amount in cash equal to such
excess and the Administrative Agent shall hold such payment for the benefit of
the Lenders as security for the obligations of the US Borrower hereunder
(including obligations in respect of US Letters of Credit Outstanding) pursuant
to a cash collateral agreement to be entered into in form and substance
satisfactory to the Administrative Agent (which shall permit certain
Investments in Permitted Investments satisfactory to the Administrative Agent,
until the proceeds are applied to the secured obligations).

 

(ii)  Aggregate Canadian
Revolving Credit Outstandings. If on any date the aggregate amount of the
Canadian Lenders’ Canadian Revolving Credit Exposures (all the foregoing,
collectively, the “Aggregate Canadian Revolving Credit Outstandings”)
exceeds the difference of (x) 103% of the Canadian Total Revolving Credit
Commitment 

 

87

 

as then in
effect minus (y) the Receivables Reduction Amount, if applicable, to the extent
such Receivables Reduction Amount has not been applied to reduce the US Total
Revolving Credit Commitment pursuant to Section 2.1, each of the US
Borrower and the Canadian Borrower, as the case may be, shall forthwith repay
on such date the principal amount of Canadian Swingline Loans and, after all
Canadian Swingline Loans have been paid in full, Canadian Revolving Credit
Loans owing by each of them, respectively, in an aggregate amount for all such
repayments equal to such excess. If, after giving effect to the prepayment of
all outstanding Canadian Swingline Loans and Canadian Revolving Credit Loans
(other than BA Loans), the Aggregate Canadian Revolving Credit Outstandings
exceed the difference of (x) the Canadian Total Revolving Credit
Commitment then in effect minus (y) the Receivables Reduction Amount, if
applicable, to the extent such Receivables Reduction Amount has not been
applied to reduce the US Total Revolving Credit Commitment pursuant to Section
2.1, the US Borrower and/or the Canadian Borrower, as the case may be,
shall pay to the Canadian Administrative Agent an amount in cash equal to such
excess and the Canadian Administrative Agent shall hold such payment for the
benefit of the applicable Lenders as security for the obligations of the US
Borrower and the Canadian Borrower hereunder (including obligations in respect
of Canadian Letters of Credit Outstanding and BA Loans) pursuant to a cash
collateral agreement to be entered into in form and substance satisfactory to
the Canadian Administrative Agent (which shall permit certain investments in
Permitted Investments satisfactory to the Canadian Administrative Agent, until
the proceeds are applied to the secured obligations).

 

(c)  Application to Repayment Amounts. Subject
to the terms of paragraph (i) below, each prepayment of Term Loans
required by Section 5.2(a) shall be applied (i) in the case of any
Asset Sale Prepayment Event, between the Term Loans in such manner as Holdings
may determine; provided that following the making of any New Term Loans,
the amount of any prepayment allocated by Holdings to any Series of New Term
Loans shall not exceed the pro rata portion
of such Series in relation to the aggregate principal amount of all Series of
Term Loans; and (ii) in the case of any other prepayment of Term Loans required
by Section 5.2(a), on a pro rata
basis as between the US Term Loans and the Canadian Term Loans, in
each case to reduce Repayment Amounts in such order as Holdings may determine
up to an amount equal to the aggregate amount of the applicable Repayment
Amounts required to be made by the Borrowers pursuant to Section 2.5(b)
during the two year period immediately following the date of the prepayment
(such amount being, the “Amortization Amount”); provided that to
the extent that the amount of the prepayment exceeds the Amortization Amount,
such excess shall be applied ratably to reduce the then remaining Repayment
Amounts pursuant to Section 2.5(b).

 

(d)  Application to Term Loans. With
respect to each prepayment of US Term Loans and Canadian Term Loans required by
Section 5.2(a), the Borrowers may designate the Types of Loans that
are to be prepaid and the specific Borrowing(s) pursuant to which made; provided
that if LIBOR Term Loans made pursuant to a single Borrowing shall reduce the
outstanding Term Loans made pursuant to such Borrowing to an amount less than
the Minimum Borrowing Amount for Term Loans, such Borrowing shall immediately
be converted into ABR Loans. In the absence of a designation by the Borrowers
as described in the preceding sentence, the Administrative Agent shall, subject
to the above, make such designation in its reasonable discretion with a view,
but no obligation, to minimize breakage costs owing under Section 2.11.

 

88

 

(e)  Application to Revolving Credit Loans.
With respect to each prepayment of Revolving Credit Loans elected by the US
Borrower or the Canadian Borrower pursuant to Section 5.1 or
required by Section 5.2(b), the US Borrower (on its own behalf and
on behalf of the Canadian Borrower) may designate (i) the Types of Loans that
are to be prepaid and the specific Borrowing(s) pursuant to which made and (ii)
the US Revolving Credit Loans or Canadian Revolving Credit Loans to be prepaid;
provided that (v) LIBOR Revolving Credit Loans may be designated
for prepayment pursuant to this Section 5.2(e) only (A) on the
last day of an Interest Period applicable thereto unless all LIBOR Loans with
Interest Periods ending on such date of required prepayment and all ABR Loans
have been paid in full, or (B) if such LIBOR Revolving Credit Loans are
cash collateralized in accordance with Section 5.2(f) in lieu of a payment
being made in respect thereof; (w) BA Loans may be designated for
prepayment pursuant to this Section 5.2(e) only (A) on the last day
of an Interest Period applicable thereto, or (B) if such BA Loans are cash
collateralized in accordance with Section 5.2(f) in lieu of a payment
being made in respect thereof; (x) if any prepayment by the US Borrower or the
Canadian Borrower, as the case may be, of LIBOR Revolving Credit Loans made
pursuant to a single Borrowing shall reduce the outstanding Dollar Equivalent
of the Revolving Credit Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount for Revolving Credit Loans, such Borrowing
shall immediately be converted into Cdn ABR Loans or ABR Loans, as applicable;
(y) each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans; and
(z) notwithstanding the provisions of the preceding clause (y), no
prepayment made pursuant to Section 5.2(a) or Section 5.2(b) of
Revolving Credit Loans shall be applied to the Revolving Credit Loans of any
Defaulting Lender. In the absence of a designation by the US Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its reasonable discretion with a view, but
no obligation, to minimize breakage costs owing under Section 2.11.

 

(f)  BA and LIBOR Interest Periods. In lieu
of making any payment pursuant to this Section 5.2 in respect of
any BA Loan or LIBOR Loan other than on the last day of the Interest Period
therefor so long as no Default or Event of Default shall have occurred and be
continuing, the US Borrower or the Canadian Borrower, as the case may be, at
its option may deposit with the applicable Administrative Agent an amount equal
to the amount of the BA Loan or LIBOR Loan to be prepaid and such BA Loan or
LIBOR Loan, as the case may be, shall be repaid on the last day of the Interest
Period therefor in the required amount. Such deposit shall be held by the
applicable Administrative Agent in a corporate time deposit account established
on terms reasonably satisfactory to the applicable Administrative Agent,
earning interest at the then-customary rate for accounts of such type. Such
deposit shall constitute cash collateral for the Obligations; provided
that the US Borrower or the Canadian Borrower, as the case may be, may at any
time direct that, in the case of LIBOR Loans, such deposit be applied to make
the applicable payment required pursuant to this Section 5.2.

 

(g)  Minimum Amount. No prepayment shall be
required pursuant to Section 5.2(a)(i) unless and until the amount
at any time of Net Cash Proceeds from Prepayment Events required to be applied
at or prior to such time pursuant to such Section and not yet applied at
or prior to such time to prepay Term Loans pursuant to such
Section exceeds the Dollar Equivalent of $15,000,000 in the aggregate for
all such Prepayment Events.

 

89

 

(h)  Foreign Asset Sales. Notwithstanding
any other provisions of this Section 5.2, (i) to the extent
that any of or all the Net Cash Proceeds of any asset sale by a Restricted
Foreign Subsidiary giving rise to an Asset Sale Prepayment Event (a “Foreign
Asset Sale”) or Excess Cash Flow are prohibited or delayed by applicable
local law from being repatriated to the United States or Canada, as applicable, the portion of such Net
Cash Proceeds or Excess Cash Flow so affected will not be required to be
applied to repay Term Loans at the times provided in this Section 5.2
but may be retained by the applicable Restricted Foreign Subsidiary so long,
but only so long, as the applicable local law will not permit repatriation to
the United States or Canada, as applicable (the US Borrower and the
Canadian Borrower hereby agreeing to cause the applicable Restricted Foreign
Subsidiary to promptly take all actions required by the applicable local law to
permit such repatriation), and once such repatriation of any of such affected
Net Cash Proceeds or Excess Cash Flow is permitted under the applicable local
law, such repatriation will be immediately effected and such repatriated Net
Cash Proceeds or Excess Cash Flow will be promptly (and in any event not later
than two Business Days after such repatriation) applied (net of additional
taxes payable or reserved against as a result thereof) to the repayment of the
Term Loans pursuant to this Section 5.2 and (ii) to the extent
that the US Borrower (or the Canadian Borrower, as applicable) has determined
in good faith that repatriation of any of or all the Net Cash Proceeds of any
Foreign Asset Sale or Excess Cash Flow would have a material adverse tax cost
consequence with respect to such Net Cash Proceeds or Excess Cash Flow, the Net
Cash Proceeds or Excess Cash Flow so affected may be retained by the applicable
Restricted Foreign Subsidiary; provided that, in the case of this clause (ii),
on or before the date on which any Net Cash Proceeds or Excess Cash Flow so
retained would otherwise have been required to be applied to prepayments
pursuant to Section 5.2(a), (x) the US Borrower or the
Canadian Borrower, as the case may be, applies an amount equal to such Net Cash
Proceeds or Excess Cash Flow to such prepayments as if such Net Cash Proceeds
or Excess Cash Flow had been received by the US Borrower or the Canadian
Borrower, as the case may be, rather than such Restricted Foreign Subsidiary,
less the amount of additional taxes that would have been payable or reserved
against if such Net Cash Proceeds or Excess Cash Flow had been repatriated (or,
if less, the Net Cash Proceeds or Excess Cash Flow that would be calculated if
received by such Restricted Foreign Subsidiary) or (y) such Net Cash
Proceeds or Excess Cash Flow are applied to the repayment of Indebtedness of a
Restricted Foreign Subsidiary.

 

(i)  Limitation on Canadian Term Loan Mandatory Prepayments.
Notwithstanding anything contained in this Section 5.2, the amount
of all Canadian Term Loan Repayment Amounts required to be paid pursuant to Section 2.5(b)(ii)
prior to the day that is one day after the fifth anniversary of the Closing
Date and the amount of all prepayments of the Canadian Term Loans required to
be made pursuant to the foregoing paragraphs of Section 5.2 shall not, in
the aggregate, at any time prior to the day that is one day after the fifth
anniversary of the Closing Date, exceed an amount equal to 25% of the initial
principal amount of the Canadian Term Loans (the “Maximum Amount”); provided
that the foregoing shall in no way preclude a Lender of Canadian Term Loans
from receiving principal payments in excess of the foregoing amounts upon or in
connection with any Event of Default. Any prepayment amount required to be made
in respect of the Canadian Term Loans (or portion thereof) in excess of the
Maximum Amount shall be reallocated to the prepayment of the US Term Loans
(until repaid in full), and then to a repayment (on a pro  rata
basis) of the Revolving Credit Loans (without a corresponding reduction in the
applicable Revolving Credit Commitments).

 

90

 

5.3. Method
and Place of Payment. (a)   Except as otherwise specifically
provided herein, all payments under this Agreement shall be made by the US
Borrower or the Canadian Borrower, as applicable, without set-off, counterclaim
or deduction of any kind, to the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the ratable account of the Lenders
entitled thereto, the Letter of Credit Issuer, the Canadian Letter of Credit
Issuer or either Swingline Lender, as the case may be, not later than
12:00 Noon (New York time) on the date when due and shall be made (i) in
the case of amounts payable in Dollars, in immediately available funds at the
Administrative Agent’s Office and (ii) in the case of amounts payable in a
Canadian Dollars, in immediately available funds at the Canadian Administrative
Agent’s Office. All payments under each Credit Document (whether of principal,
interest or otherwise) shall be made (i) in the case of the principal of
and interest on each Loan, in the currency in which such Loan is denominated,
(ii) in the case of reimbursement obligations in respect of Letters of
Credit, in the currency in which such Letter of Credit is denominated or
(iii) in the case of any indemnification or expense reimbursement payment,
in Dollars, except as otherwise expressly provided herein. The Administrative
Agent or the Canadian Administrative Agent, as applicable, will thereafter
cause to be distributed on the same day (if payment was actually received by
the Administrative Agent or the Canadian Administrative Agent, as applicable,
prior to 2:00 p.m. (New York time) on such day) like funds relating to the
payment of principal or interest or Fees ratably to the Lenders entitled
thereto.

 

(b)  Any payments under this Agreement that are made
later than 2:00 p.m. (New York time) shall be deemed to have been made on
the next succeeding Business Day. Except as otherwise provided herein, whenever
any payment to be made hereunder shall be stated to be due on a day that is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately
prior to such extension.

 

5.4. Net
Payments. (a)   Subject to the
following sentence, all payments made by or on behalf of the US Borrower and
the Canadian Borrower under this Agreement or any other Credit Document shall
be made free and clear of, and without deduction or withholding for or on
account of, any current 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 (i) net income taxes and franchise taxes (imposed in lieu of net
income taxes) and capital taxes imposed on the Administrative Agent, the
Canadian Administrative Agent or any Lender and (ii) any taxes imposed on
the Administrative Agent, the Canadian Administrative Agent or any Lender as a
result of its carrying on business or otherwise having a current or former
connection between the Administrative Agent, the Canadian Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent, the
Canadian Administrative Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings (“Non-Excluded Taxes”) are required to
be withheld from any amounts payable under this Agreement, the US Borrower or
the Canadian Borrower, as applicable, shall increase the amounts payable to the
Administrative Agent, the Canadian Administrative Agent or such Lender to the
extent necessary to yield to the Administrative Agent, the Canadian
Administrative Agent or such Lender (after payment of all 

 

91

 

Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in
this Agreement; provided, however, that the US Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof (a
“Non-US Lender”) if such Lender fails to comply with the requirements of
Section 5.4(b). Whenever any Non-Excluded Taxes are payable by the
US Borrower or the Canadian Borrower, as the case may be, as promptly as
possible thereafter, such Borrower shall send to the Administrative Agent or
the Canadian Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original receipt (or
other evidence acceptable to such Lender, acting reasonably) received by such
Borrower showing payment thereof. If the US Borrower or the Canadian Borrower,
as the case may be, fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent or
the Canadian Administrative Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Administrative Agent,
the Canadian Administrative Agent and the Lenders for any incremental taxes,
interest, costs or penalties that may become payable by the Administrative
Agent, the Canadian Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 5.4(a) shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

 

(b)  Each Non-US Lender (other than a Canadian
Lender making Loans only to the Canadian Borrower) shall:

 

(i)  deliver to the US Borrower and the
Administrative Agent on or before the date it becomes a party to this Agreement
two copies of either (x) in the case of a Non-US Lender claiming exemption
from US Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest”, United States Internal
Revenue Service Form W-8BEN (together with a certificate representing that
such Non-US Lender is not a bank for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the US Borrower and is not a
controlled foreign corporation related to the US Borrower (within the meaning
of Section 864(d)(4) of the Code)), or (y) Internal Revenue Service Form
W-8BEN or Form W-8ECI, in each case properly completed and duly executed by
such Non-US Lender claiming complete exemption from, or reduced rate of, US
Federal withholding tax on payments by the US Borrower under this Agreement;

 

(ii)  deliver to the US Borrower and the
Administrative Agent two further copies of any such form or certification (or
any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the US
Borrower; and

 

(iii)  obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by the US
Borrower or the Administrative Agent;

 

unless in any such case any change in treaty,
law or regulation has occurred prior to the date on which any such delivery
would otherwise be required that renders any such form inapplicable or 

 

92

 

would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the US Borrower and the Administrative Agent. Each Person that shall
become a Participant pursuant to Section 13.6 or a Lender pursuant
to Section 13.6 shall, upon the effectiveness of the related
transfer, be required to provide all the forms and statements required pursuant
to this Section 5.4(b); provided that in the case of a
Participant such Participant shall furnish all such required forms and
statements to such Lender from which the related participation shall have been
purchased.

 

(c)  None of the US Borrower, the Canadian
Borrower (with respect solely to the Canadian Revolving Credit Loans, Canadian
Letters of Credit and Canadian Swingline Loans) or any Guarantor (as to any
payment made by it in respect of the obligations of either Borrower pursuant to
Section 5.4(a)) shall be required to indemnify any Lender or Agent
pursuant to Section 5.4(a), or to pay any additional amounts to any
Lender or Agent pursuant to Section 5.4(a), in respect of any
withholding tax to the extent that (i) the obligation to withhold amounts
with respect to such withholding tax existed or would have applied to payments
made by either Borrower to such Lender on the date such Lender or Agent became
a party to this Agreement (or, in the case of a Participant, on the date such
Participant became a Participant hereunder); provided, however,
that this clause (c)(i) shall not apply to the extent that
(x) the indemnity payments or additional amounts any Lender (or
Participant) would be entitled to receive (without regard to this clause (c)(i))
do not exceed the indemnity payment or additional amounts that the person
making the assignment, participation or transfer to such Lender (or
Participant) would have been entitled to receive in the absence of such
assignment, participation or transfer, (y) such assignment, participation
or transfer had been requested by the US Borrower or the Canadian Borrower or
(z) such assignment, participation or transfer had occurred following the
occurrence of and during the continuance of an Event of Default pursuant to Section
11.1 or 11.5, (ii) the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender or Participant
to comply with the provisions of Section 5.4(b) above, (iii) any of
the representations or certifications made by a Lender or Participant pursuant
to Section 5.4(b) above are incorrect at the time a payment hereunder is
made, other than by reason of any change in treaty, law or regulation having
effect after the date such representations or certifications were made or
(iv) such Lender is treated as a conduit entity participating in a conduit
financing arrangement within the meaning of Treasury regulations section
1.881-3 or any successor provision with respect to the Loans. The Canadian
Borrower shall not be required to indemnify or pay additional amounts to a
Lender or Agent in respect of Canadian taxes pursuant to Section 5.4(a)
above to the extent that such Non-Excluded Taxes result from a failure by the
Lender or Agent to comply with any certification, identification, information,
documentation or other reporting requirement (collectively referred to in this Section 5.4(c)
as a “Reporting Requirement”) if (i) compliance is required by law,
regulation, administrative practice or any applicable tax treaty as a
precondition to exemption from or a reduction in the rate of deduction or
withholding of Non-Excluded Taxes, and (ii) the Canadian Borrower has first
made written request to such Lender or Agent, as applicable, that such Lender
or Agent comply with the particular Reporting Requirement (identified
specifically in such request) and such Lender or Agent, as applicable, has not
complied with such Reporting Requirement within 30 Business Days of such
written request; provided, however that the Canadian Borrower
shall not be relieved of its obligation to indemnify or pay additional amounts
to a Lender or Agent (x) in respect of certain payments where the
obligation to indemnify or pay additional amounts in respect of those payments
arose prior to Canadian Borrower’s written request to such Lender or 

 

93

 

Agent, as applicable, respecting such
Reporting Requirement, (y) if, by reason of any change in any law,
regulation, administrative practice or applicable tax treaty occurring after
the date hereof, the Lender or Agent, as applicable, is unable to duly comply
with such Reporting Requirement, or (z) to the extent that the additional
payment or indemnity compensates such Lender or Agent for an amount to which
such Lender or Agent would have been entitled to receive under Section
5.4(a) had such Lender or Agent, as applicable, complied with the Reporting
Requirement.

 

(d)  If the US Borrower or the Canadian Borrower
determines in good faith that a reasonable basis exists for contesting any
taxes for which indemnification has been demanded hereunder, the relevant
Lender, the Canadian Administrative Agent or the Administrative Agent, as
applicable, shall cooperate with such Borrower in challenging such taxes at
such Borrower’s expense if so requested by such Borrower. If any Lender, the
Canadian Administrative Agent or the Administrative Agent, as applicable,
receives a refund of a tax for which a payment has been made by the US Borrower
or the Canadian Borrower pursuant to this Agreement, which refund in the good
faith judgment of such Lender, the Canadian Administrative Agent or
Administrative Agent, as the case may be, is attributable to such payment made
by such Borrower, then the Lender, the Canadian Administrative Agent or the
Administrative Agent, as the case may be, shall reimburse such Borrower for
such amount (together with any interest received thereon) as the Lender, the
Canadian Administrative Agent or Administrative Agent, as the case may be,
determines to be the proportion of the refund as will leave it, after such
reimbursement, in no better or worse position than it would have been in if the
payment had not been required; provided that the US Borrower or the
Canadian Borrower, as the case may be, upon the request of the Administrative
Agent, the Canadian Administrative Agent or such Lender, agrees to repay the
amount paid over to the applicable Borrower to the Administrative Agent, the
Canadian Administrative Agent or such Lender in the event the Administrative
Agent, Canadian Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. A Lender, the Canadian Administrative
Agent or Administrative Agent shall claim any refund that it determines is
available to it, unless it concludes in its reasonable discretion that it would
be adversely affected by making such a claim. Neither the Lenders, the Canadian
Administrative Agent nor the Administrative Agent shall be obliged to disclose
any information regarding their respective tax affairs or computations to the
US Borrower or the Canadian Borrower in connection with this Section 5.4(d)
or any other provision of this Section 5.4.

 

(e)  Notwithstanding Section 5.4(a),
the Canadian Borrower shall not be required to indemnify or pay any additional
amounts in respect of Canadian withholding tax imposed under Part XIII of the
Tax Act applicable to any amount payable with respect to Canadian Revolving
Credit Loans, Canadian Letters of Credit or Canadian Swingline Loans pursuant
to Section 5.4(a) above to any Lender that is not a Canadian
Resident for the purposes of the Tax Act, except if any such Loans were
assigned, participated or transferred to such Lender at the request of the US
Borrower or the Canadian Borrower or were assigned, participated or transferred
to such Lender following the occurrence of and during the continuance of an
Event of Default pursuant to Section 11.1 or 11.5.

 

5.5. Computations
of Interest and Fees. (a)   Interest on LIBOR Loans and, except
as provided in the next succeeding sentence, ABR Loans shall be calculated on
the basis of a 360-day year for the actual days elapsed. For purposes of the
Interest Act (Canada), the 

 

94

 

annual rate of interest to which the interest
rate payable under the preceding sentence is equivalent is equal to such
interest rate, multiplied by the number of days in the year and divided by 360.
Interest on (i) Canadian Prime Loans, (ii) ABR Loans in respect of which the
rate of interest is calculated on the basis of the Prime Rate, (iii) Cdn ABR
Loans in respect of which the rate of interest is calculated on the basis of
the Canadian Administrative Agent’s reference rate and (iv) interest on overdue
interest shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed.

 

(b)  All Fees shall be calculated on the basis of
a 365- (or 366-, as the case may be) day year for the actual days elapsed.

 

5.6. Limit
on Rate of Interest.

 

(a)  No Payment Shall Exceed Lawful Rate. Notwithstanding
any other term of this Agreement, neither the US Borrower nor the Canadian
Borrower shall be obliged to pay any interest or other amounts under or in
connection with this Agreement in excess of the amount or rate permitted under
or consistent with any applicable law, rule or regulation. In particular, the Canadian
Borrower shall not be obliged to pay any interest or other amounts which would
result in the receipt by any Lender of interest on credit advanced at a rate in
excess of the rate permitted under the Criminal
Code (Canada). For purposes of this Section 5.6,
“interest” and “credit advanced” have the meanings ascribed in the Criminal Code (Canada) and the “effective
annual rate of interest” shall be calculated in accordance with generally
accepted actuarial practices and principles.

 

(b)  Payment at Highest Lawful Rate. If
either the US Borrower or the Canadian Borrower is not obliged to make a
payment which it would otherwise be required to make as a result of Section 5.6(a),
the US Borrower or the Canadian Borrower, as applicable, shall make such payment
to the maximum extent permitted by or consistent with applicable laws, rules
and regulations.

 

(c)  Adjustment if any Payment exceeds Lawful
Rate. If any provision of this Agreement or any of the other Credit
Documents would obligate the US Borrower or the Canadian Borrower to make any
payment of interest or other amount payable to any Lender in an amount or
calculated at a rate which would be prohibited by any applicable law, rule or
regulation, or would result in a receipt by that 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 (in the case of the US Borrower or the
Canadian Borrower) or so result in a receipt by that Lender of interest at a
criminal rate, such adjustment to be effected, to the extent necessary, as
follows:

 

(i)  firstly, by reducing the amount or rate of
interest required to be paid by the US Borrower or the Canadian Borrower to the
affected Lender under Section 2.8; and

 

(ii)  thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid by the US Borrower
or the Canadian Borrower to the affected Lender 

 

95

 

where such
amounts would constitute interest for purposes of Section 347 of the Criminal Code (Canada).

 

Notwithstanding the foregoing, and after
giving effect to all adjustments contemplated thereby, if any Lender shall have
received from the US Borrower or the Canadian Borrower an amount in excess of
the maximum permitted by any applicable law, rule or regulation, or an amount
in excess of the maximum permitted under the Criminal
Code (Canada), then the US Borrower or the Canadian Borrower, as
applicable, shall be entitled, by notice in writing to the Administrative Agent
or the Canadian Administrative Agent, as applicable, to obtain reimbursement
from such Lender in an amount equal to such excess, and pending such
reimbursement, such amount shall be deemed to be an amount payable by that
Lender to the US Borrower or the Canadian Borrower, as applicable. Any amount
or rate of interest referred to in this Section 5.6(c) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that any Loan
remains outstanding on the assumption, with respect to Canadian Borrowings,
that any charges, fees or expenses that fall within the meaning of “interest”
(as defined in the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be pro-rated over that period of time and
otherwise be pro-rated over the
period from the Closing Date to the Maturity Date.

 

SECTION 6. Conditions
Precedent to Initial Credit Event

 

The initial
Credit Event under this Agreement is subject to the satisfaction of the
following conditions precedent:

 

6.1. Credit
Documents. The Administrative Agent, Canadian Administrative Agent or the
Collateral Agent (as applicable) shall have received:

 

(a)  this Agreement, executed and delivered by a
duly authorized officer of Holdings, the US Borrower, the Canadian Borrower,
each Lender, the Canadian Administrative Agent and the US Administrative Agent;

 

(b)  each of the US Security Documents, comprised
of:

 

(i)  US Guarantee, executed and delivered by a
duly authorized officer of the US Borrower and each applicable Guarantor,

 

(ii)  the US Security Agreement, executed and
delivered by a duly authorized officer of the US Borrower and each applicable
Guarantor, and

 

(iii)  the US Pledge Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto;

 

(c)  each of the Canadian Security Documents,
comprised of:

 

(i)  each of the Canadian Guarantees, executed and
delivered by a duly authorized officer of each applicable Guarantor,

 

96

 

(ii)  each of the Canadian Security Agreements,
executed and delivered by a duly authorized officer of each grantor party
thereto, and

 

(iii)  the Canadian Pledge Agreements, executed and
delivered by a duly authorized officer of each grantor party thereto;

 

(d)  each of the Chilean Security Documents,
comprised of:

 

(i)  the Chilean Guarantee, executed and delivered
by a duly authorized officer of each applicable Guarantor, and

 

(ii)  the Chilean Pledge Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto;

 

(e)  each of the Irish Security Documents,
comprised of:

 

(i)  the Irish Guarantee, executed and delivered
by a duly authorized officer of each applicable Guarantor,

 

(ii)  the Irish Debenture, executed and delivered
by a duly authorized officer of each grantor party thereto, and

 

(iii)  the Irish Pledge Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto;

 

(f)  each of the UK Security Documents, comprised
of:

 

(i)  the UK Guarantee, executed and delivered by a
duly authorized officer of each applicable Guarantor,

 

(ii)  the UK Debenture, executed and delivered by a
duly authorized officer of each grantor party thereto, and

 

(iii)  the UK Pledge Agreements, executed and
delivered by a duly authorized officer of each grantor party thereto, together
with certified copies of the written resolutions of the board of directors of
Masonite LP Limited, Premdor Limited, Bonlea Limited, Premdor Crosby Limited,
Premdor U.K. Holdings Limited and Masonite Europe Limited amending the articles
of association of such companies, which in each case is required to effect the
pledges thereunder;

 

(g)  each of the Mexican Security Documents,
comprised of:

 

(i)  the Mexican Guarantee, executed and delivered
by a duly authorized officer of each applicable Guarantor,

 

(ii)  the Mexican Security Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto, and

 

97

 

(iii)  the Mexican Pledge Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto;

 

(h)  the French Pledge Agreement, executed and
delivered by a duly authorized officer of each grantor party thereto; and

 

(i)  a Mortgage in respect of each Mortgaged
Property, executed and delivered by a duly authorized officer of each mortgagor
party thereto and policies of title insurance together with such endorsements,
coinsurance and reinsurance as the Administrative Agents may reasonably request
and an opinion of local counsel.

 

6.2. Collateral.
(a)   All outstanding equity interests in whatever form of (i)
the US Borrower and the Canadian Borrower and (ii) each Restricted Subsidiary
(in the case of this clause (ii) directly owned by or on behalf of any
Credit Party) shall have been pledged pursuant to the Security Agreements
(except that no more than 65% of the outstanding voting equity interests of any
Foreign Subsidiary of a US Subsidiary shall be required to be pledged) and the
Collateral Agent shall have received all certificates representing securities
pledged under the Security Agreements to the extent certificated, accompanied
by instruments of transfer and undated stock powers endorsed in blank.

 

(b)  All Indebtedness for borrowed money in excess
of $5,000,000 of a Credit Party that is owing to any other Credit Party shall
be evidenced by one or more global promissory notes and shall have been pledged
pursuant to the Security Documents, and the Collateral Agent shall have
received all such promissory notes, together with instruments of transfer with
respect thereto endorsed in blank.

 

(c)  All documents and instruments, including
Uniform Commercial Code, PPSA or other applicable personal or movable property
and fixture security financing statements or filings required by law or
reasonably requested by the Administrative Agent or Canadian Administrative
Agent to be filed, registered or recorded to create the Liens intended to be
created by the Security Documents and perfect such Liens to the extent required
by, and with the priority required by, the Security Documents shall have been
filed, registered or recorded or delivered to the applicable Administrative
Agent for filing, registration or recording.

 

(d)  Holdings shall have delivered to the
Administrative Agent a completed Perfection Certificate, executed and delivered
by an Authorized Officer and the chief legal officer of Holdings, together with
all attachments contemplated thereby and copies of UCC, PPSA, United States
Patent and Trademark Office and United States Copyright Office, tax and
judgment lien searches, bankruptcy and pending lawsuit searches or equivalent
reports or searches, each of a recent date listing all effective financing
statements, lien notices or comparable documents that name any Credit Party as debtor
and that are filed in those state, province, territory and county jurisdictions
in which any property of any Credit Party is located and the state, province,
territory and county jurisdictions in which any Credit Party is organized or
maintains its principal place of business, chief executive office or domicile
and such other searches that the Administrative Agent or Canadian
Administrative Agent deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Security Documents (other
than Permitted Liens).

 

98

 

6.3. Legal
Opinions. The Administrative Agent shall have received the executed legal
opinions of (a) Simpson, Thacher & Bartlett LLP, special New York
counsel to each Borrower and each other Credit Party, in form and substance
reasonably satisfactory to the Administrative Agent, (b) Osler, Hoskin
& Harcourt LLP, special Canadian counsel for Holdings, the Canadian
Borrower and each other Canadian Subsidiary Guarantor, in form and substance
reasonably satisfactory to the Canadian Administrative Agent and (c) local and
foreign counsel to the Credit Parties in certain jurisdictions as may be
reasonably requested by the Canadian Administrative Agent and mutually agreed
upon with the Canadian Borrower in form and substance satisfactory to the
Canadian Administrative Agent. The US Borrower, the Canadian Borrower and the
other Credit Parties hereby instruct such counsel to deliver such legal
opinions.

 

6.4. Representations
and Warranties; No Default. The Administrative Agent shall have received a
certificate of an Authorized Officer of each Borrower, dated the Closing Date,
certifying that (a) on the Closing Date, the representations and warranties
made by such Borrowers in Section 8, as they relate to the Credit
Parties at such time, are true and correct in all material respects (after
giving effect to the Acquisition) and (b) after giving effect to the Credit
Event on the Closing Date and the other transactions contemplated hereby, no
Default or Event of Default shall have occurred and be continuing.

 

6.5. Senior
Subordinated Loan Facility. The Borrowers shall have received gross
proceeds of $770,000,000 (or such lesser amount sufficient, together with the
Equity Contributions and the proceeds generated hereunder, to consummate the
Transactions) from the advance of the Senior Subordinated Term Loans (and the
terms and conditions of the Senior Subordinated Term Loans (including
subordination, maturity, covenants, events of default, remedies and prepayment
events) shall be reasonably satisfactory to the Administrative Agent), and the
Administrative Agent shall have received the executed Acknowledgment of
Subordination.

 

6.6. [Intentionally
Omitted.]

 

6.7. Equity
Contributions. The Rollover Equity Contribution and the KKR Equity
Contribution shall have been made on terms and pursuant to documentation
reasonably acceptable to the Administrative Agent.

 

6.8. Closing
Certificates. The Administrative Agent shall have received a certificate of
each Credit Party, dated the Closing Date, in the case of each Borrower
substantially in the form of Exhibit F-1, and in the case of each other
Credit Party, substantially in the form of Exhibit F-2, in each case
with appropriate insertions, executed by a duly authorized officer or
representative of such Credit Party and the Secretary or any Assistant
Secretary of such Credit Party, and attaching the documents referred to in Sections
6.9 and 6.10.

 

6.9. Corporate
Proceedings of Each Credit Party. The Administrative Agent shall have
received a copy of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors (or comparable governing body)
of each Credit Party (or a duly authorized committee thereof) authorizing (a)
the execution, delivery and performance of the Credit Documents (and any
agreements relating thereto) to which it is a party and (b) in the case 

 

99

 

of the US Borrower and the Canadian Borrower,
the extensions of credit contemplated hereunder.

 

6.10. Corporate
Documents. The Administrative Agent shall have received true and
complete copies of the certificate of incorporation and by-laws (or equivalent
organizational documents) of each Credit Party.

 

6.11. Fees.
The Agents and the Lenders shall have received the fees in the amounts
previously agreed in writing by the Borrowers and (as applicable) the Agents
and such Lenders to be received on the Closing Date and all expenses (including
the reasonable fees, disbursements and other charges of counsel) for which
invoices have been presented on or prior to the Closing Date shall have been
paid.

 

6.12. Related
Agreements. The Administrative Agent shall have received (a) a fully
executed or conformed copy of the Acquisition Agreement, which shall be in full
force and effect and (b) a fully executed copy of an amendment to the
Receivables Purchase Facility deleting SunTrust Bank as “Agent” thereunder and
appointing the Administrative Agent as “Agent” thereunder, in form and
substance reasonably satisfactory to the Administrative Agent.

 

6.13. Solvency
Certificate. On the Closing Date, the Administrative Agent shall have
received a certificate from the chief financial officer of Holdings in form,
scope and substance satisfactory to Administrative Agent, with appropriate
attachments and demonstrating that after giving effect to the consummation of
the Transactions, Holdings on a consolidated basis with its Subsidiaries is
Solvent.

 

6.14. Governmental
Authorizations and Consents. Each Credit Party shall have obtained all
approval and authorizations of Governmental Authorities and all consents of
other Persons, in each case that are necessary in connection with the
Transactions and the transactions contemplated by the Credit Documents and each
of the foregoing shall be in full force and effect. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Acquisition and the Credit
Documents and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be pending,
and the time for any applicable agency to take action to set aside its consent
on its own motion shall have expired.

 

6.15. Historical
Financial Statements. The Lenders shall have received the Historical
Audited Financial Statements and the Historical Unaudited Financial Statements.

 

6.16. Pro
Forma Financial Statements. The Administrative Agent shall have received
the Pro Forma Financial Statements, together with a certificate of the chief
financial officer of Holdings to the effect that such statements accurately
present the pro forma financial position of Holdings and its Subsidiaries in
accordance with GAAP as of the date of the pro forma balance sheet forming part
of the Pro Forma Financial Statements and for the period covered by the related
pro forma income statement, assuming that the Transactions had actually
occurred at such date or at the beginning of such period, as the case may be.

 

100

 

6.17. Acquisition.
Concurrently with the initial Credit Event made hereunder, the Acquisition
shall have been consummated on terms and conditions reasonably satisfactory to
the Agents.

 

6.18. Insurance.
Certificates of insurance evidencing the existence of all insurance required to
be maintained by Holdings, each Borrower and each Material Subsidiary pursuant
to Section 9.3 and, if applicable, the designation of the
Administrative Agent, the Canadian Administrative Agent and the Collateral
Agent, as applicable, as an additional insured and loss payee as its interest
may appear thereunder, or solely as the additional insured, as the case may be,
thereunder, such certificates to be in such form and contain such information
as is specified in Section 9.3 (provided that if such endorsement as additional
insured cannot be delivered by the Closing Date, the Administrative Agent may
consent to such endorsement being delivered at such later date as it deems
appropriate under the circumstances).

 

SECTION 7. Conditions
Precedent to All Credit Events

 

The agreement
of each Lender to make any Loan requested to be made by it on any date
(excluding Mandatory Borrowings and Loans to repay Unpaid Drawings) and the
obligation of each Letter of Credit Issuer to issue or renew or extend any
Letter of Credit on any date is subject to the satisfaction of the following
conditions precedent:

 

7.1. No
Default; Representations and Warranties. At the time of each Credit Event
and also after giving effect thereto (a) no Default or Event of Default
shall have occurred and be continuing and (b) all representations and
warranties made by any Credit Party contained herein or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such Credit Event (except where such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects as of such
earlier date).

 

7.2. Notice
of Borrowing; Letter of Credit Request. (a)   Prior to the making
of each Term Loan, each Revolving Credit Loan (other than any Revolving Credit
Loan made pursuant to Section 3.4(a)) and each Swingline Loan, the
Administrative Agent (or, in the case of any Canadian Borrowing, the Canadian
Administrative Agent) shall have received a Notice of Borrowing (whether in
writing or by telephone) meeting the requirements of Section 2.3.

 

(b)  Prior to the issuance of each Letter of
Credit, the Administrative Agent or the Canadian Administrative Agent, as
applicable, and the relevant Letter of Credit Issuer shall have received a
Letter of Credit Request meeting the requirements of Section 3.2(a)
or (b), as the case may be.

 

The acceptance of the benefits of each Credit
Event shall constitute a representation and warranty by each Credit Party to
the Administrative Agent or the Canadian Administrative Agent, as applicable,
each Letter of Credit Issuer and each of the Lenders that all the applicable
conditions specified above shall have been satisfied as of that time.

 

101

 

SECTION 8. Representations,
Warranties and Agreements

 

In order to
induce the Lenders to enter into this Agreement, to make the Loans and issue or
participate in Letters of Credit as provided for herein, each of Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
representations and warranties are applicable to it) and the Canadian Borrower
(in respect of itself and on its own behalf and to the extent such
representations and warranties are applicable to it) makes the following
representations and warranties to, and agreements with, the Lenders, all of
which shall survive the execution and delivery of this Agreement and the making
of the Loans and the issuance of the Letters of Credit:

 

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

 

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

 

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

 

102

 

8.4. Litigation.
There are no actions, suits or proceedings (including Environmental Claims)
pending or, to the knowledge of Holdings, the US Borrower or the Canadian
Borrower, threatened with respect to Holdings, the Borrowers or any of their
respective Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect or a Material Adverse Change.

 

8.5. Margin
Regulations. Neither the making of any Loan hereunder nor the use of the
proceeds thereof or of the proceeds of any drawing under any Letter of Credit
will violate the provisions of Regulation T, U or X of the Board.

 

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

 

8.7. Investment
Company Act. None of Holdings, the US Borrower or the Canadian Borrower is
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

 

8.8. True
and Complete Disclosure. (a)   None of the factual information
and data (taken as a whole) heretofore or contemporaneously furnished by
Holdings, the US Borrower, the Canadian Borrower, any of their respective Subsidiaries
or any of their respective authorized representatives in writing to the
Administrative Agent and/or any Lender on or before the Closing Date (including
(i) the Confidential Information Memorandum and (ii) all information
contained in the Credit Documents) for purposes of or in connection with this
Agreement or any transaction contemplated herein contained any untrue statement
or omitted to state any material fact necessary to make such information and
data (taken as a whole) not misleading at such time in light of the
circumstances under which such information or data was furnished, it being
understood and agreed that for purposes of this Section 8.8(a),
such factual information and data shall not include projections and pro forma
financial information.

 

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

 

8.9. Financial
Statements; Financial Condition. The (a) unaudited historical
consolidated financial information of the Predecessor Company and its
Subsidiaries as set forth in the Confidential Information Memorandum, and
(b) the Historical Audited Financial Statements, in each case present or
will, when provided, present fairly in all material respects the consolidated
financial position of Holdings or the Predecessor Company, as the case may be,
at the respective dates of said information or statements and results of
operations of the applicable 

 

103

 

Person for the respective periods covered
thereby. The financial statements referred to in clause (b) of the
preceding sentence have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial statements.
As of the Closing Date, there has been no Closing Date Material Adverse Change
since December 31, 2004. After the Closing Date, there has been no
Material Adverse Change since December 31, 2004.

 

8.10. Tax
Returns and Payments. Each of Holdings, the Borrowers and each of their
respective Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has paid
all material Taxes payable by it that have become due, other than those
(a) not yet delinquent or (b) being contested in good faith as to
which adequate reserves have been provided in accordance with GAAP and which
could not reasonably be expected to result in a Material Adverse Effect.

 

8.11. Compliance
with ERISA. (a)   Each Plan is in compliance with ERISA, the Code
and any applicable Requirement of Law; no Reportable Event has occurred (or is
reasonably likely to occur) with respect to any Plan; no Plan is insolvent or
in reorganization (or is reasonably likely to be insolvent or in
reorganization), and no written notice of any such insolvency or reorganization
has been given to Holdings, any Subsidiary or any ERISA Affiliate; no Plan
(other than a multiemployer plan) has an accumulated or waived funding
deficiency (or is reasonably likely to have such a deficiency); none of
Holdings, any Subsidiary or any ERISA Affiliate has incurred (or is reasonably
likely to incur) any liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or Section 4971 or 4975 of the Code or has been notified in writing
that it will incur any liability under any of the foregoing Sections with respect
to any Plan; no proceedings have been instituted (or are reasonably likely to
be instituted) to terminate or to reorganize any Plan or to appoint a trustee
to administer any Plan, and no written notice of any such proceedings has been
given to Holdings, any Subsidiary or any ERISA Affiliate; and no lien imposed
under the Code or ERISA on the assets of Holdings or any Subsidiary or any
ERISA Affiliate exists (or is reasonably likely to exist) nor has Holdings, any
Subsidiary or any ERISA Affiliate been notified in writing that such a lien
will be imposed on the assets of Holdings, any Subsidiary or any ERISA
Affiliate on account of any Plan, except to the extent that a breach of any of
the representations, warranties or agreements in this Section 8.11
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect or relates to
any matter disclosed in the financial statements of the Predecessor Company and
its Subsidiaries contained in the Confidential Information Memorandum. No Plan
(other than a multiemployer plan) has an Unfunded Current Liability that would,
individually or when taken together with any other liabilities referenced in
this Section 8.11, be reasonably likely to have a Material Adverse
Effect. With respect to Plans that are multiemployer plans (as defined in
Section 3(37) of ERISA), the representations and warranties in this Section 8.11(a),
other than any made with respect to (i) liability under Section 4201 or
4204 of ERISA or (ii) liability for termination or reorganization of such Plans
under ERISA, are made to the best knowledge of Holdings.

 

(b)  The Canadian Pension Plans are duly
registered under all applicable pension benefits legislation; all material
obligations of each Credit Party and its Subsidiaries (including fiduciary,
funding, investment and administration obligations) required to be performed in
connection with the Canadian Pension Plans, the Canadian Benefit Plans and the
funding 

 

104

 

agreements therefor have been performed in
accordance with the terms of such plans, applicable laws and regulations; there
are no outstanding disputes concerning the assets held pursuant to any such
funding agreement; all contributions or premiums required to be made by any
Credit Party and any of its Subsidiaries to the Canadian Pension Plans and the
Canadian Benefit Plans have been made within the time limits required by, and
in accordance with, the terms of such plans and applicable laws and
regulations; all employee contributions to the Canadian Pension Plans and the
Canadian Benefit Plans required to be made by way of authorized payroll
deduction have been properly withheld and fully paid into such plans within the
time limits required by, and in accordance with, the terms of such plans and
applicable laws and regulations; all reports and disclosures relating to the
Canadian Pension Plans and Canadian Benefit Plans required by any applicable
laws or regulations have been filed or distributed in accordance with
applicable laws and regulations; no Credit Party has made any improper
withdrawals, applications or transfers of, the assets of any of the Canadian
Pension Plans or of the Canadian Benefit Plans, to the extent applicable; other
than as disclosed in Schedule 8.11(b), there have been no partial
terminations of any Canadian Pension Plan with a defined benefit provision;
other than as disclosed in Schedule 8.11(b), none of the Canadian
Pension Plans with a defined benefit provision is the result of, or has been
subject to, the merger or consolidation of two or more registered pension plans
or the funding media thereof; no amount is owing by any of the Canadian Pension
Plans under the Tax Act; no Credit Party has any knowledge, nor any grounds for
believing, that any of the Canadian Pension Plans or the Canadian Benefit Plans
is or could reasonably be expected to become the subject of an investigation,
any other proceeding, an action or a claim other than a routine claim for
benefits; except to the extent that a breach of any of the foregoing
representations, warranties or agreements in this Section 8.11(b)
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect, or relates
to any matter disclosed in the financial statements of the Borrowers contained
in the Confidential Information Memorandum. No Canadian Pension Plan has an
Unfunded Current Liability that would, individually or when taken together with
any other liabilities referenced in this Section 8.11(b), be
reasonably likely to have a Material Adverse Effect.

 

8.12. Subsidiaries.
Schedule 8.12 lists each Subsidiary of the US Borrower and the Canadian
Borrower (and the direct and indirect ownership interest of the US Borrower and
the Canadian Borrower, as applicable, therein), in each case existing on the
Closing Date. To the knowledge of each of the US Borrower and the Canadian
Borrower, after due inquiry, each Material Subsidiary as of Closing Date has
been so designated on Schedule 8.12.

 

8.13. Patents,
etc. Holdings, the Borrowers and each of the Restricted Subsidiaries have
obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain
any such rights could not reasonably be expected to have a Material Adverse
Effect.

 

8.14. Environmental
Laws. (a)  Except as could not reasonably be expected to have a
Material Adverse Effect: 
(i) Holdings, the Borrowers and each of their respective
Subsidiaries and all Real Estate are in compliance with all Environmental Laws;
(ii) none of Holdings, the Borrowers or any of their respective
Subsidiaries, is subject to any Environmental 

 

105

 

Claim or any other liability under any
Environmental Law; (iii) none of Holdings, the Borrowers or any of their
respective Subsidiaries are conducting any investigation, removal, remedial or
other corrective action pursuant to any Environmental Law at any location; and
(iv) no underground storage tank or related piping, or any impoundment or
other area containing Hazardous Materials is located at, on or under any Real
Estate currently owned or leased by Holdings, either Borrower or any of their
respective Subsidiaries.

 

(b)  None of the Borrowers or any of the other
Subsidiaries has treated, stored, transported, released or disposed or arranged
for disposal or transport for disposal of Hazardous Materials in a manner that
could reasonably be expected to have a Material Adverse Effect.

 

8.15. Properties.
(a)   The Borrowers and each of their respective Subsidiaries have
good and marketable title to or valid leasehold interests in all properties
that are necessary for the operation of their respective businesses as
currently conducted and as proposed to be conducted, free and clear of all
Liens (other than any Liens permitted by this Agreement) and except where the
failure to have such good title or interests could not reasonably be expected
to have a Material Adverse Effect and (b) no Mortgage encumbers improved Real
Estate 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 within
the meaning of the National Flood Insurance Act of 1968 unless flood insurance
available under such Act has been obtained in accordance with Section 9.3.

 

8.16. Solvency.
On the Closing Date (after giving effect to the Transactions), immediately
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, each of the US Borrower and the Canadian Borrower
on a consolidated basis with its Subsidiaries will be Solvent.

 

8.17. Public
Utility Holding Company Act. None of Holdings, the US Borrower or the
Canadian Borrower is a “holding company”, or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company”, within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

 

SECTION 9. Affirmative
Covenants

 

Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on its own behalf and to the extent such covenants are applicable to it)
hereby covenant and agree that on the Closing Date and thereafter, until the
Commitments, the Swingline Commitments and each Letter of Credit have
terminated and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:

 

9.1. Information
Covenants. Each of the US Borrower and the Canadian Borrower will furnish
to each Lender and the Administrative Agent:

 

(a)  Annual Financial Statements. As soon
as available and in any event on or before the date on which such financial
statements are required to be filed with the SEC or the Ontario Securities
Commission or delivered to the holders of the Refinancing Notes (or, if such
financial statements are not required to be filed with the SEC or delivered to
the holders of the 

 

106

 

Refinancing Notes, on or before the date that
is 120 days after the end of each such fiscal year), the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statement of operations and cash flows for
such fiscal year, setting forth comparative consolidated figures for the
preceding fiscal year, and containing a footnote to such financial statements
that includes consolidating balance sheet, income statement and cash flow
financial statement information for Holdings and its Subsidiaries, and
certified by independent chartered accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit or as to the
status of Holdings or any of its Material Subsidiaries (or group of
Subsidiaries that together would constitute a Material Subsidiary) as a going
concern, together in any event with a certificate of such accounting firm
stating that in the course of its regular audit of the business of Holdings and
its Material Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm has obtained no
knowledge of any Default or Event of Default relating to Section 10.9
or 10.10 that has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.

 

(b)  Quarterly Financial Statements. As
soon as available and in any event on or before the date on which such
financial statements are required to be filed with the SEC or delivered to the
holders of the Refinancing Notes with respect to each of the first three
quarterly accounting periods in each fiscal year of Holdings and its
Subsidiaries (or, if such financial statements are not required to be filed
with the SEC or delivered to the holders of the Refinancing Notes, on or before
the date that is 60 days after the end of each such quarterly accounting
period), the consolidated balance sheet of (i) Holdings and its
Subsidiaries, as at the end of such quarterly period and the related
consolidated statement of operations for such quarterly accounting period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and the related consolidated statement of cash flows for the
elapsed portion of the fiscal year ended with the last day of such quarterly
period, and setting forth comparative consolidated figures for the related
periods in the prior fiscal year or, in the case of such consolidated balance
sheet, for the last day of the prior fiscal year, and containing a footnote to
such financial statements that includes consolidating balance sheet, income
statement and cash flow financial statement information for Holdings and its
Subsidiaries, all of which shall be certified by an Authorized Officer of
Holdings as fairly presenting the financial condition and results of operations
of Holdings and its Subsidiaries on a consolidated basis, subject to changes
resulting from audit and normal year-end audit adjustments.

 

(c)  Budgets. Within 90 days after the
commencement of each fiscal year of each Borrower, budgets of each Borrower in
reasonable detail for such fiscal year as customarily prepared by management of
such Borrower for their internal use consistent in scope with the financial
statements provided pursuant to Section 9.1(a), setting forth the
principal assumptions upon which such budgets are based.

 

(d)  Officer’s Certificates. At the time of
the delivery of the financial statements provided for in Sections 9.1(a)
and (b), a certificate of an Authorized Officer of Holdings to the
effect that no Default or Event of Default exists or, if any Default or Event
of Default does exist, specifying the nature and extent thereof, which
certificate shall set forth (i) the calculations required to establish whether
Holdings and its Subsidiaries were in compliance with the provisions of Sections 10.9
and 10.10 as at the end of such fiscal year or period, as the case may 

 

107

 

be, (ii) a specification of any change in the
identity of the Restricted Subsidiaries, Unrestricted Subsidiaries and Foreign
Subsidiaries as at the end of such fiscal year or period, as the case may be,
from the Restricted Subsidiaries, Unrestricted Subsidiaries and Foreign
Subsidiaries, respectively, provided to the Lenders on the Closing Date or the
most recent fiscal year or period, as the case may be, (iii) the then
applicable Status and (iv) the amount of any Pro Forma Adjustment not
previously set forth in a Pro Forma Adjustment Certificate or any change in the
amount of a Pro Forma Adjustment set forth in any Pro Forma Adjustment
Certificate previously provided and, in either case, in reasonable detail, the
calculations and basis therefor. At the time of the delivery of the financial
statements provided for in Section 9.1(a), a certificate of an
Authorized Officer of Holdings setting forth in reasonable detail
(x) Holdings calculation of the Excess Cash Flow for such fiscal year and
(y) the Applicable Amount as at the end of the fiscal year to which such
financial statements relate.

 

(e)  Certain Notices. Promptly after an
authorized officer or any other senior officer of Holdings, the US Borrower,
the Canadian Borrower or any of the other Subsidiaries obtains knowledge
thereof, notice of (i) the occurrence of any event that constitutes a Default
or Event of Default, which notice shall specify the nature thereof, the period
of existence thereof and what action the US Borrower or the Canadian Borrower
proposes to take with respect thereto, (ii) any litigation or governmental
proceeding pending against the US Borrower, the Canadian Borrower or any of the
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect or Material Adverse Change, (iii) a default under Section 10.3 or 10.8
of the Senior Subordinated Loan Agreement or (iv) any other development that
has resulted in, or could reasonably be expected to result in, a Material
Adverse Effect or Material Adverse Change.

 

(f)  Environmental Matters. The Borrowers
will promptly advise the Administrative Agent in writing after obtaining
knowledge of any one or more of the following environmental matters, unless such
environmental matters would not, individually or when aggregated with all other
such matters, be reasonably expected to result in a Material Adverse Effect:

 

(i)  Any pending or threatened Environmental Claim
against the US Borrower, the Canadian Borrower or any of the other Subsidiaries
or any Real Estate;

 

(ii)  Any condition or occurrence that (x) could
reasonably be expected to result in noncompliance by the US Borrower, the
Canadian Borrower or any of the other Subsidiaries with any applicable Environmental
Law or (y) could reasonably be anticipated to form the basis of an
Environmental Claim against the US Borrower, the Canadian Borrower or any of
the other Subsidiaries or any Real Estate;

 

(iii)  Any condition or occurrence on any Real
Estate that could reasonably be anticipated to cause such Real Estate to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Estate under any Environmental Law; and

 

(iv)  The conduct of any investigation, or any
removal, remedial or other corrective action in response to the actual or
alleged presence, release or threatened release of any Hazardous Material on,
at, under or from any Real Estate.

 

108

 

All such notices shall describe in reasonable
detail the nature of the claim, investigation, condition, occurrence or removal
or remedial action and the response thereto. The term “Real Estate”
shall mean land, buildings and improvements owned or leased by the US Borrower,
the Canadian Borrower or any of the other Subsidiaries, but excluding all
operating fixtures and equipment, whether or not incorporated into
improvements.

 

(g)  Other Information. Promptly upon
filing thereof, copies of any filings (including on Form 20-F or 6-K) or
registration statements with, and reports to, the SEC, the Ontario Securities
Commission or any analogous Government Authority in any relevant jurisdiction
by Holdings, the US Borrower, the Canadian Borrower or any of their respective
Subsidiaries (other than amendments to any registration statement (to the
extent such registration statement, in the form it becomes effective, is
delivered to the Lenders), exhibits to any registration statement and, if
applicable, any registration statements on Form S-8) and copies of all
financial statements, proxy statements, notices and reports that Holdings, the
US Borrower, the Canadian Borrower or any of their respective Subsidiaries
shall send to the holders of any publicly issued debt of Parent, Holdings, the
US Borrower, the Canadian Borrower and/or any of their respective Subsidiaries
(including the Senior Subordinated Term Loans, any Refinancing Notes and any
Exchange Notes (whether publicly issued or not)) in their capacity as such
holders (in each case to the extent not theretofore delivered to the Lenders
pursuant to this Agreement) and, with reasonable promptness, such other
information (financial or otherwise) as the Administrative Agent on its own
behalf or on behalf of any Lender may reasonably request in writing from time
to time.

 

(h)  Pro Forma Adjustment Certificate. Not
later than any date on which financial statements are delivered with respect to
any four-quarter period in which a Pro Forma Adjustment is made as a result of
the consummation of the acquisition of any Acquired Entity or Business by the
US Borrower, the Canadian Borrower or any Restricted Subsidiary for which there
shall be a Pro Forma Adjustment, a certificate of an Authorized Officer of each
Borrower setting forth the amount of such Pro Forma Adjustment and, in
reasonable detail, the calculations and basis therefor.

 

9.2. Books,
Records and Inspections. Holdings and the Borrowers will, and will cause
each of their respective Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or the Required Lenders to visit
and inspect any of the properties or assets of the US Borrower, the Canadian
Borrower and any such Subsidiary in whomsoever’s possession to the extent that
it is within such party’s control to permit such inspection, and to examine the
books and records of the US Borrower, the Canadian Borrower and any such
Subsidiary and discuss the affairs, finances and accounts the US Borrower, the
Canadian Borrower and of any such Subsidiary with, and be advised as to the
same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may desire.

 

9.3. Maintenance
of Insurance. Holdings and the Borrowers will, and will cause each of the
Material Subsidiaries to, at all times maintain in full force and effect, with
insurance companies that Holdings, the US Borrower and the Canadian Borrower,
as applicable, believe (in the good faith judgment of the management of
Holdings, the US Borrower and the Canadian Borrower, as applicable,) are
financially sound and responsible at the time the relevant coverage 

 

109

 

is placed or renewed, insurance (including
flood insurance) in at least such amounts and against at least such risks (and
with such risk retentions) as are usually insured against in the same general
area by companies engaged in the same or a similar business; and will furnish
to the Lenders, upon written request from the Administrative Agent, information
presented in reasonable detail as to the insurance so carried.

 

9.4. Payment
of Taxes. Holdings and the Borrowers will pay and discharge, and will cause
each of their respective Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon them or upon their
income or profits, or upon any properties belonging to them, prior to the date
on which material penalties attach thereto, and all lawful material claims
that, if unpaid, could reasonably be expected to become a material Lien upon
any properties of or the capital stock of the US Borrower, the Canadian
Borrower or any of the Restricted Subsidiaries; provided that none of
Holdings, the Borrowers or any of their respective Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves (in the good faith judgment of the management of Holdings, the US
Borrower and the Canadian Borrower, as applicable) with respect thereto in
accordance with GAAP and the failure to pay could not reasonably be expected to
result in a Material Adverse Effect.

 

9.5. Consolidated
Corporate Franchises. Holdings and the Borrowers will do, and will cause
each Material Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its legal existence, corporate
rights and authority, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect; provided,
however, that the Borrowers and their respective Subsidiaries may consummate
any transaction permitted under Section 10.3, 10.4 or 10.5.

 

9.6. Compliance
with Statutes, Regulations, etc. Holdings and the Borrowers will, and will
cause each of their Subsidiaries to, comply with all applicable laws, rules,
regulations and orders applicable to it or its property, and to maintain all
such governmental approvals or authorizations in full force and effect, in each
case except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.

 

9.7. ERISA;
Canadian Benefit Matters. (a)   Promptly after Holdings or any
Subsidiary or any ERISA Affiliate knows or has reason to know of the occurrence
of any of the following events that, individually or in the aggregate
(including in the aggregate such events previously disclosed or exempt from
disclosure hereunder, to the extent the liability therefor remains
outstanding), would be reasonably likely to have a Material Adverse Effect,
Holdings will deliver to the Administrative Agent a certificate of an
Authorized Officer or any other senior officer of Holdings setting forth
details as to such occurrence and the action, if any, that Holdings, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices (required, proposed or otherwise) given to or filed with or by
Holdings, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant
(other than notices relating to an individual participant’s benefits) or the
Plan administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency has been incurred or an application is
to be made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any 

 

110

 

amortization period under Section 412 of
the Code with respect to a Plan; that a Plan having an Unfunded Current
Liability has been or is to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA (including the giving of written notice thereof);
that a Plan has an Unfunded Current Liability that has or will result in a lien
under ERISA or the Code; that proceedings will be or have been instituted to
terminate a Plan having an Unfunded Current Liability (including the giving of
written notice thereof); that a proceeding has been instituted against
Holdings, a Subsidiary or an ERISA Affiliate pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; that the PBGC has
notified Holdings, any Subsidiary or any ERISA Affiliate of its intention to
appoint a trustee to administer any Plan; that Holdings, any Subsidiary or any
ERISA Affiliate has failed to make a required installment or other payment
pursuant to Section 412 of the Code with respect to a Plan; or that
Holdings, any Subsidiary or any ERISA Affiliate has incurred or will incur (or
has been notified in writing that it will incur) any liability (including any
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or Section 4971 or 4975 of the Code.

 

(b)  Promptly after Holdings or any Subsidiary
thereof knows or has reason to know of the occurrence of any of the following
events that, individually or in the aggregate (including in the aggregate such
events previously disclosed or exempt from disclosure hereunder, to the extent
the liability therefor remains outstanding) would be reasonably likely to have
a Material Adverse Effect, Holdings will deliver to the Canadian Administrative
Agent a certificate of an Authorized Officer or any other senior officer of
Holdings setting forth details as to such occurrence and the action, if any,
that Holdings or such Subsidiary is required or proposes to take, together with
any notices (required, proposed or otherwise) given to or filed with or by
Holdings, such Subsidiary, any Governmental Authority, a Canadian Pension Plan
or Canadian Benefit Plan participant (other than notices relating to an
individual participant’s benefits) or the Canadian Pension Plan or Canadian
Benefit Plan administrator with respect thereto: that an application is to be
made to any Governmental Authority for a waiver or modification of the minimum
funding requirements (including any required installment payments) or an
extension of any amortization period under applicable laws or regulations with
respect to a Canadian Pension Plan or Canadian Benefit Plan; that a Canadian
Pension Plan having an Unfunded Current Liability has been or is to be
terminated or wound-up in whole or in part under applicable laws or regulations
(including the giving of written notice thereof); that a Canadian Pension Plan
has an Unfunded Current Liability that has or will result in a lien under
applicable laws or regulations; that proceedings will be or have been
instituted to terminate a Canadian Pension Plan having an Unfunded Current
Liability (including the giving of written notice thereof); that a proceeding
has been instituted against Holdings or a Subsidiary thereof pursuant to applicable
laws or regulations to collect a delinquent contribution to a Canadian Pension
Plan or a Canadian Benefit Plan; that any Governmental Authority has notified
Holdings or any Subsidiary thereof of its intention to appoint an administrator
or other trustee to administer any Canadian Pension Plan or Canadian Benefit
Plan; that Holdings or any Subsidiary thereof has failed to make a required
contribution, installment or other payment pursuant to applicable laws or
regulations with respect to a Canadian Pension Plan or Canadian Benefit Plan;
that any event has occurred in connection with a Canadian Pension Plan or
Canadian Benefit Plan giving rise to a lien (statutory or otherwise) against,
or deemed trust in respect of, any of the assets of Holdings or any Subsidiary
thereof; or that Holdings or any Subsidiary thereof has incurred or will incur
(or has been notified in writing that it will incur) any liability (including 

 

111

 

any contingent or secondary liability) to or
on account of a Canadian Pension Plan or Canadian Benefit Plan arising due to
breach by Holdings or any Subsidiary thereof of their respective obligations
pursuant to applicable laws or regulations.

 

9.8. Good
Repair. Holdings and the Borrowers will, and will cause each of the
Restricted Subsidiaries to, ensure that its properties and equipment used or
useful in its business in whomsoever’s possession they may be to the extent
that it is within the control of such party to cause same, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses and consistent with third party leases, except
in each case to the extent the failure to do so could not be reasonably
expected to have a Material Adverse Effect.

 

9.9. Transactions
with Affiliates. Each of Holdings and the Borrowers will conduct, and cause
each of the Restricted Subsidiaries to conduct, all transactions with any of
its Affiliates (other than Holdings, either Borrower or its Restricted
Subsidiaries) on terms that are substantially as favorable to Holdings, such
Borrower or such Restricted Subsidiary as it would obtain in a comparable
arm’s-length transaction with a Person that is not an Affiliate; provided
that the foregoing restrictions shall not apply to (a) the payment of
customary annual fees to the Sponsor for management, consulting and financial
services rendered to Holdings, the US Borrower, the Canadian Borrower and the
Subsidiaries and customary investment banking fees paid to the Sponsor for
services rendered to Holdings, the US Borrower, the Canadian Borrower and the
Subsidiaries in connection with divestitures, acquisitions, financings and
other transactions, (b) customary fees paid to members of the Board of
Directors (or comparable governing body) of Holdings, the US Borrower, the
Canadian Borrower and the Subsidiaries, (c) transactions with Subsidiaries
providing for the transfer of services, (d) transactions permitted by Section 10.6
and (e) investments by KKR Financial Corp. in securities of Holdings or any
Restricted Subsidiary so long as (i) the investment is being offered generally
to other investors on the same or more favorable terms and (ii) the investment
constitutes less than 5% of the proposed outstanding issue amount of such class
of securities.

 

9.10. End
of Fiscal Years. Each of Holdings and the Borrowers will, for financial
reporting purposes, cause (a) each of its, and each of its Subsidiaries’,
fiscal years to end on the Saturday closest to December 31 of each year; provided,
however, that Holdings and the Borrowers may, upon written notice to the
Administrative Agent, change the financial reporting convention specified above
to any other financial reporting convention reasonably acceptable to the
Administrative Agent, in which case Holdings, the Borrowers and the
Administrative Agent will, and are hereby authorized by the Lenders to, make
any adjustments to this Agreement that are necessary in order to reflect such
change in financial reporting.

 

9.11. Additional
Guarantors and Grantors. (a)  Except as set forth in Section 10.1(a)(x)
or (a)(xi), each Borrower will cause (i) each of its direct or
indirect wholly-owned US Subsidiaries (other than any Unrestricted Subsidiary
or any US Subsidiary owned directly or indirectly by a Foreign Subsidiary of
any US Subsidiary) formed or otherwise purchased or acquired after the date
hereof (including pursuant to a Permitted Acquisition), (ii) each of its
wholly-owned Subsidiaries (other than any Unrestricted Subsidiary) that is not
a 

 

112

 

US Subsidiary on the date hereof but
subsequently becomes a US Subsidiary (other than any Unrestricted Subsidiary or
a US Subsidiary owned directly and indirectly by a Foreign Subsidiary of any US
Subsidiary) and (iii) each of its immaterial wholly-owned US Subsidiaries
listed on Schedule 1.1(d) (unless such Subsidiary is designated an
Unrestricted Subsidiary in accordance with terms of this Agreement or is
directly or indirectly owned by any Foreign Subsidiary of any US Subsidiary)
that becomes a Material Subsidiary, in each case to execute a supplement to
each of the US Guarantee and the US Security Agreement in form and substance
reasonably satisfactory to the Collateral Agent, in order to become a guarantor
under the US Guarantee and a grantor under the US Security Agreement.

 

(b)  Except as set forth in Section 10.1(a)(x)
or (a)(xi), the Canadian Borrower will cause (i) each direct or indirect
wholly-owned Canadian Subsidiary of the Canadian Borrower (other than any
Unrestricted Subsidiary and any Canadian Subsidiary directly or indirectly
owned by any US Subsidiary) formed or otherwise purchased or acquired after the
date hereof (including pursuant to a Permitted Acquisition) and (ii) each
immaterial wholly-owned Canadian Subsidiary of the Canadian Borrower listed on Schedule
1.1(d) (unless such Canadian Subsidiary is designated an Unrestricted
Subsidiary in accordance with terms of this Agreement or is directly or
indirectly owned by any US Subsidiary) that becomes a Material Subsidiary, in
each case to execute a Canadian Guarantee and the applicable Canadian Security
Agreement (or a supplement thereto, as applicable) in form and substance
reasonably satisfactory to the Canadian Administrative Agent, in order to
become a guarantor under the Canadian Guarantee and a grantor under the
applicable Canadian Security Agreement.

 

(c)  Except as set forth in Section 10.1(a)(x)
or (a)(xi) and except to the extent the Canadian Borrower determines
that it will result in material adverse tax or legal consequences or as the
Canadian Administrative Agent and the Canadian Borrower shall otherwise
mutually agree, the Canadian Borrower will cause (i) each direct or indirect
wholly-owned Foreign Subsidiary that is a Material Subsidiary of the Canadian
Borrower (other than any Canadian Subsidiary, any Unrestricted Subsidiary and
any Foreign Subsidiary directly or indirectly owned by a US Subsidiary) formed
or otherwise purchased or acquired after the date hereof (including pursuant to
a Permitted Acquisition) and (ii) each immaterial wholly-owned Foreign
Subsidiary (other than a Canadian Subsidiary) of the Canadian Borrower listed
on Schedule 1.1(d) (unless such Foreign Subsidiary is designated an
Unrestricted Subsidiary in accordance with the terms of this Agreement or is
directly or indirectly owned by a US Subsidiary) that becomes a Material
Subsidiary, in each case to execute Foreign Security Documents in form and
substance reasonably satisfactory to the Canadian Administrative Agent, in
order to become a Foreign Subsidiary Guarantor and a grantor under the
applicable Foreign Security Agreements.

 

9.12. Pledges
of Additional Stock and Evidence of Indebtedness. (a)   Except as
set forth in Section 10.1(a)(x) or (a)(xi), the US Borrower
will deliver, and, if applicable, will cause each US Subsidiary Guarantor to
deliver, to the Collateral Agent for the ratable benefit of the Secured
Parties, (i) all certificates representing the capital stock of each US
Subsidiary (other than any Unrestricted Subsidiary or any US Subsidiary owned
by a Foreign Subsidiary), each Minority Investment and each Foreign Subsidiary
(other than an Unrestricted Subsidiary or any Voting Stock representing in
excess of 65% of the issued and outstanding Voting Stock in any Foreign
Subsidiary) held directly by the US Borrower or such US Subsidiary Guarantor,
in each case, formed or otherwise purchased or acquired after the date hereof,
in each case together with 

 

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a letter or schedule identifying such
certificates in reasonable detail and otherwise reasonably satisfactory to the
Administrative Agent, (ii) all promissory notes evidencing Indebtedness in
excess of $5,000,000 received by the US Borrower or any of the US Subsidiary
Guarantors in connection with any disposition of assets pursuant to Section 10.4(b)
or, if the obligor under such Indebtedness is not a Guarantor, Section 10.4(c),
in each case together with a letter or schedule identifying such promissory notes
in reasonable detail and otherwise reasonably satisfactory to the
Administrative Agent and (iii) any global promissory notes executed after
the date hereof evidencing Indebtedness in excess of $5,000,000 of the US
Borrower, each Subsidiary and each Minority Investment that is owing to the US
Borrower or any US Subsidiary Guarantor, in each case together with a letter or
schedule identifying such promissory notes in reasonable detail and otherwise
reasonably satisfactory to the Administrative Agent.

 

(b)  Except as set forth in Section 10.1(a)(x)
or (a)(xi), the Canadian Borrower will deliver, and, if applicable, will
cause each of its Subsidiaries that is a Subsidiary Guarantor to deliver, to
the Collateral Agent for the ratable benefit of the Secured Parties,
(i) all certificates representing the capital stock of each direct
Subsidiary of the Canadian Borrower or such Subsidiary Guarantor, in each case,
formed or otherwise purchased or acquired after the date hereof, in each case
together with a letter or schedule identifying such certificates in reasonable
detail and otherwise reasonably satisfactory to the Canadian Administrative
Agent (or supplements to then existing Foreign Pledge Agreements to the extent
necessary or advisable under applicable law, in a form agreed between the
Canadian Borrower and the Canadian Administrative Agent, but to be
substantially consistent (taking into account the scope of customary collateral
arrangements in the applicable jurisdiction) with the scope of the pledge arrangements
entered into pursuant to the Canadian Security Documents and then existing
Foreign Security Documents) and (ii) all promissory notes evidencing
Indebtedness with a Dollar Equivalent in excess of $5,000,000 received by any
of the Canadian Subsidiary Guarantors or Foreign Subsidiary Guarantors in
connection with any disposition of assets pursuant to Section 10.4(b)
or, if the obligor under such Indebtedness is not a Guarantor, Section 10.4(c),
in each case together with a letter or schedule identifying such promissory
notes in reasonable detail and otherwise reasonably satisfactory to the
Canadian Administrative Agent (or supplements to then existing Foreign Pledge
Agreements to the extent necessary or advisable under applicable law, in a form
agreed between the Borrowers and the Administrative Agent, but to be
substantially consistent (taking into account the scope of customary collateral
arrangements in the applicable jurisdiction) with the scope of the pledge
arrangements entered into pursuant to the Canadian Security Documents and then
existing Foreign Security Documents).

 

9.13. Use
of Proceeds. The Borrowers will use the Letters of Credit and the proceeds
of all Loans as follows:

 

(a)  The proceeds of the Term Loans will be used
by the US Borrower and the Canadian Borrower, together with (i) the net
proceeds of the Senior Subordinated Term Loans and (ii) the proceeds of
the Equity Contribution, on the Closing Date solely to effect the Acquisition
and the other Transactions and to pay Transaction Expenses.

 

(b)  Proceeds of Revolving Credit Loans and
Swingline Loans will be used by the US Borrower and the Canadian Borrower (and
their Subsidiaries, as applicable) after the Closing Date for general corporate
purposes (including Permitted Acquisitions), 

 

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and Letters of
Credit will be used by the US Borrower and the Canadian Borrower (and their
Subsidiaries, as applicable) for general corporate purposes.

 

9.14. Changes
in Business. (a)  Holdings and its Subsidiaries,
taken as a whole, will not fundamentally and substantively alter the character
of their business, taken as a whole, from the business conducted by Holdings
and its Subsidiaries, taken as a whole, on the Closing Date and other business
activities incidental or related to any of the foregoing.

 

9.15. Further
Assurances. (a)   Holdings and the Borrowers will, and will cause
each other Credit Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which either Administrative Agent or the Required Lenders
may reasonably request, in order to grant, preserve, protect and perfect the
validity and priority of the security interests created or intended to be
created by the Security Documents, all at the expense of the Borrowers and the
Restricted Subsidiaries.

 

(b)  If any assets (including any real estate or
improvements thereto or any interest therein) with a book value or fair market
value in excess of $5,000,000 are acquired by the US Borrower, the Canadian
Borrower or any other Credit Party after the Closing Date (other than assets
constituting Collateral under the Security Agreements that become subject to
the Lien of the applicable Security Agreement upon acquisition thereof) that
are of the nature secured by the Security Agreements or any Mortgage, as the
case may be, the applicable Borrower will notify the Administrative Agents and
the Lenders thereof, and, if requested by either Administrative Agent or the
Required Lenders, the applicable Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the other
Credit Parties to take, such actions as shall be necessary or reasonably
requested by either Administrative Agent to grant and perfect such Liens
consistent with the applicable requirements of the Security Documents,
including actions described in paragraph (a) of this Section, all at the
expense of the Credit Parties. Any Mortgage delivered to the Administrative
Agents in accordance with the preceding sentence shall, to the extent
reasonably available, be accompanied by (x) a policy or policies of title
insurance issued by a nationally recognized title insurance company insuring
the Lien of each Mortgage as a valid first Lien on the Mortgaged Property
described therein, free of any other Liens except as expressly permitted by Section 10.2,
together with such endorsements, coinsurance and reinsurance as either
Administrative Agent may reasonably request and (y) an opinion of local counsel
to the US Borrower or the Canadian Borrower, as the case may be (or in the
event a Subsidiary of the US Borrower or the Canadian Borrower is the
mortgagor, to such Subsidiary) in form and substance satisfactory to the
Administrative Agents.

 

9.16. Maintenance
of Rating of Facilities. The Borrowers will cause a senior secured credit
rating with respect to the credit facilities hereunder from each of S&P and
Moody’s to be available at all times until the last Maturity Date under this
Agreement.

 

SECTION 10. Negative
Covenants

 

Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on 

 

115

 

its own behalf and to the extent such
covenants are applicable to it) hereby covenant and agree that on the Closing
Date and thereafter, until the Commitments, the Swingline Commitments and each
Letter of Credit have terminated and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder, are paid in
full:

 

10.1. Limitation
on Indebtedness. (a)  Holdings and
the Borrowers will not, and will not permit any of the Restricted Subsidiaries
to, create, incur, assume or suffer to exist any Indebtedness, except:

 

(i)  Indebtedness arising under the Credit
Documents;

 

(ii)  Indebtedness of (x) Holdings and either
Borrower to any of Holdings’ Subsidiaries and (y) subject to compliance
with Section 10.5(g), any Subsidiary to Holdings or any Restricted
Subsidiary;

 

(iii)  Indebtedness in respect of any bankers’
acceptance, letter of credit, warehouse receipt or similar facilities entered
into in the ordinary course of business;

 

(iv)  except as provided in clauses (x) and (xi)
below, subject to compliance with Section 10.5(g), Guarantee Obligations
incurred by (x) Restricted Subsidiaries in respect of Indebtedness of
Holdings or other Restricted Subsidiaries that is permitted to be incurred
under this Agreement, (y) Holdings in respect of Indebtedness of the Restricted
Subsidiaries that is permitted to be incurred under this Agreement and (z)
either Borrower in respect of Indebtedness of the Restricted Subsidiaries that
is permitted to be incurred under this Agreement; provided that no
Guarantee (1) in respect of the Senior Subordinated Term Loans, the Refinancing
Notes, the Exchange Notes or the Permitted Additional Notes shall be permitted
unless such Guarantee is made by a Guarantor and such Guarantee is unsecured
and, (2) in respect of the Senior Subordinated Term Loans, the Senior Subordinated
Refinancing Notes, the Senior Subordinated Exchange Notes and the Permitted
Additional Senior Subordinated Notes, is subordinated to the Guarantee by such
Guarantor of the Obligations, in each case on terms at least as favorable to
the Lenders as those contained in the Senior Subordinated Term Loans, the
Refinancing Notes, the Exchange Notes or the Permitted Additional Notes, as
applicable;

 

(v)  Guarantee Obligations incurred in the
ordinary course of business in respect of obligations of suppliers, customers,
franchisees, lessors and licensees;

 

(vi)  (A) Indebtedness (including Indebtedness
arising under Capital Leases) incurred within 270 days of the acquisition,
construction or improvement of fixed or capital assets to finance the
acquisition, construction or improvement of such fixed or capital assets or
otherwise incurred in respect of Capital Expenditures, (B) Indebtedness
arising under Capital Leases entered into in connection with Permitted Sale
Leasebacks, (C) Indebtedness arising under Capital Leases, other than
Capital Leases in effect on the date hereof and Capital Leases entered into
pursuant to subclauses (A) and (B) above; provided that
the aggregate amount of Indebtedness incurred pursuant to this subclause (C)
shall not exceed $35,000,000 at any time outstanding, and (D) any
refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (A),
(B) or 

 

116

 

(C) above;
provided that the principal amount thereof is not increased above the
principal amount thereof outstanding immediately prior to such refinancing,
refunding, renewal or extension, plus the amount of any interest, premiums or
penalties required to be paid thereon plus fees and expenses associated therewith;

 

(vii)  Indebtedness outstanding on the date hereof
and listed on Schedule 10.1 and any refinancing, refunding, renewal
or extension thereof; provided that (i) the principal amount
thereof is not increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension, plus the amount of
any interest, premiums or penalties required to be paid thereon plus fees and
expenses associated therewith, except to the extent otherwise permitted
hereunder and (ii) the direct and contingent obligors with respect to such
Indebtedness are not changed, except to the extent otherwise permitted
hereunder;

 

(viii)  Indebtedness in respect of Hedge Agreements;

 

(ix)  [Intentionally Omitted];

 

(x)  (A) Indebtedness of a Person or Indebtedness
attaching to assets of a Person that, in either case, becomes a Restricted
Subsidiary or Indebtedness attaching to assets that are acquired by Holdings or
any Restricted Subsidiary, in each case after the Closing Date as the result of
a Permitted Acquisition; provided that (w) such Indebtedness
existed at the time such Person became a Restricted Subsidiary or at the time
such assets were acquired and, in each case, was not created in anticipation
thereof, (x) such Indebtedness is not guaranteed in any respect by
Holdings or any Restricted Subsidiary (other than by any such person that so
becomes a Restricted Subsidiary), (y) (1) the capital stock of such
Person is pledged to the Administrative Agent to the extent required under Section 9.12
and (2) such Person executes a supplement to each of the applicable
Guarantee Agreement and the applicable Security Documents (or alternative
guarantee and security arrangements in relation to the Obligations reasonably
acceptable to the Administrative Agent) to the extent required under Sections 9.11,
9.12 or 9.15 as applicable; provided that the requirements
of this subclause (y) shall not apply to an aggregate amount at any time
outstanding of up to (and including) the Guarantee and Collateral Exception
Amount at such time of the aggregate of (I) such Indebtedness and
(II) all Indebtedness as to which the proviso to clause (xi)(A)(y)
below then applies, and (B) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (A) above; provided
that, except to the extent otherwise permitted hereunder, (x) the
principal amount of any such Indebtedness is not increased above the principal
amount thereof outstanding immediately prior to such refinancing, refunding,
renewal or extension, plus the amount of any interest, premiums or penalties
required to be paid thereon plus fees and expenses associated therewith, and
(y) the direct and contingent obligors with respect to such Indebtedness
are not changed;

 

(xi)  (A) Indebtedness of Holdings or any
Restricted Subsidiary (including any Permitted Additional Notes) incurred to
finance a Permitted Acquisition; provided that (x) except in the
case of Permitted Additional Notes, such Indebtedness is not guaranteed in any
respect by any Restricted Subsidiary (other than any Person acquired (the 

 

117

 

“acquired
Person”) as a result of such Permitted Acquisition or the Restricted
Subsidiary so incurring such Indebtedness) or, in the case of Indebtedness of
any Restricted Subsidiary, subject to compliance with Section 10.5(g),
by Holdings and (y)(1) Holdings or the relevant Restricted Subsidiary
pledges the capital stock of such acquired Person to the Collateral Agent to
the extent required under Section 9.12 and (2) such acquired
Person executes a supplement to the applicable Guarantee Agreement and the
applicable Security Documents (or alternative guarantee and security
arrangements in relation to the Obligations reasonably acceptable to the Administrative
Agent or the Canadian Administrative Agent, as applicable) to the extent
required under Sections 9.11, 9.12 or 9.15 as
applicable; provided that the requirements of this subclause (y)
shall not apply to an aggregate amount at any time outstanding of up to (and
including) the amount of the Guarantee and Collateral Exception Amount at such
time of the aggregate of (I) such Indebtedness and (II) all
Indebtedness as to which the proviso to clause (x)(A)(y) above then
applies, and (B) any refinancing, refunding, renewal or extension of any
such Indebtedness; provided that, except to the extent otherwise
permitted hereunder, (x) the principal amount of any such Indebtedness is not
increased above the principal amount thereof outstanding immediately prior to
such refinancing, refunding, renewal or extension, plus the amount of any
interest, premiums or penalties required to be paid thereon plus fees and
expenses associated therewith, and (y) the direct and contingent obligors
with respect to such Indebtedness are not changed, except to the extent
otherwise permitted hereunder;

 

(xii)  Indebtedness in respect of performance bonds,
bid bonds, appeal bonds, surety bonds and completion guarantees and similar
obligations not in connection with money borrowed, in each case provided in the
ordinary course of business, including those incurred to secure health, safety
and environmental obligations in the ordinary course of business;

 

(xiii)  (A) additional Indebtedness and (B) any
refinancing, refunding, renewal or extension of any Indebtedness specified in subclause
(A) above; provided that the aggregate amount of Indebtedness
incurred and remaining outstanding pursuant to this clause (xiii)
shall not at any time exceed $125,000,000;

 

(xiv)  Indebtedness in respect of (A) the Senior
Subordinated Loan Facility (including the Exchange Notes), provided that the
aggregate outstanding principal amount of such Indebtedness shall not, at any
time, exceed $770,000,000 except as a result of the capitalization of amounts, if
any, of any default interest on the Senior Subordinated Term Loans (or Exchange
Notes), (B) the Refinancing Notes, provided that the aggregate outstanding
principal amount of such Indebtedness shall not exceed the principal amount of
the Senior Subordinated Loan Facility (including the Exchange Notes) refinanced
thereby and the accrued and unpaid interest on such principal amount at the
time of such refinancing, and (C) Permitted Additional Notes to the extent that
the Net Cash Proceeds from the issuance of such Permitted Additional Notes are,
immediately after the receipt thereof, applied to the prepayment of Term Loans
in accordance with Section 5.2; provided that the aggregate
principal amount of Senior Exchange Notes and Senior Refinancing Notes shall
not exceed $400,000,000;

 

118

 

(xv)  Indebtedness in respect of Receivables
Transactions (other than Exempt Receivables Transactions), so long as the
aggregate amount thereof does not exceed, at any time outstanding, the greater
of (x) $250,000,000 and (y) 67% of the aggregate amount of accounts receivable
of Holdings and its Restricted Subsidiaries; and

 

(xvi)  Indebtedness in respect of Exempt Receivables
Transactions.

 

(b)  Neither Holdings nor the Borrowers will issue
any preferred stock or other preferred equity interests other than (with
respect to Holdings) Qualified PIK Securities.

 

10.2. Limitation
on Liens. Holdings and the Borrowers will not, and will not permit any of
the Restricted Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any property or assets of any kind (real or personal, movable or
immovable, tangible or intangible) of any Credit Party or any Restricted
Subsidiary, whether now owned or hereafter acquired, except:

 

(a)  Liens arising under the Credit Documents;

 

(b)  Permitted Liens;

 

(c)  Liens securing Indebtedness permitted
pursuant to Section 10.1(a)(vi); provided that such Liens
attach at all times only to the assets so financed;

 

(d)  Liens existing on the date hereof and listed
on Schedule 10.2;

 

(e)  the replacement, extension or renewal of any
Lien permitted by clauses (a) through (d) above and clause (f)
of this Section 10.2 upon or in the same assets theretofore subject
to such Lien or the replacement, extension or renewal (without increase in the
amount or change in any direct or contingent obligor except to the extent
otherwise permitted hereunder) of the Indebtedness secured thereby;

 

(f)  Liens existing on the assets of any Person
that becomes a Restricted Subsidiary, or existing on assets acquired, pursuant
to a Permitted Acquisition to the extent the Liens on such assets secure
Indebtedness permitted by Section 10.1(a)(x); provided that
such Liens attach at all times only to the same assets that such Liens attached
to, and secure only the same Indebtedness that such Liens secured, immediately
prior to such Permitted Acquisition;

 

(g)  (i) Liens placed upon the capital stock
of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition to
secure Indebtedness of Holdings or any Restricted Subsidiary in an aggregate
amount at any time outstanding not to exceed the Guarantee and Collateral
Exception Amount incurred pursuant to Section 10.1(a)(xi) in
connection with such Permitted Acquisition and (ii) Liens placed upon the
assets of such Restricted Subsidiary to secure a guarantee by such Restricted
Subsidiary of any such Indebtedness of Holdings or any Restricted Subsidiary in
an aggregate amount at any time outstanding not to exceed the Guarantee and
Collateral Exception Amount;

 

(h)  Liens on accounts receivable and related
property sold pursuant to Receivables Transactions (other than Exempt
Receivables Transactions), so long as the 

 

119

 

aggregate amount thereof does not exceed, at
any time outstanding, the greater of (x) $250,000,000 and (y) 67% of the
aggregate amount of accounts receivable of Holdings and its Restricted
Subsidiaries;

 

(i)  Liens on accounts receivable and related
property sold pursuant to Exempt Receivables Transactions; and

 

(j)  additional Liens so long as the aggregate
principal amount of the obligations so secured does not exceed $50,000,000 at
any time outstanding.

 

10.3. Limitation
on Fundamental Changes. Except as permitted by Section 10.4, 10.5
or 10.6, Holdings and the Borrowers will not, and will not permit any of
the Restricted Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all its business units, assets or
other properties, except that:

 

(a)  any Subsidiary of the US Borrower or any
other Person may be merged or consolidated with or into the US Borrower; provided
that (i) the US Borrower shall be the continuing or surviving corporation
or the Person formed by or surviving any such merger or consolidation (if other
than the US Borrower) shall be an entity organized or existing under the laws
of the United States, any state thereof or the District of Columbia (the US
Borrower or such Person, as the case may be, being herein referred to as the “Successor
US Borrower”), (ii) the Successor US Borrower (if other than the US
Borrower) shall expressly assume all the obligations of the US Borrower under
this Agreement and the other Credit Documents pursuant to a supplement hereto
or thereto in form reasonably satisfactory to the Administrative Agent,
(iii) no Default or Event of Default would result from the consummation of
such merger or consolidation, (iv) Holdings shall be in compliance, on a
pro forma basis after giving effect to such merger or consolidation, with the
covenants set forth in Sections 10.9 and 10.10 as such
covenants are recomputed as at the last day of the most recently ended Test
Period under such Section as if such merger or consolidation had occurred
on the first day of such Test Period, (v)  Holdings, the Canadian Borrower
and each Subsidiary Guarantor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the applicable Guarantee confirmed
that its Guarantee shall apply to the Successor US Borrower’s obligations under
this Agreement, (vi) each grantor and each pledgor, unless it is the other
party to such merger or consolidation, shall have by a supplement to the
Security Agreements confirmed that its obligations thereunder shall apply to
the Successor US Borrower’s obligations under this Agreement, (vii) each
mortgagor of a Mortgaged Property, unless it is the other party to such merger
or consolidation, shall have by an amendment to or restatement of the
applicable Mortgage confirmed that its obligations thereunder shall apply to
the Successor US Borrower’s obligations under this Agreement, and (viii) the US
Borrower shall have delivered to the Administrative Agent (x) an officer’s
certificate and an opinion of counsel, each stating that such merger or
consolidation and such supplement to this Agreement or any Security Document comply
with this Agreement and (y) all necessary National Security Laws
information relating to the Successor US Borrower; provided  further
that if the foregoing are satisfied, the Successor US Borrower (if other than
the US Borrower) will succeed to, and be substituted for, the US Borrower under
this Agreement;

 

120

 

(b)  any Subsidiary of the Canadian Borrower or
any other Person may be merged, amalgamated or consolidated with or into the
Canadian Borrower; provided that (i) the Canadian Borrower shall be
the continuing or surviving corporation or the Person formed by or surviving
any such merger, amalgamation or consolidation (if other than the Canadian
Borrower) shall be a corporation organized or existing under the laws of Canada
or any province thereof (the Canadian Borrower or such Person, as the case may
be, being herein referred to as the “Successor Canadian Borrower”),
(ii) the Successor Canadian Borrower (if other than the Canadian Borrower)
shall expressly assume all the obligations of the Canadian Borrower under this
Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form reasonably satisfactory to the Administrative Agent,
(iii) no Default or Event of Default would result from the consummation of
such merger, amalgamation or consolidation, (iv) Holdings shall be in
compliance, on a pro forma basis after giving effect to such merger,
amalgamation or consolidation, with the covenants set forth in Sections 10.9
and 10.10 as such covenants are recomputed as at the last day of the
most recently ended Test Period under such Section as if such merger,
amalgamation or consolidation had occurred on the first day of such Test
Period, (v) Holdings, the US Borrower and each Subsidiary Guarantor,
unless it is the other party to such merger, amalgamation or consolidation,
shall have by a supplement to the applicable Guarantee confirmed that its
Guarantee shall apply to the Successor Canadian Borrower’s obligations under
this Agreement, (vi) each grantor and each pledgor, unless it is the other
party to such merger, amalgamation or consolidation, shall have by a supplement
to the applicable Security Document confirmed that its obligations thereunder
shall apply to the Successor Canadian Borrower’s obligations under this
Agreement, (vii) each mortgagor of a Mortgaged Property, unless it is the other
party to such merger, amalgamation or consolidation, shall have by an amendment
to or restatement of the applicable Mortgage confirmed that its obligations
thereunder shall apply to the Successor Canadian Borrower’s obligations under
this Agreement, and (viii) the Canadian Borrower shall have delivered to the
Administrative Agent (x) an officer’s certificate and an opinion of
counsel, each stating that such merger, amalgamation or consolidation, such
supplement to this Agreement or any Security Document and such amendment or
restatement to any applicable Mortgage, as the case may be, comply with this
Agreement and (y) all necessary National Security Laws information
relating to the Successor Canadian Borrower; provided  further
that if the foregoing are satisfied, the Successor Canadian Borrower (if other
than the Canadian Borrower) will succeed to, and be substituted for, the
Canadian Borrower under this Agreement;

 

(c)  any Subsidiary of either Borrower or any
other Person may be merged, amalgamated or consolidated with or into any one or
more Subsidiaries of either Borrower; provided that (i) in the case
of any merger, amalgamation or consolidation involving one or more Restricted
Subsidiaries, (A) a Restricted Subsidiary shall be the continuing or
surviving corporation or (B) the relevant Borrower shall take all steps
necessary to cause the Person formed by or surviving any such merger, amalgamation
or consolidation (if other than a Restricted Subsidiary) to become a Restricted
Subsidiary, (ii) in the case of any merger, amalgamation or consolidation
involving one or more US Subsidiary Guarantors, Canadian Subsidiary Guarantors
and/or Foreign Subsidiary Guarantors, as the case may be, a US Subsidiary
Guarantor, Canadian Subsidiary Guarantor and/or Foreign Subsidiary Guarantor,
as the case may be, shall be the continuing or surviving corporation or the
Person formed by or surviving any such merger, amalgamation or consolidation
(if other than a US Subsidiary Guarantor, Canadian Subsidiary Guarantor or
Foreign Subsidiary Guarantor, as the case may be) 

 

121

 

shall execute a supplement to the applicable
Guarantee Agreement and the Security Agreements and any applicable Mortgage or
the analogous Security Documents, as the case may be, in form and substance
reasonably satisfactory to the Administrative Agent, in order to become a
Subsidiary Guarantor and pledgor, mortgagor and grantor of Collateral for the
benefit of the Secured Parties, (iii) no Default or Event of Default would
result from the consummation of such merger, amalgamation or consolidation,
(iv) Holdings shall be in compliance, on a pro forma basis after giving
effect to such merger, amalgamation or consolidation, with the covenants set
forth in Sections 10.9 and 10.10 as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Section as if such merger or consolidation had occurred on the first day
of such Test Period, and (v) the US Borrower or the Canadian Borrower, as
applicable, shall have delivered to the Administrative Agent an officer’s
certificate stating that such merger, amalgamation or consolidation and such
supplements to any Security Document comply with this Agreement;

 

(d)  any Restricted Subsidiary that is not a
Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to Holdings, a
Borrower, a Subsidiary Guarantor or any other Restricted Subsidiary, subject to
compliance with Section 10.5(g);

 

(e)  any Guarantor may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to Holdings, either Borrower or any other Guarantor; and

 

(f)  any Restricted Subsidiary (other than either
Borrower) may liquidate or dissolve if (x) Holdings determines in good faith
that such liquidation or dissolution is in the best interests of such
Restricted Subsidiary or Holdings and is not materially disadvantageous to the
Lenders and (y) to the extent such Restricted Subsidiary is a Credit Party, any
assets or business not otherwise disposed of or transferred in accordance with Section 10.4
or 10.5, or, in the case of any such business, discontinued, shall be
transferred to, or otherwise owned or conducted by, another Credit Party after
giving effect to such liquidation or dissolution.

 

10.4. Limitation
on Sale of Assets. Holdings and the Borrowers will not, and will not permit
any of the Restricted Subsidiaries to, (i) convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including receivables and leasehold interests), whether now owned or hereafter
acquired (other than any such sale, transfer, assignment or other disposition
resulting from any casualty or condemnation, of any assets of Holdings or a
Restricted Subsidiary) or (ii) sell to any Person (other than a Guarantor)
any shares owned by it of any Restricted Subsidiary’s capital stock, except
that:

 

(a)  Holdings and its Restricted Subsidiaries may
sell, transfer or otherwise dispose of used or surplus equipment, vehicles,
inventory and other assets in the ordinary course of business;

 

(b)  Holdings and its Restricted Subsidiaries may
sell, transfer or otherwise dispose of other assets (other than accounts
receivable) for fair market value; provided that (i) the total
non-cash consideration received since the Closing Date in respect of sales,
transfers and dispositions for which less than 50% of such consideration
consisted of cash shall not exceed 

 

122

 

$150,000,000, (ii) any non-cash proceeds
received are pledged to the applicable Administrative Agent to the extent
required under Section 9.12, (iii) with respect to any such
sale, transfer or disposition (or series of related sales, transfers or
dispositions), Holdings shall be in compliance, on a pro forma basis after
giving effect to such sale, transfer or disposition, with the covenants set
forth in Sections 10.9 and 10.10 as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Sections as if such sale, transfer or disposition had occurred on the first day
of such Test Period and (iv) after giving effect to any such sale,
transfer or disposition, no Default or Event of Default shall have occurred and
be continuing;

 

(c)  Holdings and its Restricted Subsidiaries may
make sales of assets to Holdings or to any Restricted Subsidiary; provided
that with respect to any such sales to Restricted Subsidiaries that are not
Guarantors (i)  such sale, transfer or disposition shall be for
consideration that is substantially as favorable to Holdings or such Restricted
Subsidiary as it could obtain in a comparable arm’s-length transaction with a
willing buyer that is not an Affiliate, (ii) the total non-cash
consideration received since the Closing Date in respect of such sales,
transfers and dispositions for which less than 50% of such consideration
consisted of cash shall not exceed $150,000,000 and (iii) any non-cash
proceeds received are pledged to the Collateral Agent to the extent required
under Section 9.12;

 

(d)  any Restricted Subsidiary may effect any
transaction permitted by Section 10.3 or 10.5;

 

(e)  in addition to selling or transferring
accounts receivable pursuant to the other provisions hereof, Holdings and its
Restricted Subsidiaries may (i) sell or discount without recourse accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof and (ii) sell or transfer accounts receivable
and related rights pursuant to Receivables Transactions (other than Exempt
Receivables Transactions) so long as the aggregate amount thereof does not
exceed, at any time outstanding, the greater of (x) $250,000,000 and (y) 67% of
the aggregate amount of accounts receivable of Holdings and its Restricted
Subsidiaries;

 

(f)  Holdings and its Restricted Subsidiaries may
sell or transfer accounts receivable and related property pursuant to Exempt
Receivables Transactions; and

 

(g)  Holdings and its Restricted Subsidiaries may
lease, or sub-lease, any real property or personal property in the ordinary
course of business.

 

10.5. Limitation
on Investments. Holdings and the Borrowers will not, and will not permit
any of the Restricted Subsidiaries to, make any advance, loan, extensions of
credit or capital or asset contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets of, or make any other
Investment in, any Person, except:

 

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

 

(b)  Permitted Investments;

 

123

 

(c)  loans and advances to officers, directors and
employees of Holdings or any of its Subsidiaries (i) for reasonable and
customary business-related travel expenses and (ii) for additional purposes in
an aggregate principal amount at any time outstanding under this clause (ii)
(determined without regard to any write-downs or write-offs of such loans or
advances) not exceeding $25,000,000;

 

(d)  Investments existing on the date hereof and
listed on Schedule 10.5 and any extensions, renewals or
reinvestments thereof, so long as the aggregate amount of all Investments
pursuant to this clause (d) is not increased at any time above the
amount of such Investments existing on the date hereof except to the extent
otherwise permitted hereunder;

 

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

 

(f)  Investments to the extent that payment for
such Investments is made solely with capital stock of Holdings;

 

(g)  Investments in (i) any Guarantor or
either Borrower and (ii) Restricted Subsidiaries that are not Guarantors,
in the case of this clause (g)(ii), in an aggregate amount not to exceed
$25,000,000 plus the Applicable Amount at any time outstanding;

 

(h)  Investments constituting Permitted
Acquisitions; provided that the aggregate amount of any such investment,
as valued at the fair market value of such investment at the time each such
investment is made, made by Holdings or any Restricted Subsidiary in any
Restricted Foreign Subsidiary, to the extent that such Restricted Foreign
Subsidiary does not become a Subsidiary Guarantor pursuant to Section 9.11
and does not enter into the guarantee and collateral arrangements contemplated
thereby, shall not exceed the Applicable Amount at the time of such investment
plus an amount equal to any repayments, interest, returns, profits,
distributions, income and similar amounts actually received in cash in respect
of any such investment (which amount shall not exceed the amount of such
investment valued at the fair market value of such investment at the time such
investment was made);

 

(i)  (i) Investments in Minority Investments
and Unrestricted Subsidiaries and (ii) Investments in joint ventures or
similar entities that do not constitute Restricted Subsidiaries, in each case,
as valued at the fair market value of such Investment at the time each such
Investment is made, (A) in an amount that, at the time such Investment is
made, would not exceed the sum of (x) the Applicable Amount at such time plus
(y) an amount equal to any repayments, interest, returns, profits,
distributions, income and similar amounts actually received in cash in respect
of any such Investment (which amount shall not exceed the amount of such
Investment valued at the fair market value of such Investment at the time such
Investment was made) and/or (B) in the case of clause (ii) only, in
any amount, to the extent that (x) such joint venture owns an interest in
assets the addition of which would have been a Capital Expenditure if acquired
or constructed, and owned, directly by Holdings or a Restricted Subsidiary, and
(y) the ability of Holdings and/or one or more Restricted Subsidiaries to
receive cash flows attributable to its interest therein substantially as they
would if they directly owned such asset or portion thereof is not prohibited by
contract, applicable law or otherwise;

 

124

 

(j)  Investments constituting non-cash proceeds of
sales, transfers and other dispositions of assets to the extent permitted by Section 10.4(b)
or (c);

 

(k)  Investments made to repurchase or retire
common stock of Parent, Holdings or either Borrower owned by any employee stock
ownership plan or key employee stock ownership plan of Parent, Holdings or
either Borrower;

 

(l)  Investments permitted under Section 10.6;
and

 

(m)  Investments to the extent constituting customary
arrangements in connection with Receivables Transactions.

 

10.6. Limitation
on Dividends. Holdings will not declare or pay any dividends (other than
dividends payable solely in its capital stock) or return any capital to its
stockholders or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for consideration, any shares of any class of
its capital stock or the capital stock of any direct or indirect parent now or
hereafter outstanding (or any options or warrants or stock appreciation rights
issued with respect to any of its capital stock), or set aside any funds for
any of the foregoing purposes, or permit any of the Restricted Subsidiaries to
purchase or otherwise acquire for consideration (other than in connection with
an Investment permitted by Section 10.5) any shares of any class of
the capital stock of Holdings now or hereafter outstanding (or any options or
warrants or stock appreciation rights issued with respect to any of its capital
stock) (all of the foregoing “dividends”); provided that so long
as no Default or Event of Default exists or would exist after giving effect
thereto, (a) Holdings may redeem in whole or in part any of its capital stock
for another class of capital stock or rights to acquire its capital stock or
with proceeds from substantially concurrent equity contributions or issuances
of new shares of its capital stock; provided that such other class of
capital stock contains terms and provisions at least as advantageous to the
Lenders in all respects material to their interests as those contained in the
capital stock redeemed thereby, (b) Holdings may declare and pay dividends
and/or make distributions to Parent, to enable Parent to repurchase shares of
its capital stock (or any options or warrants or stock appreciation rights
issued with respect to any of its capital stock) held by officers, directors
and employees of Parent, Holdings, each Borrower and its Subsidiaries, so long
as such repurchase is pursuant to, and in accordance with the terms of,
management and/or employee stock plans, stock subscription agreements or
shareholder agreements, (c) Holdings may declare and pay dividends on its
capital stock; provided that the amount of any such dividends pursuant
to this clause (c) shall not exceed an amount equal to the Applicable
Amount at such time, (d) Holdings may declare and pay dividends and/or make
distributions to Parent, solely to pay administrative and similar expenses
related to ownership of the Borrowers and Holdings; provided that the
amount of such dividends does not exceed in any fiscal year the amount of such
expenses payable for such fiscal year (it being understood that such expense
shall in no event exceed $1,000,000 in the aggregate per fiscal year) and (e)
Holdings may declare and pay dividends and/or make distributions to Parent to
pay taxes related to Parent’s existence or to ownership or operations of
Borrowers and Holdings; provided that the amount of such dividends does
not exceed in any fiscal year the amount of such taxes payable for such fiscal
year.

 

125

 

10.7. Limitations
on Debt Payments and Amendments; Unpaid Refinancing Amount. (a)  
Holdings and the Borrowers will not, and will not permit any Restricted
Subsidiary to, prepay, repurchase or redeem or otherwise defease any
Subordinated Indebtedness; provided, however, that (i) the
Borrowers may (A) prepay the principal of, and premium and accrued
interest on, the Senior Subordinated Loan Facility and the Senior Subordinated
Exchange Notes with any Net Cash Proceeds of the Refinancing Notes, or of any
refinancing or replacement of the Senior Subordinated Loan Facility or the
Senior Subordinated Exchange Notes on the terms described in the definition of
the term “Senior Subordinated Loan Facility” or “Senior Subordinated Exchange
Notes”, as the case may be, or with any Net Cash Proceeds contributed to the
Borrowers in respect of any Equity Issuance Event, and (B) replace Senior
Subordinated Term Loans with Exchange Notes evidencing the same underlying
indebtedness in accordance with the terms of the Senior Subordinated Loan
Facility and (ii) so long as no Default or Event of Default has occurred and is
continuing, Holdings or any Restricted Subsidiary may prepay, purchase,
repurchase or redeem Subordinated Indebtedness (x) for an aggregate price
not in excess of the Applicable Amount at the time of such prepayment,
repurchase or redemption or (y) with the proceeds of Subordinated
Indebtedness that (1) is permitted by Section 10.1 (other than
Section 10.1(a)(xiv)(C)) and (2) has terms material to the
interests of the Lenders not materially less advantageous to the Lenders than
those of such Subordinated Indebtedness being refinanced.

 

(b)  Holdings and the Borrowers will not, and will
not permit any Restricted Subsidiary to, waive, amend, modify, terminate or release
any Subordinated Indebtedness to the extent that any such waiver, amendment,
modification, termination or release would be adverse to the Lenders in any
material respect; provided that this clause (b) shall not
prohibit the repayment of obligations under the Senior Subordinated Loan
Facility with the Net Cash Proceeds from the issuance of the Refinancing Notes.

 

10.8. Limitations
on Sale Leasebacks. Holdings will not, and will not permit any of the
Restricted Subsidiaries to, enter into or effect any Sale Leasebacks, other
than Permitted Sale Leasebacks.

 

10.9. Consolidated
Total Debt to Consolidated EBITDA Ratio. Holdings will not permit the
Consolidated Total Debt to Consolidated EBITDA Ratio at any time during any
Test Period ending on the last day of any fiscal quarter set forth below to be
greater than the ratio set forth below opposite such fiscal quarter:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2005 to December 31, 2005

  	
   

  	
  7.90 to 1.00

  	
   

  
	
  January 1, 2006 to March 31, 2006

  	
   

  	
  7.90 to 1.00

  	
   

  
	
  April 1, 2006 to June 30, 2006

  	
   

  	
  7.90 to 1.00

  	
   

  
	
  July 1, 2006 to September 30, 2006

  	
   

  	
  7.70 to 1.00

  	
   

  
	
  October 1, 2006 to December 31, 2006

  	
   

  	
  7.40 to 1.00

  	
   

  
	
  January 1, 2007 to March 31, 2007

  	
   

  	
  7.40 to 1.00

  	
   

  
	
  April 1, 2007 to June 30, 2007

  	
   

  	
  7.40 to 1.00

  	
   

  
	
  July 1, 2007 to September 30, 2007

  	
   

  	
  7.30 to 1.00

  	
   

  
	
  October 1, 2007 to December 31, 2007

  	
   

  	
  7.00 to 1.00

  	
   

  

 

126

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2008 to March 31, 2008

  	
   

  	
  7.00 to 1.00

  	
   

  
	
  April 1,
  2008 to June 30, 2008

  	
   

  	
  7.00 to 1.00

  	
   

  
	
  July 1, 2008
  to September 30, 2008

  	
   

  	
  6.80 to 1.00

  	
   

  
	
  October 1,
  2008 to December 31, 2008

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  January 1,
  2009 to March 31, 2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  April 1,
  2009 to June 30, 2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  July 1, 2009
  to September 30, 2009

  	
   

  	
  6.30 to 1.00

  	
   

  
	
  October 1,
  2009 to December 31, 2009

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  January 1,
  2010 to March 31, 2010

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  April 1,
  2010 to June 30, 2010

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  July 1, 2010
  to September 30, 2010

  	
   

  	
  5.80 to 1.00

  	
   

  
	
  October 1,
  2010 to December 31, 2010

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  January 1,
  2011 to March 31, 2011

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  April 1,
  2011 to June 30, 2011

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  July 1, 2011
  to September 30, 2011

  	
   

  	
  5.30 to 1.00

  	
   

  
	
  October 1,
  2011 to December 31, 2011

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  January 1,
  2012 to March 31, 2012

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  April 1,
  2012 to June 30, 2012

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  July 1, 2012
  to September 30, 2012

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  October 1,
  2012 to December 31, 2012

  	
   

  	
  4.75 to 1.00

  	
   

  

 

10.10. Consolidated
EBITDA to Consolidated Interest Expense Ratio. Holdings will not permit the
Consolidated EBITDA to Consolidated Interest Expense Ratio at any time during
any Test Period ending during any period set forth below to be less than the
ratio set forth below opposite such fiscal quarter:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1,
  2005 to December 31, 2005

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  January 1,
  2006 to March 31, 2006

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  April 1,
  2006 to June 30, 2006

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  July 1, 2006
  to September 30, 2006

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  October 1,
  2006 to December 31, 2006

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  January 1,
  2007 to March 31, 2007

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  April 1,
  2007 to June 30, 2007

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  July 1, 2007
  to September 30, 2007

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  October 1,
  2007 to December 31, 2007

  	
   

  	
  1.65 to 1.00

  	
   

  
	
  January 1,
  2008 to March 31, 2008

  	
   

  	
  1.65 to 1.00

  	
   

  
	
  April 1,
  2008 to June 30, 2008

  	
   

  	
  1.65 to 1.00

  	
   

  
	
  July 1, 2008
  to September 30, 2008

  	
   

  	
  1.65 to 1.00

  	
   

  
	
  October 1,
  2008 to December 31, 2008

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  January 1,
  2009 to March 31, 2009

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  April 1,
  2009 to June 30, 2009

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  July 1, 2009
  to September 30, 2009

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  October 1,
  2009 to December 31, 2009

  	
   

  	
  1.90 to 1.00

  	
   

  

 

127

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2010 to March 31, 2010

  	
   

  	
  1.90 to 1.00

  	
   

  
	
  April 1,
  2010 to June 30, 2010

  	
   

  	
  1.90 to 1.00

  	
   

  
	
  July 1, 2010
  to September 30, 2010

  	
   

  	
  1.90 to 1.00

  	
   

  
	
  October 1,
  2010 to December 31, 2010

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1,
  2011 to March 31, 2011

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  April 1,
  2011 to June 30, 2011

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  July 1, 2011 to September 30, 2011

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  October 1,
  2011 to December 31, 2011

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  January 1,
  2012 to March 31, 2012

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  April 1,
  2012 to June 30, 2012

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  July 1, 2012
  to September 30, 2012

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  October 1,
  2012 to December 31, 2012

  	
   

  	
  2.20 to 1.00

  	
   

  

 

SECTION 11. Events
of Default.

 

Upon the
occurrence of any of the following specified events (each an “Event of
Default”):

 

11.1. Payments.
Either Borrower shall (a) default in the payment when due of any principal of
the Loans or (b) default, and such default shall continue for five or more
days, in the payment when due of any interest or stamping fees on the Loans or
any Fees or any Unpaid Drawings or of any other payment Obligations; or

 

11.2. Representations,
etc. Any representation, warranty or statement made or deemed made by any
Credit Party herein or in any Security Document or any certificate delivered or
required to be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or

 

11.3. Covenants.
Any Credit Party shall (a) default in the due performance or observance by it
of any term, covenant or agreement contained in Section 9.1(e) or Section 10
or (b) default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in Section 11.1 or 11.2
or clause (a) of this Section 11.3) contained in this
Agreement, any Security Document or the Amended and Restated Fee Letter dated
February 4, 2005 between the Canadian Borrower and the Agents and such default
shall continue unremedied for a period of at least 30 days after receipt of
written notice by either Borrower from the Administrative Agent or the Required
Lenders; or

 

11.4. Default
Under Other Agreements. (a) Holdings, either Borrower or any
Restricted Subsidiary shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) in excess of $50,000,000 in the
aggregate, of Holdings, the Borrowers and the Restricted Subsidiaries beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist (other than, with
respect to Indebtedness consisting of any Hedge Agreements, 

 

128

 

termination events or equivalent events
pursuant to the terms of such Hedge Agreements), the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause, any such Indebtedness to become due prior to its stated maturity; or
(b) without limiting the provisions of clause (a) above, any
such Indebtedness shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (and, with respect to Indebtedness consisting of any Hedge
Agreements, other than due to a termination event or equivalent event pursuant
to the terms of such Hedge Agreements), prior to the stated maturity thereof;
or

 

11.5. Bankruptcy,
etc. Holdings, either Borrower or any Specified Subsidiary shall commence a
voluntary case, proceeding or action concerning itself under (a) Title 11
of the United States Code entitled “Bankruptcy” (“U.S. Bankruptcy Code”),
(b) any of the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors
Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada)
(collectively, the “Canadian Insolvency Laws”) or (c) in the case
of the Canadian Borrower and any Foreign Subsidiary that is a Specified
Subsidiary, any domestic or foreign law relating to bankruptcy, insolvency,
reorganization or relief of debtors legislation of its jurisdiction of
incorporation, in each case as now or hereafter in effect, or any successor
thereto (collectively, the “Bankruptcy Code”); or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not controverted within 10 days after
commencement of the case, proceeding or action; or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not dismissed within 60 days after
commencement of the case, proceeding or action; or a custodian (as defined in
the Bankruptcy Code), receiver, interim receiver, receiver manager, examiner,
trustee, liquidator, assignee, sequestrator or similar person is appointed for,
or takes charge of, all or any substantial part of the property of Holdings,
either Borrower or any Specified Subsidiary and such appointment continues
undischarged or unstayed for a period of 60 days; or Holdings, either Borrower
or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, winding up, relief of debtors,
dissolution, receivership, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings, either
Borrower or any Specified Subsidiary; or there is commenced against Holdings,
either Borrower or any Specified Subsidiary any such proceeding or action that
remains undismissed for a period of 60 days; or Holdings, either Borrower or
any Specified Subsidiary is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding or action is
entered; or Holdings, either Borrower or any Specified Subsidiary makes a
general assignment for the benefit of creditors; or any corporate action is
taken by Holdings, either Borrower or any Specified Subsidiary for the purpose
of effecting any of the foregoing; or

 

11.6. ERISA.
(a)  (i)  Any Plan shall fail
to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA
(including the giving of written notice thereof); an event shall have occurred
or a condition shall exist in either case entitling the PBGC to terminate any
Plan or to appoint a trustee to administer any Plan (including the giving of
written notice thereof); any Plan shall have an accumulated funding 

 

129

 

deficiency (whether or not waived); Holdings
or any Subsidiary or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975
of the Code (including the giving of written notice thereof); (ii) there could
result from any event or events set forth in clause (i) of this Section 11.6(a)
the imposition of a lien, the granting of a security interest, or a liability,
or the reasonable likelihood of incurring a lien, security interest or
liability; and (iii) such lien, security interest or liability will or
would be reasonably likely to have a Material Adverse Effect, or
(b)  (i) Holdings or any Subsidiary thereof shall have failed to
make any required contribution, installment or other payment pursuant to
applicable laws or regulations with respect to a Canadian Pension Plan or
Canadian Benefit Plan, or any other event shall have occurred, giving rise to a
lien (statutory or otherwise) against, or deemed trust in respect of, any of
the assets of Holdings or any Subsidiary thereof, or a waiver of the minimum
funding requirements or an extension of any amortization period under
applicable laws or regulations with respect to a Canadian Pension Plan or
Canadian Benefit Plan is sought or granted; any Canadian Pension Plan is or
shall have been terminated or wound up in whole or in part or is the subject of
termination proceedings under applicable laws or regulations (including the
giving of written notice thereof); an event shall have occurred or a condition
shall exist in either case entitling any Governmental Authority to terminate or
wind up in whole or in part any Canadian Pension Plan or Canadian Benefit Plan
(including the giving of written notice thereof); Holdings or any Subsidiary
thereof has incurred or is likely to incur a liability to or on account of a
Canadian Pension Plan or Canadian Benefit Plan arising due to breach by
Holdings or any Subsidiary thereof of their respective obligations pursuant to
applicable laws or regulations (including the giving of written notice
thereof); (ii) there could result from any event or events set forth in clause
(i) of this Section 11.6(b) the imposition of a lien, the granting
of a security interest, or a liability, or the reasonable likelihood of
incurring a lien, security interest or liability; and (iii) such lien,
security interest or liability will or would be reasonably likely to have a
Material Adverse Effect; or

 

11.7. Guarantee.
The Guarantee Agreements or any material provision thereof shall cease to be in
full force or effect or any Guarantor thereunder or any Credit Party shall deny
or disaffirm in writing any Guarantor’s obligations under any Guarantee
Agreement; or

 

11.8. Security
Agreements. The Security Agreements or any material provision thereof shall
cease to be in full force or effect (other than pursuant to the terms hereof or
thereof or as a result of acts or omissions of the Administrative Agent or the
Canadian Administrative Agent, as applicable, or any Lender) or any grantor
thereunder or any Credit Party shall deny or disaffirm in writing any grantor’s
obligations under any Security Agreement; or

 

11.9. Mortgages.
Any Mortgage or any material provision of any Mortgage relating to any material
portion of the Collateral shall cease to be in full force or effect (other than
pursuant to the terms hereof or thereof or as a result of acts or omissions of
the Collateral Agent or any Lender) or any mortgagor thereunder or any Credit
Party shall deny or disaffirm in writing any mortgagor’s obligations under any
Mortgage; or

 

11.10. Other
Security Documents. Any other Security Document or any material provision
of any other Security Document shall cease to be in full force or effect (other
than pursuant to the terms hereof or thereof or as a result of acts or
omissions of the Administrative 

 

130

 

Agent or any Lender) or any grantor
thereunder or any Credit Party shall deny or disaffirm in writing any grantors
obligations under any Security Document; or

 

11.11. Judgments.
One or more judgments or decrees shall be entered against Holdings, either
Borrower or any of the Restricted Subsidiaries involving a liability of $50,000,000
or more in the aggregate for all such judgments and decrees for Holdings, the
Borrowers and the Restricted Subsidiaries (to the extent not paid or fully
covered by insurance provided by a carrier not disputing coverage after having
been notified thereof) and any such judgments or decrees shall not have been
satisfied, vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or

 

11.12. Change
of Control. A Change of Control shall occur; or

 

11.13. Subordination.
The Obligations, or the obligations of any Subsidiary Guarantors pursuant to
the Guarantee Agreements, shall cease to constitute senior indebtedness under
the subordination provisions of any document or instrument evidencing any
Subordinated Indebtedness or such subordination provisions shall be invalidated
or otherwise cease to be legal, valid and binding obligations of the parties
thereto, enforceable in accordance with their terms;

 

then, and in
any such event, and at any time thereafter, if any Event of Default shall then
be continuing, the Administrative Agent may, and upon the request of the
Required Lenders shall, by written notice to the either Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent, the Canadian Administrative Agent or any Lender to
enforce its claims against any Credit Party, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default specified
in Section 11.5 shall occur with respect to Holdings, the US
Borrower, the Canadian Borrower or any Specified Subsidiary, the result that
would occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i), (ii) and (iv) below shall occur
automatically without the giving of any such notice):  (i) declare the US Total Revolving
Credit Commitment terminated and the Canadian Total Revolving Credit Commitment
terminated, whereupon the Commitments and Swingline Commitment, if any, of each
Lender or the Swingline Lenders, as the case may be, shall forthwith terminate
immediately and any Fees theretofore accrued shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest and fees in respect of all Loans and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the US Borrower and the
Canadian Borrower; (iii) terminate any Letter of Credit that may be
terminated in accordance with its terms; and/or (iv) direct the US Borrower and
the Canadian Borrower to pay (and the US Borrower and the Canadian Borrower
agree that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 11.5 with respect to Holdings, the US
Borrower, the Canadian Borrower or any Specified Subsidiary, it will pay) to
the Administrative Agent or the Canadian Administrative Agent, as applicable,
at its Administrative Agent’s Office such additional amounts of cash, to be
held as security for the US Borrower’s and the Canadian Borrower’s respective
reimbursement obligations for (x) Drawings that may subsequently occur
thereunder, equal to the aggregate Stated Amount of all Letters of Credit
issued and then outstanding and (y) the full face amount of Bankers’
Acceptances outstanding prior to their maturity dates.

 

131

 

SECTION 12. The
Administrative Agent.

 

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

 

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

 

12.3. Exculpatory
Provisions. Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
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 Credit Document
(except for its or such Person’s own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the US Borrower, the Canadian
Borrower, any Guarantor, any other Credit Party or any officer thereof
contained in this Agreement or any other Credit Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Credit Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Credit Document or
for any failure of the US Borrower, the Canadian Borrower, any Guarantor or any
other Credit Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of the US Borrower or
the Canadian Borrower.

 

12.4. Reliance
by Administrative Agent. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any 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 US Borrower and/or the Canadian Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
may deem and treat the Lender specified in the Register with respect to any
amount owing hereunder as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer 

 

132

 

thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required 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
or both. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.

 

12.5. Notice
of Default. The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative 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 the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders (except to the extent
that this Agreement requires that such action be taken only with the approval
of the Required Lenders or each of the Lenders, as applicable).

 

12.6. Non-Reliance
on Administrative Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the US Borrower, the
Canadian Borrower, any Guarantor or any other Credit Party, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative 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
US Borrower, the Canadian Borrower, any Guarantor and any other Credit Party
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 the Administrative 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 Credit 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
US Borrower, the Canadian Borrower, any Guarantor and any other Credit Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, assets, operations, properties,
financial condition, prospects or creditworthiness of the US Borrower, the
Canadian Borrower, any Guarantor or any other Credit 

 

133

 

Party that may come into the possession of
the Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.

 

12.7. Indemnification.
The Lenders agree to indemnify the Administrative Agent in its capacity as such
(to the extent not reimbursed by the US Borrower or the Canadian Borrower and
without limiting the obligation of the US Borrower and the Canadian Borrower to
do so), ratably according to their respective portions of the Total Credit
Exposure in effect on the date on which indemnification is sought (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 their respective portions of the Total Credit Exposure in effect
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
(including at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Credit
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 the Administrative 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 resulting from the Administrative
Agent’s gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.

 

12.8. Administrative
Agent in its Individual Capacity. The Administrative Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the US Borrower, the Canadian Borrower, any Guarantor and
any other Credit Party as though the Administrative Agent were not the
Administrative Agent hereunder and under the other Credit Documents. With
respect to the Loans made by it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Credit Documents as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

 

12.9. Successor
Agent. The Administrative Agent may resign as Administrative Agent upon 20
days’ prior written notice to the Lenders and the Borrowers. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Credit Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrowers (which approval shall not be unreasonably
withheld) so long as no Default or Event of Default is continuing, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section 12 shall inure
to its benefit as to any actions 

 

134

 

taken or omitted to be taken by it while it
was Administrative Agent under this Agreement and the other Credit Documents.

 

12.10. Withholding
Tax. To the extent required by any applicable law, the Administrative Agent
may withhold from any interest payment to any Lender an amount equivalent to
any applicable withholding tax. If the Internal Revenue Service, Canada Revenue
Agency or any authority of the United States, Canada or other jurisdiction
asserts a claim that the Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender
failed to notify the Administrative Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason), such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including penalties and interest, together with all
expenses incurred, including legal expenses, allocated staff costs and any out
of pocket expenses.

 

12.11. Canadian
Administrative Agent. Each of the Lenders hereby agrees and confirms that
the provisions of this Section 12 shall apply mutatis mutandis
to the Canadian Administrative Agent as if each reference to the Administrative
Agent were a reference to the Canadian Administrative Agent unless the context
clearly indicates otherwise upon the same terms and subject to the same
conditions as provided in this Section 12; provided that any
successor Canadian Administrative Agent shall be a Canadian Resident with an
office in Toronto, Canada or Montreal, Canada having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such bank which is also
a bank and a Canadian Resident.

 

12.12. Other
Agents; Arrangers and Bookrunners. Each Lender and each Administrative
Agent hereby irrevocably designates and appoints the Collateral Agent as the
collateral agent for the benefit of such Lender and such Administrative Agent
under each Security Document, and as the security trustee for the benefit of
such Lender and such Administrative Agent under the UK Security Documents and
the Irish Security Documents. None of the Lenders or other Persons identified
on the cover page of this Agreement as a “joint lead arranger,” “joint
bookrunner,” “co-syndication agent” or “co-documentation agent” shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement in their respective capacities as such, but shall be entitled to all
the benefits of this Section 12 applicable to the Administrative
Agent. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.

 

SECTION 13. Miscellaneous

 

13.1. Amendments
and Waivers. Neither this Agreement nor any other Credit Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section 13.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the
relevant Credit Party or Credit Parties written amendments, supplements 

 

135

 

or modifications hereto and to the other
Credit Documents for the purpose of adding any provisions to this Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Credit Parties hereunder or thereunder or (b) waive, on such terms
and conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Credit 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 directly (i) forgive any
portion of any Loan or extend the final scheduled maturity date of any Loan or
reduce the stated rate, or forgive any portion, or extend the date for the
payment, of any interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates), or
extend the final expiration date of any Lender’s Commitment or extend the final
expiration date of any Letter of Credit beyond the L/C Maturity Date, or
increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 13.8(a), in each case without the
written consent of each Lender directly and adversely affected thereby, or
(ii) amend, modify or waive any provision of this Section 13.1
or reduce the percentages specified in the definitions of the terms “Required
Lenders” and “Required Term Loan Lenders” or consent to the assignment or
transfer by the US Borrower or the Canadian Borrower of its rights and
obligations under any Credit Document to which it is a party (except as
permitted pursuant to Section 10.3), in each case without the
written consent of each Lender directly and adversely affected thereby, or
(iii) amend, modify or waive any provision of Section 12 without
the written consent of the then-current Administrative Agent, or (iv) amend,
modify or waive any provision of Section 3 without the written
consent of each Letter of Credit Issuer, or (v) amend, modify or waive any
provisions hereof relating to Swingline Loans without the written consent of
each Swingline Lender, or (vi) change any Revolving Credit Commitment to a Term
Loan Commitment, or change any Term Loan Commitment to a Revolving Credit
Commitment, in each case without the prior written consent of each Lender directly
and adversely affected thereby, or (vii) release all or substantially all
of the Guarantors under the Guarantee Agreements (except as expressly permitted
by the applicable Guarantee Agreement), or release all or substantially all of
the Collateral under the Security Agreements, the other Canadian Security
Documents and the Mortgages, in each case without the prior written consent of
each Lender, or (viii) amend Section 2.9 so as to permit Interest
Period intervals greater than six months without regard to availability to
Lenders, without the written consent of each Lender directly and adversely
affected thereby, or (ix) decrease any Repayment Amount, extend any
scheduled Repayment Date or decrease the percentage allocation of any mandatory
prepayment to be received by any Lender holding any Term Loans, in each case
without the written consent of the Required Term Loan Lenders. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the affected Lenders and shall be binding upon Holdings, the US Borrower,
the Canadian Borrower, such Lenders, the Administrative Agent and all future
holders of the affected Loans. In the case of any waiver, the Borrowers, the
Lenders and the Administrative Agent shall be restored to their former
positions and rights hereunder and under the other Credit Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing, it being understood that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

 

13.2. Notices.
All notices, requests and demands to or upon the respective parties hereto to
be effective shall be in writing (including by facsimile transmission), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when 

 

136

 

delivered, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of Holdings, the US Borrower,
the Canadian Borrower, the Administrative Agent and the Canadian Administrative
Agent, and as set forth on Schedule 1.1(c) in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:

 

	
  The US Borrower:

  	
   

  	
  Suite 950

  1 North Dale Mabry

  Tampa, Florida 33609

  USA 

  Attn: Legal Department

  Fax:  (813) 739-0112

  
	
   

  	
   

  	
   

  
	
  Holdings or the Canadian Borrower:

  	
   

  	
  1600
  Britannia Rd East

  Mississauga, Ontario

  L4W 1J2

  Canada

  Attn: General Counsel

  Fax:  (905) 670-6520

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Administrative Agent:

  	
   

  	
  The Bank of
  Nova Scotia

  One Liberty Plaza, 25th Floor

  New York, New York 10006

  
	
   

  	
   

  	
  Attn: John
  Hall

  
	
   

  	
   

  	
           Senior Manager

  
	
   

  	
   

  	
  Fax:  (416) 866-5991

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy
  to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
   

  	
  Attn:

  	
  Andrew
  Mattei, Esq.

  
	
   

  	
   

  	
  Fax:

  	
  (212)
  262-1910

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Canadian Administrative Agent:

  	
   

  	
  The Bank of
  Nova Scotia 

  Wholesale Banking Operations 

  720 King Street West, 3rd Floor 

  Toronto, Ontario 

  M5V 2T3 

  
	
   

  	
   

  	
  Attention:  John Hall

  
	
   

  	
   

  	
                    Senior Manager 

  
	
   

  	
   

  	
  Facsimile: (416)
  866-5991

  

 

137

 

	
   

  	
   

  	
  with a copy
  to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
   

  	
  Attn: Andrew
  Mattei, Esq.

  
	
   

  	
   

  	
  Fax:  (212) 262-1910

  

 

provided
that any notice, request or demand to or upon the Administrative Agent, the
Canadian Administrative Agent or the Lenders pursuant to Sections 2.3,
2.6, 2.9, 4.2 and 5.1 shall not be effective until
received.

 

13.3. No
Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Canadian
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Credit 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.

 

13.4. Survival
of Representations and Warranties. All representations and warranties made
hereunder, in the other Credit 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 hereunder.

 

13.5. Payment
of Expenses. The Borrowers agree (a) to pay or reimburse the Agents and the
Collateral Agent for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit 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, disbursements
and other charges of counsel to the Agents and the Collateral Agent, (b) to pay
or reimburse each Lender and Agent and the Collateral Agent for all its
reasonable and documented costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other
Credit Documents and any such other documents, including the reasonable fees,
disbursements and other charges of counsel to each Lender and of counsel to the
Agents and the Collateral Agent, (c) to pay, indemnify, and hold harmless each
Lender and Agent and the Collateral Agent from, any and all recording and
filing fees and (d) to pay, indemnify, and hold harmless each Lender and Agent
and the Collateral Agent and their respective directors, officers, employees,
trustees and agents from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
and documented fees, disbursements and other charges of counsel, with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Credit Documents and any such other documents, including
any of the foregoing relating to the violation of, noncompliance with 

 

138

 

or liability under, any Environmental Law or
to any actual or alleged presence, release or threatened release of Hazardous
Materials involving or attributable to the operations of either Borrower, any
of its Subsidiaries or any of the Real Estate (all the foregoing in this clause
(d), collectively, the “indemnified liabilities”), provided that the
US Borrower and the Canadian Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender nor any of their respective directors,
officers, employees and agents with respect to indemnified liabilities to the
extent attributable to (i) the gross negligence or willful misconduct of the
party to be indemnified to the extent so determined in the final,
non-appealable judgment of a court of competent jurisdiction or
(ii) disputes among the Administrative Agent, the Lenders and/or their
transferees. The agreements in this Section 13.5 shall survive
repayment of the Loans and all other amounts payable hereunder.

 

13.6. Successors
and Assigns; Participations and Assignments. (a)   The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of any Letter of Credit Issuer that issues any Letter of Credit),
except that (i) Holdings, the US Borrower and the Canadian Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by Holdings, the US Borrower or the Canadian Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of any Letter
of Credit Issuer that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Canadian Administrative Agent, the Letter of Credit Issuers and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)  (i) 
Subject to the conditions set forth in clause (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent of:

 

(A)  the applicable Borrower
(which consent shall not be unreasonably withheld or delayed; it being
understood that, without limitation, either Borrower shall have the right to
withhold consent to any assignment if, in order for such assignment to comply
with applicable law, such Borrower would be required to obtain the consent of,
or make any filing or registration with, any Governmental Authority); provided
that no Borrower consent shall be required for an assignment to a Lender, an
Affiliate of a Lender (unless increased costs or additional amounts under Section
5.4(a) would result therefrom except if an Event of Default under Section 11.1
or Section 11.5 has occurred and is continuing), an Approved Fund,
or if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing, any other assignee; and

 

139

 

(B)  the Administrative Agent
(which consent shall not be unreasonably withheld or delayed); provided
that no Administrative Agent consent shall be required for an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C)  regardless of clause (B)
above, in the case of Revolving Credit Commitments, Revolving Credit Loans or
Letters of Credit only, the applicable Swingline Lender and the applicable
Letter of Credit Issuer.

 

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

 

(A)  except in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $2,500,000 (or, in the case of a
Term Loan Commitment or Term Loan, $1,000,000), and increments of $1,000,000 in
excess thereof, unless each of the US Borrower and the Administrative Agent
otherwise consents; provided that no such consent of the US Borrower
shall be required if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing; provided  further that
contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;

 

(B)  each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement; provided that this
clause shall not be construed to prohibit the assignment of a proportionate
part of all the assigning Lender’s rights and obligations in respect of one
Class of Commitments or Loans;

 

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

 

(D)  the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an administrative
questionnaire in a form approved by the Administrative Agent the “Administrative
Questionnaire”; and

 

(E)  so long as no Event of
Default under Section 11.1 or 11.5 has occurred and is
continuing, with respect to any assignment of the Canadian Revolving Credit
Commitments, Canadian Letter of Credit 

 

140

 

Commitments
and Canadian Swingline Commitments, the assignee shall be a Canadian Resident
and it or its Related Affiliate shall also be either a “United States person”
(as such term is defined in Section 7701(a)(30) of the Code) or a Non-US
Lender that has fulfilled the requirements of Section 5.4(b).

 

For the purpose of this Section 13.6(b), the term “Approved
Fund” shall mean any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course and that is administered, advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers, advises or manages a Lender.

 

(iii)  Subject to acceptance and
recording thereof pursuant to clause (b)(v) of this Section, from
and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.10, 2.11,
3.5, 5.4 and 13.5). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
Section shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with paragraph
(c) of this Section.

 

(iv)  The Administrative Agent,
acting for this purpose as an agent of the US Borrower and the Canadian
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and any payment made by any Letter of Credit Issuer under
any Letter of Credit owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). In the case of a Lender in respect of a
Canadian Revolving Credit Commitment or a Canadian Letter of Credit Commitment,
the Register shall also record the address of the lending office of the Lender
through which such Lender acts under this Agreement and whether or not the
Lender is a Canadian Resident. Further, the Register shall contain the name and
address of the Administrative Agent and the Canadian Administrative Agent and
the lending office through which each such Person acts under this Agreement. The
entries in the Register shall be conclusive, and the US Borrower, the Canadian
Borrower, the Administrative Agent, the Canadian Administrative Agent, the
Letter of Credit Issuers and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the US Borrower, the Canadian
Borrower, any Letter of Credit Issuer and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

141

 

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

 

(c)  (i)    Any Lender may, without the consent of the US
Borrower, the Canadian Borrower, the Administrative Agent, the Canadian
Administrative Agent, any Letter of Credit Issuer or either Swingline Lender,
sell participations to one or more banks or other entities (each, a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitments and/or the Loans owing
to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the US
Borrower, the Canadian Borrower, the Administrative Agent, the Canadian
Administrative Agent, the Letter of Credit Issuers and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement or any other Credit Document; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 13.1 that affects such Participant. Subject
to paragraph (c)(ii) of this Section, the US Borrower and the
Canadian Borrower agree that each Participant shall be entitled to the benefits
of Sections 2.10, 2.11 and 5.4 to the same extent as if it
were a Lender (subject to the requirements of those Sections) and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 13.8(b) as though it were a Lender, provided
such Participant agrees to be subject to Section 13.8(a) as though
it were a Lender. Each Lender that sells a participation hereunder shall record
in book entries maintained by such Lender the name and the amount of the
participating interest of each Participant entitled to receive payments in
respect of such participating interest.

 

(ii)  A Participant shall not be
entitled to receive any greater payment under Section 2.10 or 5.4
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the US Borrower’s and the
Canadian Borrower’s prior written consent (which consent shall not be
unreasonably withheld).

 

(d)  Any Lender may, without the consent of or
notice to the US Borrower, the Canadian Borrower or the Administrative Agent or
any other Person, at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender 

 

142

 

from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. In
order to facilitate such pledge or assignment, the US Borrower and the Canadian
Borrower hereby agree that, upon request of any Lender at any time and from
time to time after each of the US Borrower and the Canadian Borrower has made
its initial borrowing hereunder, the US Borrower or the Canadian Borrower, as
the case may be, shall provide to such Lender, at the US Borrower’s or the
Canadian Borrower’s own expense, a promissory note, substantially in the form
of Exhibit G-1, G-2 or G-3, as the case may be, evidencing
the Term Loans, New Term Loans, Revolving Credit Loans and Swingline Loans,
respectively, owing to such Lender.

 

(e)  Subject to Section 13.16, the US
Borrower and the Canadian Borrower authorize each Lender to disclose to any
Participant, secured creditor of such Lender or assignee (each, a “Transferee”)
and any prospective Transferee any and all financial information in such
Lender’s possession concerning each Borrower and its Affiliates that has been
delivered to such Lender by or on behalf of each Borrower and its Affiliates
pursuant to this Agreement or which has been delivered to such Lender by or on
behalf of each Borrower and its Affiliates in connection with such Lender’s
credit evaluation of each Borrower and its Affiliates prior to becoming a party
to this Agreement.

 

(f)  Each Person that is or becomes a Lender or
Canadian Administrative Agent in respect of the Canadian Revolving Credit
Commitment or Canadian Letter of Credit Commitment shall (i) promptly direct
the Administrative Agent to record in the Register the information described in
Section 13.6(b)(iv) of this Agreement, (ii) upon written request
made by Canadian Borrower, deliver to the Canadian Borrower and the
Administrative Agent such certificates, forms, documents, or other evidence as
may be applicable and determined by the Canadian Borrower, acting reasonably,
to be reasonably satisfactory to determine whether such Person is a Canadian
Resident, and (iii) promptly direct the Administrative Agent to amend the
Register to reflect any change in the information contained therein with
respect to such Person.

 

13.7. Replacements
of Lenders under Certain Circumstances. (a)   The US Borrower (on
its own behalf and on behalf of the Canadian Borrower) shall be permitted to
replace any Lender that (i) requests reimbursement for amounts owing pursuant
to Section 2.10, 2.12, 3.5 or 5.4, (ii) is
affected in the manner described in Section 2.10(a)(iii) and as a
result thereof any of the actions described in such Section is required to
be taken, (iii) is a Canadian Lender and ceases to be a Canadian Resident
(other than during a period that an Event of Default under Section 11.1
or 11.5 has occurred or is continuing), or (iv) becomes a Defaulting
Lender, with a replacement bank or other financial institution; provided
that (1) such replacement does not conflict with any Requirement of Law, (2)
the US Borrower and/or the Canadian Borrower, as applicable, shall repay (or
the replacement bank or institution shall purchase, at par) all Loans and other
amounts (other than any disputed amounts), pursuant to Section 2.10,
2.11, 2.12, 3.5 or 5.4, as the case may be) owing
to such replaced Lender prior to the date of replacement, (3) the replacement
bank or institution, if not already a Lender, and the terms and conditions of
such replacement, shall be reasonably satisfactory to the Administrative Agent,
(4) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 13.6 (provided
that the US Borrower and the Canadian Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (5) any such
replacement shall not 

 

143

 

be deemed to be a waiver of any rights that
the US Borrower, the Canadian Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.

 

(b)  If any Lender (such Lender, a “Non-Consenting
Lender”) has failed to consent to a proposed amendment, waiver, discharge
or termination which pursuant to the terms of Section 13.1 requires
the consent of such Lender affected and with respect to which the Required
Lenders shall have granted their consent, the Borrowers shall have the right
(unless such Non-Consenting Lender grants such consent) to replace such
Non-Consenting Lender by requiring such Non-Consenting Lender to assign its
Term Loans, its Revolving Credit Loans and/or its Commitments hereunder to one
or more assignees reasonably acceptable to the Administrative Agent; provided
that: (i) all Obligations with respect to such assigned Loans or Commitments
owing to such Non-Consenting Lender being replaced shall be paid in full to
such Non-Consenting Lender concurrently with such assignment, and (ii) the
replacement Lender shall purchase the foregoing by paying to such Non-Consenting
Lender a price equal to the principal amount thereof plus accrued and unpaid
interest thereon. In connection with any such assignment, the Borrowers,
Administrative Agent, such Non-Consenting Lender and the replacement Lender
shall otherwise comply with Section 13.6.

 

13.8. Adjustments;
Set-off. (a)   If any Lender (a “benefited Lender”) shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 11.5, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender’s Loans, or interest thereon, such benefited
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender’s Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

 

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

 

144

 

13.9. Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by facsimile or other
electronic transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the US Borrower and
the Administrative Agent.

 

13.10. 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.

 

13.11. Integration.
This Agreement and the other Credit Documents represent the agreement of
Holdings, the US Borrower, the Canadian Borrower, the Administrative Agent, the
Canadian Administrative Agent and the Lenders with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent, the Canadian Administrative Agent or
any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Credit Documents.

 

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

 

13.13. Submission
to Jurisdiction; Waivers. Each of Holdings, the US Borrower and the
Canadian Borrower each hereby irrevocably and unconditionally:

 

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

 

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

 

(c)  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
each Borrower at its address set forth in Section 13.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;

 

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

 

145

 

(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 13.13 any special,
exemplary, punitive or consequential damages.

 

13.14. Acknowledgments.
Each of Holdings, the US Borrower and the Canadian Borrower hereby acknowledges
that:

 

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

 

(b)  none of the Administrative Agent, the
Canadian Administrative Agent or any Lender has any fiduciary relationship with
or duty to Holdings, the US Borrower or the Canadian Borrower arising out of or
in connection with this Agreement or any of the other Credit Documents, and the
relationship between Administrative Agent, the Canadian Administrative Agent
and Lenders, on one hand, and Holdings, the US Borrower or the Canadian
Borrower, 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 Credit Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings, the US Borrower, the
Canadian Borrower and the Lenders.

 

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

 

13.16. Confidentiality.
The Administrative Agent, the Canadian Administrative Agent and each Lender
shall hold all non-public information furnished by or on behalf of the US
Borrower or the Canadian Borrower in connection with such Lender’s evaluation
of whether to become a Lender hereunder or obtained by such Lender or the
Administrative Agent or the Canadian Administrative Agent pursuant to the
requirements of this Agreement (“Confidential Information”),
confidential in accordance with its customary procedure for handling
confidential information of this nature and (in the case of a Lender that is a
bank) in accordance with safe and sound banking practices and in any event may
make disclosure as required or requested by any regulatory or governmental
agency or representative thereof or pursuant to legal process or to such
Lender’s or the Administrative Agent’s or the Canadian Administrative Agent’s
attorneys, professional advisors or independent auditors or Affiliates,
provided that unless specifically prohibited by applicable law or court order,
each Lender and the Administrative Agent and the Canadian Administrative Agent
shall notify each Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Person or Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided
further that in no event shall any Lender, the Administrative Agent or the
Canadian Administrative Agent be obligated or required to return any materials
furnished by such Borrower or any Subsidiary of such Borrower. Each Lender, the
Administrative Agent and the Canadian 

 

146

 

Administrative Agent agrees that it will not
provide to prospective Transferees or to prospective direct or indirect
contractual counterparties in swap agreements to be entered into in connection
with Loans made hereunder any of the Confidential Information unless such
Person is advised of and agrees to be bound by the provisions of this Section 13.16.

 

13.17. Québec
Security. For the purposes of holding any security granted by any Credit
Party pursuant to the laws of the Province of Québec to secure payment of any
debenture issued by any Credit Party, the Canadian Administrative Agent is
hereby appointed to act as the person holding the power of attorney (fondé de pouvoir) for the benefit of the Secured Parties
pursuant to article 2692 of the Civil Code of Québec to act on behalf of each
of the debentureholders, initially namely The Bank of Nova Scotia in its
capacity as Canadian Administrative Agent. Each Person who is or becomes a
Canadian Lender and each assignee holder of any debenture issued by any Credit
Party shall be deemed to ratify the power of attorney (fondé de
pouvoir) granted to the Canadian Administrative Agent hereunder by
its execution of an Assignment and Acceptance. The Canadian Administrative
Agent agrees to act in such capacity. Each party hereto agrees that,
notwithstanding Section 32 of An Act respecting the special powers of legal
persons (Québec), the Canadian Administrative Agent, as fondé de pouvoir,
shall also be entitled to act as a debentureholder and to acquire and/or be the
pledgee of any debentures or other titles of indebtedness to be issued under
any deed of hypothec executed by or on behalf of any Credit Party.

 

13.18. Language.
The parties hereto confirm that it is their wish that this Agreement, as well
as any other documents relating to this Agreement, including notices, schedules
and authorizations, have been and shall be drawn up in the English language
only. Les signataires confirment leur volonté que la
présente convention, de même que tous les documents s’y rattachant, y compris
tout avis, annexe et autorisation, soient rédigés en anglais seulement.

 

13.19. Judgment
Currency. (a)   The obligations of the US Borrower and the
Canadian Borrower hereunder and under the other Credit Documents to make
payments in Dollars or in Canadian Dollars, as the case may be (the “Obligation
Currency”), shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent, the Canadian
Administrative Agent or a Lender of the full amount of the Obligation Currency
expressed to be payable to the Administrative Agent, the Canadian
Administrative Agent or Lender under this Agreement or the other Credit
Documents. If, for the purpose of obtaining or enforcing judgment against
Holdings, the US Borrower, the Canadian Borrower or any other Credit Party in
any court or in any jurisdiction, it becomes necessary to convert into or from
any currency other than the Obligation Currency (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the conversion shall be made, at the rate of exchange
prevailing, in each case, as of the date immediately preceding the day on which
the judgment is given (such Business Day being hereinafter referred to as the “Judgment
Currency Conversion Date”).

 

(b)  If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, Holdings, the US Borrower and the Canadian Borrower
each covenant and agree to pay, or cause to be paid, such 

 

147

 

additional amounts, if any (but in any event
not a lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the
date of payment, will produce the amount of the Obligation Currency which could
have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.

 

(c)  For purposes of determining the prevailing
rate of exchange, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

 

13.20. National
Security Laws. Each Lender hereby notifies the US Borrower and the Canadian
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), the Criminal Code, the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the United
Nations Suppression of Terrorism Regulations, the Anti-Terrorism Act and any
equivalent Law applicable under any relevant foreign jurisdiction
(collectively, the “National Security Laws”), it is required to obtain,
verify and record information that identifies the US Borrower and the Canadian
Borrower, which information includes the name and address of the US Borrower
and the Canadian Borrower and other information that will allow such Lender to
identify the US Borrower and the Canadian Borrower in accordance with
applicable National Security Laws.

 

148

 

IN WITNESS
WHEREOF, each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.

 

	
   

  	
  STILE U.S.
  ACQUISITION CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name:  Tagar C. Olson

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STILE
  ACQUISITION CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name:  Tagar C. Olson

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STILE
  CONSOLIDATED CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name:  Tagar C. Olson

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

	
   

  	
  THE BANK OF
  NOVA SCOTIA, as

  Administrative Agent, as Canadian Administrative

  Agent and as Joint Lead Arranger and Joint

  Bookrunner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  

 

 

	
   

  	
  DEUTSCHE
  BANK SECURITIES INC., as Joint

  Lead Arranger, Joint Bookrunner and as 

  Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Eydenberg

  	
   

  
	
   

  	
   

  	
  Name:  John Eydenberg

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie L. Perry

  	
   

  
	
   

  	
   

  	
  Name: Stephanie
  L. Perry

  
	
   

  	
   

  	
  Title:   Director

  

 

 

	
   

  	
  UBS
  SECURITIES LLC, as Joint Bookrunner and

  as Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A.
  Juge

  	
   

  
	
   

  	
   

  	
  Name: David
  A. Juge

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren
  Jervey

  	
   

  
	
   

  	
   

  	
  Name: Warren
  Jervey

  
	
   

  	
   

  	
  Title:   Director and Counsel Region Americas

  
	
   

  	
   

  	
              Legal

  

 

 

	
   

  	
  BANK OF
  MONTREAL, as Co-Documentation

  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  A. Batterham

  	
   

  
	
   

  	
   

  	
  Name:  Thomas A. Batterham

  
	
   

  	
   

  	
  Title:    Managing Director

  

 

 

	
   

  	
  SUNTRUST
  BANK, as Co-Documentation Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken
  Bauche

  	
   

  
	
   

  	
   

  	
  Name: Ken
  Bauche

  
	
   

  	
   

  	
  Title:   Vice President

  

 

 

	
   

  	
  LENDERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  
						

 

 

	
   

  	
  DEUTSCHE
  BANK AG, CANADA BRANCH, as

  Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Jurist

  	
   

  
	
   

  	
   

  	
  Name:  Paul Jurist

  
	
   

  	
   

  	
  Title:   Managing Director & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  Johnston

  	
   

  
	
   

  	
   

  	
  Name:  Robert Johnston

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

	
   

  	
  UBS AG
  CANADA BRANCH, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amy Fung

  	
   

  
	
   

  	
   

  	
  Name: Amy
  Fung

  
	
   

  	
   

  	
  Title:   Director Banking Products Services

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  Gerry

  	
   

  
	
   

  	
   

  	
  Name: Stephen
  Gerry

  
	
   

  	
   

  	
  Title:   Director

  

 

 

	
   

  	
  SUNTRUST
  BANK, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken
  Bauche

  	
   

  
	
   

  	
   

  	
  Name: Ken
  Bauche

  	
   

  
	
   

  	
   

  	
  Title:   Vice President

  	
   

  

 

 

	
   

  	
  BANK OF
  MONTREAL, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  A. Batterham

  	
   

  
	
   

  	
   

  	
  Name:  Thomas A. Batterham

  
	
   

  	
   

  	
  Title:    Managing DirectorExhibit 10.2

 

Execution Copy

 

 

SENIOR SUBORDINATED LOAN AGREEMENT

 

Dated as of April 6, 2005,

 

among

 

STILE U.S. ACQUISITION CORP., 

as the US Borrower,

 

STILE ACQUISITION CORP.,

as the Canadian Borrower,

 

STILE CONSOLIDATED CORP.,

as Guarantor,

 

The Several Lenders

from Time to Time Parties Hereto

 

and

 

THE BANK OF NOVA SCOTIA,

as US Administrative Agent and as 

Canadian Administrative Agent

 

 

THE BANK OF NOVA SCOTIA,

as Joint Lead Arranger and Joint Bookrunner

 

DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arranger, Joint Bookrunner

and Co-Syndication Agent

UBS SECURITIES LLC,

as Joint Bookrunner and Co-Syndication Agent

 

BANK OF MONTREAL and SUNTRUST BANK,

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Defined
  Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  Amount and Terms of Credit

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.

  	
   

  	
  Commitments

  	
   

  	
  39

  
	
  2.2.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  40

  
	
  2.3.

  	
   

  	
  Notice of
  Borrowing

  	
   

  	
  40

  
	
  2.4.

  	
   

  	
  Disbursement
  of Funds

  	
   

  	
  41

  
	
  2.5.

  	
   

  	
  Repayment of
  Loans; Evidence of Debt

  	
   

  	
  42

  
	
  2.6.

  	
   

  	
  Conversions
  and Continuations

  	
   

  	
  43

  
	
  2.7.

  	
   

  	
  Pro Rata
  Borrowings

  	
   

  	
  44

  
	
  2.8.

  	
   

  	
  Interest

  	
   

  	
  44

  
	
  2.9.

  	
   

  	
  Interest
  Periods

  	
   

  	
  45

  
	
  2.10.

  	
   

  	
  Increased
  Costs, Illegality, etc

  	
   

  	
  46

  
	
  2.11.

  	
   

  	
  Compensation

  	
   

  	
  48

  
	
  2.12.

  	
   

  	
  Change of
  Lending Office

  	
   

  	
  48

  
	
  2.13.

  	
   

  	
  Notice of
  Certain Costs

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  Subordination

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1.

  	
   

  	
  Agreement to
  Subordinate

  	
   

  	
  49

  
	
  3.2.

  	
   

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  	
  49

  
	
  3.3.

  	
   

  	
  Default on
  Designated Senior Indebtedness of the Company

  	
   

  	
  49

  
	
  3.4.

  	
   

  	
  Acceleration
  of Payment of the Loans

  	
   

  	
  51

  
	
  3.5.

  	
   

  	
  When
  Distribution Must Be Paid Over

  	
   

  	
  51

  
	
  3.6.

  	
   

  	
  Subrogation

  	
   

  	
  51

  
	
  3.7.

  	
   

  	
  Relative
  Rights

  	
   

  	
  51

  
	
  3.8.

  	
   

  	
  Subordination
  May Not Be Impaired by the Borrowers

  	
   

  	
  51

  
	
  3.9.

  	
   

  	
  Rights of
  Administrative Agents

  	
   

  	
  51

  
	
  3.10.

  	
   

  	
  Distribution
  or Notice to Representative

  	
   

  	
  52

  
	
  3.11.

  	
   

  	
  Section 3
  Not To Prevent Events of Default or Limit Right To Accelerate

  	
   

  	
  52

  
	
  3.12.

  	
   

  	
  Administrative
  Agents Entitled To Rely

  	
   

  	
  52

  
	
  3.13.

  	
   

  	
  US
  Administrative Agent To Effectuate Subordination

  	
   

  	
  52

  
	
  3.14.

  	
   

  	
  Administrative
  Agents Not Fiduciary for Holders of Senior Indebtedness

  	
   

  	
  52

  
	
  3.15.

  	
   

  	
  Reliance by
  Holders of Senior Indebtedness on Subordination Provisions

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  Fees; Commitments

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.

  	
   

  	
  Fees

  	
   

  	
  53

  
	
  4.2.

  	
   

  	
  Mandatory
  Termination of Commitments

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  Payments

  	
   

  	
  53

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.

  	
   

  	
  Voluntary
  Prepayments

  	
   

  	
  53

  
	
  5.2.

  	
   

  	
  Mandatory
  Prepayments

  	
   

  	
  54

  
	
  5.3.

  	
   

  	
  Method and
  Place of Payment

  	
   

  	
  55

  
	
  5.4.

  	
   

  	
  Net Payments

  	
   

  	
  56

  
	
  5.5.

  	
   

  	
  Computations
  of Interest and Fees

  	
   

  	
  59

  
	
  5.6.

  	
   

  	
  Limit on
  Rate of Interest

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Conditions Precedent to Initial Credit Event

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1.

  	
   

  	
  Loan
  Documents

  	
   

  	
  60

  
	
  6.2.

  	
   

  	
  Legal
  Opinions

  	
   

  	
  61

  
	
  6.3.

  	
   

  	
  Representations
  and Warranties; No Default

  	
   

  	
  61

  
	
  6.4.

  	
   

  	
  Equity
  Contributions

  	
   

  	
  61

  
	
  6.5.

  	
   

  	
  Closing
  Certificates

  	
   

  	
  61

  
	
  6.6.

  	
   

  	
  Corporate
  Proceedings of Each Credit Party

  	
   

  	
  61

  
	
  6.7.

  	
   

  	
  Corporate
  Loan Documents

  	
   

  	
  62

  
	
  6.8.

  	
   

  	
  Fees

  	
   

  	
  62

  
	
  6.9.

  	
   

  	
  Acquisition
  Agreement

  	
   

  	
  62

  
	
  6.10.

  	
   

  	
  Solvency
  Certificate

  	
   

  	
  62

  
	
  6.11.

  	
   

  	
  Governmental
  Authorizations and Consents

  	
   

  	
  62

  
	
  6.12.

  	
   

  	
  Historical
  Financial Statements

  	
   

  	
  62

  
	
  6.13.

  	
   

  	
  Pro Forma
  Financial Statements

  	
   

  	
  62

  
	
  6.14.

  	
   

  	
  Acquisition

  	
   

  	
  62

  
	
  6.15.

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  62

  
	
  6.16.

  	
   

  	
  Notice of
  Borrowing

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  63

  
	
  SECTION 8.

  	
   

  	
  Representations, Warranties and Agreements

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1.

  	
   

  	
  Corporate
  Status

  	
   

  	
  63

  
	
  8.2.

  	
   

  	
  Corporate
  Power and Authority

  	
   

  	
  63

  
	
  8.3.

  	
   

  	
  Authorization;
  No Violation

  	
   

  	
  64

  
	
  8.4.

  	
   

  	
  Litigation

  	
   

  	
  64

  
	
  8.5.

  	
   

  	
  Margin
  Regulations

  	
   

  	
  64

  
	
  8.6.

  	
   

  	
  Governmental
  Approvals

  	
   

  	
  64

  
	
  8.7.

  	
   

  	
  Investment
  Company Act

  	
   

  	
  64

  
	
  8.8.

  	
   

  	
  True and Complete
  Disclosure

  	
   

  	
  64

  
	
  8.9.

  	
   

  	
  Financial
  Statements; Financial Condition

  	
   

  	
  65

  
	
  8.10.

  	
   

  	
  Tax Returns
  and Payments

  	
   

  	
  65

  
	
  8.11.

  	
   

  	
  Compliance
  with ERISA

  	
   

  	
  65

  
	
  8.12.

  	
   

  	
  Subsidiaries

  	
   

  	
  67

  
	
  8.13.

  	
   

  	
  Patents, etc

  	
   

  	
  67

  
	
  8.14.

  	
   

  	
  Environmental
  Laws

  	
   

  	
  67

  
	
  8.15.

  	
   

  	
  Properties

  	
   

  	
  67

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.16.

  	
   

  	
  Solvency

  	
   

  	
  67

  
	
  8.17.

  	
   

  	
  Public
  Utility Holding Company Act

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  Affirmative Covenants

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1.

  	
   

  	
  Information
  Covenants

  	
   

  	
  68

  
	
  9.2.

  	
   

  	
  Books,
  Records and Inspections

  	
   

  	
  70

  
	
  9.3.

  	
   

  	
  Maintenance
  of Insurance

  	
   

  	
  71

  
	
  9.4.

  	
   

  	
  Payment of
  Taxes

  	
   

  	
  71

  
	
  9.5.

  	
   

  	
  Consolidated
  Corporate Franchises

  	
   

  	
  71

  
	
  9.6.

  	
   

  	
  Compliance
  with Statutes, Regulations, etc

  	
   

  	
  71

  
	
  9.7.

  	
   

  	
  ERISA;
  Canadian Benefit Matters

  	
   

  	
  71

  
	
  9.8.

  	
   

  	
  Good Repair

  	
   

  	
  73

  
	
  9.9.

  	
   

  	
  Refinancing
  the Loans

  	
   

  	
  73

  
	
  9.10.

  	
   

  	
  End of
  Fiscal Years

  	
   

  	
  73

  
	
  9.11.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  74

  
	
  9.12.

  	
   

  	
  Use of
  Proceeds

  	
   

  	
  74

  
	
  9.13.

  	
   

  	
  Changes in
  Business

  	
   

  	
  74

  
	
  9.14.

  	
   

  	
  Exchange
  Notes

  	
   

  	
  74

  
	
  9.15.

  	
   

  	
  Change of
  Control

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  Negative Covenants

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Limitation
  on Asset Sales

  	
   

  	
  76

  
	
  10.2.

  	
   

  	
  Limitation
  on Restricted Payments

  	
   

  	
  76

  
	
  10.3.

  	
   

  	
  Limitations
  on Incurrence of Indebtedness and Issuance of Disqualified Stock

  	
   

  	
  80

  
	
  10.4.

  	
   

  	
  Limitation
  on Liens

  	
   

  	
  84

  
	
  10.5.

  	
   

  	
  Merger,
  Consolidation or Sale of All or Substantially All Assets

  	
   

  	
  85

  
	
  10.6.

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  86

  
	
  10.7.

  	
   

  	
  Dividend and
  Other Payment Restrictions Affecting Subsidiaries

  	
   

  	
  87

  
	
  10.8.

  	
   

  	
  Limitation
  on Other Pari Passu Indebtedness; etc

  	
   

  	
  89

  
	
  10.9.

  	
   

  	
  Guarantees
  of Indebtedness by Restricted Subsidiaries

  	
   

  	
  89

  
	
  10.10.

  	
   

  	
  Amendments
  or Waivers of Certain Loan Documents

  	
   

  	
  90

  
	
  10.11.

  	
   

  	
  Payments for
  Consent

  	
   

  	
  90

  
	
  10.12.

  	
   

  	
  Restricted
  Subsidiaries

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  Events of Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1.

  	
   

  	
  Payments

  	
   

  	
  91

  
	
  11.2.

  	
   

  	
  Representations,
  etc

  	
   

  	
  91

  
	
  11.3.

  	
   

  	
  Covenants

  	
   

  	
  91

  
	
  11.4.

  	
   

  	
  Defaults
  Under Other Agreement

  	
   

  	
  91

  
	
  11.5.

  	
   

  	
  Bankruptcy,
  etc

  	
   

  	
  91

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.6.

  	
   

  	
  ERISA

  	
   

  	
  92

  
	
  11.7.

  	
   

  	
  Guarantee

  	
   

  	
  93

  
	
  11.8.

  	
   

  	
  Judgments

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  The Administrative Agents

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1.

  	
   

  	
  Appointment

  	
   

  	
  93

  
	
  12.2.

  	
   

  	
  Delegation
  of Duties

  	
   

  	
  94

  
	
  12.3.

  	
   

  	
  Exculpatory
  Provisions

  	
   

  	
  94

  
	
  12.4.

  	
   

  	
  Reliance by
  US Administrative Agent

  	
   

  	
  94

  
	
  12.5.

  	
   

  	
  Notice of
  Default

  	
   

  	
  95

  
	
  12.6.

  	
   

  	
  Non-Reliance
  on US Administrative Agent and Other Lenders

  	
   

  	
  95

  
	
  12.7.

  	
   

  	
  Indemnification

  	
   

  	
  96

  
	
  12.8.

  	
   

  	
  US
  Administrative Agent in its Individual Capacity

  	
   

  	
  96

  
	
  12.9.

  	
   

  	
  Successor
  Agent

  	
   

  	
  96

  
	
  12.10.

  	
   

  	
  Withholding
  Tax

  	
   

  	
  97

  
	
  12.11.

  	
   

  	
  Canadian
  Administrative Agent

  	
   

  	
  97

  
	
  12.12.

  	
   

  	
  Other
  Agents; Arrangers and Bookrunners

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  Miscellaneous

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1.

  	
   

  	
  Amendments
  and Waivers

  	
   

  	
  97

  
	
  13.2.

  	
   

  	
  Notices

  	
   

  	
  99

  
	
  13.3.

  	
   

  	
  No Waiver;
  Cumulative Remedies

  	
   

  	
  101

  
	
  13.4.

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  101

  
	
  13.5.

  	
   

  	
  Payment of
  Expenses

  	
   

  	
  101

  
	
  13.6.

  	
   

  	
  Successors
  and Assigns; Participations and Assignments

  	
   

  	
  102

  
	
  13.7.

  	
   

  	
  Replacements
  of Lenders under Certain Circumstances

  	
   

  	
  105

  
	
  13.8.

  	
   

  	
  Adjustments;
  Set-off

  	
   

  	
  106

  
	
  13.9.

  	
   

  	
  Counterparts

  	
   

  	
  107

  
	
  13.10.

  	
   

  	
  Severability

  	
   

  	
  107

  
	
  13.11.

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  107

  
	
  13.12.

  	
   

  	
  GOVERNING
  LAW

  	
   

  	
  107

  
	
  13.13.

  	
   

  	
  Submission
  to Jurisdiction; Waivers

  	
   

  	
  107

  
	
  13.14.

  	
   

  	
  Acknowledgments

  	
   

  	
  108

  
	
  13.15.

  	
   

  	
  WAIVERS OF
  JURY TRIAL

  	
   

  	
  108

  
	
  13.16.

  	
   

  	
  Confidentiality

  	
   

  	
  108

  
	
  13.17.

  	
   

  	
  Language

  	
   

  	
  109

  
	
  13.18.

  	
   

  	
  Judgment
  Currency

  	
   

  	
  109

  
	
  13.19.

  	
   

  	
  National
  Security Laws

  	
   

  	
  109

  

 

iv

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  Commitments and Addresses of Lenders

  
	
  Schedule 1.1(b)

  	
   

  	
  Closing Date Investments

  
	
  Schedule 8.11(b)

  	
   

  	
  Canadian Pension Plan Matters

  
	
  Schedule 8.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 10.3(b)(iii)

  	
   

  	
  Closing Date Indebtedness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit B-1

  	
   

  	
  Form of US Guarantee

  
	
  Exhibit B-2

  	
   

  	
  Form of Canadian Guarantee

  
	
  Exhibit B-3

  	
   

  	
  Form of Chilean Guarantee

  
	
  Exhibit B-4

  	
   

  	
  Form of Mexican Guarantee

  
	
  Exhibit B-5

  	
   

  	
  Form of Irish Guarantee

  
	
  Exhibit B-6

  	
   

  	
  Form of UK Guarantee

  
	
  Exhibit C-1

  	
   

  	
  Form of Closing Certificate

  
	
  Exhibit C-2

  	
   

  	
  Form of Credit Party Closing Certificate

  
	
  Exhibit D

  	
   

  	
  Form of Promissory Note

  
	
  Exhibit E-1

  	
   

  	
  Form of US Borrowing Request

  
	
  Exhibit E-2

  	
   

  	
  Form of Canadian Borrowing Request

  
	
  Exhibit F

  	
   

  	
  Form of Exchange Note Indenture

  
					

 

i

 

THIS SENIOR
SUBORDINATED LOAN AGREEMENT, dated as of April 6, 2005, is among STILE U.S.
ACQUISITION CORP., a Delaware
corporation (the “US Borrower”), STILE ACQUISITION CORP., a corporation
organized under the laws of Ontario (the “Canadian Borrower” and,
together with the US Borrower, the “Borrowers”), STILE CONSOLIDATED
CORP., a corporation formed under the federal laws of Canada (“Holdings”),
the lending institutions from time to time parties hereto (each a “Lender”
and, collectively, the “Lenders”), THE BANK OF NOVA SCOTIA, as the US
Administrative Agent, the Canadian Administrative Agent and Joint Lead Arranger
and Joint Bookrunner, DEUTSCHE BANK SECURITIES INC., as Joint Lead Arranger and
Joint Bookrunner and as Co-Syndication Agent, UBS SECURITIES LLC, as Joint
Bookrunner and Co-Syndication Agent, and BANK OF MONTREAL and SUNTRUST BANK, as
Co-Documentation Agents.

 

Pursuant to or
in connection with the Acquisition Agreement (such term and each other
capitalized term used but not defined in this introductory statement having the
meaning provided in Section 1), (a) the Canadian Borrower will
acquire (the “Acquisition”) all of the issued and outstanding Capital
Stock of Masonite International Corporation, a corporation governed by the laws
of Ontario, and shall subsequently be amalgamated with Masonite International
Corporation in accordance with applicable law, (b) affiliates of KKR will make
the KKR Equity Contribution, (c) on the Closing Date, the Management Investors
will acquire equity interests in Stile Holding Corp., a corporation continued
under the federal laws of Canada and the direct parent of Holdings (“Parent”)
in an aggregate amount that, when combined with the KKR Equity Amount, equals
not less than 20.0% of the aggregate pro forma capitalization of Parent on the
Closing Date (such equity interests, the “Rollover Equity Contribution”,
and, together with the KKR Equity Contribution, the “Equity Contributions”),
(d) the US Borrower and the Canadian Borrower will incur loans, in each case,
under the Senior Credit Facilities and (e) the Borrowers will incur the Loans
hereunder.

 

In connection
with the foregoing, the parties hereto agree as follows:

 

SECTION 1. Definitions.

 

1.1.  Defined
Terms. (a)    As used herein, the following terms shall
have the meanings specified in this Section 1.1 (it being
understood that defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular):

 

“ABR”
shall mean, 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%. If
the US Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
US Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the ABR shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. 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.

 

 

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

 

“Acquired
Entity or Business” shall mean any Person, property, business or asset
(other than an Unrestricted Subsidiary) acquired to the extent not subsequently
sold, transferred or otherwise disposed of by Holdings or any Restricted
Subsidiary.

 

“Acquired
Indebtedness” shall mean, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Restricted Subsidiary of such specified
Person, including Indebtedness incurred in connection with, or in contemplation
of, such other Person merging with or into or becoming a Restricted Subsidiary
of such specified Person, and (b) Indebtedness secured by a Lien encumbering
any asset acquired by such specified Person.

 

“Acquisition”
shall have the meaning provided in the preamble to this Agreement.

 

“Acquisition
Agreement” shall mean the Second Amended and Restated Combination
Agreement, dated February 17, 2005 between Stile Acquisition Corp. and Masonite
International Corporation (amending and restating that certain Amended and
Restated Combination Agreement dated January 16, 2005 amending and restating
that certain Combination Agreement dated December 22, 2004), and all other
material documents and instruments entered into in connection therewith, each
as in effect on the date of this Agreement.

 

“Adjusted
Commitment” shall mean at any time the Commitment less the Commitments of
all Defaulting Lenders.

 

“Adjusted
Credit Exposure” shall, at any date, mean the sum of (a) the portion
of the Adjusted Commitment that relates to Commitments at such date and
(b) the outstanding principal amount of the Loans (excluding the Loans
held by Defaulting Lenders) in the aggregate at such date.

 

“Administrative
Agent” shall mean, as the context may require, either the US Administrative
Agent, the Canadian Administrative Agent, or both.

 

“Administrative
Agent’s Office” shall mean (a) in respect of all Credit Events for the
account of the US Borrower, the office of the US Administrative Agent located
at 720 King Street West, 3rd
Floor, Toronto, Ontario  M5V 2T3,
or such other office as the US Administrative Agent may hereafter designate in
writing as such to the other parties hereto and (b) in respect of all Credit
Events for the account of the Canadian Borrower, the office of the Canadian
Administrative Agent located at 720
King Street West, 3rd Floor, Toronto, Ontario  M5V 2T3, or such other office in
Canada as the Canadian Administrative Agent may hereafter designate in writing
as such to the other parties hereto and all references to the term “Canadian
Administrative Agent’s Office” shall mean the office referred to in this clause
(b).

 

2

 

“Administrative
Questionnaire” shall have the meaning provided in Section 13.6(b).

 

“Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

 

“Affiliate Transaction” is defined in Section 10.6.

 

“Agents”
shall mean the US Administrative Agent, the Canadian Administrative Agent, the
Guarantee Agents, the Joint Lead Arrangers and Joint Bookrunners, the
Co-Syndication Agents and the Co-Documentation Agents.

 

“Agreement”
shall mean this Senior Subordinated Loan Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Applicable
Spread” shall mean, initially 0.0% from the Closing Date to, but excluding,
the Designated 2 Date and thereafter increasing by 0.50% on the Designated 2
Date and on the first day of each subsequent 90-day period.

 

“Approved
Fund” shall have the meaning provided in Section 13.6.

 

“Asset Sale” shall
mean (x) the sale, conveyance, transfer or other disposition (whether in a
single transaction or a series of related transactions) of property or assets
(including by way of a Sale Leaseback) of Holdings, any Borrower or any Restricted
Subsidiary (each referred to in this definition as a “disposition”) or (y) the sale of Equity Interests of
any Restricted Subsidiary (whether in a single transaction or a series of
related transactions), in each case other than:

 

(a)  a disposition of Cash Equivalents or
Investment Grade Securities or obsolete or worn out equipment in the ordinary
course of business or inventory or goods held for sale in the ordinary course
of business;

 

(b)  the disposition of all or substantially all
of the assets of Holdings, any Borrower or any Restricted Subsidiary in a
manner permitted pursuant to Section 10.5 or any disposition that
constitutes a Change of Control;

 

(c)  the making of any Restricted Payment or
Permitted Investment that is permitted to be made, and is made, under Section
10.2;

 

(d)  any disposition of assets in a single
transaction or a series of transactions with an aggregate fair market value of
less than $10.0 million;

 

3

 

(e)  any disposition of property or assets or
issuance of securities by a Restricted Subsidiary to a Borrower or by a
Borrower or a Restricted Subsidiary to a Restricted Subsidiary;

 

(f)  to the extent allowable under Section 1031 of
the Code, any exchange of like property (excluding any boot thereon) for use in
a Similar Business;

 

(g)  the lease, assignment or sub-lease of any
real or personal property in the ordinary course of business;

 

(h)  foreclosures on assets pursuant to the
enforcement of a Lien permitted under Section 10.4; and

 

(i)  sales of accounts receivable, or
participations therein, in connection with any Receivables Facility.

 

“Asset Sale
Prepayment Event” shall mean the consummation of any Asset Sale.

 

“Assignment
and Acceptance” shall mean an assignment and acceptance substantially in
the form of Exhibit A.

 

“Authorized
Officer” shall mean the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer or any other senior officer of Holdings, the
US Borrower or the Canadian Borrower, as the case may be, designated as such in
writing to the US Administrative Agent by Holdings, the US Borrower or the
Canadian Borrower, as applicable.

 

“Bankruptcy
Code” shall have the meaning provided in Section 11.5.

 

“Blockage
Notice” has the meaning specified in Section 3.3.

 

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

 

“Borrowers”
shall have the meaning provided in the preamble to this Agreement.

 

“Borrowing”
shall mean and include the incurrence of one Type of Loan on (or, with respect
to the Term Loan, after) the Closing Date (or resulting from conversions on a
given date after the Closing Date) having, in the case of LIBOR Loans, the same
Interest Period (provided that CR Loans incurred pursuant to Section 2.10(b)
shall be considered part of any related Borrowing of LIBOR Loans).

 

“Business
Day” shall mean any day excluding Saturday, Sunday and any day that shall
be in The City of New York, New York or Toronto, Ontario a legal holiday or a
day on which banking institutions are authorized by law or other governmental
actions to close; provided, however, that when used in connection
with a LIBOR Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

 

4

 

“Canadian
Administrative Agent” shall mean The Bank of Nova Scotia, a Schedule I bank
under the Bank Act (Canada), as
the Canadian administrative agent for the holders of Canadian Loans and all
Obligations in respect thereof under this Agreement and the other Loan
Documents, together with any of its permitted successors appointed pursuant to Section 12.

 

“Canadian
Benefit Plans” shall mean all material employee benefit plans, programs,
policies, practices or other arrangements of any nature or kind whatsoever that
are not Canadian Pension Plans and are maintained or contributed to by any
Credit Party, or under which any Credit Party has any liability or contingent
liability, in relation to employees or former employees that it may have in
Canada.

 

“Canadian
Borrower” shall have the meaning provided in the preamble to this Agreement.

 

“Canadian
Borrowing” shall mean a Borrowing by the Canadian Borrower.

 

“Canadian
Commitment” shall mean (a) in the case of each Lender that is a Lender on
the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “Canadian Commitment” and (b) in the case of any
Lender that becomes a Lender after the date hereof, the amount specified as
such Lender’s “Canadian Commitment” in the Assignment and Acceptance pursuant
to which such Lender assumed a portion of the Commitment, in each case as the
same may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Canadian Commitments as of the Closing Date is
$358,000,000.

 

“Canadian
Dollars” shall mean the lawful money of Canada.

 

“Canadian
Guarantee” shall mean the Canadian Senior Subordinated Guarantee made by
Holdings, the Canadian Borrower (with respect to Credit Parties other than
itself) and each Canadian Subsidiary Guarantor, respectively, in favor of the
Canadian Administrative Agent for the ratable benefit of the Loan Parties, each
substantially in the form of Exhibit B-2, and any guarantee governed by
Canadian law entered into by a Subsidiary pursuant to Section 10.9, in
each case, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Canadian
Insolvency Laws” shall have the meaning provided in Section 11.5.

 

“Canadian
Loans” shall mean at any time (i) prior to the Initial Loan Repayment
Date, the Initial Canadian Loans, and (ii) on or after the Initial Loan
Repayment Date, the Canadian Term Loans.

 

“Canadian
Pension Plans” shall mean each plan which is a registered pension plan for
the purposes of the Tax Act established, maintained or contributed to by either
Borrower or any of its Subsidiaries, or under which either Borrower or any of
its Subsidiaries has any liability or contingent liability, in relation to any
employees or former employees that it may have in Canada.

 

5

 

“Canadian
Resident” shall mean, at any time, a Person who at that time is (a) not a
non-resident of Canada for purposes of the Tax Act or (b) an authorized foreign
bank deemed to be resident in Canada for purposes of the Tax Act in respect of
all amounts paid or credited to such Person.

 

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

 

“Canadian
Subsidiary Guarantors” shall mean each Canadian Subsidiary of Holdings that
is a party to the Canadian Guarantee or becomes a party thereto after the
Closing Date pursuant to Section 10.9 or otherwise.

 

“Canadian
Term Loan” shall have the meaning provided in Section 2.1(b).

 

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

 

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

 

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

 

“Cash
Equivalents” shall mean (a) Dollars; (b) Canadian Dollars;
(c) (i) euros, or any national currency of any participating member state
in the European Union, or (ii) in the case of any Foreign Subsidiary that
is a Restricted Subsidiary, such local currencies held by them from time to
time in the ordinary course of business; (d) securities issued or directly
and fully and unconditionally guaranteed or insured by the Canadian or US
government or any agency or instrumentality thereof the securities of which are
unconditionally guaranteed as a full faith and credit obligation of such
government with maturities of 24 months or less from the date of acquisition;
(e) certificates of deposit, time deposits and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any commercial bank having capital and surplus of not less
than $250.0 million in the case of US banks and $100.0 million (or the
Dollar equivalent as of the date of determination) in the case of non-US banks;
(f) repurchase obligations for underlying securities of the types
described in clauses (d) and (e) entered into with any financial
institution meeting the qualifications specified in clause (e) above;
(g) commercial paper rated at least P-1 by Moody’s or at least A-1 by
S&P and in each case maturing within 12 months after the date of creation
thereof; (h) marketable short-term money market and similar securities
having a rating of at least P-2 or A-2 from either Moody’s or S&P, 

 

6

 

respectively, and in each case maturing within 12 months after the date
of creation thereof; (i) investment funds investing 95% of their assets in
securities of the types described in clauses (a) through (h)
above; (j) readily marketable direct obligations issued by any state of
the United States or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody’s or S&P with
maturities of 24 months or less from the date of acquisition; and
(k) Indebtedness or Preferred Stock issued by Persons with a rating of “A”
or higher from S&P or “A2” or higher from Moody’s with maturities of 12
months or less from the date of acquisition; provided, however,
that notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than those set forth in clauses (a)
through (c) above, provided
that such amounts are converted into any currency listed in clauses (a)
through (c) as promptly as practicable and in any event within ten
Business Days following the receipt of such amounts.

 

“Casualty
Event” shall mean, with respect to any property of any Person, any loss of
or damage to, or any condemnation or other taking by a Governmental Authority
of such property for which such Person or any of its Restricted Subsidiaries
receives insurance proceeds, or proceeds of a condemnation award or other
compensation.

 

“Change of
Control” shall mean and be deemed to have occurred if (a) (i) the
Sponsor and the Management Investors shall at any time not own, in the
aggregate, directly or indirectly, beneficially and of record, at least 35% of
the voting power of the outstanding Voting Stock of Holdings (other than as the
result of one or more widely distributed offerings of common stock of Parent or
Holdings, in each case whether by Parent, Holdings, the Sponsor or Management Investors)
and/or (ii) any person, entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
or “offeror” (within the meaning of Section 89(1) of the Securities Act
(Ontario)), other than Sponsor, shall at any time have acquired direct or
indirect beneficial ownership of a percentage of the voting power of the
outstanding Voting Stock of Holdings that exceeds the percentage of the voting
power of such Voting Stock then beneficially owned, in the aggregate, by the
Sponsor and the Management Investors, unless, in the case of either clause (i)
or (ii) above, the Sponsor and the Management Investors have, at such
time, the right or the ability by voting power, contract or otherwise to elect
or designate for election at least a majority of the Board of Directors of
Holdings; and/or (b) at any time Continuing Directors shall not constitute
at least a majority of the Board of Directors of Holdings; and/or (c) at any
time, Holdings shall cease to directly own, beneficially and of record, 100% of
the issued and outstanding Voting Stock and other equity interests of either
Borrower.

 

“Change of
Control Payment” shall have the meaning provided in Section 9.15(a).

 

“Chilean
Guarantee” shall mean the Chilean Guarantee, made by Masonite Chile
Holdings S.A. in favor of the Guarantee Agent for the benefit of the Loan
Parties, substantially in the form of Exhibit B-3, and any guarantee
governed by Chilean law entered into by a Subsidiary pursuant to Section 10.9,
in each case, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are US Loans or Canadian Loans and,
when 

 

7

 

used in reference to any Commitment, refers to whether such Commitment
is a US Commitment or a Canadian Commitment.

 

“Closing
Date” shall mean the date of the initial Borrowing hereunder.

 

“Closing
Date Material Adverse Change” shall mean any change, effect, event or
occurrence with respect to the condition (financial or otherwise), properties,
assets, liabilities, obligations (whether absolute, accrued, conditional or
otherwise), businesses, operations or results of operations or prospects of the
Borrowers and their Subsidiaries that is, or would reasonably be expected to
be, material and adverse to Borrowers and their Subsidiaries on a consolidated
basis (other than a change, effect, event or occurrence caused by or arising
from (a) changes in the markets in which the Borrowers and their Subsidiaries
operate (other than changes in reaction to the announcement of the
Transactions) or (b) macroeconomic factors, interest rates, general financial
market conditions, war, terrorism or hostilities, except, in each case, to the
extent any change, effect, event or occurrence has had a disproportionate
effect on the Borrowers and their Subsidiaries as compared to other Persons in
the industry in which the Borrowers and their Subsidiaries operate).

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued thereunder. Section references
to the Code are to the Code, as in effect at the date of this Agreement, and
any subsequent provisions of the Code, amendatory thereof, supplemental thereto
or substituted therefor.

 

“Co-Documentation
Agents” shall mean Bank of Montreal and SunTrust Bank, together with their
affiliates, as the co-documentation agents under this Agreement and the other
Loan Documents.

 

“Commitment”
shall mean, with respect to each Lender and as the context may require, such
Lender’s US Commitment, such Lender’s Canadian Commitment, or both.

 

“Confidential
Information” shall have the meaning provided in Section 13.16.

 

“Confidential
Information Memorandum” shall mean the Confidential Information Memorandum
of the Borrowers dated March 2005, delivered to the Lenders in connection with
this Agreement.

 

“Consolidated
Depreciation and Amortization Expense” shall mean with respect to any
Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.

 

“Consolidated
Interest Expense” shall mean, with respect to any Person for any period,
the sum, without duplication, of:

 

(a)  consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, to the extent such expense was
deducted in computing Consolidated Net Income (including amortization of
original issue discount resulting from the issuance of Indebtedness at 

 

8

 

less than par, non-cash interest payments (but excluding any non-cash
interest expense attributable to the movement in the mark to market valuation
of Hedging Obligations or other derivative instruments pursuant to GAAP), the
interest component of Capitalized Lease Obligations and net payments, if any,
pursuant to interest rate Hedging Obligations with respect to Indebtedness, and
excluding amortization of deferred financing fees, debt issuance costs,
commissions, fees and expenses and any expensing of bridge, commitment and
other financing fees), and

 

(b)  consolidated capitalized interest of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
less

 

(c)  interest income for such period.

 

For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by such Person to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP.

 

“Consolidated
Net Income” shall mean, with respect to any Person for any period, the
aggregate of the Net Income, of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, and otherwise determined in accordance
with GAAP; provided, however, that, without duplication,

 

(a)  any after tax effect of extraordinary,
non-recurring or unusual gains or losses (less all fees and expenses relating
thereto) or expenses (including relating to severance, relocation costs,
curtailments or modifications to pension and post-retirement employee benefit
plans, inventory provisions and write downs, new product introductions, one
time compensation charges and the Transactions) shall be excluded,

 

(b)  the Net Income for such period shall not
include the cumulative effect of a change in accounting principles during such
period,

 

(c)  any after tax effect of income (loss) from
disposed or discontinued operations and any net after tax gains or losses on
disposal of disposed, abandoned or discontinued operations shall be excluded,

 

(d)  any after tax effect of gains or losses (less
all fees and expenses relating thereto) attributable to asset dispositions
other than in the ordinary course of business, as determined in good faith by
the Board of Directors of Holdings, shall be excluded,

 

(e)  the Net Income for such period of any Person
that is not a Subsidiary of Holdings, or that is an Unrestricted Subsidiary, or
that is accounted for by the equity method of accounting, shall be excluded;
provided that Consolidated Net Income of Holdings shall be increased by the
amount of dividends or distributions or other payments that are actually paid
in cash (or to the extent converted into cash) to the referent Person or a
Restricted Subsidiary thereof in respect of such period,

 

(f)  [Intentionally Omitted],

 

9

 

(g)  effects of adjustments (including the effects
of such adjustments pushed down to Holdings, the Borrowers and their
subsidiaries) in any line item in such Person’s consolidated financial
statements pursuant to GAAP resulting from the application of purchase
accounting in relation to the Transaction or any acquisition that is consummated
after the Closing Date, net of taxes, shall be excluded,

 

(h)  any after tax effect of income (loss) from
the early extinguishment of Indebtedness or Hedging Obligations or other
derivative instruments shall be excluded,

 

(i)  any impairment charge or asset write off
pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP
shall be excluded, and

 

(j)  any non cash compensation expense recorded
from grants of stock appreciation or similar rights, stock options, restricted
stock or other rights shall be excluded.

 

“Contingent
Obligations” means, with respect to any Person, any obligation of such
Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent,

 

(a)  to purchase any such primary obligation or
any property constituting direct or indirect security therefor,

 

(b)  to advance or supply funds

 

(i)  for the purchase or payment
of any such primary obligation or

 

(ii)  to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, or

 

(c)  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 against loss in respect thereof.

 

“Continuing
Director” shall mean, at any date, an individual (a) who is a member
of the Board of Directors of Holdings or either Borrower on the date hereof,
(b) who, as at such date, has been a member of such Board of Directors for
at least the 12 preceding months, (c) who has been nominated to be a
member of such Board of Directors, directly or indirectly, by a Sponsor or
Persons nominated by a Sponsor or (d) who has been nominated to be a
member of such Board of Directors by a majority of the other Continuing Directors
then in office.

 

“Contract
Rate” shall mean, as of any date of determination, (a) from the Closing
Date to, but excluding, the Designated 1 Date, a rate per annum (the “First
Contract Rate”) equal to the greater of (i) 8.50% and (ii) the sum of
the ABR plus 5.00%, (b) on and after the Designated 1 Date to, but
excluding, the Designated 2 Date, a rate per annum (the “Second Contract
Rate”) equal to the sum of the First Contract Rate plus 1.00%, (c)
on and after the Designated 2 Date, but excluding the Initial Loan Repayment
Date, a rate per annum (the “Third 

 

10

 

Contract Rate”) equal to the sum of the Second
Contract Rate plus the Applicable Spread and (d) on and after the
Initial Loan Repayment Date, a rate per annum equal to the sum of the Third
Contract Rate plus the Term Spread.

 

“Converted
Restricted Subsidiary” shall mean any Unrestricted Subsidiary that is
converted into a Restricted Subsidiary.

 

“Co-Syndication
Agents” shall mean Deutsche Bank Securities Inc. and UBS Securities LLC,
together with their affiliates, as co-syndication agents under this Agreement
and the other Loan Documents.

 

“Credit
Event” shall mean and include the making (but not the conversion or continuation)
of a Loan.

 

“Credit
Party” shall mean each of Holdings, the US Borrower, the Canadian Borrower,
the US Subsidiary Guarantors, the Canadian Subsidiary Guarantors, the Foreign
Subsidiary Guarantors and each other Subsidiary of Holdings that is a party to
a Loan Document.

 

“CR Loan”
shall mean any Loan bearing interest at a rate determined by reference to the
Contract Rate.

 

“Debt
Incurrence Prepayment Event” shall mean any issuance or incurrence by
Holdings, either Borrower or any of the Restricted Subsidiaries of any
Refinancing Indebtedness.

 

“Default”
shall mean any event, act or condition that with notice or lapse of time, or
both, would constitute an Event of Default.

 

“Defaulting
Lender” shall mean any Lender with respect to which a Lender Default is in
effect.

 

“Designated
1 Date” shall mean October 6, 2005.

 

“Designated
2 Date” shall mean January 6, 2006.

 

“Designated
Default” shall mean any Default listed in Section 11.1 or Section
11.5.

 

“Designated
Non-Cash Consideration” shall mean the fair market value of non-cash
consideration received by a Holdings or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-Cash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such
valuation, executed by a senior vice president and the principal financial
officer of Holdings, less the amount of cash or Cash Equivalents received in
connection with a subsequent sale of or collection on such Designated Non-Cash
Consideration.

 

“Designated
Preferred Stock” means Preferred Stock of Holdings or any parent
corporation thereof (in each case other than Disqualified Stock) that is issued
for cash (other than to a Restricted Subsidiary) and is so designated as
Designated Preferred Stock, pursuant to an Officers’ Certificate executed by a
senior vice president and the principal financial officer of 

 

11

 

Holdings or the applicable parent corporation thereof, as the case may
be, on the issuance date thereof.

 

“Designated
Senior Indebtedness” shall mean

 

(1)           any Indebtedness
outstanding under the Senior Credit Facilities; and

 

(2)           any other Senior
Indebtedness permitted under this Agreement, the principal amount of which is
$25.0 million or more and that has been designated by Holdings as “Designated
Senior Indebtedness.”

 

“Directing
Lenders” shall mean, at any date, Non-Defaulting Lenders and holders of
Exchange Notes having or holding at least 33 1/3% (or a majority at any time
that the Agents and their respective Affiliates hold a majority of the sum of
the aggregate principal amount of Exchange Notes outstanding at such time plus
the Adjusted Credit Exposure) of the Adjusted Credit Exposure.

 

“Disqualified
Stock” shall mean, with respect to any Person, any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is puttable or exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable or retractable (other than
as a result of a change of control or asset sale), pursuant to a sinking fund
obligation or otherwise, or is redeemable or retractable at the option of the
holder thereof (other than as a result of a change of control or asset sale),
in whole or in part, in each case prior to the date 91 days after the earlier
of the Maturity Date or the date the Loans are no longer outstanding; provided,
however, that if such Capital Stock is issued to any Plan or Canadian
Pension Plan, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the issuer thereof in order to
satisfy applicable statutory or regulatory obligations.

 

“Dollars”
and “$” shall mean dollars in lawful currency of the United States of
America.

 

“Dollar Equivalent”
shall mean, on any date of determination, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount denominated
in Canadian Dollars, the equivalent in Dollars of such amount, determined by
the US Administrative Agent using the Exchange Rate.

 

“EBITDA”
shall mean, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period

 

(a)  increased
(without duplication) by:

 

(i)            provision for taxes based on income or profits, plus
franchise or similar taxes, foreign withholding taxes and provincial capital
taxes of such Person for such period deducted in computing Consolidated Net
Income, plus

 

12

 

(ii)           Consolidated Interest Expense of such Person for such
period (together with charges in connection with the sale of receivables for
such Person for such period to the extent not included in Consolidated Interest
Expense) to the extent the same was deducted in calculating such Consolidated
Net Income, plus

 

(iii)          Consolidated Depreciation and Amortization Expense of such
Person for such period to the extent the same were deducted in computing
Consolidated Net Income, plus

 

(iv)          any expenses or charges (other than depreciation or amortization
expense) related to any Equity Offering, Permitted Investment, acquisition,
disposition, recapitalization or the incurrence of Indebtedness permitted to be
incurred by this Agreement (including a refinancing thereof) (whether or not
successful), including (A) such fees, expenses or charges related to the Senior
Credit Facilities and the Loans and (B) any amendment or other modification of
the Documents, and, in each case, deducted in computing Consolidated Net
Income, plus

 

(v)           the amount of any restructuring charge deducted in such
period in computing Consolidated Net Income, including any one time costs
incurred in connection with acquisitions after the Closing Date and costs
related to the closure and/or consolidation of facilities, plus

 

(vi)          any other non cash charges, including any write off or
write downs, reducing Consolidated Net Income for such period, (provided that
if any such non-cash charges represent an accrual or reserve for potential cash
items in any future period, the cash payment in respect thereof in such future
period shall be subtracted from EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period), plus

 

(vii)         the amount of any minority interest expense deducted in such
period in calculating Consolidated Net Income (less the amount of any cash
dividends paid to the holders of such minority interests), plus

 

(viii)        the amount of management, monitoring, consulting and advisory
fees and related expenses paid in such period to the Investors or any of their
respective Affiliates, plus

 

(ix)           costs of surety bonds incurred in such period in
connection with financing activities;

 

(b)  decreased
by (without duplication) non cash items increasing Consolidated Net Income of
such Person for such period, excluding any items which represent the reversal
of any accrual of, or cash reserve for, anticipated cash charges in any prior
period; and

 

(c)  increased
or decreased by (without duplication):

 

13

 

(i)            any net gain or loss resulting in such period from
Hedging Obligations, plus or minus, as applicable,

 

(ii)           any net gain or loss resulting in such period from
currency transaction gains or losses related to currency remeasurements
(including any net loss or gain resulting from hedge agreements for currency
exchange risk), plus or minus, as applicable,

 

(iii)          without duplication, the Historical Adjustments incurred in
such period.

 

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

 

“Environmental
Law” shall mean any applicable federal, state, provincial, territorial,
foreign or local statute, law, rule, regulation, ordinance, code and rule of
common law now or hereafter in effect and in each case as amended, and any
binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment relating
to the protection of the environment, including ambient air, surface water,
groundwater, land surface and subsurface strata and natural resources such as
wetlands, or health or safety (to the extent relating to human exposure to
Hazardous Materials), or Hazardous Materials, including the Canadian
Environmental Protection Act, 1999, the Fisheries Act (Canada), the
Transportation of Dangerous Goods Act, 1992 (Canada), the Environmental
Protection Act (Ontario), the Ontario Water Resources Act, the Environment
Quality Act (Québec), the Hazardous Products Act (Canada), the Canada Shipping
Act, and the Canada Wildlife Act.

 

“Equity
Contributions” shall have the meaning provided in the preamble to this
Agreement.

 

“Equity
Interests” shall mean Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.

 

14

 

“Equity
Issuance Prepayment Event” shall mean any issuance or sale or other
disposition by Holdings, either Borrower or any of the Restricted Subsidiaries
of any Capital Stock after the Closing Date other than any such issuance, sale
or other disposition that is (x)  to a Borrower, a Restricted Subsidiary
or any members of management, directors or consultants of a Borrower, any
direct or indirect parent corporation of a Borrower or a Borrower’s
Subsidiaries, (y) used to finance any Permitted Acquisition or
(z) pursuant to a Plan or Canadian Pension Plan.

 

“Equity
Offering” means any public or private sale of common stock or Preferred
Stock of Holdings or any of its direct or indirect parent companies (excluding
Disqualified Stock), other than

 

(a)           public offerings
with respect to Holdings’ or any direct or indirect parent company’s common
stock registered on Form S-8;

 

(b)           issuances to any
Subsidiary of Holdings; and

 

(c)           any such public or
private sale that constitutes an Excluded Contribution.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time. Section references to ERISA are to ERISA as in effect at the
date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.

 

“ERISA
Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) that together with either Borrower or a Subsidiary would be deemed to be
a “single employer” within the meaning of Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“Event of
Default” shall have the meaning provided in Section 11.

 

“Exchange
Loan Documents” means the Exchange Note Indenture and the Exchange Notes.

 

“Exchange
Note Holders” shall mean the registered holders of the Exchange Notes.

 

“Exchange
Note Indenture” shall mean the indenture to be entered into relating to the
Exchange Notes to be issued by each of the US Borrower and the Canadian
Borrower, substantially in the form of Exhibit F (with such changes as
are noted in Exhibit F to reflect differences between the terms
applicable to the Exchange Notes issued by the US Borrower and Exchange Notes
issued by the Canadian Borrower and with such changes to cure any ambiguity,
omission, defect or inconsistency as the US Administrative Agent and the
Borrowers shall approve), as the same may be amended, modified or supplemented.

 

“Exchange
Notes” shall mean the securities issued under the Exchange Note Indenture.

 

15

 

“Exchange
Note Trustee” shall mean the trustee under the Exchange Note Indenture.

 

“Exchange
Rate” shall mean on any day the rate at which Canadian Dollars may be
exchanged into Dollars, computed by the Canadian Administrative Agent at the
Bank of Canada noon spot rate, after 12:00 noon (Toronto time) on such day; provided
that if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Canadian Administrative Agent, after consultation
with Holdings, may use any reasonable method it deems appropriate to determine
such rate, and such determination shall be conclusive absent manifest error.

 

“Exchange
Request” is defined in Section 9.14(b).

 

“Excluded
Contribution” shall mean
net cash proceeds, marketable securities or Qualified Proceeds, in each case
received by Holdings in an aggregate amount not to exceed the sum of (a) $50.0
million plus (b) 50% of net cash proceeds, marketable securities or Qualified
Proceeds received by Holdings or either Borrower in excess of $50.0 million
from:

 

(a)  contributions
to its common equity capital; and

 

(b)  the
sale (other than to a Subsidiary of Holdings or to any management equity plan
or stock option plan or any other management or employee benefit plan or
agreement of Holdings) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of Holdings;

 

in each case designated
as Excluded Contributions pursuant to an Officers’ Certificate executed by an
executive vice president and the principal financial officer of Holdings on the
date such capital contributions are made or the date such Equity Interests are
sold, as the case may be.

 

“Exempt
Receivables Transactions” shall mean sales of accounts receivable from The
Home Depot, Inc., The Home Depot U.S.A., Inc., Home Depot of Canada Inc. Lowe’s
Companies, Inc., their respective Affiliates and any other Person, including
pursuant to (a) the Receivables Purchase Facility and (b) the Supplier
Agreement, dated as of April 7, 2004 (the “Orbian Facility”), by and
between Masonite International Corporation, an Ontario corporation, and
Citibank, N.A.; provided that such sales are substantially consistent
with sales of receivables under the Receivables Purchase Facility or the Orbian
Facility as in effect on the date hereof.

 

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

 

“Fixed
Charge Coverage Ratio” shall mean, with respect to any Person for any
period, the ratio of EBITDA of such Person for such period to the Fixed Charges
of such Person for such period. In the event that Holdings or any Restricted
Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any
Indebtedness or issues or redeems Disqualified 

 

16

 

Stock or Preferred Stock subsequent to the commencement of the period
for which the Fixed Charge Coverage Ratio is being calculated but prior to or
simultaneously with the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the “Fixed
Charge Coverage Ratio Calculation Date”), then the Fixed Charge
Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee, redemption,
retirement or extinguishment of Indebtedness, or such issuance or redemption of
Disqualified Stock or Preferred Stock, as if the same had occurred at the
beginning of the applicable four-quarter period.

 

For purposes
of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and disposed operations (as determined in
accordance with GAAP) that have been made by Holdings or any Restricted
Subsidiary during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Fixed Charge
Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, mergers, consolidations and disposed
operations (and the change in any associated fixed charge obligations and the
change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter
reference period. If since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into Holdings
or any Restricted Subsidiary since the beginning of such period) shall have
made any Investment, acquisition, disposition, merger, consolidation or
disposed operation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period
as if such Investment, acquisition, disposition, merger, consolidation or
disposed operation had occurred at the beginning of the applicable four-quarter
period.

 

For purposes
of this definition, whenever pro forma
effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of Holdings. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Fixed Charge Coverage Ratio
Calculation Date had been the applicable rate for the entire period (taking
into account any Hedging Obligations applicable to such Indebtedness). Interest
on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of
Holdings to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma
basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period. Interest on Indebtedness that may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then
based upon such optional rate chosen as Holdings may designate.

 

“Fixed
Charges” shall mean, with respect to any Person for any period, the sum of

 

(a)           Consolidated Interest Expense of such
Person for such period,

 

17

 

(b)           all cash dividend payments (excluding
items eliminated in consolidation) on any series of Preferred Stock (including
any Designated Preferred Stock) or any Refunding Capital Stock of such Person
made during such period, and

 

(c)           all cash dividend payments (excluding
items eliminated in consolidation) on any series of Disqualified Stock made
during such period.

 

“Foreign
Asset Sale” shall have the meaning provided in Section 5.2(f).

 

“Foreign
Plan” shall mean any employee benefit plan, program, policy, arrangement or
agreement maintained or contributed to by either Borrower or any of its
Subsidiaries with respect to employees employed outside the United States.

 

“Foreign
Subsidiary” shall mean each Subsidiary of either Borrower that is not a US
Subsidiary.

 

“Foreign
Subsidiary Guarantees” shall mean, collectively, (a) the UK Guarantee, (b)
the Irish Guarantee, (c) the Chilean Guarantee, (d) the Mexican Guarantee, (e)
any guarantee agreement entered into by a Foreign Subsidiary (other than a
Canadian Subsidiary) pursuant to Section 10.9 and (f) any other
guarantee agreement entered into by a Foreign Subsidiary (other than a Canadian
Subsidiary) to guarantee any of the Obligations.

 

“Foreign Subsidiary Guarantors” shall mean,
collectively, each Foreign Subsidiary (other than a Canadian Subsidiary) that
is a party to a Foreign Subsidiary Guarantee or becomes a party thereto after
the Closing Date pursuant to Section 10.9 or otherwise.

 

“Funded
Debt” shall mean all indebtedness of Holdings and its Restricted
Subsidiaries for borrowed money that matures more than one year from the date
of its creation or matures within one year from such date that is renewable or
extendable, at the option of such Person, to a date more than one year from
such date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more than
one year from such date, including all amounts of Funded Debt required to be
paid or prepaid within one year from the date of its creation and, in the case
of the Borrowers, Indebtedness in respect of the Loans, and the Loans and
Letter of Credit Exposures (each as defined in the Senior Credit Facilities).

 

“GAAP”
shall mean generally accepted accounting principles in Canada in effect on the
Closing Date.

 

“Governmental
Authority” shall mean any nation or government, any state, province,
territory or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

 

“Guarantee”
shall have the meaning set forth in the definition of “Guarantee Obligations”.

 

“Guarantee
Agent” shall have the meaning provided in the Guarantee Agreements, as
applicable.

 

18

 

“Guarantee
Agreements” shall mean, collectively, the US Guarantee, the Canadian
Guarantees and the Foreign Subsidiary Guarantees.

 

“Guarantee
Obligations” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or any such property or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such Indebtedness of the ability of the primary obligor to make
payment of such Indebtedness or (d) otherwise to assure or hold harmless the
owner of such Indebtedness against loss in respect thereof; provided, however,
that the term “Guarantee Obligations” shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the Indebtedness in respect of which such
Guarantee Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith. The
term “Guarantee” when used as a verb shall mean to provide or incur a
Guarantee Obligation and when used as a noun shall have a correlative meaning.

 

“Guarantors”
shall mean (a) Holdings, (b) the US Borrower (with respect to the Obligations
of Credit Parties other than itself), (c) the Canadian Borrower (with respect
to the Obligations of Credit Parties other than itself) and (d) the US
Subsidiary Guarantors, the Canadian Subsidiary Guarantors and the Foreign
Subsidiary Guarantors.

 

“Hazardous
Materials” shall mean (a) any petroleum or petroleum products, radioactive
materials, asbestos, urea formaldehyde foam insulation, urea  formaldehyde 
or phenol formaldehyde resin, polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances”, “hazardous waste”, “hazardous materials”,
“extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic
pollutants”, “contaminants”, or “pollutants”, or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, which is prohibited, limited or regulated by, or that may give rise
to liability under, any Environmental Law.

 

“Hedging
Obligations” shall mean, with respect to any Person, the obligations of
such Person under any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, commodity swap agreement, commodity
cap agreement, commodity collar agreement, foreign exchange contract, currency
swap agreement or similar agreement providing for the transfer or mitigation of
interest rate or currency risks either generally or under specific
contingencies.

 

“Historical
Adjustments” means with respect to any Person, without duplication, the
following items to the extent incurred prior to the Closing Date (or, with
respect to clause (i) below, prior to December 31, 2005) and, in
each case, during the applicable period:

 

19

 

(a)  extraordinary
losses and unusual or non-recurring charges, including severance, relocation
costs, curtailments or modifications to pension and post-retirement employee
benefit plans, costs related to labor disruptions or strikes, direct costs of
extreme weather conditions such as hurricanes (it being agreed that the
aggregate amount of such costs related to labor disruptions or strikes and
direct costs of extreme weather conditions shall be $1,800,000 for the third
fiscal quarter of fiscal year 2004), inventory provisions and write downs and
one-time compensation charges;

 

(b)  gains
(losses) from the early extinguishment of Indebtedness;

 

(c)  the
cumulative effect of a change in accounting principles;

 

(d)  gains
(losses), net of tax, from disposed or discontinued operations;

 

(e)  non-cash
adjustments to LIFO reserves;

 

(f)  gains
(losses) attributable to the disposition of fixed assets;

 

(g)  other
costs consisting of (i) one-time restructuring charges, (ii) one-time severance
costs in connection with former employees, (iii) debt financing costs, (iv)
fees and expenses related to acquisitions, (v) consulting services in
connection with acquisitions and (vi) non-cash charges related to stock based
awards expense (including charges related to effect of the increase in the
value of the stock of Masonite International Corporation on restricted stock
units and deferred stock units prior to the occurrence of the Transactions);

 

(h)  with
respect to any entity acquired by or consolidated with Holdings during the
twelve months ended December 31, 2004, the amount of EBITDA for such entity for
the period from January 1, 2004 through the date of such acquisition or
consolidation, all as determined on a consolidated basis for such entity in
accordance with GAAP; and

 

(i)  the
estimated cost savings that would have been achieved had (a) the supply
contract, dated March 28, 2002, between Masonite International Corporation and
Craftmaster been terminated at the beginning of such period and (b) the molded
door facings purchased by Florida Made from Craftmaster instead been
manufactured by Masonite during such period (it being agreed that such cost
savings relating to the contracts in (a) and (b), in the aggregate, for each of
the fiscal quarters in fiscal year 2004 would have been $2,550,000 and for the
first fiscal quarter in fiscal year 2005 would have been $1,250,000).

 

“Historical
Audited Financial Statements” shall mean as of the Closing Date, the
audited financial statements of the Predecessor Company and its consolidated
Subsidiaries, in each case for the three most recently completed fiscal years,
consisting of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such fiscal years.

 

“Historical
Unaudited Financial Statements” shall mean as of the Closing Date, the
unaudited financial statements of the Predecessor Company and its consolidated
Subsidiaries for each fiscal quarter subsequent to the most recent Historical
Audited Financial Statement and 

 

20

 

ended 45 days before the Closing Date, consisting of balance sheets and
the related consolidated statements of income, stockholders’ equity and cash
flows of the Predecessor Company.

 

“Holdings”
shall have the meaning provided in the preamble to this Agreement.

 

“Indebtedness”
shall mean, with respect to any Person, without duplication,

 

(a)  any
indebtedness (including principal and premium) of such Person, whether or not
contingent

 

(i)            in respect of borrowed money,

 

(ii)           evidenced by bonds, notes, debentures or similar
instruments or letters of credit or bankers’ acceptances (or, without double
counting, reimbursement agreements in respect thereof),

 

(iii)          representing the balance deferred and unpaid of the
purchase price of any property (including Capitalized Lease Obligations),
except any such balance that constitutes a trade payable or similar obligation
to a trade creditor, in each case accrued in the ordinary course of business,
or

 

(iv)          representing any Hedging Obligations,

 

if and to the extent that any of the foregoing Indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet (excluding the footnotes thereto) of such Person prepared in
accordance with GAAP,

 

(b)  to
the extent not otherwise included, any obligation by such Person to be liable
for, or to pay, as obligor, guarantor or otherwise, on the obligations of the
type referred to in clause (a) above of another Person (whether or not
such items would appear upon the balance sheet of the such obligor or
guarantor), other than by endorsement of negotiable instruments for collection
in the ordinary course of business, and

 

(c)  to
the extent not otherwise included, the obligations of the type referred to in clause
(a) above of another Person secured by a Lien on any asset owned by such
Person, whether or not such Indebtedness is assumed by such Person;

 

provided, however, that notwithstanding
the foregoing, Indebtedness shall be deemed not to include (a) Contingent
Obligations incurred in the ordinary course of business or (b) obligations
under or in respect of Receivables Facilities.

 

“Independent
Financial Advisor” shall mean an accounting, appraisal, investment banking
firm or consultant to Persons engaged in similar businesses of nationally
recognized standing that is, in the good faith judgment of Holdings, qualified
to perform the task for which it has been engaged.

 

“Initial
Canadian Loan” shall have the meaning provided in Section 2.1(a).

 

21

 

“Initial
Loan Repayment Date” shall mean October 6, 2006.

 

“Initial
Loans” shall mean, collectively, the Initial US Loans and the Initial
Canadian Loans.

 

“Initial US
Loan” shall have the meaning provided in Section 2.1(a).

 

“Interest
Period” shall mean, with respect to any Loan, the interest period
applicable thereto, as determined pursuant to Section 2.9.

 

“Investment
Grade Securities” shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents); (b) debt securities
or debt instruments with a rating of BBB- or higher by S&P or Baa3 or
higher by Moody’s or the equivalent of such rating by such rating organization,
or, if no rating of S&P or Moody’s then exists, the equivalent of such
rating by any other nationally recognized securities rating agency, but
excluding any debt securities or instruments constituting loans or advances
among Holdings, either Borrower, and the Restricted Subsidiaries;
(c) investments in any fund that invests exclusively in investments of the
type described in clauses (a) and (b) which fund may also hold
immaterial amounts of cash pending investment or distribution; and
(d) corresponding instruments in countries other than the United States
customarily utilized for high quality investments.

 

“Investments”
shall mean, for any Person, all investments by such Person in other Persons
(including Affiliates) in the form of loans (including guarantees), advances or
capital contributions (excluding accounts receivable, trade credit, advances to
customers, commission, travel and similar advances to officers and employees,
in each case made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities issued by any other Person and investments that are required by GAAP
to be classified on the balance sheet (excluding the footnotes) of Holdings in
the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property. For
purposes of the definition of “Unrestricted Subsidiary” and Section 10.2,

 

(a)           “Investments” shall include the portion
(proportionate to Holdings’ equity interest in such Subsidiary) of the fair
market value of the net assets of a Subsidiary of Holdings at the time that
such Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
Holdings shall be deemed to continue to have a permanent “Investment” in an
Unrestricted Subsidiary in an amount (if positive) equal to

 

(i)            Holdings’ “Investment” in such Subsidiary at the time of
such redesignation less

 

(ii)           the portion (proportionate to Holdings’ equity interest in
such Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; and

 

22

 

(b)           any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the Board of
Directors of Holdings.

 

“Irish
Guarantee” shall mean the Irish Subordinated Guarantee, made by Masonite
Ireland, Masonite Europe and Masonite Components in favor of the Guarantee
Agent for the benefit of the Loan Parties, substantially in the form of Exhibit
B-5, and any guarantee governed by Irish law entered into by a Subsidiary
pursuant to Section 10.9, in each case, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Joint
Bookrunners” shall mean The Bank of Nova Scotia, Deutsche Bank Securities
Inc. and UBS Securities LLC, together with their affiliates, as joint
bookrunners under this Agreement and the other Loan Documents.

 

“Joint Lead
Arrangers” shall mean The Bank of Nova Scotia and Deutsche Bank Securities
Inc., together with their affiliates, as joint lead arrangers under this
Agreement and the other Loan Documents.

 

“Judgment
Currency” shall have the meaning set forth in Section 13.18.

 

“Judgment
Currency Conversion Date” shall have the meaning set forth in Section 13.18.

 

“KKR”
shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR Associates, L.P.

 

“KKR Equity
Amount” shall mean an amount equal to not less than 95% of the Equity
Contribution.

 

“KKR Equity
Contribution” shall mean the contribution by affiliates of KKR of an amount
of cash equal to not less than the KKR Equity Amount to Parent, in exchange for
the issuance to KKR of 95% of the issued and outstanding equity interests of
Parent.

 

“Lender”
shall have the meaning provided in the preamble to this Agreement.

 

“Lender
Default” shall mean the failure (which has not been cured) of a Lender to
make available its portion of any Borrowing required to be made available or
funded by it hereunder.

 

“LIBO Rate”
shall mean, as of any date of determination, (a) from the Closing Date to, but
excluding, the Designated 1 Date, a rate per annum (the “First LIBO Rate”)
equal to the greater of (i) 8.50% and (ii) the sum of six month LIBOR plus
6.00%, (b) on and after the Designated 1 Date to, but excluding, the Designated
2 Date, a rate per annum (the “Second LIBO Rate”) equal to the sum of
the First LIBO Rate plus 1.00%, (c) on and after the Designated 2 Date
to, but excluding the Initial Loan Repayment Date, a rate per annum (the “Third
LIBO Rate”) equal to the sum of the Second LIBO Rate plus the
Applicable Spread and (d) on and after the Initial Loan Repayment Date, a rate
per annum equal to the sum of the Third LIBO Rate plus the Term Spread.

 

23

 

“LIBOR”
shall mean, in the case of any LIBOR Loan, with respect to each day during each
Interest Period pertaining to such LIBOR Loan, the rate per annum
determined by the US Administrative Agent at approximately 11:00 a.m. (London
time), on the date that is two Business Days prior to the commencement of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in dollars (as set forth by any service selected
by the US Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period (or, to the extent that
an interest rate is not so ascertainable, the rate per annum
determined by the US Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such
Interest Period to major banks in the London interbank market in London,
England by the US Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period).

 

“LIBOR Loan”
shall mean any Loan bearing interest at a rate determined by reference to
LIBOR.

 

“LIBOR
Unavailability Event” shall mean any event or circumstance described in clause
(i), (ii) or (iii) of Section 2.10(a).

 

“Lien”
shall mean with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided that in no event shall an operating lease be deemed to
constitute a Lien.

 

“Loan
Documents” shall mean this Agreement, the Guarantee Agreements, any
promissory notes issued by either Borrower hereunder and the Exchange Loan
Documents.

 

“Loan
Parties” shall mean (a) the Lenders, (b) the US Administrative Agent, (c)
the Canadian Administrative Agent, (d) the other Agents, (e) each counterparty
(that is not a Credit Party) to an agreement the obligations under which
constitute Obligations as set forth in clause (iii) of the definition of
“Obligations”, (f) the beneficiaries of each indemnification obligation undertaken
by any Credit Party under any Loan Document and (g) any successors, indorsees,
transferees and assigns of each of the foregoing.

 

“Loans”
shall mean, as the context may require, either US Loans, Canadian Loans, or
both.

 

“Management
Investors” shall mean the management, officers and employees of Holdings or
any Restricted Subsidiaries on the Closing Date who are or become investors in
Parent.

 

“Material
Adverse Change” shall mean any event or circumstance which has resulted or
is reasonably likely to result in a material adverse change in the business,
assets, operations, properties or financial condition of Holdings, the
Borrowers and their respective 

 

24

 

Subsidiaries, taken as a whole, or that would materially adversely
affect the ability of Holdings, the Borrowers and the other Credit Parties,
taken as a whole, to perform their obligations under this Agreement or any of
the other Loan Documents.

 

“Material
Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of Holdings and
its Subsidiaries, taken as a whole, that would materially adversely affect (a)
the ability of Holdings, the Borrowers and the other Credit Parties, taken as a
whole, to perform their obligations under this Agreement or any of the other
Loan Documents or (b) the rights and remedies of the Administrative Agents
and the Lenders under this Agreement or any of the other Loan Documents.

 

“Material
Subsidiary” shall mean, at any date of determination, each Restricted
Subsidiary of Holdings (a) whose total assets at the last day of the Test
Period ending on the last day of the most recent fiscal period for which
Section 9.1 Financials have been delivered were equal to or greater than
5% of the consolidated total assets of Holdings and its Restricted Subsidiaries
at such date or (b) whose gross revenues for such Test Period were equal
to or greater than 5% of the consolidated gross revenues of Holdings and its
Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP.

 

“Maturity
Date” shall mean the date that is ten years after the Closing Date, or, if
such date is not a Business Day, the immediately preceding Business Day.

 

“Mexican
Guarantee” shall mean the Mexican Senior Subordinated Subsidiary Guarantee,
made by Masonite Mexico S.A. de C.V. in favor of the Guarantee Agent for the
benefit of the Loan Parties, substantially in the form of Exhibit B-4,
and any guarantee governed by Mexican law entered into by a Subsidiary pursuant
to Section 10.9, in each case, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Minimum
Borrowing Amount” shall mean $1,000,000.

 

“Minority
Investment” shall mean any Person (other than a Subsidiary) in which either
Borrower or any Restricted Subsidiary owns Capital Stock or other equity
interests.

 

“Moody’s”
shall mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.

 

“National
Security Laws” shall have the meaning provided in Section 13.19.

 

“Net Cash
Proceeds” shall mean, with respect to any Prepayment Event, (a) the
gross cash proceeds (including payments from time to time in respect of
installment obligations, if applicable) received by or on behalf of Holdings or
any of the Restricted Subsidiaries in respect of such Prepayment Event, less
(b) the sum of:

 

(i)            in the case of any Prepayment Event,
the amount, if any, of all taxes paid or estimated to be payable by Holdings or
any of the Restricted Subsidiaries in connection with such Prepayment Event;

 

25

 

(ii)           in the case of any Prepayment Event,
the amount of any reasonable reserve established in accordance with GAAP
against any liabilities (other than any taxes deducted pursuant to clause
(i) above) (x) associated with the assets that are the subject of
such Prepayment Event and (y) retained by Holdings or any of the
Restricted Subsidiaries; provided that the amount of any subsequent reduction
of such reserve (other than in connection with a payment in respect of any such
liability) shall be deemed to be Net Cash Proceeds of such Prepayment Event
occurring on the date of such reduction;

 

(iii)          in the case of any Prepayment Event,
the amount of any Indebtedness secured by a Lien on the assets that are the
subject of such Prepayment Event to the extent that the instrument creating or
evidencing such Indebtedness requires that such Indebtedness be repaid upon
consummation of such Prepayment Event;

 

(iv)          in the case of any Asset Sale
Prepayment Event or Casualty Event, the amount of any proceeds of such Asset
Sale Prepayment Event that (x) is applied to permanently reduce obligations
under the Senior Credit Facility and which correspondingly reduces commitments
with respect thereto and (y) Holdings or any Subsidiary has reinvested (or
intends to reinvest within the Reinvestment Period or has entered into a
binding commitment prior to the last day of the Reinvestment Period to
reinvest) in the business of Holdings or any of the Restricted Subsidiaries
(subject to Section 9.13); provided that any portion of such
proceeds that has not been so reinvested within such Reinvestment Period shall,
unless Holdings or a Subsidiary has entered into a binding commitment prior to
the last day of such Reinvestment Period to so reinvest such proceeds, (x) be
deemed to be Net Cash Proceeds of an Asset Sale Prepayment Event or Casualty
Event occurring on the last day of such Reinvestment Period and (y) be applied
to the repayment of Term Loans in accordance with Section 5.2(a); and

 

(v)           in the case of any Prepayment Event,
reasonable and customary fees, commissions, expenses, and other costs paid by
Holdings, either Borrower or any of the Restricted Subsidiaries, as applicable,
in connection with such Prepayment Event (other than those payable to Holdings,
either Borrower or any Subsidiary of Holdings), in each case only to the extent
not already deducted in arriving at the amount referred to in clause (a)
above.

 

“Net Income”
means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends.

 

“Non-Defaulting
Lender” shall mean and include each Lender other than a Defaulting Lender.

 

“Non-Excluded
Taxes” shall have the meaning provided in Section 5.4(a).

 

“Non-Payment
Default” shall mean any Default other than a Payment Default.

 

“Non-US
Lender” shall have the meaning provided in Section 5.4(a).

 

“Notice of
Borrowing” shall have the meaning provided in Section 2.3(a).

 

26

 

“Notice of
Conversion or Continuation” shall have the meaning provided in Section 2.6.

 

“Obligations”
shall mean the collective reference to (i) the due and punctual payment of (x)
the principal of and premium, if any, and interest at the applicable rate
provided under this Agreement (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (y) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrowers or any other Credit Party to any of the Loan
Parties under this Agreement and the other Loan Documents, (ii) the due and
punctual payment and performance of all covenants, agreements, obligations and
liabilities of the Borrowers and each other Credit Party under or pursuant to
this Agreement and the other Loan Documents and (iii) the due and punctual
payment and performance of all Hedging Obligations of each Credit Party under
an agreement that (x) is in effect on the Closing Date with a counterparty that
is a Lender or an affiliate of a Lender as of the Closing Date or (y) is
entered into after the Closing Date with any counterparty that is a Lender or
an affiliate of a Lender at the time the underlying agreement is entered into.

 

“Parent”
shall have the meaning provided in the preamble to this Agreement.

 

“Pari Passu
Indebtedness” shall mean (a) with respect to either Borrower, Indebtedness
which ranks pari passu in right of payment to the Loans and Exchange Notes and
(b) with respect to any Guarantor, Indebtedness which ranks pari passu in right
of payment to the guarantee of such Guarantor as set forth in its Guarantee
Agreement.

 

“Participant”
shall have the meaning provided in Section 13.6(c)(i).

 

“pay the
Loans” has the meaning specified in Section 3.3.

 

“Payment
Blockage Period” has the meaning specified in Section 3.3 of
this Agreement.

 

“Payment
Default” has the meaning specified in Section 3.3 of this
Agreement.

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

 

“Permitted
Acquisition” shall mean any acquisition, by merger, amalgamation or
otherwise, set forth in clause (j) of the definition of Permitted
Investments.

 

“Permitted
Asset Swap” shall mean the concurrent purchase and sale or exchange of
Related Business Assets or a combination of Related Business Assets and cash or
Cash Equivalents between Holdings or any of its Restricted Subsidiaries and
another Person; provided

 

27

 

that any cash or Cash Equivalents received must be applied in
accordance with the “Asset Sales” covenant.

 

“Permitted
Holders” shall mean each of Sponsors and members of management of Holdings
(or its direct parent) who are shareholders of Holdings (or its direct parent)
on the Closing Date and any group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act or any successor provision) of which any
of the foregoing are members; provided, that, in the case of such group and
without giving effect to the existence of such group or any other group, such
Sponsors and members of management, collectively, have beneficial ownership of
more than 50% of the total voting power of the Voting Stock of Holdings or any
of its direct or indirect parent companies.

 

“Permitted Investments” shall
mean (a) any Investment in Holdings, any Borrower or any Restricted Subsidiary;
(b) any Investment in cash and Cash Equivalents or Investment Grade Securities;
(c) any Investment by any Borrower or any Restricted Subsidiary in a Person
that is engaged in a Similar Business if as a result of such Investment (i)
such Person becomes a Restricted Subsidiary or (ii) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, a Borrower or a Restricted Subsidiary; (d)
any Investment in securities or other assets not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to Section
10.1 or any other disposition of assets not constituting an Asset Sale;
(e) any Investment existing on the Closing Date as listed on Schedule
1.1(b); (f) advances to employees not in excess of $10.0 million
outstanding at any one time, in the aggregate; (g) any Investment acquired by
Holdings, any Borrower or any Restricted Subsidiary (i) in exchange for any
other Investment or accounts receivable held by any Borrower or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (ii) as a result of a foreclosure by any Borrower
or any Restricted Subsidiary with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default; (h)
Hedging Obligations permitted under Section 10.3(b)(x); (i) loans and
advances to officers, directors and employees for business-related travel
expenses, moving expenses and other similar expenses, in each case incurred in
the ordinary course of business; (j) any Investment in a Similar Business
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (j) that are at the time
outstanding (without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash and/or marketable
securities, not to exceed $125.0 million (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (k) Investments the payment for which consists of
Equity Interests of Holdings or any of its direct or indirect parent
corporations (exclusive of Disqualified Stock); (l) guarantees (including
Guarantees) of Indebtedness permitted under Section 10.3; (m) any
transaction to the extent it constitutes an investment that is permitted and
made in accordance with Section 10.6(b) (except transactions described
in clauses (ii), (vi), (vii) and (xi) of Section
10.6(b)); (n) Investments consisting of purchases and acquisitions of
inventory, supplies, material or equipment, (o) Investments relating to
any special purpose Wholly-Owned Subsidiary of Holdings organized in connection
with an Receivables Facility that, in the good faith determination of the Board
of Directors of Holdings, are necessary or advisable to effect such Receivables
Facility; 

 

28

 

(p) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (p)
that are at that time outstanding (without giving effect to the sale of an Unrestricted
Subsidiary to the extent the proceeds of such sale do not consist of cash or
marketable securities), not to exceed $25.0 million (with the fair market value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value).

 

“Permitted
Junior Securities” shall mean (a) Equity Interests in Holdings, any
Borrower, any Guarantor or any direct or indirect parent of Holdings; or (b)
unsecured debt securities that are subordinated to all Senior Indebtedness (and
any debt securities issued in exchange for Senior Indebtedness) to
substantially the same extent as, or to a greater extent than, the Indebtedness
in respect of the Loans are subordinated to Senior Indebtedness under this
Agreement; provided, however, that the term “Permitted Junior
Securities” shall not include any securities distributed pursuant to a plan of
reorganization if the Indebtedness under the Senior Credit Facilities is
treated as part of the same class as the Indebtedness issued or incurred hereunder
or under the related Guarantee Agreements for purposes of such plan of
reorganization.

 

“Person”
shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any Governmental
Authority.

 

“Plan”
shall mean any multiemployer, multiple-employer or single-employer plan, as
defined in Section 4001 of ERISA and subject to Title IV of ERISA, that is
or was within any of the preceding six plan years maintained or contributed to
by (or to which there is or was an obligation to contribute or to make payments
to) Holdings, either Borrower, a Subsidiary or an ERISA Affiliate.

 

“Predecessor
Company” shall mean Masonite International Corporation, a corporation
governed by the laws of Ontario, as existing prior to the consummation of the
Acquisition.

 

“Preferred
Stock” shall mean any Equity Interest with preferential rights of payment
of dividends or upon liquidation, dissolution or winding up.

 

“Prepayment
Event” shall mean any Asset Sale Prepayment Event, Debt Incurrence
Prepayment Event, Casualty Event, the issuance of any Subordinated Notes or any
Equity Issuance Prepayment Event.

 

“Prime Rate”
shall mean the rate of interest per annum
determined from time to time by the US Administrative Agent as its reference
rate in effect at its principal office in New York City.

 

“Pro Forma
Adjustment” shall mean, for any Test Period that includes any of the six
consecutive fiscal quarters first ending following any Permitted Acquisition,
with respect to the Acquired EBITDA of the applicable Acquired Entity or
Business or the EBITDA of the relevant Borrower affected by such acquisition,
the pro forma increase or decrease in such Acquired EBITDA or such EBITDA, as
the case may be, projected by the relevant Borrower in good faith as a result
of reasonably identifiable and factually supportable net cost savings or 

 

29

 

additional net costs, as the case may be, realizable during such period
by combining the operations of such Acquired Entity or Business with the
operations of the relevant Borrower and its Subsidiaries; provided that
so long as such net cost savings or additional net costs will be realizable at
any time during such six-quarter period, it may be assumed, for purposes of
projecting such pro forma increase or decrease to such Acquired EBITDA or
such EBITDA, as the case may be, that such net cost savings or additional net
costs will be realizable during the entire such period; provided, further,
that any such pro forma increase or decrease to such Acquired EBITDA or
such EBITDA, as the case may be, shall be without duplication for net cost
savings or additional net costs actually realized during such period and
already included in such Acquired EBITDA or such EBITDA, as the case may be.

 

“Pro Forma
Adjustment Certificate” shall mean any certificate of an Authorized Officer
of either Borrower delivered pursuant to Section 9.1(h) or setting
forth the information described in clause (iv) to Section 9.1(d).

 

“Pro Forma
Financial Statements” shall mean the unaudited pro forma balance sheet of
Holdings and its consolidated Subsidiaries at December 31, 2004, and the
related unaudited pro forma consolidated statement
of income of Holdings and its consolidated Subsidiaries for the twelve months
ended December 31, 2004, in each case prepared giving effect to the
Transactions as if they had occurred, with respect to such balance sheet, on
such date, and with respect to such statement of income, on the first day of
such twelve-month period.

 

“Qualified
Proceeds” shall mean assets that are used or useful in, or Capital Stock of
any Person engaged in, a Similar Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the board of
directors in good faith.

 

“Real
Estate” shall have the meaning provided in Section 9.1(f).

 

“Receivables
Facility” shall mean one or more receivables financing facilities, as
amended from time to time, the Indebtedness of which is non-recourse (except
for standard representations, warranties, covenants and indemnities made in
connection with such facilities) to Holdings and the Restricted Subsidiaries
pursuant to which Holdings or any of its Restricted Subsidiaries sells its
accounts receivable to a Person that is not a Restricted Subsidiary.

 

“Receivables
Facility Outstandings” shall mean, at any date of determination with
respect to any Receivables Transaction (other than Exempt Receivables
Transactions), the aggregate cash purchase price received by Holdings or any of
its Restricted Subsidiaries from the buyer in connection with its purchase of
accounts receivable under such Receivables Transaction (including any bills of
exchange) less the amount of collections received in respect of such accounts
receivable and paid to such buyer, excluding any amounts applied to purchase
fees or discounts or in the nature of interest, in each case as determined in
good faith and in a consistent and commercially reasonable manner by Holdings
and reasonably acceptable to the US Administrative Agent.

 

“Receivables
Fees” shall mean distributions or payments made directly or by means of
discounts with respect to any participation interest issued or sold in
connection with, 

 

30

 

and other fees paid to a Person that is not a Restricted Subsidiary in
connection with, any Receivables Facility.

 

“Receivables
Purchase Facility” shall mean the Trade Receivable Purchase Facility
Agreement, dated as of June 25, 2004, by and between Masonite Door Corporation
and SunTrust Bank, as amended.

 

“Receivables
Transactions” shall mean (a) the Exempt Receivables Transactions and (b)
any transaction providing for the sale or financing of accounts receivable of
Holdings or any of the Restricted Subsidiaries having limited recourse based on
the collectability of the accounts receivable sold or financed, with any such
sales or financing in the case of the preceding clause (b) being on
customary terms.

 

“Refinancing
Indebtedness” shall have the meaning set forth in Section 10.3(b)(xv).

 

“Register”
shall have the meaning provided in Section 13.6(b)(iv).

 

“Registration
Rights Agreement” shall mean the Registration Rights Agreement to be
entered into pursuant to the Exchange Note Indenture.

 

“Regulation D”
shall mean Regulation D of the Board as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.

 

“Regulation T”
shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.

 

“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.

 

“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.

 

“Reinvestment
Period”  shall mean 12 months
following the date of the applicable Asset Sale Prepayment Event or Casualty
Event.

 

“Related
Business Assets” shall mean assets (other than cash or Cash Equivalents)
used or useful in a Similar Business, provided
that any assets received by a Borrower or a Restricted Subsidiary in exchange
for assets transferred by a Borrower or a Restricted Subsidiary shall not be
deemed to be Related Business Assets if they consist of securities of a Person,
unless upon receipt of the securities of such Person, such Person would become
a Restricted Subsidiary.

 

“Related
Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors
of such Person and any Person that possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise.

 

31

 

“Reportable
Event” shall mean an event described in Section 4043 of ERISA and the
regulations thereunder.

 

“Representative”
shall mean (a) with respect to Senior Indebtedness under or in respect of the
Senior Credit Facilities, the Senior Administrative Agent (or its successor or
assign pursuant to the Senior Credit Facilities) and (b) with respect to any
other Senior Indebtedness, any trustee, agent or representative (if any) as may
be designated by the holders thereof and notified in writing to the US
Administrative Agent and the Borrowers.

 

“Required
Lenders” shall mean, at any date, Non-Defaulting Lenders and holders of
Exchange Notes having or holding a majority of the sum of (a) the portion
of the Adjusted Commitment that relates to Commitments at such date,
(b) the outstanding principal amount of the Loans (excluding the Loans
held by Defaulting Lenders) in the aggregate at such date and (c) the aggregate
principal amount of the Exchange Notes outstanding at such time.

 

“Requirement
of Law” shall mean, 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 assets or to which such Person or any of its
property or assets is subject.

 

“Restricted
Foreign Subsidiary” shall mean a Foreign Subsidiary that is a Restricted
Subsidiary.

 

“Restricted
Investment” shall mean an Investment other than a Permitted Investment.

 

“Restricted
Subsidiary” shall mean any Subsidiary of Holdings other than an
Unrestricted Subsidiary.

 

“Restricted
US Subsidiary” shall mean a US Subsidiary that is a Restricted Subsidiary.

 

“Rollover
Equity Contribution” shall have the meaning provided in the preamble to
this Agreement.

 

“S&P”
shall mean Standard & Poor’s Ratings Services or any successor by
merger or consolidation to its business.

 

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

 

“Schedule I
Lender” shall mean any Lender named in Schedule I to the Bank Act (Canada).

 

32

 

“SEC”
shall mean the Securities and Exchange Commission or any successor thereto.

 

“Section 9.1
Financials” shall mean the financial statements delivered, or required to
be delivered, pursuant to Section 9.1(a) or (b) together
with the accompanying officer’s certificate delivered, or required to be
delivered, pursuant to Section 9.1(d).

 

“Senior
Administrative Agent” shall mean the “Administrative Agent” as defined in
the Senior Credit Facilities.

 

“Senior
Credit Facilities” shall mean the Senior Credit Agreement, dated the date
hereof, by and among Holdings, the Borrowers, the lenders party thereto in
their capacities as lenders thereunder, The Bank of Nova Scotia, as US
Administrative Agent, Canadian Administrative Agent, joint lead arranger and
joint bookrunner, Deutsche Bank Securities Inc., as joint lead arranger, joint
bookrunner and co-syndication agent, UBS Securities LLC, as joint bookrunner
and co-syndication agent and Bank of Montreal and Sun Trust Bank as
co-documentation agents, and any guarantees, collateral documents, instruments
and agreements executed in connection therewith, and any amendments,
supplements, modifications, extensions, renewals, restatements, refundings or
refinancings thereof and any indentures or credit facilities or commercial
paper facilities with banks or other institutional lenders or investors that
replace, refund or refinance any part of the loans, notes, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility or indenture that increases the amount borrowable
thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under
Section 10.1).

 

“Senior
Guarantor” shall mean a “Guarantor” (as defined in the Senior Credit
Facilities) which has a Guarantee Obligation in respect of Senior Indebtedness.

 

“Senior
Indebtedness” shall mean

 

(a)           all Indebtedness of
Holdings, any Borrower or any Senior Guarantor arising or outstanding under the
Senior Credit Facilities and related Guarantee Obligations in respect thereof
(including interest accruing on or after the filing of any petition in
bankruptcy or similar proceeding or for reorganization of Holdings, any
Borrower or any Senior Guarantor (at the rate provided for in the documentation
with respect thereto, regardless of whether or not a claim for post-filing
interest is allowed in such proceedings)), and any and all other fees, expense
reimbursement obligations, indemnification amounts, penalties, and other
amounts (whether existing on the date of the initial Borrowing hereunder or
thereafter created or incurred) and all obligations of Holdings, any Borrower
or any Senior Guarantor to reimburse any bank or other Person in respect of
amounts paid under letters of credit, acceptances or other similar instruments
issued under the Senior Credit Facilities;

 

(b)           all Hedging
Obligations (and guarantees thereof) owing to a Lender (as defined in the
Senior Credit Facilities) or any Affiliate of such Lender (or any Person that
was a Lender (as defined in the Senior Credit Facilities) or an 

 

33

 

Affiliate of such Lender at the time the
applicable agreement giving rise to such obligation was entered into); provided that such obligations
are permitted to be incurred under the terms of this Agreement;

 

(c)           any other
Indebtedness of either Borrower permitted to be incurred under the terms of
this Agreement, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to any or all of the Obligations incurred or arising hereunder or in
respect hereof or any related Guarantee;

 

(d)           all Obligations (as
defined in the Senior Credit Facilities as of the date hereof) with respect to
the items listed in the preceding clauses (a), (b) and (c);

 

provided, however, that Senior
Indebtedness shall not include:

 

(1)           any obligation of
such Person to Holdings or any of its Subsidiaries;

 

(2)           any liability for
federal, state, local or other taxes owed or owing by such Person or any other
Affiliate of either Borrower or any Subsidiary of any such Affiliate;

 

(3)           any accounts payable
or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities);

 

(4)           any Indebtedness or
other liabilities or obligation of such Person which is subordinate or junior
in any respect to any other Indebtedness or other liability or obligation of
such Person;

 

(5)           that portion of any
Indebtedness which at the time of incurrence is incurred in violation of this
Agreement; provided, however, that such Indebtedness shall be deemed
not to have been incurred in violation of this Agreement for purposes of this
clause if such Indebtedness consists of Designated Senior Indebtedness, and the
holder(s) of such Indebtedness or their agent or representative (x) had no
actual knowledge at the time of incurrence that the incurrence of such
Indebtedness violated this Agreement and (y) shall have received a certificate
from an officer of the applicable Borrower to the effect that the incurrence of
such Indebtedness does not violate the provisions of this Agreement;

 

(6)           any Indebtedness of
either Borrower which, when incurred and without regard to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to such
Borrower;

 

(7)           any Indebtedness
evidenced by the Loans;

 

34

 

(8)  any Capital Stock of
Holdings, either Borrower or any Subsidiary Guarantor; or

 

(9)  any amounts owing under
leases (other than Capitalized Lease Obligations).

 

“Similar
Business” shall mean any business conducted or proposed to be conducted by
Holdings, either Borrower and the Restricted Subsidiaries on the Closing Date
or any business that is similar, reasonably related, incidental or ancillary
thereto.

 

“Sold
Entity or Business” shall mean any Person, property, business or asset
(other than an Unrestricted Subsidiary) sold, transferred or otherwise disposed
of, closed or classified as discontinued operations by Holdings or any
Restricted Subsidiary.

 

“Solvent”
shall mean, with respect to each Borrower, that as of the Closing Date, both
(i) (a) the sum of such Borrower’s debt (including contingent liabilities) does
not exceed the present fair saleable value of such Borrower’s present assets;
(b) such Borrower’s capital is not unreasonably small in relation to its
business as contemplated on the Closing Date; and (c) such Borrower has not
incurred and does not intend to incur, or believe that it will incur, debts
including current obligations beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Borrower is “solvent”
(and is not “insolvent”, if applicable) within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under GAAP).

 

“Specified
Subsidiary” shall mean, at any date of determination (a) any Material
Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets at
the last day of the Test Period ending on the last day of the most recent
fiscal period for which Section 9.1 Financials have been delivered were
equal to or greater than 10% of the consolidated total assets of the Borrowers
and their respective Subsidiaries at such date, (ii) whose gross revenues
for such Test Period were equal to or greater than 10% of the consolidated
gross revenues of the Borrowers and their respective Subsidiaries for such
period, in each case determined in accordance with GAAP and (c) each other
Subsidiary that, when combined with any other Subsidiary that is the subject of
an Event of Default under Section 11.5 would constitute a Specified
Subsidiary under clause (a) or (b) above.

 

“Sponsor”
shall mean KKR and its Affiliates.

 

“Statutory
Reserve Rate” shall mean for any day as applied to any LIBOR Loan, a
fraction (expressed as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages that are in effect on that day (including any marginal,
special, emergency or supplemental reserves), expressed as a decimal, as
prescribed by the Board and to which the US Administrative Agent is subject,
for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in 

 

35

 

Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed
to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change
in any reserve percentage.

 

“Subordinated
Indebtedness” shall mean (a) with respect to either Borrower, Indebtedness
which is subordinated in right of payment to the Loans and the Exchange Notes
and (b) with respect to any Guarantor, Indebtedness which is subordinated in
right of payment to the obligations of such Guarantor under its Guarantee
Agreement.

 

“Subordinated
Notes” shall have the meaning provided in Section 9.9.

 

“Subsidiary”
means, with respect to any Person,

 

(a)  any
corporation, association, or other business entity (other than a partnership,
joint venture, limited liability company or similar entity) of which more than
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof or is consolidated
under GAAP with such Person at such time and

 

(b)  any
partnership, joint venture, limited liability company or similar entity which
is consolidated under GAAP with such Person at such time or of which

 

(x)            more
than 50% of the capital accounts, distribution rights, total equity and voting
interests or general or limited partnership interests, as applicable, are owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof whether in the form
of membership, general, special or limited partnership or otherwise, and

 

(y)           such
Person or any Restricted Subsidiary of such Person is a controlling general
partner or otherwise controls such entity.

 

“Subsidiary
Guarantor” shall mean a US Subsidiary Guarantor, a Canadian Subsidiary
Guarantor and a Foreign Subsidiary Guarantor, as applicable.

 

“Successor
Canadian Borrower” shall have the meaning provided in Section 10.5(b).

 

“Successor
US Borrower” shall have the meaning provided in Section 10.5(a).

 

“Tax Act”
shall mean the Income Tax Act (Canada), as
amended, and any successor thereto, and any regulations promulgated thereunder.

 

36

 

“Taxes”
shall mean any and all present or future taxes, duties, levies, imposts, assessments,
deductions, withholdings or other similar charges imposed by any Governmental Authority
whether computed on a separate, consolidated, unitary, combined or other basis
and any and all liabilities (including interest, fines, penalties or additions
to tax) with respect to the foregoing.

 

“Term Loans”
shall mean, collectively, the US Term Loans and the Canadian Term Loans.

 

“Term
Spread” shall mean, with respect to any Term Loan, initially 0.50% from the
date of issue thereof, being the Initial Loan Repayment Date, to the date
ending 3 months subsequent thereto and increasing by 0.50% on the first day of
each subsequent 3 month period.

 

“Test
Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrowers then last ended.

 

“Total
Assets” shall mean the total assets of Holdings, the Borrowers and the
Restricted Subsidiaries on a consolidated basis, as shown on the most recent
balance sheet of Holdings.

 

“Total
Credit Exposure” shall mean, at any date, the sum of (a) the
Commitment at such date and (b) the outstanding principal amount of all
Loans at such date.

 

“Transactions”
shall mean, collectively, the transactions contemplated by this Agreement and
the Senior Credit Facilities, including the Acquisition and the Equity
Contributions.

 

“Transaction
Expenses” shall mean any fees or expenses incurred or paid by the Borrowers
or any of their respective Subsidiaries in connection with the Transactions,
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby.

 

“Transferee”
shall have the meaning provided in Section 13.6(e).

 

“Type”
shall mean as to any Loan, its nature as a CR Loan or a LIBOR Loan.

 

“UK
Guarantee” shall mean the UK Senior Subordinated Guarantee, made by Bonlea
Limited, Premdor Crosby Limited, Premdor U.K. Holdings Limited and Masonite
Europe Limited in favor of the Guarantee Agent for the benefit of the Loan
Parties, substantially in the form of Exhibit B-6, and any guarantee
governed by English law entered into by a Subsidiary pursuant to Section 10.9,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Unfunded
Current Liability” of any Plan shall mean the amount, if any, by which the
Accumulated Benefit Obligation (as defined under Statement of Financial
Accounting Standards No. 87 (“SFAS 87”)) under the Plan as of the close
of its most recent plan year, determined in accordance with SFAS 87, exceeds
the fair market value of the assets allocable thereto and in relation to a
Canadian Pension Plan or Foreign Plan shall mean the amount, if any, 

 

 

37

 

by which (A)
the present value of the accrued benefits under the Canadian Pension Plan or
Foreign Plan as of the close of business of its most recent plan year,
determined in accordance with (I) the SFAS 87 as in effect on the date hereof,
or (II) if in the normal course of business, no such determination is made in
relation to the Canadian Pension Plan or Foreign Plan, the Canadian or
applicable foreign equivalent of SFAS 87 as in effect on the date hereof, in
either case such determination being based upon the actuarial assumptions that
would be used by the actuary for the Canadian Pension Plan or Foreign Plan in
the termination of that Canadian Pension Plan or Foreign Plan, exceeds (B) the
fair market value of the assets allocable thereto.

 

“Unrestricted Subsidiary” shall mean (i) any
Subsidiary of Holdings which at the time of determination is an Unrestricted Subsidiary
(as designated by the Board of Directors of Holdings, as provided below) and
(ii) any Subsidiary of an Unrestricted Subsidiary, provided that
no Credit Party shall be an Unrestricted Subsidiary. The Board of Directors of
the Borrowers may designate any Subsidiary of Holdings (including any existing
Subsidiary and any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries own
any Equity Interests or Indebtedness of, or own or hold any Lien on, any
property of, Holdings or any Subsidiary of Holdings (other than any Subsidiary
of the Subsidiary to be so designated), provided that
(a) any Unrestricted Subsidiary must be an entity of which shares of the
Capital Stock or other equity interests (including partnership interests)
entitled to cast at least a majority of the votes that may be cast by all
shares or equity interests having ordinary voting power for the election of
directors or other governing body are owned, directly or indirectly, by a
Borrower, (b) such designation complies with the covenants described in Section
10.12 and (c) each of (I) the Subsidiary to be so designated and (II) its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of Holdings or any Restricted Subsidiary. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to
such designation no Default or Event of Default shall have occurred and be
continuing and either (i) the Fixed Charge Coverage Ratio for Holdings and the
Restricted Subsidiaries on a consolidated basis would be at least 2.0:1.0 or
(ii) the Fixed Charge Coverage Ratio for Holdings and the Restricted
Subsidiaries on a consolidated basis would be greater than such ratio for
Holdings and the Restricted Subsidiaries on a consolidated basis immediately
prior to such designation, in each case on a pro forma basis taking into
account such designation. Any such designation by the Board of Directors shall be notified by
Holdings to the US Administrative Agent by promptly filing with the US
Administrative Agent a copy of the board resolution giving effect to such
designation and an Officers’ Certificate certifying that such designation
complied with the foregoing provisions.

 

“US
Administrative Agent” shall mean The Bank of Nova Scotia, as the
administrative agent for the US Lenders and other holders of US Loans and all
Obligations with respect thereof.

 

“US
Borrower” shall have the meaning provided in the preamble to this
Agreement.

 

38

 

“US
Commitment” shall mean (a) in the case of each Lender that is a Lender on
the date hereof, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “US Commitment” and (b) in the case of any Lender
that becomes a Lender after the date hereof, the amount specified as such
Lender’s “US Commitment” in the Assignment and Acceptance pursuant to which
such Lender assumed a portion of the Commitment, in each case as the same may
be changed from time to time pursuant to the terms hereof. The aggregate amount
of the US Commitments as of the Closing Date is $412,000,000.

 

“US
Guarantee” shall mean the US Senior Subordinated Guarantee, made by the US
Borrower (with respect to the Obligations of Credit Parties other than itself)
and each US Subsidiary Guarantor in favor of the Guarantee Agent for the
ratable benefit of the Loan Parties, substantially in the form of Exhibit
B-1, and any guarantee governed by United States law entered into by a
Subsidiary pursuant to Section 10.9, in each case, as the same may
be amended, supplemented or otherwise modified from time to time.

 

“US Loans”
shall mean at any time (i) prior to the Initial Loan Repayment Date, the
Initial US Loans, and (ii) on or after the Initial Loan Repayment Date,
the US Term Loans.

 

“US
Subsidiary” shall mean each Subsidiary of Holdings that is organized under
the laws of the United States, any state thereof, or the District of Columbia.

 

“US Term
Loan” shall have the meaning provided in Section 2.1(b).

 

“Voting Stock”
shall mean, with respect to any Person, shares of such Person’s Capital Stock
having the right to vote for the election of directors (or comparable governing
body) of such Person under ordinary circumstances.

 

“Weighted
Average Life to Maturity” shall mean, when applied to any Indebtedness or
Disqualified Stock, as the case may be, at any date, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the date of each successive principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (ii) the sum of all such
payments.

 

(b)           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 references are to Sections of this Agreement unless
otherwise specified. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”.

 

SECTION 2. Amount
and Terms of Credit.

 

2.1.  Commitments.
(a)   Subject to and upon the terms and conditions herein set forth,
(x) each Lender having a US Commitment severally (and not jointly) agrees
to make a loan (each an “Initial US Loan”) to the US Borrower in
Dollars, which Initial US Loans shall not exceed for any such Lender the US
Commitment of such Lender and (y) each Lender having a Canadian Commitment
severally agrees to make a loan or loans (each an “Initial Canadian Loan”)
to the Canadian Borrower in Dollars, which Initial Canadian Loans shall not
exceed for 

 

39

 

any such Lender the Canadian Commitment of such
Lender; and such Loans (i) shall be made on the Closing Date, (ii) shall
be incurred as CR Loans and automatically converted to LIBOR Loans three
Business Days after the Closing Date, (iii) may be repaid or prepaid in accordance
with the provisions hereof, but once repaid or prepaid, may not be reborrowed,
(iv) shall not exceed for any such Lender the Commitment of such Lender and
(v) shall not exceed in the aggregate the total of all Commitments.

 

(b)  Subject
to the terms and conditions hereof, the US Borrower and each Lender which had a
US Commitment severally (and not jointly) agrees, if the Initial US Loans have
not been repaid, and so long as no Designated Default has occurred and is
continuing, that the then outstanding principal amount of its Initial US Loan
shall be repaid in full by the issuance of a new debt obligation (individually
a “US Term Loan” and collectively the “US Term Loans”) by the US
Borrower to such Lender, on the Initial Loan Repayment Date, in a principal
amount equal to the then outstanding principal amount of the Initial US Loan
held by such Lender (for certainty, including any capitalized interest) and the
US Borrower and such Lender shall be released from their respective obligations
under such Initial US Loan. Subject to the terms and conditions hereof, the
Canadian Borrower and each Lender which had a Canadian Commitment severally
agrees, if the Initial Canadian Loans have not been repaid, and so long as no
Designated Default has occurred and is continuing, that the then outstanding
principal amount of its Initial Canadian Loan shall be repaid in full by the
issuance of a new debt obligation (individually a “Canadian Term Loan”
and collectively the “Canadian Term Loans”) by the Canadian Borrower to
such Lender, on the Initial Loan Repayment Date, in a principal amount equal to
the then outstanding principal amount of the Initial Canadian Loan held by such
Lender (for certainty, including any capitalized interest and the Canadian
Borrower) and such Lender shall be released from their respective obligations
under such Initial Canadian Loan. Upon the repayment of and release in respect
of the Initial Loans and the replacement thereof by Term Loans, each Lender
shall amend its records to reflect the repayment of the principal amount of the
Initial Loan held by such Lender corresponding to the principal amount of the
Initial Loan issued to such Lender and the advance of the corresponding Term
Loan. The Term Loans shall incorporate the terms of the Exchange Note Indenture
as set forth in the second sentence of Section 13.1. If a Default or an
Event of Default shall have occurred and be continuing on the Initial Loan
Repayment Date, any notices given or cure periods commenced while any Initial
Loan was outstanding shall be deemed given or commenced (as of the actual dates
thereof) for all purposes with respect to the Term Loans (with the same effect
as if the Term Loans had been outstanding as of the actual dates thereof),
notwithstanding that the Term Loans constitute separate indebtedness from the
Initial Loans.

 

2.2.  [Intentionally
Omitted].

 

2.3.  Notice
of Borrowing. (a)     Each Borrower shall give the US
Administrative Agent at the Administrative Agent’s Office prior written
notice (or telephonic notice promptly confirmed in writing) prior to 10:00 a.m.
(New York time) on the same Business Day of the Borrowing of Loans. Such notice
(a “Notice of Borrowing”) shall be irrevocable and shall specify
(i) the aggregate principal amount of the Loans to be made pursuant to the
Borrowing, (ii) the date of the Borrowing (which shall be the Closing
Date) and (iii) the Interest Period to be applicable upon the initial
conversion, which, shall be six months. The US Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly confirmed
in 

 

40

 

writing) of the proposed Borrowing of Loans, of such
Lender’s proportionate share thereof and of the other matters covered by the
related Notice of Borrowing.

 

(b)  Without
in any way limiting the obligation of the US Borrower or the Canadian Borrower,
as the case may be, to confirm in writing any notice it may give hereunder by
telephone, the US Administrative Agent and the Canadian Administrative Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by the US Administrative Agent and the
Canadian Administrative Agent in good faith to be from an Authorized Officer of
the US Borrower or the Canadian Borrower, as the case may be. In each such
case, the US Borrower and the Canadian Borrower each hereby waives the right to
dispute the US Administrative Agent’s and the Canadian Administrative Agent’s
record of the terms of any such telephonic notice.

 

2.4.  Disbursement
of Funds. (a)     No later than 12:00 Noon (New York
time) on the date specified in the Notice of Borrowing, each Lender will make
available its pro rata portion of the
Borrowing requested to be made on such date in the manner provided below.

 

(b)  Each
Lender shall make available all amounts it is to fund to the US Borrower under
any Borrowing in immediately available Dollars to the US Administrative Agent
at the Administrative Agent’s Office and the US Administrative Agent will
(except in the case of Borrowings made upon the conversion of another Type of
Borrowing) make available to the US Borrower by depositing to the US Borrower’s
account (as designated by it in a written notice to the US Administrative Agent
from time to time) the aggregate of the amounts so made available in Dollars. Each
Lender shall make available all amounts it is to fund to the Canadian Borrower
under any Canadian Borrowing in immediately available Dollars to the Canadian
Administrative Agent at the Canadian Administrative Agent’s Office and the
Canadian Administrative Agent will make available to the Canadian Borrower, by
depositing to the Canadian Borrower’s account (as designated by it in a written
notice to the Canadian Administrative Agent from time to time) the aggregate of
the amounts so made available in Dollars. Unless the US Administrative Agent or
the Canadian Administrative Agent (in the case of Canadian Borrowings) shall
have been notified by any Lender prior to the date of any such Borrowing that
such Lender does not intend to make available to the US Administrative Agent or
the Canadian Administrative Agent (in the case of Canadian Borrowings) its
portion of the Borrowing or Borrowings to be made on such date, the US
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) may assume that such Lender has made such amount available
to the US Administrative Agent or the Canadian Administrative Agent (in the
case of Canadian Borrowings) on such date of Borrowing, and the US
Administrative Agent and the Canadian Administrative Agent (in the case of
Canadian Borrowings), in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the US
Borrower or the Canadian Borrower, as the case may be, a corresponding amount. If
such corresponding amount is not in fact made available to the US
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) by such Lender and the US Administrative Agent or the
Canadian Administrative Agent (in the case of Canadian Borrowings) has made
available same to the US Borrower or the Canadian Borrower, as the case may be,
the US Administrative Agent or the Canadian Administrative Agent (in the case
of Canadian Borrowings) shall be entitled to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding 

 

41

 

amount forthwith upon the US Administrative Agent’s or
the Canadian Administrative Agent’s (in the case of Canadian Borrowings) demand
therefor the US Administrative Agent or the Canadian Administrative Agent (in
the case of Canadian Borrowings) shall promptly notify the US Borrower or the
Canadian Borrower, as the case may be, and the US Borrower or the Canadian
Borrower, as the case may be, shall immediately pay such corresponding amount
to the US Administrative Agent or the Canadian Administrative Agent (in the
case of Canadian Borrowings). The US Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) shall also be
entitled to recover from such Lender or the US Borrower or the Canadian
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
US Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) to the US Borrower or the Canadian Borrower, as the case
may be, to the date such corresponding amount is recovered by the US Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian
Borrowings), at a rate per annum equal to (i) if paid by such Lender, the
Federal Funds Effective Rate (or, in the case of an amount owing in respect of
a Canadian Borrowing, the rate reasonably determined by the Canadian
Administrative Agent to be the cost to it of funding such amount) or (ii) if
paid by the US Borrower or the Canadian Borrower, as the case may be, the
then-applicable rate of interest or fees, calculated in accordance with Section 2.8,
for the respective Loans comprising the applicable Borrowing.

 

(c)  Nothing
in this Section 2.4 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
the US Borrower or the Canadian Borrower, as the case may be, may have against
any Lender as a result of any default by such Lender hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to fulfill its commitments hereunder).

 

2.5.  Repayment
of Loans; Evidence of Debt. (a)     The Initial Loans,
to the extent unpaid, will be repaid in full by, and the Borrower shall be
released through, the making of the Term Loans on the Initial Loan Repayment
Date pursuant to Section 2.1(b). The Term Loans will mature on the
Maturity Date. Any Term Loan shall bear interest as described in Section 2.8
from the Initial Loan Repayment Date until such Loan shall be paid in full or
continued as an Exchange Note evidencing the same underlying indebtedness
pursuant to Section 9.14. Each Borrower shall repay to the US
Administrative Agent or the Canadian Administrative Agent, as the case may be,
for the ratable benefit of the Lenders of US Loans and the Lenders of Canadian
Loans, as applicable, on the Maturity Date, the then-unpaid Loans made to such
Borrower, in Dollars.

 

(b)  Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the US Borrower and the Canadian Borrower,
as the case may be, to the appropriate lending office of such Lender resulting
from each Loan made by such lending office of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
lending office of such Lender from time to time under this Agreement.

 

(c)  The
US Administrative Agent shall maintain the Register pursuant to Section 13.6(b),
and a subaccount for each Lender, in which Register and subaccounts (taken 

 

42

 

together) shall be recorded (i) the amount and
currency of each Loan made hereunder, the Class and Type of each Loan made and,
if applicable, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
U.S. Borrower and the Canadian Borrower, as the case may be, to each Lender
hereunder and (iii) the amount of any sum received by the US Administrative
Agent and the Canadian Administrative Agent hereunder from the US Borrower and
the Canadian Borrower, as the case may be, and each Lender’s share thereof.

 

(d)  The
entries made in the Register and accounts and subaccounts maintained pursuant
to paragraphs (b) and (c) of this Section 2.5 shall,
to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the US Borrower and the Canadian
Borrower therein recorded; provided, however, that the failure of
any Lender or the US Administrative Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the US Borrower or the Canadian Borrower to
repay (with applicable interest) the Loans made to the US Borrower or the
Canadian Borrower by such Lender in accordance with the terms of this
Agreement.

 

(e)  Subject
to Section 9.14, each Lender will have the option at any time or from
time to time after the Initial Loan Repayment Date to receive the Exchange
Notes as evidence of all or a part of the principal amount of the Term Loans of
such Lender then outstanding. The principal amount of the Exchange Notes will
equal 100% of the aggregate principal amount (for certainty, including all
accrued and capitalized interest thereon) of the Term Loans which they evidence.
If a Default or an Event of Default shall have occurred and be continuing on
the date such Exchange Notes are issued to evidence the principal amount of the
Term Loans, any notices given or cure periods commenced while the Term Loan was
outstanding shall be deemed given or commenced (as of the actual dates thereof)
for all purposes with respect to the Exchange Note (with the same effect as if
the Exchange Note had been outstanding as of the actual dates thereof).

 

2.6.  Conversions
and Continuations. (a)     The Loans advanced hereunder
on the Closing Date shall be automatically converted from CR Loans to LIBOR
Loans 3 Business Days thereafter. Upon the occurrence and during the
continuance of a LIBOR Unavailability Event of the type described in clauses
(i) and (iii) of Section 2.10 (a), outstanding LIBOR Loans
shall be converted into CR Loans as provided in such Section 2.10 (a). Upon
the occurrence and during the continuance of a LIBOR Unavailability Event of
the type described in clause (ii) of Section 2.10(a), the US
Borrower or the Canadian Borrower, as the case may be, shall have the option of
converting any LIBOR Loan adversely affected as a result of such LIBOR
Unavailability Event into a CR Loan on the last day of the Interest Period
therefore. Each conversion or continuation permitted hereunder (other than an
automatic conversion pursuant to Section 2.10(a) shall be effected by
the US Borrower or the Canadian Borrower, as the case may be, by giving the
U.S. Administrative Agent or the Canadian Administrative Agent at the
applicable Administrative Agent’s Office prior to 12:00 Noon (New York time) at
least three Business Days’ (or one Business Day’s notice in the case of a
conversion into CR Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a “Notice of Conversion or Continuation”)
specifying the Loans to be so converted or continued, the Type of Loans to be
converted or continued into and, if such Loans are to be converted into or
continued as LIBOR Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent (or the 

 

43

 

Canadian Administrative Agent, in the case of Canadian
Loans) shall give each Lender notice as promptly as practicable of any such
proposed conversion or continuation affecting any of its Loans.

 

(b)  If
any Default or Event of Default is in existence at the time of any proposed
continuation of any LIBOR Loans, as the case may be, and the Administrative
Agent has or the Required Lenders have determined in its or their sole
discretion not to permit such continuation, such LIBOR Loans shall be
automatically converted on the last day of the then-current Interest Period in
respect of LIBOR Loans, into CR Loans. If upon the expiration of any Interest
Period in respect of LIBOR Loans, the US Borrower or the Canadian Borrower, as
the case may be, has failed to elect a new Interest Period to be applicable
thereto as provided in paragraph (a) above, the US Borrower or the
Canadian Borrower, as the case may be, shall be deemed to have elected to
continue such LIBOR Loan as a LIBOR Loan with an Interest Period of one month
in duration, effective as of the expiration date of such then-current Interest
Period. Upon the cessation of any Default, Event of Default or LIBOR
Unavailability Event, as the case may be, the applicable Borrower shall have
three Business Days after written notice of such cessation from the
Administrative Agent to provide a Notice of Conversion or Continuation to the
applicable Administrative Agent converting any Loans then being maintained as
CR Loans (as a result of such Default, Event of Default or LIBOR Unavailability
Event) into LIBOR Loans. If such Borrower fails to timely deliver such Notice
of Conversion or Continuance, such CR Loans will automatically be converted
into LIBOR Loans having an Interest Period of one month’s duration.

 

(c)  For
the avoidance of doubt, the term “conversion” (and the corresponding form of
the verb “convert”) as used in this Agreement in respect of converting a CR
Loan to a LIBOR Loan or a LIBOR Loan to a CR Loan shall mean the change in
method by which the interest payable on a Loan is calculated and shall not be
interpreted to mean the repayment and extinguishment of such Loan followed by
the advance of a new Loan.

 

2.7.  Pro
Rata Borrowings. Each Borrowing of US Loans under this Agreement shall be
advanced by the Lenders pro rata on the
basis of their then-applicable US Commitments. Each Borrowing of Canadian Loans
under this Agreement shall be advanced by the Lenders pro rata on the basis of their then-applicable Canadian Commitments.
It is understood that no Lender shall be responsible for any default by any
other Lender in its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder regardless
of the failure of any other Lender to fulfill its commitments hereunder.

 

2.8.  Interest.
(a)      (i) The unpaid principal amount of each
CR Loan shall bear interest from the date of the Borrowing thereof to but
excluding the date of conversion or repayment thereof at a rate per  annum
that shall at all times be the Contract Rate, as in effect from time to time.

 

(b)  The
unpaid principal amount of each LIBOR Loan shall bear interest from the date of
the Borrowing thereof to but excluding the date of repayment thereof at a rate
per annum that shall at all times be the LIBO Rate in effect from time to time.

 

44

 

(c)  Notwithstanding
the foregoing clauses, the interest rate borne by the Loans shall not (subject
to Section 2.8(d)) exceed 11.0% per annum. To the extent the per annum
interest on any Loan exceeds a rate of 11.0% per annum, each Borrower may elect,
by giving written notice to the relevant Administrative Agent and the relevant
Lenders on or before the relevant Interest Payment Date, to pay such excess
interest by adding the amount thereof to the then principal amount of the Loan,
in which event the interest so capitalized shall be treated as principal for
all purposes.

 

(d)  Any
amount (whether of principal, interest or Fees) not paid when due hereunder or
under any other Loan Document (whether at the stated maturity, by acceleration
or otherwise) shall bear interest, to the extent permitted by law (after as
well as before judgment), payable on demand, (i) in the case of principal, at
the rate that would otherwise be applicable thereto plus 2% per annum and (ii)
in all other cases, at a rate per annum equal to the rate that would be
applicable to a CR Loan plus 2% per annum, in each case from and including the
date of such non-payment to but excluding the date on which such amount is paid
in full.

 

(e)  Interest
on each Loan shall accrue from and including the date of any Borrowing to but
excluding the date of any repayment thereof and, subject to Section 3.3,
shall be payable (i) in respect of each CR Loan, quarterly in arrears on the
last Business Day of each fiscal quarter of the Borrowers, (ii) in respect of
each LIBOR Loan, on the last day of each Interest Period applicable thereto and
on each date occurring at three-month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, (A) on any prepayment
(on the amount prepaid), (B) on the date the Exchange Notes are issued to
evidence the principal amount of the Term Loans evidencing the same underlying
indebtedness (but only with respect to the principal amount of the Term Loan so
evidenced), (C) in respect of each LIBOR Loan, on conversion into a CR Loan,
(D) at maturity (whether by acceleration or otherwise) and (E)  after such maturity, on demand.

 

(f)  All
computations of interest hereunder shall be made in accordance with Section 5.5.

 

(g)  The
US Administrative Agent, upon determining the interest rate for any Borrowing
of LIBOR Loans, shall promptly notify the applicable Borrower and the relevant
Lenders thereof. Each such determination shall, absent clearly demonstrable
error, be final and conclusive and binding on all parties hereto.

 

2.9.  Interest
Periods.

 

(a)  The
initial Interest Period for any Borrowing of LIBOR Loans shall commence on the
date of such Borrowing (including the date of any conversion from a Borrowing
of CR Loans, as applicable) and shall end on the numerically corresponding day
in the calendar month that is six months thereafter, and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day on
which the next preceding Interest Period expires and shall end on the
numerically corresponding day in the calendar month that is six months
thereafter.

 

45

 

(b)  If
any Interest Period relating to a Borrowing of LIBOR Loans begins on the last
Business Day of a calendar month or begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period.

 

(c)  If
any Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day; provided
that if any Interest Period in respect of a LIBOR Loan would otherwise expire
on a day that is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the immediately preceding Business Day.

 

(d)  Neither
Borrower shall be entitled to elect any Interest Period in respect of any LIBOR
Loan if such Interest Period would extend beyond the applicable Maturity Date
of such Loan.

 

(e)  The
Interest Period for any Exchange Note shall be as set forth in the Exchange
Note Indenture.

 

2.10.  Increased
Costs, Illegality, etc. (a)      In the event that
(x) in the case of clause (i) below, the US Administrative
Agent or (y) in the case of clauses (ii) and (iii)
below, any Lender shall have reasonably determined (which determination shall,
absent clearly demonstrable error, be final and conclusive and binding upon all
parties hereto):

 

(i)  on any date for determining the LIBOR for any
Interest Period that (x) deposits in the principal amounts of the Loans
comprising such LIBOR Borrowing are not generally available in the relevant
market or (y) by reason of any changes arising on or after the Closing Date
affecting the interbank LIBOR market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR; or

 

(ii)  at any time, that such Lender shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any LIBOR Loans (other than any such increase or reduction
attributable to Taxes) because of (x) any change since the date hereof in any
applicable law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline or order), such as, for
example, a change in official reserve requirements, and/or (y) other
circumstances affecting the interbank LIBOR market or the position of such
Lender in such market; or

 

(iii)  at any time, that the making or continuance
of any LIBOR Loan has become unlawful by compliance by such Lender in good
faith with any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the date hereof that materially and adversely affects the
interbank LIBOR market;

 

46

 

then, and in
any such event, such Lender (or the US Administrative Agent, in the case of clause (i)
above) shall within a reasonable time thereafter give notice (if by telephone,
confirmed in writing) to the applicable Borrower and to the US Administrative
Agent of such determination (which notice the US Administrative Agent shall
promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, (A) LIBOR Loans shall no longer be
available until such time as the US Administrative Agent notifies such Borrower
and the Lenders that the circumstances giving rise to such notice by the US
Administrative Agent no longer exist (which notice the US Administrative Agent
agrees to give at such time when such circumstances no longer exist),
(B) any Notice of Borrowing or Notice of Conversion given by the US
Borrower or the Canadian Borrower with respect to LIBOR Loans that have not yet
been incurred shall be deemed rescinded by the US Borrower or the Canadian
Borrower and (C) any outstanding LIBOR Loans shall be converted, on the
last day of the then current Interest Period with respect thereto, to CR Loans,
(y) in the case of clause (ii) above, the US Borrower or the
Canadian Borrower, as the case may be, shall pay to such Lender, promptly after
receipt of written demand therefor such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its reasonable discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts receivable hereunder (it being agreed that a written notice as to the
additional amounts owed to such Lender, showing in reasonable detail the basis
for the calculation thereof, submitted to the US Borrower or the Canadian
Borrower, as the case may be, by such Lender shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the US Borrower or the
Canadian Borrower, as the case may be, shall take one of the actions specified
in Section 2.10(b) as promptly as possible and, in any event,
within the time period required by law.

 

(b)  At
any time that any LIBOR Loan is affected by the circumstances described in Section 2.10(a)(ii)
or (iii), the US Borrower or the Canadian Borrower, as the case may be,
may (and in the case of a LIBOR Loan affected pursuant to Section 2.10(a)(iii)
shall) either (x) if the affected LIBOR Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the US Administrative Agent
telephonic notice (confirmed promptly in writing) thereof on the same date that
the US Borrower or the Canadian Borrower, as the case may be, was notified by a
Lender pursuant to Section 2.10(a)(ii) or (iii) or
(y) if the affected LIBOR Loan is then outstanding, upon at least three
Business Days’ notice to the US Administrative Agent, require the affected
Lender to convert each such LIBOR Loan into a CR Loan; provided that if
more than one Lender is affected at any time, then all affected Lenders must be
treated in the same manner pursuant to this Section 2.10(b).

 

(c)  [Intentionally
Omitted].

 

(d)  If,
after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, the
National Association of Insurance Commissioners, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by a Lender or its parent with any request or directive made or adopted after
the date hereof regarding capital adequacy (whether or not having the force of
law) of any such authority, association, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender’s or its
parent’s or its Affiliate’s 

 

47

 

capital or assets as a consequence of such Lender’s
commitments or obligations hereunder to a level below that which such Lender or
its parent could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s or its parent’s policies
with respect to capital adequacy), then from time to time, promptly after
demand by such Lender (with a copy to the US Administrative Agent), the US
Borrower or the Canadian Borrower, as the case may be, shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
for such reduction, it being understood and agreed, however, that no Lender
shall be entitled to such compensation as a result of such Lender’s compliance
with, or pursuant to any request or directive to comply with, any such law,
rule or regulation as in effect on the date hereof. Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 2.10(d), will give prompt written notice thereof to
the applicable Borrower which notice shall set forth in reasonable detail the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not, subject to Section 2.13, release or
diminish any of the US Borrower’s or the Canadian Borrower’s, as the case may
be, obligations to pay additional amounts pursuant to this Section 2.10(d)
upon receipt of such notice.

 

(e)  It
is understood that this Section 2.10 shall not apply to Taxes.

 

2.11.  Compensation.
If (a) any payment of principal of any LIBOR Loan is made by the US
Borrower or the Canadian Borrower (or, with respect to Section 13.7,
is purchased by a replacement bank or institution), as the case may be, to or
for the account of a Lender other than on the last day of the Interest Period
for such LIBOR Loan as a result of a payment or conversion pursuant to Section 2.5,
2.6, 2.10, 5.1, 5.2 or 13.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or
for any other reason, (b) any Borrowing of LIBOR Loans is not made as a
result of a withdrawn Notice of Borrowing, (c) any CR Loan is not
converted into a LIBOR Loan as a result of a withdrawn Notice of Conversion or
Continuation, (d) any LIBOR Loan is not continued as a LIBOR Loan, as the
case may be, as a result of a withdrawn Notice of Conversion or Continuation or
(f) any prepayment of principal of any LIBOR Loan is not made as a result
of a withdrawn notice of prepayment pursuant to Section 5.1 or 5.2,
the US Borrower or the Canadian Borrower, as the case may be, shall, after
receipt of a written request by such Lender (which request shall set forth in
reasonable detail the basis for requesting such amount), pay to the US Administrative
Agent or the Canadian Administrative Agent, as applicable, for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that such Lender may reasonably incur as a result of
such payment, failure to convert, failure to continue or failure to prepay,
including any loss, cost or expense (excluding loss of anticipated profits)
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such LIBOR Loan.

 

2.12.  Change
of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii),
2.10(b) or 5.4 with respect to such Lender, it will, if requested
by the US Borrower or the Canadian Borrower, as the case may be, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Initial Loans affected by such event; provided
that such designation is made on such terms that such Lender and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving 

 

48

 

rise to the operation of any such Section. Nothing in
this Section 2.12 shall affect or postpone any of the obligations
of the US Borrower or the Canadian Borrower, as the case may be, or the right
of any Lender provided in Section 2.10 or 5.4.

 

2.13.  Notice
of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11
or 5.4 is given by any Lender more than 180 days after such Lender
has knowledge (or should have had knowledge) of the occurrence of the event giving
rise to the additional cost, reduction in amounts, loss, tax or other
additional amounts described in such Sections, such Lender shall not be
entitled to compensation under Section 2.10, 2.11 or 5.4,
as the case may be, for any such amounts incurred or accruing prior to the
181st day prior to the giving of such notice to the US Borrower or the Canadian
Borrower, as the case may be.

 

SECTION 3. Subordination.

 

3.1.  Agreement
to Subordinate. The Borrowers agree, and each Lender (which shall include
for purposes of this Section, each such Lender’s transferees, successors and
assigns) agrees, that the Obligations are subordinated in right of payment, to
the extent and in the manner provided in this Section 3, to the prior
payment of all Senior Indebtedness and that such subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Obligations shall in all respects rank pari passu with all other existing and
future Pari Passu Indebtedness and shall rank senior to all existing and future
Subordinated Indebtedness. Only Senior Indebtedness shall rank senior to the
Obligations in accordance with the provisions set forth herein.

 

3.2.  Liquidation,
Dissolution, Bankruptcy. Upon any payment or distribution of the assets of
any Borrower to its creditors upon a total or partial liquidation or
dissolution or reorganization of or similar proceeding relating to any Borrower
or its property:

 

(a)  holders
of Senior Indebtedness shall be entitled to receive payment in full in cash of
such Senior Indebtedness before any Lender shall be entitled to receive any
payment of principal of or interest on the Loans;

 

(b)  until
such Senior Indebtedness is paid in full in cash, any payment or distribution
to which any Lender would be entitled but for this Section 3 shall be
made to holders of such Senior Indebtedness as their interests may appear,
except that Lenders may receive Permitted Junior Securities; and

 

(c)  if
a distribution is made to the Lenders that, due to this Section 3,
should not have been made to them, the Lenders are required to hold such
distribution in trust for the holders of Senior Indebtedness and pay it over to
them as their interests may appear.

 

3.3.  Default
on Designated Senior Indebtedness of the Company. Neither Holdings, nor any
Borrower nor any Guarantor shall pay the principal of, premium, if any, or
interest on the Loans or make any deposit in respect thereof, and may not
purchase, redeem or otherwise retire any Loans (collectively, “pay the Loans”)
(except in the form of Permitted Junior Securities) if either of the following
(a “Payment Default”) occurs: (i) any Indebtedness constituting
Designated Senior Indebtedness is not paid in full in cash when due (after
giving 

 

49

 

effect to any applicable grace period); or (ii) any
other default on Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms;
unless, in either case, the Payment Default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash. Regardless of the foregoing, the Borrowers are
permitted to pay the Loans if Holdings or the Borrowers, on the one hand, and
the US Administrative Agent, on the other hand, receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which the Payment Default has occurred. During the
continuance of any default (other than a Payment Default) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Borrowers shall not be permitted to pay the Loans (except in the form of
Permitted Junior Securities) for a period (a “Payment Blockage Period”)
commencing upon the receipt by the US Administrative Agent (with copies to the
Borrowers) of written notice (a “Blockage Notice”) of such default from
the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period, which Payment Blockage Period
shall end 179 days after receipt of such Blockage Notice. The Payment Blockage
Period will end earlier if such Payment Blockage Period is terminated: (x) by
written notice to the US Administrative Agent and the Borrowers from the
Representative which gave such Blockage Notice; (y) because the default giving
rise to such Blockage Notice is cured, waived or otherwise no longer
continuing; or (z) because such Designated Senior Indebtedness has been
discharged or repaid in full in cash.

 

Notwithstanding
the provisions described in the immediately preceding two sentences (but
subject to the provisions contained in the first sentence of this Section
3.3), unless the maturity of such Designated Senior Indebtedness shall have
been accelerated, the Borrowers and the Guarantors shall be entitled to resume
payments on the Loans after termination of such Payment Blockage Period. The
Loans shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Borrowers during such period; provided,
that if any Blockage Notice within such 360-day period is delivered to the US
Administrative Agent by or on behalf of any holders of Designated Senior
Indebtedness (other than Designated Senior Indebtedness created under the
Senior Credit Facilities), the Senior Administrative Agent shall be entitled to
give another Blockage Notice within such period; provided, however,
that in no event shall the total number of days during which any Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any consecutive 360-day period, and there must be at least 181 days during any
consecutive 360-day period during which no Payment Blockage Period is in effect.
For purposes of this Section 3.3, no Default which existed or was
continuing on the date of delivery of any Blockage Notice to the US Administrative
Agent shall be, or be made, the basis for a subsequent Blockage Period unless
such default has been waived for a period of not less than 90 days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants during the period after the date of delivery of a Blockage Notice,
that, in either case, would give rise to a Non-Payment Default pursuant to any
provisions under which a Non-Payment Default previously existed or was
continuing shall constitute a new Non-Payment Default for this purpose).

 

50

 

3.4.  Acceleration
of Payment of the Loans. If payment of the Loans is accelerated because of
an Event of Default, the Borrowers or the US Administrative Agent shall
promptly notify the Representatives of all Designated Senior Indebtedness of
such acceleration.

 

3.5.  When
Distribution Must Be Paid Over. If a distribution or other payment is made
on or in respect of the Loans that because of this Section 3 should not
have been made, the Lenders who receive such distribution or other payment
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.

 

3.6.  Subrogation.
After all Senior Indebtedness is paid in full and until the Loans are paid in
full, the Lenders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Section 3 to holders of such Senior
Indebtedness which otherwise would have been made to the Lenders is not and
shall not be deemed to be as between the Borrowers and the Guarantors, on the
one hand, and the Lenders, on the other hand, a payment on such Senior
Indebtedness.

 

3.7.  Relative
Rights. This Section 3 defines the relative rights of the Lenders
and the holders of Senior Indebtedness. Nothing in this Agreement shall:

 

(a)  impair, as between the Borrowers and
the Lenders, the obligation of the Borrowers, which is absolute and
unconditional, to pay principal of and interest on the Loans and all other
Obligations in accordance with the terms hereof and the other Loan Documents;
or

 

(b)  prevent the Administrative Agents, any
Lender or any other holder of the Obligations from exercising its available remedies
upon a Default, subject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to the Lenders.

 

3.8.  Subordination
May Not Be Impaired by the Borrowers. No right of any holder of Senior
Indebtedness to enforce the subordination of the Indebtedness evidenced by the
Loans shall be impaired by any act or failure to act by any Borrower or by its
failure to comply with this Agreement.

 

3.9.  Rights
of Administrative Agents. Notwithstanding Section 3.3, the
Administrative Agents shall continue to make payments on the Loans and shall
not be charged with knowledge of the existence of facts that under this Section
3 would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, the US Administrative Agent
receives notice satisfactory to it that such payments are prohibited by this Section
3. Holdings, either Borrower, any Representative or any Person designated
by any Representative (as to which designation the US Administrative Agent has
received prior written notice) to act on its behalf shall be entitled to give
the notice.

 

Each
Administrative Agent in its individual or any other capacity shall be entitled
to hold Senior Indebtedness with the same rights it would have if it were not
an Administrative Agent. Each Administrative Agent shall be entitled to all the
rights set forth in this Section 3 with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent 

 

51

 

as any other
holder of such Senior Indebtedness. Nothing in this Section 3 shall
apply to claims of, or payments to, either Administrative Agent under or
pursuant to Section 12.

 

3.10.  Distribution
or Notice to Representative. Whenever any Person is to make a distribution
or give a notice to holders of Senior Indebtedness, such Person shall be
entitled to make such distribution or give such notice to the Representative of
or in respect of such Senior Indebtedness, if any.

 

3.11.  Section
3 Not To Prevent Events of Default or Limit Right To Accelerate. The
failure to make a payment on or in respect of the Loans or any Obligations in
respect thereof under this Agreement by reason of any provision in this Section
3 shall not be construed as preventing the occurrence of a Default. Nothing
in this Section 3 shall have any effect on the right of the Lenders or
the Administrative Agents to accelerate the maturity of the Loans or other
Obligations.

 

3.12.  Administrative
Agents Entitled To Rely. Upon any payment or distribution pursuant to this Section
3, the Administrative Agents and the Lenders shall be entitled to rely (i)
upon any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 3.2 are pending, (ii)
upon a certificate of the liquidating trustee or agent or other Person making
such payment or distribution to the Administrative Agents or the Lenders or
(iii) upon any Representative for the holder of Senior Indebtedness, in each
case for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Borrowers, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 3. In the event that either Administrative
Agent determines, in good faith, that evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Section 3, such Administrative
Agent shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of such Administrative Agent as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Section 3, and, if
such evidence is not furnished, such Administrative Agent shall be entitled to
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Section 12
shall be applicable to all actions or omissions by such Administrative Agent
pursuant to this Section 3.

 

3.13.  US
Administrative Agent To Effectuate Subordination. Each Lender authorizes
and directs the US Administrative Agent on such Lender’s behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Lenders and the holders of Senior Indebtedness as
provided in this Section 3 and appoints the US Administrative Agent as
attorney-in-fact for any and all such purposes.

 

3.14.  Administrative
Agents Not Fiduciary for Holders of Senior Indebtedness. No Administrative
Agent shall be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to the Lenders or the Borrowers or any other Person,
money or assets to which any holders of Senior Indebtedness shall be entitled
by virtue of this Section 3 or otherwise.

 

52

 

3.15.  Reliance
by Holders of Senior Indebtedness on Subordination Provisions. Each Lender
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness, whether such Senior Indebtedness was created or acquired
before or after the Closing Date, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.

 

SECTION 4. Fees;
Commitments.

 

4.1.  Fees.
The Borrowers agree to pay to each Administrative Agent the fees in the amounts
and on the dates previously agreed to in writing by such parties.

 

4.2.  Mandatory
Termination of Commitments. The US Commitments and the Canadian Commitments
shall terminate at 5:00 p.m. (New York time) on the Closing Date.

 

SECTION 5. Payments.

 

5.1.  Voluntary
Prepayments. (a)  The US Borrower shall have the right to prepay
Initial US Loans, and the Canadian Borrower shall have the right to repay
Initial Canadian Loans, in each case, without premium or penalty, in whole or
in part from time to time on the following terms and conditions: (i) the
applicable Borrower shall give the US Administrative Agent, the Canadian
Administrative Agent (at the applicable Administrative Agent’s Office) and the
Exchange Note Trustee written notice (or telephonic notice promptly confirmed
in writing) of its intent to make such prepayment, the amount of such prepayment
and (in the case of LIBOR Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be given by such Borrower no later than
10:00 a.m. (New York time) one Business Day prior to the date of such prepayment;
(ii) as promptly as practicable after receipt of such notice, the US
Administrative Agent and the Canadian Administrative Agent shall give notice to
each relevant Initial Lender, of (A) the pro
rata amount that would be payable to each such Initial Lender in respect of
its Initial Loan, and (B) the expected date of such payment; (iii) each
partial prepayment of any Borrowing of Initial Loans shall be in a multiple of
$100,000 and in an aggregate principal amount of at least $1,000,000; provided
that no partial prepayment of LIBOR Loans made pursuant to a single Borrowing
shall reduce the outstanding LIBOR Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Initial Loans; and (iv) any
prepayment of LIBOR Loans pursuant to this Section 5.1 on any day
other than the last day of an Interest Period applicable thereto shall be
subject to compliance by the US Borrower or the Canadian Borrower, as the case
may be, with the applicable provisions of Section 2.11. No prepayment
of Initial Loans of one Borrower may be made by such Borrower unless a
prepayment of a pro rata amount of the Initial Loans of the other Borrower is
also made. Each prepayment in respect of Initial US Loans pursuant to this Section 5.1
shall be applied pro  rata to all Initial US Loans. Each
prepayment in respect of Initial Canadian Loans pursuant to this Section 5.1
shall be applied pro  rata to all Initial Canadian Loans. At the
applicable Borrower’s election in connection with any prepayment pursuant to
this Section 5.1, such prepayment shall not be applied to any Loan
of a Defaulting Lender.

 

53

 

(b)  Restriction
Regarding Term Loans. No Borrower shall offer to prepay its Term Loans
unless the other Borrower concurrently offers to pay a pro rata amount of its
Term Loans and unless each Borrower concurrently offers to prepay a pro rata
amount of its then outstanding Exchange Notes. No Borrower shall offer to
prepay its Exchange Notes unless the other Borrower concurrently offers to
prepay a pro rata amount of its Exchange Notes and unless each Borrower
concurrently offers to prepay a pro rata amount of its then outstanding Term
Loans.

 

5.2.  Mandatory
Prepayments. (a)     Prepayments. On each
occasion that a Prepayment Event occurs, the Borrowers shall, within one
Business Day after the occurrence of a Debt Incurrence Prepayment Event and
within five Business Days after the occurrence of any other Prepayment Event,
prepay, in accordance with paragraph (b) below, the principal
amount of Initial Loans in an amount equal to 100% of the Net Cash Proceeds
from such Prepayment Event.

 

(b)  [Intentionally
Omitted].

 

(c)  Application
to Initial Loans. With respect to each prepayment of Initial US Loans and
Initial Canadian Loans required by Section 5.2(a), the Borrowers
may designate the Types of Initial Loans that are to be prepaid and the
specific Borrowing(s) pursuant to which made. In the absence of a designation
by the Borrowers as described in the preceding sentence, the relevant
Administrative Agent shall, subject to the above, make such designation in its
reasonable discretion with a view, but no obligation, to minimize breakage
costs owing under Section 2.11.

 

(d)  LIBOR
Interest Periods. In lieu of making any payment pursuant to this Section 5.2
in respect of any LIBOR Loan other than on the last day of the Interest Period
therefor so long as no Default or Event of Default shall have occurred and be
continuing, the US Borrower or the Canadian Borrower, as the case may be, at
its option may deposit with the applicable Administrative Agent an amount equal
to the amount of the LIBOR Loan to be prepaid and such LIBOR Loan shall be
repaid on the last day of the Interest Period therefor in the required amount. Such
deposit shall be held by the applicable Administrative Agent in a corporate
time deposit account established on terms reasonably satisfactory to the
applicable Administrative Agent, earning interest at the then-customary rate
for accounts of such type. Such deposit shall constitute cash collateral for
the Obligations; provided that the US Borrower or the Canadian Borrower,
as the case may be, may at any time direct that such deposit be applied to make
the applicable payment required pursuant to this Section 5.2.

 

(e)  Minimum
Amount. No prepayment shall be required pursuant to Section 5.2(a)
unless and until the amount at any time of Net Cash Proceeds from Prepayment
Events required to be applied at or prior to such time pursuant to such
Section and not yet applied at or prior to such time to prepay Initial
Loans pursuant to such Section exceeds the Dollar Equivalent of
$15,000,000 in the aggregate for all such Prepayment Events.

 

(f)  Foreign
Asset Sales. Notwithstanding any other provisions of this Section 5.2,
(i) to the extent that any of or all the Net Cash Proceeds of any asset
sale by a Restricted Foreign Subsidiary giving rise to an Asset Sale Prepayment
Event (a “Foreign Asset 

 

54

 

Sale”)
are prohibited or delayed by applicable local law from being repatriated to the
United States or Canada, as applicable, the portion of such Net Cash Proceeds
so affected will not be required to be applied to repay Initial Loans at the
times provided in this Section 5.2 but may be retained by the
applicable Restricted Foreign Subsidiary so long, but only so long, as the
applicable local law will not permit repatriation to the United States or
Canada, as applicable (the US Borrower and the Canadian Borrower hereby agreeing
to cause the applicable Restricted Foreign Subsidiary to promptly take all
actions required by the applicable local law to permit such repatriation), and
once such repatriation of any of such affected Net Cash Proceeds permitted
under the applicable local law, such repatriation will be immediately effected
and such repatriated Net Cash Proceeds will be promptly (and in any event not
later than two Business Days after such repatriation) applied (net of
additional taxes payable or reserved against as a result thereof) to the
repayment of the Initial Loans pursuant to this Section 5.2 and
(ii) to the extent that the US Borrower (or the Canadian Borrower, as
applicable) has determined in good faith that repatriation of any of or all the
Net Cash Proceeds of any Foreign Asset Sale would have a material adverse tax
cost consequence with respect to such Net Cash Proceeds, the Net Cash Proceeds
so affected may be retained by the applicable Restricted Foreign Subsidiary; provided
that, in the case of this clause (f)(ii), on or before the date on
which any Net Cash Proceeds so retained would otherwise have been required to
be applied to prepayments pursuant to Section 5.2(a), (x) the
US Borrower or the Canadian Borrower, as the case may be, applies an amount
equal to such Net Cash Proceeds to such prepayments as if such Net Cash
Proceeds had been received by the US Borrower or the Canadian Borrower, as the
case may be, rather than such Restricted Foreign Subsidiary, less the amount of
additional taxes that would have been payable or reserved against if such Net
Cash Proceeds had been repatriated (or, if less, the Net Cash Proceeds that
would be calculated if received by such Restricted Foreign Subsidiary) or
(y) such Net Cash Proceeds are applied to the repayment of Indebtedness of
a Restricted Foreign Subsidiary.

 

5.3.  Method
and Place of Payment. (a)      Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
by the US Borrower or the Canadian Borrower, as applicable, without set-off,
counterclaim or deduction of any kind, to the US Administrative Agent or the
Canadian Administrative Agent, as applicable, for the ratable account of the
Lenders entitled thereto, not later than 12:00 Noon (New York time) on the
date when due and shall be made in immediately available funds at the
Administrative Agent’s Office. All payments under each Loan Document (whether
of principal, interest or otherwise) shall be made in Dollars, except as
otherwise expressly provided herein. The US Administrative Agent or the
Canadian Administrative Agent, as applicable, will thereafter cause to be
distributed on the same day (if payment was actually received by the US Administrative
Agent or the Canadian Administrative Agent, as applicable, prior to 2:00 p.m.
(New York time) on such day) like funds relating to the payment of principal or
interest or Fees ratably to the Lenders entitled thereto.

 

(b)  Any
payments under this Agreement that are made later than 2:00 p.m. (New York
time) shall be deemed to have been made on the next succeeding Business Day. Except
as otherwise provided herein, whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.

 

55

 

5.4.  Net
Payments. (a)    Subject to
the following sentence, all payments made by or on behalf of the US Borrower
and the Canadian Borrower under this Agreement or any other Loan Document shall
be made free and clear of, and without deduction or withholding for or on
account of, any current 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 (i) net income taxes and franchise taxes (imposed in lieu of net
income taxes) and capital taxes imposed on the US Administrative Agent, the
Canadian Administrative Agent or any Lender and (ii) any taxes imposed on
the US Administrative Agent, the Canadian Administrative Agent or any Lender as
a result of its carrying on business or otherwise having a current or former
connection between the US Administrative Agent, the Canadian Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the US
Administrative Agent, the Canadian Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”)
are required to be withheld from any amounts payable under this Agreement, the
US Borrower or the Canadian Borrower, as applicable, shall increase the amounts
payable to the US Administrative Agent, the Canadian Administrative Agent or
such Initial Lender to the extent necessary to yield to the US Administrative
Agent, the Canadian Administrative Agent or such Initial Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement; provided, however,
that the US Borrower shall not be required to increase any such amounts payable
to any Initial Lender that is not organized under the laws of the United States
of America or a state thereof (a “Non-US Lender”) if such Initial Lender
fails to comply with the requirements of Section 5.4(b). Whenever
any Non-Excluded Taxes are payable by the US Borrower or the Canadian Borrower,
as the case may be, as promptly as possible thereafter, such Borrower shall
send to the US Administrative Agent or the Canadian Administrative Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original receipt (or other evidence acceptable to such
Lender, acting reasonably) received by such Borrower showing payment thereof. If
the US Borrower or the Canadian Borrower, as the case may be, fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the US Administrative Agent or the Canadian Administrative Agent the
required receipts or other required documentary evidence, such Borrower shall
indemnify the US Administrative Agent, the Canadian Administrative Agent and
the Lenders for any incremental taxes, interest, costs or penalties that may
become payable by the US Administrative Agent, the Canadian Administrative
Agent or any Lender as a result of any such failure. The agreements in this Section 5.4(a)
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.

 

(b)  Each
Non-US Lender shall:

 

(i)  deliver to the US Borrower and the US
Administrative Agent on or before the date it becomes a party to this Agreement
two copies of either (x) in the case of a Non-US 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”, United States Internal
Revenue Service Form W-8BEN (together with a 

 

56

 

certificate representing
that such Non-US Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the US Borrower and is not a
controlled foreign corporation related to the US Borrower (within the meaning
of Section 864(d)(4) of the Code)), or (y) Internal Revenue Service Form
W-8BEN or Form W-8ECI, in each case properly completed and duly executed by
such Non-US Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the US Borrower under this Agreement;

 

(ii)  deliver to the US Borrower and the US
Administrative Agent two further copies of any such form or certification (or
any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the US
Borrower; and

 

(iii)  obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by the US
Borrower or the US Administrative Agent;

 

unless in any
such case any change in treaty, law or regulation has occurred prior to the
date on which any such delivery would otherwise be required that renders any
such form inapplicable or would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the US
Borrower and the US Administrative Agent. Each Person that shall become a
Participant pursuant to Section 13.6 or a Lender pursuant to Section 13.6
shall, upon the effectiveness of the related transfer, be required to provide
all the forms and statements required pursuant to this Section 5.4(b);
provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to such Lender from which the
related participation shall have been purchased.

 

(c)  Notwithstanding
anything to the contrary provided under this agreement, neither the US
Borrower, nor any Guarantor (as to any payment made by it in respect of the
obligations of the US Borrower pursuant to Section 5.4(a)) shall be
required to indemnify any Initial Lender or Agent pursuant to Section 5.4(a),
or to pay any additional amounts to any Initial Lender or Agent pursuant to Section
5.4(a), in respect of any withholding tax to the extent that (i) the
obligation to withhold amounts with respect to such withholding tax existed or
would have applied to payments made by the US Borrower to such Initial Lender
on the date such Lender or Agent became a party to this Agreement (or, in the
case of a Participant, on the date such Participant became a Participant
hereunder); provided, however, that this clause (c)(i)
shall not apply to the extent that (x) the indemnity payments or
additional amounts any Initial Lender (or Participant) would be entitled to
receive (without regard to this clause (c)(i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Initial Lender (or Participant) would have
been entitled to receive in the absence of such assignment, participation or
transfer, (y) such assignment, participation or transfer had been
requested by the US Borrower or the Canadian Borrower or (z) such assignment,
participation or transfer had occurred following the occurrence of and during
the continuation of an Event of Default pursuant to Section 11.1 or 11.5,
(ii) the obligation to pay such additional amounts would not have arisen
but for a failure by such Initial Lender or 

 

57

 

Participant to comply with the provisions of Section
5.4(b) above, (iii) any of the representations or certifications made
by a Initial Lender or Participant pursuant to Section 5.4(b) above are
incorrect at the time a payment hereunder is made, other than by reason of any
change in treaty, law or regulation having effect after the date such
representations or certifications were made or (iv) such Initial Lender is
treated as a conduit entity participating in a conduit financing arrangement
within the meaning of Treasury regulations section 1.881-3 or any successor
provision with respect to the Initial Loans. The Canadian Borrower shall not be
required to indemnify or pay additional amounts to a Lender or Agent in respect
of Canadian taxes pursuant to Section 5.4(a) above to the extent that
such Non-Excluded Taxes result from a failure by the Initial Lender or Agent to
comply with any certification, identification, information, documentation or
other reporting requirement (collectively referred to in this Section 5.4(c)
as a “Reporting Requirement”) if (i) compliance is required by law, regulation,
administrative practice or any applicable tax treaty as a precondition to
exemption from or a reduction in the rate of deduction or withholding of
Non-Excluded Taxes, and (ii) the Canadian Borrower has first made written
request to such Initial Lender or Agent, as applicable, that such Initial
Lender or Agent comply with the particular Reporting Requirement (identified
specifically in such request) and such Initial Lender or Agent, as applicable,
has not complied with such Reporting Requirement within 30 Business Days of
such written request; provided, however, that the Canadian
Borrower shall not be relieved of its obligation to indemnify or pay additional
amounts to an Initial Lender or Agent (x) in respect of certain payments
where the obligation to indemnify or pay additional amounts in respect of those
payments arose prior to Canadian Borrower’s written request to such Initial
Lender or Agent, as applicable, respecting such Reporting Requirement,
(y) if, by reason of any change in any law, regulation, administrative
practice or applicable tax treaty occurring after the date hereof, the Initial
Lender or Agent, as applicable, is unable to duly comply with such Reporting
Requirement, or (z) to the extent that the additional payment or indemnity
compensates such Initial Lender or Agent for an amount to which such Initial
Lender or Agent would have been entitled to receive under Section 5.4(a)
had such Initial Lender or Agent, as applicable, complied with the Reporting
Requirement.

 

(d)  If
the US Borrower or the Canadian Borrower determines in good faith that a
reasonable basis exists for contesting any Taxes for which indemnification has
been demanded hereunder, the relevant Initial Lender, the Canadian
Administrative Agent or the US Administrative Agent, as applicable, shall
cooperate with such Borrower in challenging such taxes at such Borrower’s
expense if so requested by such Borrower. If any Initial Lender, the Canadian
Administrative Agent or the US Administrative Agent, as applicable, receives a
refund of a tax for which a payment has been made by the US Borrower or the
Canadian Borrower pursuant to this Agreement, which refund in the good faith
judgment of such Initial Lender, the Canadian Administrative Agent or US
Administrative Agent, as the case may be, is attributable to such payment made
by such Borrower, then the Initial Lender, the Canadian Administrative Agent or
the US Administrative Agent, as the case may be, shall reimburse such Borrower
for such amount (together with any interest received thereon) as the Initial
Lender, the Canadian Administrative Agent or US Administrative Agent, as the
case may be, determines to be the proportion of the refund as will leave it,
after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. An Initial Lender, the Canadian
Administrative Agent or US Administrative Agent shall claim any refund that it
determines is available to it, unless it concludes in its reasonable discretion
that it would be adversely affected by making such a claim. Neither the Initial
Lenders, the Canadian Administrative Agent nor the 

 

58

 

US Administrative Agent shall be obliged to disclose
any information regarding their respective tax affairs or computations to the
US Borrower or the Canadian Borrower in connection with this Section 5.4(d)
or any other provision of this Section 5.4.

 

5.5.  Computations
of Interest and Fees. (a)      Interest on LIBOR Loans
and, except as provided in the last sentence of this paragraph, CR Loans shall
be calculated on the basis of a 360-day year for the actual days elapsed. For
purposes of the Interest Act (Canada), the annual rate of interest to which the
interest rate payable under the preceding sentence is equivalent is equal to
such interest rate, multiplied by the number of days in the calendar year in
which such interest rate is to be determined and divided by 360. Interest on
(i) CR Loans in respect of which the rate of interest is calculated on the
basis of the Prime Rate, and (ii) interest on overdue interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the actual
number of days elapsed.

 

(b)  All
Fees shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed.

 

5.6.  Limit
on Rate of Interest.

 

(a)  No
Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this
Agreement, neither the US Borrower nor the Canadian Borrower shall be obliged
to pay any interest or other amounts under or in connection with this Agreement
in excess of the amount or rate permitted under or consistent with any
applicable law, rule or regulation. In particular, the Canadian Borrower shall
not be obliged to pay any interest or other amounts which would result in the
receipt by any Lender of interest on credit advanced at a rate in excess of the
rate permitted under the Criminal Code (Canada). For purposes of this Section 5.6,
“interest” and “credit advanced” have the meanings ascribed in the Criminal
Code (Canada) and the “effective annual rate of interest” shall be calculated
in accordance with generally accepted actuarial practices and principles.

 

(b)  Payment
at Highest Lawful Rate. If either the US Borrower or the Canadian Borrower
is not obliged to make a payment which it would otherwise be required to make
as a result of Section 5.6(a), the US Borrower or the Canadian
Borrower, as applicable, shall make such payment to the maximum extent
permitted by or consistent with applicable laws, rules and regulations.

 

(c)  Adjustment
if any Payment exceeds Lawful Rate. If any provision of this Agreement or
any of the other Loan Documents would obligate the US Borrower or the Canadian
Borrower to make any payment of interest or other amount payable to any Lender
in an amount or calculated at a rate which would be prohibited by any applicable
law, rule or regulation, or would result in a receipt by that 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
(in the case of the US Borrower or the Canadian Borrower) or so result in a
receipt by that Lender of interest at a criminal rate, such adjustment to be
effected, to the extent necessary, as follows:

 

59

 

(i)  firstly, by reducing the amount or rate of
interest required to be paid by the US Borrower or the Canadian Borrower to the
affected Lender under Section 2.8; and

 

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

 

Notwithstanding
the foregoing, and after giving effect to all adjustments contemplated thereby,
if any Lender shall have received from the US Borrower or the Canadian Borrower
an amount in excess of the maximum permitted by any applicable law, rule or
regulation, or an amount in excess of the maximum permitted under the Criminal Code (Canada), then the US
Borrower or the Canadian Borrower, as applicable, shall be entitled, by notice
in writing to the US Administrative Agent or the Canadian Administrative Agent,
as applicable, to obtain reimbursement from such Lender in an amount equal to
such excess, and pending such reimbursement, such amount shall be deemed to be
an amount payable by that Lender to the US Borrower or the Canadian Borrower,
as applicable. Any amount or rate of interest referred to in this Section 5.6(c)
shall be determined in accordance with generally accepted actuarial practices
and principles as an effective annual rate of interest over the term that any
Loan remains outstanding on the assumption, with respect to Canadian
Borrowings, that any charges, fees or expenses that fall within the meaning of “interest”
(as defined in the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be pro rated over that period of time and otherwise be pro rated
over the period from the Closing Date to the Maturity Date.

 

SECTION 6. Conditions
Precedent to Initial Credit Event.

 

The initial
Credit Event under this Agreement is subject to the satisfaction of the
following conditions precedent:

 

6.1.  Loan
Documents. The US Administrative Agent, Canadian Administrative Agent or
the Guarantee Agent (as applicable) shall have received:

 

(a)  this
Agreement, executed and delivered by a duly authorized officer of Holdings, the
US Borrower, the Canadian Borrower, each Lender, the Canadian Administrative
Agent and the US Administrative Agent;

 

(b)  the
US Guarantee, executed and delivered by a duly authorized officer of the US
Borrower and each applicable Guarantor;

 

(c)  the
Canadian Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;

 

(d)  the
Chilean Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;

 

(e)  the
Irish Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;

 

60

 

(f)  the
UK Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;

 

(g)  the
Mexican Guarantee, executed and delivered by a duly authorized officer of each
applicable Guarantor;

 

6.2.  Legal
Opinions. The Administrative Agents shall have received the executed legal
opinions of (a) Simpson Thacher & Bartlett LLP, special New York
counsel to each Borrower and each other Credit Party, in form and substance
reasonably satisfactory to the US Administrative Agent, (b) Osler, Hoskin
& Harcourt LLP, special Canadian counsel for Holdings, the Canadian
Borrower and each other Canadian Subsidiary Guarantor, in form and substance
reasonably satisfactory to the Canadian Administrative Agent, and
(c) local and foreign counsel to the Credit Parties in certain
jurisdictions as may be reasonably requested by the Canadian Administrative
Agent and mutually agreed upon with the Canadian Borrower in form and substance
satisfactory to the Canadian Administrative Agent. The US Borrower, the
Canadian Borrower and the other Credit Parties hereby instruct such counsel to
deliver such legal opinions.

 

6.3.  Representations
and Warranties; No Default. The US Administrative Agent shall have received
a certificate of an Authorized Officer of each Borrower, dated the Closing
Date, certifying that (a) on the Closing Date, the representations and warranties
made by such Borrowers in Section 8, as they relate to the Credit
Parties at such time, are true and correct in all material respects (after
giving effect to the Acquisition) and (b) after giving effect to the Credit
Event on the Closing Date and the other transactions contemplated hereby, no
Default or Event of Default shall have occurred and be continuing.

 

6.4.  Equity
Contributions. The Rollover Equity Contribution and the KKR Equity
Contribution shall have been made on terms and pursuant to documentation reasonably
acceptable to the US Administrative Agent.

 

6.5.  Closing
Certificates. The US Administrative Agent shall have received a certificate
of each Credit Party, dated the Closing Date, in the case of each Borrower
substantially in the form of Exhibit C-1, and in the case of each other
Credit Party, substantially in the form of Exhibit C-2, in each case
with appropriate insertions, executed by a duly authorized officer or
representative of such Credit Party and the Secretary or any Assistant Secretary
of such Credit Party, and attaching the documents referred to in Sections
6.6 and 6.7.

 

6.6.  Corporate
Proceedings of Each Credit Party. The US Administrative Agent shall have
received a copy of the resolutions, in form and substance satisfactory to the
US Administrative Agent, of the Board of Directors (or comparable governing
body) of each Credit Party (or a duly authorized committee thereof) authorizing
(a) the execution, delivery and performance of the Loan Documents (and any
agreements relating thereto) to which it is a party and (b) in the case of the
US Borrower and the Canadian Borrower, the extensions of credit contemplated
hereunder.

 

61

 

6.7.  Corporate
Loan Documents. The US Administrative Agent shall have received true
and complete copies of the certificate of incorporation and by-laws (or
equivalent organizational documents) of each Credit Party.

 

6.8.  Fees.
The Agents and the Lenders shall have received the fees in the amounts previously
agreed in writing by the Borrowers and (as applicable) the Agents and such
Lenders to be received on the Closing Date and all expenses (including the
reasonable fees, disbursements and other charges of counsel) for which invoices
have been presented on or prior to the Closing Date shall have been paid.

 

6.9.  Acquisition
Agreement. The US Administrative Agent shall have received a fully executed
or conformed copy of the Acquisition Agreement, which shall be in full force
and effect and in form and substance reasonably satisfactory to the US
Administrative Agent.

 

6.10.  Solvency
Certificate. On the Closing Date, the US Administrative Agent shall have
received a certificate from the chief financial officer of Holdings in form,
scope and substance satisfactory to US Administrative Agent, with appropriate
attachments and demonstrating that after giving effect to the consummation of
the Transactions, Holdings on a consolidated basis with its Subsidiaries is
Solvent.

 

6.11.  Governmental
Authorizations and Consents. Each Credit Party shall have obtained all
approval and authorizations of Governmental Authorities and all consents of
other Persons, in each case that are necessary in connection with the
Transactions and the transactions contemplated by the Loan Documents and each
of the foregoing shall be in full force and effect. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Acquisition and the Loan
Documents and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.

 

6.12.  Historical
Financial Statements. The Lenders shall have received the Historical
Audited Financial Statements and the Historical Unaudited Financial Statements.

 

6.13.  Pro
Forma Financial Statements. The US Administrative Agent shall have received
the Pro Forma Financial Statements, together with a certificate of the chief
financial officer of Holdings to the effect that such statements accurately
present the pro forma financial position of Holdings and its Subsidiaries in
accordance with GAAP as of the date of the pro forma balance sheet forming part
of the Pro Forma Financial Statements and for the period covered by the related
pro forma income statement, assuming that the Transactions had actually
occurred at such date or at the beginning of such period, as the case may be.

 

6.14.  Acquisition.
Concurrently with the initial Credit Event made hereunder, the Acquisition
shall have been consummated on terms and conditions reasonably satisfactory to
the Agents.

 

6.15.  Representations
and Warranties. At the time of each Credit Event and also after giving
effect thereto all representations and warranties made by any Credit Party
contained 

 

62

 

herein or in the other Loan Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event (except where such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such earlier date).

 

6.16.  Notice
of Borrowing. Prior to the making of each Loan, the US Administrative Agent
(or, in the case of any Canadian Borrowing, the Canadian Administrative Agent)
shall have received a Notice of Borrowing (whether in writing or by telephone)
meeting the requirements of Section 2.3.

 

The acceptance
of the benefits of each Credit Event shall constitute a representation and warranty
by each Credit Party to the US Administrative Agent or the Canadian
Administrative Agent, as applicable, and each of the Lenders that all the
applicable conditions specified above shall have been satisfied as of that
time.

 

SECTION 7. [Intentionally
Omitted].

 

SECTION 8. Representations,
Warranties and Agreements.

 

In order to
induce the Lenders to enter into this Agreement, to make the Loans as provided
for herein, each of Holdings, the US Borrower (in respect of itself and on its
own behalf and to the extent such representations and warranties are applicable
to it) and the Canadian Borrower (in respect of itself and on its own behalf
and to the extent such representations and warranties are applicable to it)
makes the following representations and warranties to, and agreements with, the
Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans until one year after repayment of all of
the outstanding Loans and Exchange Notes:

 

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

 

8.2.  Corporate
Power and Authority. Each Credit Party has the corporate or other
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Loan Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party (and, in
the case of the Borrowers, to borrow hereunder). Each Credit Party has duly
executed and delivered each Loan Document to which it is a party and each such
Loan Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except as the
enforceability thereof may be limited by 

 

63

 

bankruptcy, insolvency or similar laws affecting creditors’
rights generally and subject to general principles of equity.

 

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

 

8.4.  Litigation.
There are no actions, suits or proceedings (including Environmental Claims)
pending or, to the knowledge of Holdings, the US Borrower or the Canadian
Borrower, threatened with respect to Holdings, the Borrowers or any of their
respective Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect or a Material Adverse Change.

 

8.5.  Margin
Regulations. Neither the making of any Loan hereunder nor the use of the
proceeds thereof will violate the provisions of Regulation T, U or X of the
Board.

 

8.6.  Governmental
Approvals. The execution, delivery and performance of the Acquisition
Agreement or any Loan Document does not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except for (i) such as have been obtained or made and are in
full force and effect and (ii) such licenses, approvals, authorizations or
consents the failure to obtain or make could not reasonably be expected to have
a Material Adverse Effect.

 

8.7.  Investment
Company Act. None of Holdings, the US Borrower or the Canadian Borrower is
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

 

8.8.  True
and Complete Disclosure. (a)      None of the factual
information and data (taken as a whole) heretofore or contemporaneously
furnished by Holdings, the US Borrower, the Canadian Borrower, any of their
respective Subsidiaries or any of their respective authorized representatives
in writing to the US Administrative Agent and/or any Lender on or before the
Closing Date (including (i) the Confidential Information Memorandum and
(ii) all information contained in the Loan Documents) for purposes of or
in connection with this Agreement or any transaction contemplated herein
contained any untrue statement or omitted to state any material fact necessary
to make such information and data (taken as a whole) not misleading at such
time in light of the circumstances under which such information or data was 

 

64

 

furnished, it being understood and agreed that for
purposes of this Section 8.8(a), such factual information and data
shall not include projections and pro forma financial information.

 

(b)  The
projections and pro forma financial information contained in the information
and data referred to in Section 8.8(a) above were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.

 

8.9.  Financial
Statements; Financial Condition. The (a) unaudited historical
consolidated financial information of the Predecessor Company and its
Subsidiaries as set forth in the Confidential Information Memorandum, and
(b) the Historical Audited Financial Statements, in each case present or
will, when provided, present fairly in all material respects the consolidated
financial position of Holdings or the Predecessor Company, as the case may be,
at the respective dates of said information or statements and results of operations
of the applicable Person for the respective periods covered thereby. The
financial statements referred to in clause (b) of the preceding
sentence have been prepared in accordance with GAAP consistently applied except
to the extent provided in the notes to said financial statements. As of the
Closing Date, there has been no Closing Date Material Adverse Change since
December 31, 2004. After the Closing Date, there has been no Material
Adverse Change since December 31, 2004.

 

8.10.  Tax
Returns and Payments. Each of Holdings, the Borrowers and each of their
respective Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material Taxes payable by it that have become due, other than those
(a) not yet delinquent or (b) being contested in good faith as to
which adequate reserves have been provided in accordance with GAAP and which
could not reasonably be expected to result in a Material Adverse Effect.

 

8.11.  Compliance
with ERISA. (a)      Each Plan is in compliance with
ERISA, the Code and any applicable Requirement of Law; no Reportable Event has
occurred (or is reasonably likely to occur) with respect to any Plan; no Plan
is insolvent or in reorganization (or is reasonably likely to be insolvent or
in reorganization), and no written notice of any such insolvency or
reorganization has been given to Holdings, any Subsidiary or any ERISA
Affiliate; no Plan (other than a multiemployer plan) has an accumulated or
waived funding deficiency (or is reasonably likely to have such a deficiency);
none of Holdings, any Subsidiary or any ERISA Affiliate has incurred (or is
reasonably likely to incur) any liability to or on account of a Plan pursuant
to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA or Section 4971 or 4975 of the Code or has been notified in writing
that it will incur any liability under any of the foregoing Sections with
respect to any Plan; no proceedings have been instituted (or are reasonably
likely to be instituted) to terminate or to reorganize any Plan or to appoint a
trustee to administer any Plan, and no written notice of any such proceedings
has been given to Holdings, any Subsidiary or any ERISA Affiliate; and no lien
imposed under the Code or ERISA on the assets of Holdings or any Subsidiary or
any ERISA Affiliate exists (or is reasonably likely to exist) nor has Holdings,
any Subsidiary or any ERISA Affiliate been notified in writing that such a lien
will be imposed on the assets of Holdings, any Subsidiary or any ERISA
Affiliate on account of any Plan, except to the extent that a breach of any of
the 

 

65

 

representations, warranties or agreements in this Section 8.11
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect or relates to
any matter disclosed in the financial statements of the Predecessor Company and
its Subsidiaries contained in the Confidential Information Memorandum. No Plan
(other than a multiemployer plan) has an Unfunded Current Liability that would,
individually or when taken together with any other liabilities referenced in
this Section 8.11, be reasonably likely to have a Material Adverse
Effect. With respect to Plans that are multiemployer plans (as defined in
Section 3(37) of ERISA), the representations and warranties in this Section 8.11(a),
other than any made with respect to (i) liability under Section 4201 or
4204 of ERISA or (ii) liability for termination or reorganization of such Plans
under ERISA, are made to the best knowledge of Holdings.

 

(b)  The
Canadian Pension Plans are duly registered under all applicable pension
benefits legislation; all material obligations of each Credit Party and its
Subsidiaries (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with the Canadian Pension
Plans, the Canadian Benefit Plans and the funding agreements therefor have been
performed in accordance with the terms of such plans, applicable laws and
regulations; there are no outstanding disputes concerning the assets held
pursuant to any such funding agreement; all contributions or premiums required
to be made by any Credit Party and any of its Subsidiaries to the Canadian
Pension Plans and the Canadian Benefit Plans have been made within the time
limits required by, and in accordance with, the terms of such plans and
applicable laws and regulations; all employee contributions to the Canadian
Pension Plans and the Canadian Benefit Plans required to be made by way of
authorized payroll deduction have been properly withheld and fully paid into
such plans within the time limits required by, and in accordance with, the
terms of such plans and applicable laws and regulations; all reports and
disclosures relating to the Canadian Pension Plans and Canadian Benefit Plans
required by any applicable laws or regulations have been filed or distributed
in accordance with applicable laws and regulations; no Credit Party has made
any improper withdrawals, applications or transfers of, the assets of any of
the Canadian Pension Plans or of the Canadian Benefit Plans, to the extent
applicable; other than as disclosed in Schedule 8.11(b), there have been
no partial terminations of any Canadian Pension Plan with a defined benefit
provision; other than as disclosed in Schedule 8.11(b), none of the
Canadian Pension Plans with a defined benefit provision is the result of, or
has been subject to, the merger or consolidation of two or more registered
pension plans or the funding media thereof; no amount is owing by any of the
Canadian Pension Plans under the Tax Act; no Credit Party has any knowledge,
nor any grounds for believing, that any of the Canadian Pension Plans or the
Canadian Benefit Plans is or could reasonably be expected to become the subject
of an investigation, any other proceeding, an action or a claim other than a
routine claim for benefits; except to the extent that a breach of any of the
foregoing representations, warranties or agreements in this Section 8.11(b)
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect, or relates
to any matter disclosed in the financial statements of the Borrowers contained
in the Confidential Information Memorandum. No Canadian Pension Plan has an
Unfunded Current Liability that would, individually or when taken together with
any other liabilities referenced in this Section 8.11(b), be
reasonably likely to have a Material Adverse Effect.

 

66

 

8.12.  Subsidiaries.
Schedule 8.12 lists each Subsidiary of the US Borrower and the Canadian
Borrower (and the direct and indirect ownership interest of the US Borrower and
the Canadian Borrower, as applicable, therein), in each case existing on the
Closing Date. To the knowledge of each of the US Borrower and the Canadian
Borrower, after due inquiry, each Material Subsidiary as of Closing Date has
been so designated on Schedule 8.12.

 

8.13.  Patents,
etc. Holdings, the Borrowers and each of the Restricted Subsidiaries have
obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain
any such rights could not reasonably be expected to have a Material Adverse
Effect.

 

8.14.  Environmental
Laws. (a)     Except as could not reasonably be
expected to have a Material Adverse Effect: 
(i) Holdings, the Borrowers and each of their respective Subsidiaries
and all Real Estate are in compliance with all Environmental Laws;
(ii) none of Holdings, the Borrowers or any of their respective
Subsidiaries, is subject to any Environmental Claim or any other liability
under any Environmental Law; (iii) none of Holdings, the Borrowers or any
of their respective Subsidiaries are conducting any investigation, removal, remedial
or other corrective action pursuant to any Environmental Law at any location;
and (iv) no underground storage tank or related piping, or any impoundment
or other area containing Hazardous Materials is located at, on or under any
Real Estate currently owned or leased by Holdings, either Borrower or any of
their respective Subsidiaries.

 

(b)  None
of the Borrowers or any of the other Subsidiaries has treated, stored,
transported, released or disposed or arranged for disposal or transport for
disposal of Hazardous Materials in a manner that could reasonably be expected
to have a Material Adverse Effect.

 

8.15.  Properties.
The Borrowers and each of their respective Subsidiaries have good and marketable
title to or valid leasehold interests in all properties that are necessary for
the operation of their respective businesses as currently conducted and as
proposed to be conducted, free and clear of all Liens (other than any Liens
permitted by this Agreement) and except where the failure to have such good
title or interests could not reasonably be expected to have a Material Adverse
Effect.

 

8.16.  Solvency.
On the Closing Date (after giving effect to the Transactions), immediately following
the making of each Loan and after giving effect to the application of the
proceeds of such Loans, each of the US Borrower and the Canadian Borrower on a
consolidated basis with its Subsidiaries will be Solvent.

 

8.17.  Public
Utility Holding Company Act. None of Holdings, the US Borrower or the
Canadian Borrower is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

 

SECTION 9. Affirmative
Covenants.

 

67

 

Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on its own behalf and to the extent such covenants are applicable to it)
hereby covenant and agree that on the Closing Date and thereafter, until the
Commitments have terminated and the Loans, together with interest, Fees and all
other Obligations incurred hereunder (other than the Exchange Notes and the
Exchange Note Indenture and the obligations in respect thereof), are paid in
full:

 

9.1.  Information
Covenants. Each of the US Borrower and the Canadian Borrower will furnish
to each Lender and the US Administrative Agent:

 

(a)  Annual
Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the
SEC or the Ontario Securities Commission or delivered to the holders of the
Senior Credit Facilities (or, if such financial statements are not required to
be filed with the SEC or delivered to the holders of the Senior Credit
Facilities, on or before the date that is 120 days after the end of each
such fiscal year), the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statement of operations and cash flows for such fiscal year, setting forth
comparative consolidated figures for the preceding fiscal year, and containing
a footnote to such financial statements that includes consolidating balance
sheet, income statement and cash flow financial statement information for
Holdings and its Subsidiaries, and certified by independent chartered
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit or as to the status of Holdings or any of
its Material Subsidiaries (or group of Subsidiaries that together would constitute
a Material Subsidiary) as a going concern, together in any event with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of Holdings and its Material Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of Default
relating to Section 10.9 or 10.10 that has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof.

 

(b)  Quarterly
Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the
SEC or delivered to the holders of the Senior Credit Facilities with respect to
each of the first three quarterly accounting periods in each fiscal year of
Holdings and its Subsidiaries (or, if such financial statements are not
required to be filed with the SEC or delivered to the holders of the Senior
Credit Facilities, on or before the date that is 60 days after the end of
each such quarterly accounting period), the consolidated balance sheet of
(i) Holdings and its Subsidiaries, as at the end of such quarterly period
and the related consolidated statement of operations for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and the related consolidated statement of
cash flows for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and setting forth comparative consolidated figures
for the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year, and
containing a footnote to such financial statements that includes consolidating
balance sheet, income statement and cash flow financial statement information
for Holdings and its Subsidiaries, all of which shall be certified by an
Authorized Officer of Holdings as fairly presenting the financial 

 

68

 

condition and results of operations of Holdings and
its Subsidiaries on a consolidated basis, subject to changes resulting from
audit and normal year-end audit adjustments.

 

(c)  Budgets.
Within 90 days after the commencement of each fiscal year of each
Borrower, budgets of each Borrower in reasonable detail for such fiscal year as
customarily prepared by management of such Borrower for their internal use
consistent in scope with the financial statements provided pursuant to Section 9.1(a),
setting forth the principal assumptions upon which such budgets are based.

 

(d)  Officer’s
Certificates. At the time of the delivery of the financial statements
provided for in Sections 9.1(a) and (b), a certificate of an
Authorized Officer of Holdings to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth (i) a
specification of any change in the identity of the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such fiscal
year or period, as the case may be, from the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries, respectively, provided to
the Lenders on the Closing Date or the most recent fiscal year or period, as
the case may be, and (ii) the amount of any Pro Forma Adjustment not previously
set forth in a Pro Forma Adjustment Certificate or any change in the amount of
a Pro Forma Adjustment set forth in any Pro Forma Adjustment Certificate
previously provided and, in either case, in reasonable detail, the calculations
and basis therefor.

 

(e)  Certain
Notices. Promptly after an authorized officer or any other senior officer
of Holdings, the US Borrower, the Canadian Borrower or any of the other
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
event that constitutes a Default or Event of Default, which notice shall
specify the nature thereof, the period of existence thereof and what action the
US Borrower or the Canadian Borrower proposes to take with respect thereto,
(ii) any litigation or governmental proceeding pending against the US Borrower,
the Canadian Borrower or any of the Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect or Material Adverse Change and
(iii) any other development that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect or Material Adverse Change.

 

(f)  Environmental
Matters. The Borrowers will promptly advise the US Administrative Agent in
writing after obtaining knowledge of any one or more of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such matters, be reasonably
expected to result in a Material Adverse Effect:

 

(i)  Any pending or threatened Environmental Claim
against the US Borrower, the Canadian Borrower or any of the other Subsidiaries
or any Real Estate;

 

(ii)  Any condition or occurrence that (x) could
reasonably be expected to result in noncompliance by the US Borrower, the
Canadian Borrower or any of the other Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis of
an Environmental Claim against the 

 

69

 

US Borrower, the Canadian
Borrower or any of the other Subsidiaries or any Real Estate;

 

(iii)  Any condition or occurrence on any Real
Estate that could reasonably be anticipated to cause such Real Estate to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Estate under any Environmental Law; and

 

(iv)  The conduct of any investigation, or any
removal, remedial or other corrective action in response to the actual or
alleged presence, release or threatened release of any Hazardous Material on,
at, under or from any Real Estate.

 

All such notices
shall describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and the response thereto. The
term “Real Estate” shall mean land, buildings and improvements owned or
leased by the US Borrower, the Canadian Borrower or any of the other
Subsidiaries, but excluding all operating fixtures and equipment, whether or
not incorporated into improvements.

 

(g)  Other
Information. Promptly upon filing thereof, copies of any filings (including
on Form 20-F or 6-K) or registration statements with, and reports to, the
SEC, the Ontario Securities Commission or any analogous Government Authority in
any relevant jurisdiction by Holdings, the US Borrower, the Canadian Borrower
or any of their respective Subsidiaries (other than amendments to any
registration statement (to the extent such registration statement, in the form
it becomes effective, is delivered to the Lenders), exhibits to any
registration statement and, if applicable, any registration statements on Form
S-8) and copies of all financial statements, proxy statements, notices and
reports that Holdings, the US Borrower, the Canadian Borrower or any of their
respective Subsidiaries shall send to the holders of any publicly issued debt
of Parent, Holdings, the US Borrower, the Canadian Borrower and/or any of their
respective Subsidiaries in their capacity as such holders (in each case to the
extent not theretofore delivered to the Lenders pursuant to this Agreement)
and, with reasonable promptness, such other information (financial or
otherwise) as the US Administrative Agent on its own behalf or on behalf of any
Lender may reasonably request in writing from time to time.

 

(h)  Pro
Forma Adjustment Certificate. Not later than any date on which financial statements
are delivered with respect to any four-quarter period in which a Pro Forma
Adjustment is made as a result of the consummation of the acquisition of any
Acquired Entity or Business by the US Borrower, the Canadian Borrower or any
Restricted Subsidiary for which there shall be a Pro Forma Adjustment, a
certificate of an Authorized Officer of each Borrower setting forth the amount
of such Pro Forma Adjustment and, in reasonable detail, the calculations and
basis therefor.

 

9.2.  Books,
Records and Inspections. Holdings and the Borrowers will, and will cause
each of their respective Subsidiaries to, permit officers and designated representatives
of the US Administrative Agent or the Required Lenders to visit and inspect any
of the properties or assets of the US Borrower, the Canadian Borrower and any
such Subsidiary in whomsoever’s possession to the extent that it is within such
party’s control to permit such inspection, and to 

 

70

 

examine the books and records of the US Borrower, the
Canadian Borrower and any such Subsidiary and discuss the affairs, finances and
accounts the US Borrower, the Canadian Borrower and of any such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the US Administrative Agent or the Required Lenders may desire.

 

9.3.  Maintenance
of Insurance. Holdings and the Borrowers will, and will cause each of the
Material Subsidiaries to, at all times maintain in full force and effect, with
insurance companies that Holdings, the US Borrower and the Canadian Borrower,
as applicable, believe (in the good faith judgment of the management of
Holdings, the US Borrower and the Canadian Borrower, as applicable) are
financially sound and responsible at the time the relevant coverage is placed
or renewed, insurance (including flood insurance) in at least such amounts and
against at least such risks (and with such risk retentions) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and will furnish to the Lenders, upon written request from
the US Administrative Agent, information presented in reasonable detail as to the
insurance so carried.

 

9.4.  Payment
of Taxes. Holdings and the Borrowers will pay and discharge, and will cause
each of their respective Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon them or upon their
income or profits, or upon any properties belonging to them, prior to the date
on which material penalties attach thereto, and all lawful material claims
that, if unpaid, could reasonably be expected to become a material Lien upon
any properties of or the Capital Stock of the US Borrower, the Canadian
Borrower or any of the Restricted Subsidiaries; provided that none of
Holdings, the Borrowers or any of their respective Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves (in the good faith judgment of the management of Holdings, the US
Borrower and the Canadian Borrower, as applicable) with respect thereto in accordance
with GAAP and the failure to pay could not reasonably be expected to result in
a Material Adverse Effect.

 

9.5.  Consolidated
Corporate Franchises. Holdings and the Borrowers will do, and will cause
each Material Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its legal existence, corporate
rights and authority, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect; provided, however,
that the Borrowers and their respective Subsidiaries may consummate any
transaction permitted under Section 10.3, 10.4 or 10.5.

 

9.6.  Compliance
with Statutes, Regulations, etc. Holdings and the Borrowers will, and will
cause each of their Subsidiaries to, comply with all applicable laws, rules,
regulations and orders applicable to it or its property, and to maintain all
such governmental approvals or authorizations in full force and effect, in each
case except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.

 

9.7.  ERISA;
Canadian Benefit Matters. (a)      Promptly after
Holdings or any Subsidiary or any ERISA Affiliate knows or has reason to know
of the occurrence of any of the following events that, individually or in the
aggregate (including in the aggregate such events 

 

71

 

previously disclosed or exempt from disclosure
hereunder, to the extent the liability therefor remains outstanding), would be
reasonably likely to have a Material Adverse Effect, Holdings will deliver to
the US Administrative Agent a certificate of an Authorized Officer or any other
senior officer of Holdings setting forth details as to such occurrence and the
action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices (required, proposed or
otherwise) given to or filed with or by Holdings, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an
individual participant’s benefits) or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding deficiency
has been incurred or an application is to be made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan;
that a Plan having an Unfunded Current Liability has been or is to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA (including the giving of written notice thereof); that a Plan has an
Unfunded Current Liability that has or will result in a lien under ERISA or the
Code; that proceedings will be or have been instituted to terminate a Plan
having an Unfunded Current Liability (including the giving of written notice
thereof); that a proceeding has been instituted against Holdings, a Subsidiary
or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the PBGC has notified Holdings, any
Subsidiary or any ERISA Affiliate of its intention to appoint a trustee to administer
any Plan; that Holdings, any Subsidiary or any ERISA Affiliate has failed to
make a required installment or other payment pursuant to Section 412 of
the Code with respect to a Plan; or that Holdings, any Subsidiary or any ERISA
Affiliate has incurred or will incur (or has been notified in writing that it
will incur) any liability (including any contingent or secondary liability) to
or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of
the Code.

 

(b)  Promptly
after Holdings or any Subsidiary thereof knows or has reason to know of the
occurrence of any of the following events that, individually or in the
aggregate (including in the aggregate such events previously disclosed or
exempt from disclosure hereunder, to the extent the liability therefor remains
outstanding) would be reasonably likely to have a Material Adverse Effect,
Holdings will deliver to the Canadian Administrative Agent a certificate of an
Authorized Officer or any other senior officer of Holdings setting forth
details as to such occurrence and the action, if any, that Holdings or such
Subsidiary is required or proposes to take, together with any notices
(required, proposed or otherwise) given to or filed with or by Holdings, such
Subsidiary, any Governmental Authority, a Canadian Pension Plan or Canadian
Benefit Plan participant (other than notices relating to an individual
participant’s benefits) or the Canadian Pension Plan or Canadian Benefit Plan
administrator with respect thereto: that an application is to be made to any
Governmental Authority for a waiver or modification of the minimum funding
requirements (including any required installment payments) or an extension of
any amortization period under applicable laws or regulations with respect to a
Canadian Pension Plan or Canadian Benefit Plan; that a Canadian Pension Plan
having an Unfunded Current Liability has been or is to be terminated or
wound-up in whole or in part under applicable laws or regulations (including
the giving of written 

 

72

 

notice thereof); that a Canadian Pension Plan has an
Unfunded Current Liability that has or will result in a lien under applicable
laws or regulations; that proceedings will be or have been instituted to terminate
a Canadian Pension Plan having an Unfunded Current Liability (including the
giving of written notice thereof); that a proceeding has been instituted
against Holdings or a Subsidiary thereof pursuant to applicable laws or
regulations to collect a delinquent contribution to a Canadian Pension Plan or
a Canadian Benefit Plan; that any Governmental Authority has notified Holdings
or any Subsidiary thereof of its intention to appoint an administrator or other
trustee to administer any Canadian Pension Plan or Canadian Benefit Plan; that
Holdings or any Subsidiary thereof has failed to make a required contribution,
installment or other payment pursuant to applicable laws or regulations with
respect to a Canadian Pension Plan or Canadian Benefit Plan; that any event has
occurred in connection with a Canadian Pension Plan or Canadian Benefit Plan
giving rise to a lien (statutory or otherwise) against, or deemed trust in
respect of, any of the assets of Holdings or any Subsidiary thereof; or that
Holdings or any Subsidiary thereof has incurred or will incur (or has been
notified in writing that it will incur) any liability (including any contingent
or secondary liability) to or on account of a Canadian Pension Plan or Canadian
Benefit Plan arising due to breach by Holdings or any Subsidiary thereof of
their respective obligations pursuant to applicable laws or regulations.

 

9.8.  Good
Repair. Holdings and the Borrowers will, and will cause each of the
Restricted Subsidiaries to, ensure that its properties and equipment used or
useful in its business in whomsoever’s possession they may be to the extent
that it is within the control of such party to cause same, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses and consistent with third party leases, except
in each case to the extent the failure to do so could not be reasonably
expected to have a Material Adverse Effect.

 

9.9.  Refinancing
the Loans. Holdings and the Borrowers shall take all commercially
reasonable actions as previously agreed in writing to refinance, or cause the
refinancing of, the Loans as promptly as the Sponsor, Holdings, the Borrowers
and the US Administrative Agent reasonably agree is appropriate and practicable
after the Closing Date through a public offering or Rule 144A/Regulation S
placement of up to $770,000,000 aggregate principal amount (or such lesser
amount equal to the sum of the outstanding Initial Loans plus the
capitalization of amounts, if any, of any default interest on the Initial
Loans) of subordinated debt or preferred equity (the “Subordinated Notes”)
by each Borrower or such other corporation or entity agreed to by the US
Administrative Agent, the Borrowers, Holdings and the Sponsor. Without limiting
the foregoing Holdings and the Borrowers will cause their respective officers
to participate in due diligence and marketing efforts (including participation
in a roadshow and preparation of an offering memorandum) to effect such
refinancing.

 

9.10.  End
of Fiscal Years. Each of Holdings and the Borrowers will, for financial
reporting purposes, cause (a) each of its, and each of its Subsidiaries’,
fiscal years to end on the Saturday closest to December 31 of each year; provided,
however, that Holdings and the Borrowers may, upon written notice to the
US Administrative Agent, change the financial reporting convention specified
above to any other financial reporting convention reasonably acceptable to the
US Administrative Agent, in which case Holdings, the Borrowers and the US
Administrative Agent will, and are hereby authorized by the Lenders to, make
any adjustments to this Agreement that are necessary in order to reflect such
change in financial reporting.

 

73

 

9.11.  [Intentionally
Omitted].

 

9.12.  Use
of Proceeds. The proceeds of the Loans will be used by the US Borrower and
the Canadian Borrower, together with (i) the net proceeds of the issuance
of the Senior Credit Facilities and (ii) the proceeds of the Equity
Contribution, on the Closing Date solely to effect the Acquisition and the
other Transactions and to pay Transaction Expenses.

 

9.13.  Changes
in Business. Holdings and its Subsidiaries, taken as a whole, will not
fundamentally and substantively alter the character of their business, taken as
a whole, from the business conducted by Holdings and its Subsidiaries, taken as
a whole, on the Closing Date and other business activities incidental or
related to any of the foregoing.

 

9.14.  Exchange
Notes. So long as the Borrowers have received requests to issue at least
$20,000,000 in the aggregate principal amount of Exchange Notes:

 

(a)  each
Borrower shall, as promptly as practicable after being requested to do so by
the US Administrative Agent at any time after the date that is 16 months after
the Closing Date and in any event prior to the Initial Loan Repayment Date, (i)
select a bank or trust company to act as Exchange Note Trustee, (ii) enter into
the Exchange Note Indenture and the Registration Rights Agreement and (iii)
cause counsel to such Borrower to deliver to the relevant Administrative Agent
an executed legal opinion in form and substance customary for a transaction of
that type to be mutually agreed upon by such Borrower and the relevant
Administrative Agent.

 

(b)  Each
Borrower will, on the fifth Business Day following the written request (the “Exchange
Request”) of the holder of any Loan (or beneficial owner of a portion
thereof) given at any time on or after the fifth Business Day prior to the
Initial Loan Repayment Date:

 

(i)  execute and deliver, and cause the Exchange
Note Trustee to execute and deliver, the Exchange Note Indenture if such
Exchange Note Indenture has not previously been executed and delivered; and

 

(ii)  execute and deliver to such holder or
beneficial owner in accordance with the Exchange Note Indenture one or more
Exchange Notes as evidence of all or a part of the principal amount of such
Term Loan bearing interest as set forth therein dated the date of the issuance
of such Exchange Note, payable to the order of such holder or owner, as the
case may be, in the same principal amount as such Loan being evidenced (for
certainty, including any capitalized interest).

 

The Exchange
Request shall specify the principal amount of the Loan to be evidenced by Exchange
Notes pursuant to this Section, which shall be at least $100,000 and integral
multiples of $50,000 in excess thereof or the entire remaining aggregate
principal amount of the Loan of such Lender (for certainty, including any
capitalized interest). Loans delivered to any Borrower under this Section to be
evidenced by Exchange Notes shall be governed by and construed in accordance
with the terms of the Exchange Note Indenture.

 

(c)  The
Exchange Note Trustee shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good 

 

74

 

standing and having its principal offices in the
Borough of Manhattan, in The City of New York, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has a combined capital and
surplus of not less than $500,000,000.

 

(d)  If
Exchange Notes are issued pursuant to the terms hereof, then the Exchange Note
Holders shall have the registration rights with respect to such Exchange Notes
as set forth in the Registration Rights Agreement.

 

(e)  The
Exchange Note Indenture shall provide that the unpaid principal amount of each
Exchange Note shall bear interest at a rate per annum equal to that of the Term
Loans on the date of issuance of the Exchange Note.

 

(f)  It
is understood and agreed that the Term Loans exchanged for Exchange Notes
constitute the same indebtedness as such Exchange Notes and that no novation
shall be effected by any such exchange.

 

9.15.  Change
of Control.

 

(a)  Upon
a Change of Control, each Borrower shall prepay each Lender’s Loans (including
any Initial Loans and Term Loans, without any premium, plus accrued and unpaid
interest, if any, to the date of prepayment (the “Change of Control Payment”),
in accordance with the terms contemplated in this Section 9.15.

 

(b)  Prior
to complying with the provisions of this Section 9.15, but in any event
within 30 days following a Change of Control, each Borrower shall either repay
all outstanding Indebtedness under the Senior Secured Facilities or obtain the
requisite consents, if any, under the Senior Secured Facilities necessary to
permit the prepayment of the Loans required by this Section 9.15, provided
that the failure to repay such Indebtedness or obtain such consent shall not
affect the obligation of any Borrower pursuant to clause (a) above.

 

(c)    Each
Borrower shall comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws or regulations are applicable in connection with the prepayment of the
Loans pursuant to a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
9.15, each Borrower shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Section 9.15 by virtue thereof.

 

SECTION 10. Negative
Covenants.

 

Holdings, the
US Borrower (in respect of itself and on its own behalf and to the extent such
covenants are applicable to it) and the Canadian Borrower (in respect of itself
and on its own behalf and to the extent such covenants are applicable to it)
hereby covenant and agree that on the Closing Date and thereafter, until the
Commitments have terminated and the Loans, together with interest, fees and all
other Obligations incurred hereunder (other than the Exchange Notes and the
Exchange Note Indenture and the obligations in respect thereof), are paid in
full:

 

75

 

10.1.  Limitation
on Asset Sales. Holdings and the Borrowers will not, and will not permit
any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale,
unless (x) Holdings, such Borrower or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the fair market value (as determined in good faith by the board of directors of
Holdings) of the assets sold or otherwise disposed of and (y) except for any
Permitted Asset Swap, at least 75% of the consideration therefor received by
Holdings, such Borrower or such Restricted Subsidiary, as the case may be, is
in the form of cash or Cash Equivalents; provided that the amount of (a)
any liabilities (as shown on Holdings’, such Borrower’s, or such Restricted
Subsidiary’s most recent balance sheet or in the notes thereto) of Holdings,
such Borrower or such Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Loans), that are assumed by the transferee of
any such assets and for which Holdings, the Borrowers and all Restricted
Subsidiaries have been validly released by all creditors in writing, (b) any
securities received by Holdings, such Borrower or such Restricted Subsidiary
from such transferee that are converted by Holdings, by such Borrower or by
such Restricted Subsidiary into cash (to the extent of the cash received)
within 180 days following the closing of such Asset Sale and/or (c) any
Designated Non-Cash Consideration received by Holdings, such Borrower or any
Restricted Subsidiary in such Asset Sale having an aggregate fair market value,
taken together with all other Designated Non-Cash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to
exceed $75.0 million (with the fair market value of each item of Designated
Non-Cash Consideration being measured at the time received and without giving
effect to subsequent changes in value), shall be deemed to be cash for purposes
of this provision and for no other purpose.

 

10.2.  Limitation
on Restricted Payments.

 

(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
directly or indirectly:  (i) declare or
pay any dividend or make any distribution on account of Holdings’ or any
Borrower’s or any Restricted Subsidiary’s Equity Interests, including any
dividend or distribution payable in connection with any merger or consolidation
(other than (A) dividends or distributions by Holdings payable in Equity
Interests (other than Disqualified Stock) of Holdings or in options, warrants
or other rights to purchase such Equity Interests or (B) dividends or
distributions by a Restricted Subsidiary so long as, in the case of any
dividend or distribution payable on or in respect of any class or series of
securities issued by a Subsidiary other than a Wholly Owned Subsidiary,
Holdings, a Borrower or a Restricted Subsidiary receives at least its pro rata
share of such dividend or distribution in accordance with its Equity Interests
in such class or series of securities); (ii) purchase, redeem, defease or
otherwise acquire or retire for value any Equity Interests of Holdings or any
direct or indirect parent of Holdings, including in connection with any merger
or consolidation; (iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value in each case, prior to any
scheduled repayment, sinking fund payment or maturity, any Subordinated
Indebtedness (other than (x) Indebtedness permitted under clauses (b)(vii)
and (b)(viii) of Section 10.3 or (y) the purchase, repurchase or
other acquisition of Subordinated Indebtedness purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase or
acquisition); or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses  (i) through (iv) above
being collectively referred to as “Restricted Payments”).

 

76

 

(b)  The
foregoing provisions will not prohibit:

 

(i)  the payment of any dividend within 60 days
after the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Agreement;

 

(ii)  (A) the redemption, repurchase, retirement or
other acquisition of any Equity Interests (“Retired Capital Stock”) or
Subordinated Indebtedness of Holdings or a Borrower, or any Equity Interests of
any direct or indirect parent company of Holdings, in exchange for, or out of
the proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary) of, Equity Interests of Holdings or a Borrower (in each case, other
than any Disqualified Stock) (“Refunding Capital Stock”) and (B) if
immediately prior to the retirement of Retired Capital Stock, the declaration
and payment of dividends thereon was permitted under clause (xi) of this
paragraph, the declaration and payment of dividends on the Refunding Capital
Stock (other than Refunding Capital Stock the proceeds of which were used to
redeem, repurchase, retire or otherwise acquire any Equity Interests of any
direct or indirect parent company of Holdings) in an aggregate amount per year
no greater than the aggregate amount of dividends per annum that was declarable
and payable on such Retired Capital Stock immediately prior to such retirement;

 

(iii)  the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of Holdings or a
Borrower made by exchange for, or out of the proceeds of the substantially
concurrent sale of, new Indebtedness of Holdings or a Borrower which is
incurred in compliance with Section 10.3 so long as

 

(A)  the principal amount of such new Indebtedness
does not exceed the principal amount of (or accreted value, if applicable),
plus any accrued and unpaid interest on the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value, plus the amount of any
reasonable premium required to be paid under the terms of the instrument
governing the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired and any reasonable fees and expenses incurred in connection
with the issuance of such new Indebtedness,

 

(B)  such Indebtedness is subordinated to Loans or
Holdings’ Guarantee at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or
retired for value,

 

(C)  such Indebtedness has a final scheduled
maturity date equal to or later than the final scheduled maturity date of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired
and

 

77

 

(D)  such Indebtedness has a Weighted Average Life
to Maturity equal to or greater than the remaining Weighted Average Life to
Maturity of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired;

 

(iv)  a Restricted Payment to pay for the
repurchase, retirement or other acquisition or retirement for value of common
Equity Interests of Holdings, any of its direct or indirect parent corporations
held by any future, present or former employee, director or consultant of
Holdings, any of its Subsidiaries or any of its direct or indirect parent
corporations pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement; provided, however,
that the aggregate Restricted Payments made under this clause (i) (other
than proceeds from the issuance of Disqualified Capital Stock and Designated
Preferred Stock) do not exceed in any calendar year $20.0 million; and provided,
further, that such amount in any calendar year may be increased by an
amount not to exceed (A) the cash proceeds from the sale of (x) Equity
Interests of Holdings or any Borrower and (y) to the extent contributed to
Holdings, Equity Interests of any of Holdings direct or indirect parent
corporations, in each case to members of management, directors or consultants
of Holdings, any of its Subsidiaries or any of its direct or indirect parent
corporations that occurs after the Closing Date, plus (B) the cash proceeds of
key man life insurance policies received by a Borrower and the Restricted
Subsidiaries after the Closing Date less (C) the amount of any Restricted
Payments previously made pursuant to clauses (A) and (B) of this clause
(i);

 

and provided
further that cancellation of Indebtedness owing to Holdings or a Borrower from
members of management of Holdings or a Borrower, any of Holdings’ direct or indirect
parent companies or any Restricted Subsidiary in connection with a repurchase
of Equity Interests of Holdings or any of its direct or indirect parent
companies in an aggregate amount not to exceed $3.0 million will not be deemed
to constitute a Restricted Payment for purposes of this covenant or any other
provision of this Agreement;

 

(v)  Investments in Unrestricted Subsidiaries
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (ii) that are at the time outstanding,
without giving effect to the sale of an Unrestricted Subsidiary to the extent
the proceeds of such sale do not consist of cash and/or marketable securities,
not to exceed $60.0 million at the time of such Investment (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value);

 

(vi)  repurchases of Equity Interests deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;

 

(vii)  distributions or payments of Receivables
Fees;

 

78

 

(viii)  the declaration and payment of dividends by
Holdings or any Borrower to, or the making of loans to, any direct or indirect
parent corporations to pay

 

(A)  franchise taxes and other fees, taxes and
expenses required to maintain their corporate existence,

 

(B)  federal, state, provincial and local income
taxes, to the extent such income taxes are attributable to the income of
Holdings, such Borrower or any Restricted Subsidiaries (and, to the extent of
the amounts actually received from the Unrestricted Subsidiaries, in amounts
required to pay such taxes to the extent attributable to the income of the
Unrestricted Subsidiaries),

 

(C)  customary salary, bonus and other benefits
payable to officers and employees of any direct or indirect parent corporation
of the Borrowers to the extent such salaries, bonuses and other benefits are
attributable to the ownership or operation of the Borrowers and the Restricted
Subsidiaries, and

 

(D)  general corporate overhead expenses
(including professional expenses) of any direct or indirect parent corporation
of the Borrowers to the extent such expenses are attributable to the ownership
or operation of the Borrowers and the Restricted Subsidiaries;

 

(ix)  any Restricted Payment used to fund the
payment of fees and expenses incurred in connection with the Transactions or
owed to Affiliates and permitted by Section 10.6;

 

(x)  the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of Holdings, any Borrower
or any Restricted Subsidiary issued in accordance with Section 10.3 to
the extent such dividends are included in the definition of “Fixed Charges”;

 

(xi)  the declaration and payment of dividends to a
direct or indirect parent corporation of Holdings, the proceeds of which will
be used to fund the payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of such parent
corporation issued after the Closing Date; provided that the amount of
dividends paid pursuant to this clause (viii) shall not exceed the
aggregate amount of cash actually contributed to Holdings from the sale of such
Designated Preferred Stock and provided, further, that for the
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of such declaration or
payment, after giving effect to such declaration or payment on a pro forma
basis, Holdings and the Restricted Subsidiaries on a consolidated basis would
have had a Fixed Charge Coverage Ratio of at least 2.0 to 1.0;

 

(xii)  Investments that are made with Excluded Contributions;
and

 

79

 

(xiii)  other Restricted Payments in an aggregate
amount not to exceed $10.0 million;

 

provided
in the case of each of clauses (b)(i), (b)(iv),  (b)(v), (b)(x),
(b)(xi) and (b)(xiii), that no Default shall exist or result from
such payment.

 

10.3.  Limitations
on Incurrence of Indebtedness and Issuance of Disqualified Stock.

 

(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, “incur” and collectively, an “incurrence”) any
Indebtedness (including Acquired Indebtedness) and Holdings and the Borrowers
will not issue any shares of Disqualified Stock and will not permit any
Restricted Subsidiary to issue any shares of Preferred Stock or Disqualified
Stock;

 

(b)  The
foregoing limitations will not apply to:

 

(i)  the incurrence of Indebtedness under Senior
Credit Facilities up to an aggregate principal amount of $1,825.0 million
outstanding at any one time;

 

(ii)  the incurrence by Holdings, the Borrowers and
the Guarantors of Indebtedness represented by the Loans (including the
Guarantees thereof) and the Exchange Notes (and the Guarantees thereof);

 

(iii)  Indebtedness outstanding on the date hereof
as listed on Schedule 10.3(b)(iii);

 

(iv)  Indebtedness (including Capitalized Lease
Obligations), Disqualified Stock and Preferred Stock incurred by Holdings or
any Restricted Subsidiary to finance the purchase, lease or improvement of
property (real or personal) or equipment that is used or useful in a Similar
Business (whether through the direct purchase of assets or the Capital Stock of
any Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness, Disqualified
Stock and Preferred Stock then outstanding and incurred pursuant to this clause
(iv) and including all Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(iv), does not exceed (i) $75.0 million;

 

(v)  Indebtedness incurred by Holdings or any
Restricted Subsidiary constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including letters
of credit, in respect of workers’ compensation claims or other Indebtedness
with respect to reimbursement type obligations regarding workers’ compensation
claims; provided, however, that upon the drawing of such letters
of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;

 

80

 

(vi)  Indebtedness arising from agreements of
Holdings or a Restricted Subsidiary providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business or assets permitted hereunder
(including any disposition of a Subsidiary), other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business or assets for the purpose of financing such acquisition; provided,
however, that (A) such Indebtedness is not reflected on the balance
sheet of Holdings or any Restricted Subsidiary (contingent obligations referred
to in a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (A)) and (B) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including non-cash proceeds (the fair market value of such non-cash proceeds
being measured at the time received and without giving effect to any subsequent
changes in value) actually received by Holdings and any Restricted Subsidiary
in connection with such disposition;

 

(vii)  Indebtedness of Holdings to a Restricted
Subsidiary; provided that any such Indebtedness is subordinated in right
of payment to the Loans to at least the same extent as the Loans are
subordinated to Senior Indebtedness; and provided, further, that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except to
another Restricted Subsidiary) shall be deemed, in each case, to be an
incurrence of such Indebtedness;

 

(viii)  Indebtedness of a Restricted Subsidiary to
Holdings, any Borrower or another Restricted Subsidiary; provided that
(A) any such Indebtedness is made pursuant to an intercompany note and (B) if a
Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a
Guarantor such Indebtedness is subordinated in right of payment to the
Guarantee of such Guarantor to at least the same extent as such Guarantor’s
Guarantee is subordinated to Senior Indebtedness; and provided, further,
that any subsequent transfer of any such Indebtedness (except to Holdings or
another Restricted Subsidiary) shall be deemed, in each case to be an
incurrence of such Indebtedness;

 

(ix)  shares of Preferred Stock of a Restricted
Subsidiary issued to Holdings, any Borrower or another Restricted Subsidiary; provided
that any subsequent issuance or transfer of any Capital Stock or any other
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such shares of
Preferred Stock (except to another Holdings or Restricted Subsidiary) shall be
deemed, in each case, to be an issuance of such shares of Preferred Stock;

 

(x)  Hedging Obligations of any Borrower or any
Restricted Subsidiary that are not entered into for speculative purposes and
that are entered into for the purpose of limiting (A) interest rate risk
with respect to any Indebtedness that is

 

81

 

permitted by the terms of
this Agreement to be outstanding, (B) exchange rate risk with respect to any
Indebtedness to be incurred pursuant to this Section 10.3 or (C)
commodity pricing risk;

 

(xi)  obligations in respect of performance and
surety bonds and completion guarantees provided by any Borrower or any
Restricted Subsidiary in the ordinary course of business;

 

(xii)  Indebtedness of any Guarantor in respect of
such Guarantor’s Guarantee of the Obligations;

 

(xiii)  Indebtedness, Disqualified Stock and
Preferred Stock of Holdings, or any Restricted Subsidiary not otherwise
permitted hereunder in an aggregate principal amount or liquidation preference,
which when aggregated with the principal amount and liquidation preference of
all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding
and incurred pursuant to this clause (xiii), does not at any one time
outstanding exceed $150.0 million; provided, however, that the
aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock
incurred by the Restricted Subsidiaries (other than the Guarantors) pursuant to
this clause (xiii) may not exceed $75.0 million at any time outstanding;

 

(xiv)  any guarantee by Holdings, any Borrower or a
Guarantor of Indebtedness or other obligations of any Restricted Subsidiary so
long as the incurrence of such Indebtedness incurred by such Restricted
Subsidiary is permitted under the terms of this Agreement;

 

(xv)  the incurrence by Holdings, any Borrower or
any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred
Stock that serves to refund or refinance any Indebtedness incurred as permitted
under Sections 10.3(b)(ii), (b)(iii) and (b)(xvi) or any
Indebtedness issued to so refund or refinance such Indebtedness, Disqualified
Stock or Preferred Stock including additional Indebtedness incurred to pay
premiums and fees in connection therewith (the “Refinancing Indebtedness”)
prior to its respective maturity; provided, however, that such
Refinancing Indebtedness (other than Refinancing Indebtedness that serves to refund
or refinance any Indebtedness incurred as permitted under Section
10.3(b)(ii)) (I) has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred which is not less than the remaining
Weighted Average Life to Maturity of Indebtedness being refunded or refinanced,
(II) to the extent such Refinancing Indebtedness refinances Indebtedness
subordinated or pari passu to the Loans or any Guarantee of the Loans, such
Refinancing Indebtedness is subordinated or pari passu to the Loans or such
Guarantee at least to the same extent as the Indebtedness being refinanced or
refunded and (III) shall not include (A) Indebtedness, Disqualified Stock or
Preferred Stock of a Subsidiary that refinances

 

82

 

Indebtedness,
Disqualified Stock or Preferred Stock of Holdings or (B) Indebtedness,
Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor
that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor
or (C) Indebtedness, Disqualified Stock or Preferred Stock of Holdings or a
Restricted Subsidiary that is not a Guarantor that refinances Indebtedness,
Disqualified Stock, or Preferred Stock of a Guarantor and (IV) shall not be in
a principal amount in excess of the principal amount of, premium, if any,
accrued interest on, and related fees and expenses of, the Indebtedness being
refunded or refinanced, and (V) shall not have a stated maturity date prior to
the stated maturity date of the Indebtedness being refunded or refinanced; provided,
further, that sub-clause (I) of this clause (xv) will not apply to any
refunding or refinancing of any Senior Indebtedness;

 

(xvi)  Indebtedness, Disqualified Stock or Preferred
Stock of Persons that are either acquired by Holdings or any Restricted
Subsidiary or merged into Holdings or a Restricted Subsidiary in accordance
with the terms of this Agreement; provided that such Indebtedness is not
incurred or Disqualified Stock or Preferred Stock is not issued in contemplation
of such acquisition or merger; and provided, further, that after
giving effect to such acquisition or merger, either (i) the Fixed Charge
Coverage Ratio on a consolidated basis for Holdings and the Restricted
Subsidiaries’ most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock
had been issued, as the case may be, and the application of proceeds therefrom
had occurred at the beginning of such four-quarter period, or (ii) the Fixed
Charge Coverage Ratio, determined as set forth in clause (i) above, would be
greater than immediately prior to such acquisition or merger;

 

(xvii)  Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business, provided
that such Indebtedness is extinguished within two Business Days of its
incurrence;

 

(xviii)  Indebtedness of Holdings or any Restricted
Subsidiary supported by a letter of credit issued pursuant to the Senior Credit
Facilities, in a principal amount not in excess of the stated amount of such
letter of credit; and

 

(xix) any guarantee by a
Restricted Subsidiary of Indebtedness of Holdings, provided that such
guarantee is incurred in accordance with the covenant described under Section
10.9.

 

(c)  For
purposes of determining compliance with this covenant, in the event that an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of more than one of the categories of permitted Indebtedness, Disqualified
Stock or Preferred Stock described in clause (b) above, Holdings shall,
in its sole discretion, classify such item of Indebtedness, Disqualified Stock
or Preferred Stock (or any position thereof) in any manner that complies with

 

83

 

this covenant and such
item of Indebtedness will be treated as having been incurred pursuant to only
one of such categories. Accrual of interest, the accretion of accreted value
and the payment of interest in the form of additional Indebtedness,
Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of
Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section
10.3.

 

(d)  For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
incurred, in the case of term debt, or first committed, in the case of
revolving credit debt; provided that (x) the U.S. dollar-equivalent
principal amount of any such Indebtedness outstanding or committed on the
Closing Date shall be calculated based on the relevant currency exchange rate
in effect on the Closing Date, and (y) if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to
be exceeded if calculated at the relevant currency exchange rate in effect on
the date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. The principal amount of any Indebtedness
incurred to refinance other Indebtedness, if incurred in a different currency
from the Indebtedness being refinanced, shall be calculated based on the
currency exchange rate applicable to the currencies in which such respective
Indebtedness is denominated that is in effect on the date of such refinancing.

 

10.4.  Limitation
on Liens.

 

(a)           Holdings and the Borrowers will not,
and will not permit any Restricted Subsidiary to, directly or indirectly
create, incur, assume or suffer to exist any Lien that secures obligations
under any Pari Passu Indebtedness or Subordinated Indebtedness of Holdings or
such Restricted Subsidiary on any asset or property of Holdings or any Borrower
or any Restricted Subsidiary, or any income or profits therefrom, or assign or
convey any right to receive income therefrom, unless (i) in the case of Pari
Passu Indebtedness, the Obligations are equally and ratably secured with such
Pari Passu Indebtedness, and (ii) in case of Subordinated Indebtedness, the
obligations are secured by a Lien that is senior and first priority to such
Subordinated Indebtedness, in either case until such time as such Obligations
are no longer secured by a Lien and in a manner reasonably satisfactory to the
US Administrative Agent.

 

(b)           No Guarantor will directly or indirectly
create, incur, assume or suffer to exist any Lien that secures obligations
under any Pari Passu Indebtedness or Subordinated Indebtedness of such
Guarantor on any asset or property of such Guarantor or any income or profits
therefrom, or assign or convey any right to receive income therefrom, unless
(i) in the case of Pari Passu Indebtedness, the Guarantee of such Guarantor is
equally and ratably secured with such Pari Passu Indebtedness, and (ii) in case
of Subordinated Indebtedness, the Guarantee of such Guarantor is secured by a
Lien that is senior and first priority to such Subordinated Indebtedness, in
either case until such time as such obligations are no longer secured by a Lien
and in a manner reasonably satisfactory to the US Administrative Agent.

 

84

 

10.5.  Merger,
Consolidation or Sale of All or Substantially All Assets. (a)  
Neither Holdings nor either Borrower may consolidate, merge or amalgamate with
or into or wind up into (whether or not Holdings or such Borrower is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more
related transactions, to any Person unless (i) Holdings or such Borrower is the
surviving corporation or the Person formed by or surviving any such
consolidation, merger or amalgamation (if other than Holdings or such Borrower)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made is a corporation organized or existing under
the laws of the jurisdiction of organization of Holdings or such Borrower or
the laws of the United States, any state thereof or the District of Columbia,
or the laws of Canada, any province thereof or any territory thereof (such
Person, as the case may be, being herein called the “Successor Company”);
(ii) the Successor Company, if other than the Holdings or such Borrower,
expressly assumes all the obligations of the Holdings or such Borrower under
the Loan Documents pursuant to an agreement or other documents or instruments
in form reasonably satisfactory to the Administrative Agent;  (iii) immediately after such transaction, no
Default or Event of Default exists; (iv) immediately after giving pro forma
effect to such transaction either (A) the Fixed Charge Coverage Ratio for the
Successor Company and the Restricted Subsidiaries’ most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such transaction would occur would have
been at least 2.00 to 1.00, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if such transaction had
occurred at the beginning of such four quarter period or (B) the Fixed Charge
Coverage Ratio for Holdings or the applicable Borrower, or the Successor
Company if Holdings or such Borrower is not the survivor of any such
consolidation, merger or transfer, would be greater than such Fixed Charge Coverage
Ratio for Holdings or such Borrower immediately prior to such transaction; (v)
each Borrower (as to its Guarantee of the other Borrower) and each Guarantor,
unless it is the other party to the transactions described above, in which case
clause (b) of the second succeeding paragraph shall apply, shall have
confirmed that its Guarantee shall apply to such Person’s obligations under the
this Agreement and Guarantee; and (vi) Holdings shall have delivered to the
Administrative Agent an Officers’ Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, amalgamation or transfer comply with
this Agreement. The Successor Company will succeed to, and be substituted for
either Borrower or Holdings, as the case may be, under the Loan Documents.
Notwithstanding the foregoing clauses (iii) and (iv), (a) any
Restricted Subsidiary (other than a Borrower) may consolidate or amalgamate
with, merge into or transfer all or part of its properties and assets to
Holdings and (b) Holdings or a Borrower may merge with an Affiliate of Holdings
or a Borrower, as the case may be, solely for the purpose of reincorporating
Holdings or such Borrower in a State of the United States so long as the amount
of Indebtedness of Holdings and the Restricted Subsidiaries is not increased
thereby.

 

(b)  Subject
to Section 10.9, no Guarantor shall, and Holdings and the Borrowers
shall not permit any Guarantor to, consolidate or merge with or into or wind up
into (whether or not such Guarantor is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions to, any
Person unless (i) (A) such Guarantor is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been

 

85

 

made is a corporation
organized or existing under the laws of the jurisdiction of organization of
such Guarantor, as the case may be, or the laws of the United States, any state
thereof or the District of Columbia, or the laws of Canada, any province
thereof or any territory thereof (such Guarantor or such Person, as the case
may be, being herein called the “Successor Person”); (B) the Successor
Person, if other than such Guarantor, expressly assumes all the obligations of
such Guarantor under the Loan Documents and such Guarantor’s Guarantee pursuant
to the Loan Documents or Exchange Loan Documents or other documents or
instruments in form reasonably satisfactory to the Administrative Agent; (C)
immediately after such transaction, no Default or Event of Default exists; and
(D) Holdings shall have delivered to the Administrative Agent an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer comply with the Loan Documents; or (ii) the transaction
results in an Asset Sale Purchase Event and is made in compliance with Section
5.2. Subject to Section 10.9, the Successor Person shall succeed to,
and be substituted for, such Guarantor under this Agreement and such Guarantor’s
Guarantee. Notwithstanding the foregoing, any Guarantor may merge into or
transfer all or part of its properties and assets to another Guarantor, either
Borrower or Holdings.

 

10.6.  Transactions
with Affiliates.

 

(a)  Holdings
and the Borrowers will not, and will not permit any Restricted Subsidiary to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
their respective properties or assets to, or purchase any property or assets
from, or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of Holdings (each of the foregoing, an “Affiliate Transaction”)
involving aggregate payments or consideration in excess of $5.0 million, unless
(i) such Affiliate Transaction is on terms that are not materially less
favorable to Holdings, the relevant Borrower or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by Holdings, such Borrower or such Restricted Subsidiary with an unrelated
Person and (ii) Holdings delivers to the US Administrative Agent with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution
adopted by a majority of its Board of Directors approving such Affiliate
Transaction and setting forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clause (a)(i) above.

 

(b)  The
foregoing provisions will not apply to the following:  (i) transactions between or among Holdings,
the Borrowers and/or any Restricted Subsidiary which are Guarantors; (ii)
Restricted Payments permitted by the provisions of this Agreement described in Section
10.2; (iii) the payment of management, consulting, monitoring and advisory
fees and related expenses to the Sponsor; (iv) the payment of reasonable and
customary fees paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of Holdings, any of its direct or indirect
parent corporations or any Restricted Subsidiary; (v) payments of fees and
expenses to the Sponsor made for any financial advisory, financing,
underwriting or placement services or in respect of other investment banking
activities, including in connection with acquisitions or divestitures which payments
are approved by a majority of the Board of Directors of Holdings in good faith;
(vi) transactions otherwise prohibited by clause (a) above in which
Holdings or any Restricted Subsidiary, as the case may be, delivers to the US
Administrative Agent a letter from an Independent Financial Advisor stating
that such transaction is fair to

 

86

 

Holdings or such
Restricted Subsidiary from a financial point of view or meets the requirements
of clause (a)(i) above; (vii) payments or loans (or cancellations of
loans) to employees or consultants of Holdings or any of its direct or indirect
parent corporations or any Restricted Subsidiary which are approved by a
majority of the Board of Directors of Holdings in good faith; (viii) any
agreement as in effect as of the Closing Date or any amendment thereto (so long
as any such amendment (and such amendment when aggregated with all other such
amendments) is not disadvantageous to the Lenders in any material respect as compared
to the applicable agreement as in effect on the Closing Date); (ix) the
existence of, or the performance by Holdings or any Restricted Subsidiary of
its obligations under the terms of, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party as of the Closing Date and any similar agreements which it may
enter into thereafter; provided, however, that the existence of,
or the performance by Holdings or any Restricted Subsidiary of obligations
under, any future amendment to any such existing agreement or under any similar
agreement entered into after the Closing Date shall only be permitted by this clause
(b)(ix) to the extent that the terms of any such amendment or new agreement
are not otherwise disadvantageous to the Lenders in any material respect; (x)
the Transactions and the payment of all fees and expenses related to the
Transactions; (xi) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary course
of business and otherwise in compliance with the terms of this Agreement which
are fair to Holdings or the Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of Holdings or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (xii) the issuance of Equity
Interests (other than Disqualified Stock) of Holdings or any of its parent
corporations to any Permitted Holder or to any director, officer, employee or
consultant; (xiii) sales of accounts receivable, or participations
therein, in connection with any Receivables Facility; and
(xiv) Investments by KKR Financial Corp. in securities of the Holdings or
any Restricted Subsidiary so long as (x) the Investment is being offered
generally to other investors on the same or more favorable terms and (y) the
Investment constitutes less than 5% of the proposed or outstanding issue amount
of such class of securities.

 

10.7.  Dividend
and Other Payment Restrictions Affecting Subsidiaries. Holdings and the
Borrowers will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to:

 

(a)  (i)
pay dividends or make any other distributions to Holdings or any Restricted
Subsidiary (A) on its Capital Stock or (B) with respect to any other interest
or participation in, or measured by, its profits, or (ii) pay any Indebtedness
owed to Holdings or any Restricted Subsidiary;

 

(b)  make
loans or advances to Holdings or any Restricted Subsidiary; or

 

(c)  sell,
lease or transfer any of its properties or assets to Holdings or any Restricted
Subsidiary, except (in each case) for such encumbrances or restrictions
existing under or by reason of:

 

87

 

(A)  contractual encumbrances or restrictions in
effect on the Closing Date, including pursuant to the Senior Credit Facilities
and their related documentation;

 

(B)  this Agreement and the Loans;

 

(C)  purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in clause (c) above on the property so acquired;

 

(D)  applicable law or any applicable rule,
regulation or order;

 

(E)  any agreement or other instrument of a Person
acquired by Holdings or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired;

 

(F)  contracts for the sale of assets, including
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary;

 

(G)  secured Indebtedness otherwise permitted to
be incurred pursuant to Sections 10.3 and 10.4 that limits the
right of the debtor to dispose of the assets securing such Indebtedness;

 

(H)  restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business;

 

(I)  other Indebtedness or Disqualified Stock of
Restricted Subsidiaries permitted to be incurred subsequent to the Closing Date
pursuant to the provisions of the covenant described under Section 10.3;
provided that such dividend and other payment restrictions do not
materially adversely effect any Borrower’s ability to pay principal of, and
interest on, the Loans;

 

(J)  customary provisions in joint venture agreements
and other similar agreements entered into in the ordinary course of business;

 

(K)  customary provisions contained in leases and
other agreements entered into in the ordinary course of business;

 

(L)  any encumbrances or restrictions of the type
referred to in clauses (A), (B) and (C) above imposed by
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations

 

88

 

referred to in clauses
(A) through (K) above, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of Holdings’ Board
of Directors, no more restrictive with respect to such encumbrance and other
restrictions than those prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing; or

 

(M)  restrictions created in connection with any
Receivables Facility that, in the good faith determination of the Board of
Directors of Holdings, are necessary or advisable to effect such Receivables
Facility.

 

10.8.  Limitation
on Other Pari Passu Indebtedness; etc. Holdings and the Borrowers will not,
and will not permit any Subsidiary Guarantor to, directly or indirectly, incur
any Indebtedness (including Acquired Indebtedness) that is subordinate in right
of payment to any other Indebtedness of Holdings, the Borrowers or such
Subsidiary Guarantor, as the case may be, unless such Indebtedness is either
(a) pari passu in right of payment with the Loans and Holdings’ or such other
Subsidiary Guarantor’s Guarantee, as the case may be, or (b) subordinate in
right of payment to the Loans, or Holdings’ or such Subsidiary Guarantor’s
Guarantee, as the case may be.

 

10.9.  Guarantees
of Indebtedness by Restricted Subsidiaries.

 

(a)  Holdings
shall not permit any Restricted Subsidiary, other than the Borrowers, a
Guarantor or a special-purpose Restricted Subsidiary formed in connection with
Receivables Facilities, to guarantee the payment of any Indebtedness of
Holdings, Borrowers or any other Guarantor unless (i)  such Restricted Subsidiary simultaneously
executes and delivers a supplement to the applicable Guarantee Agreement
providing for a Guarantee by such Restricted Subsidiary, except that with
respect to a guarantee of Indebtedness of the Borrowers or Holdings (A) if the
Loans or the Guarantee Agreement are subordinated in right of payment to such
Indebtedness, the Guarantee under the supplement shall be subordinated to such
Restricted Subsidiary’s guarantee with respect to such Indebtedness
substantially to the same extent as the Loans or the Guarantee are subordinated
to such Indebtedness under this Agreement and the Guarantee Agreement and (B)
if such Indebtedness is by its express terms subordinated in right of payment
to the Loans or the Guarantee, any such guarantee by such Restricted Subsidiary
with respect to such Indebtedness shall be subordinated in right of payment to
such Restricted Subsidiary’s Guarantee with respect to the Loans substantially
to the same extent as such Indebtedness is subordinated to the Loans or the
Guarantee; (ii) to the extent permitted by the law of the jurisdiction of
organization of such Restricted Subsidiary, such Restricted Subsidiary waives
and will not in any manner whatsoever claim or take the benefit or advantage
of, any rights of reimbursement, indemnity or subrogation or any other rights
against the Borrowers or Holdings or any Restricted Subsidiary as a result of
any payment by such Restricted Subsidiary under its Guarantee; (iii) such
Restricted Subsidiary shall deliver to the US Administrative Agent an opinion
of counsel to the effect that (A) such Guarantee supplement has been duly
executed and authorized, and (B) such Guarantee supplement constitutes a valid,
binding and enforceable obligation of such Restricted Subsidiary, except
insofar as enforcement thereof may be limited by bankruptcy, insolvency or
similar laws (including all laws relating to fraudulent transfers) and

 

89

 

except insofar as
enforcement thereof is subject to general principles of equity; and (iv) the
Indebtedness so guaranteed is permitted under Section 10.3; provided
that this paragraph (a) shall not be applicable to any guarantee by any
Restricted Subsidiary (x) that (I) existed at the time such Person became a
Restricted Subsidiary, and (II) was not incurred in connection with, or in contemplation
of, such Person becoming a Restricted Subsidiary, or (y) that guarantees
Indebtedness that could have been incurred by such Restricted Subsidiary
directly under Section 10.3. In addition, any such Guarantee may be limited in
accordance with the laws of the jurisdiction of organization of the applicable
Restricted Subsidiary such that the Guarantee would be enforceable in
accordance with such law.

 

(b)  Notwithstanding
the other provisions of this Agreement, any Guarantee by a Restricted Subsidiary
shall provide by its terms that it shall be automatically and unconditionally
released and discharged upon (i) any sale, exchange or transfer, to any Person
not an Affiliate of Holdings, of all of Holdings’ or the Borrowers’ Capital
Stock in, or all or substantially all the assets of, such Restricted
Subsidiary, which sale, exchange or transfer is not prohibited by this
Agreement, or (ii) the release or discharge of the Guarantee by such Restricted
Subsidiary that is a Subsidiary of a Borrower which resulted in the creation of
such Guarantee, except a discharge or release by or as a result of payment
under such Guarantee.

 

10.10.  Amendments
or Waivers of Certain Loan Documents. Without the consent of the Required
Lenders, Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any amendment,
modification, supplement or waiver with respect to the Senior Credit Facility
as in effect on the Closing Date that would modify any of the provisions
thereof or any of the definitions relating to the provisions thereof in respect
of (i) the issuance of the Exchange Notes, (ii) the issuance or sale of any
equity or debt securities or the incurrence of any Indebtedness to repay or
refinance the Initial Loans or (iii) the application of Net Cash Proceeds from
a Prepayment Event (other than an Asset Sale Prepayment Event) to repay the
Initial Loans, in either case in a manner adverse to the Lenders.

 

10.11.  Payments
for Consent. Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, premium or otherwise, to any
Lender or Exchange Note Holder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Agreement, the
Guarantees or the Exchange Note Indenture or Exchange Notes unless such
consideration is offered to be paid or agreed to be paid to all Lenders and
Exchange Note Holders which so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.

 

10.12.  Restricted
Subsidiaries. As of the Closing Date, all of Holdings’ Subsidiaries will be
Restricted Subsidiaries. Holdings will not permit any Unrestricted Subsidiary
to become a Restricted Subsidiary except pursuant to the second to last
sentence of the definition of “Unrestricted Subsidiary”. For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by Holdings and the Restricted Subsidiaries (except to
the extent repaid) in the Subsidiary so designated will be deemed to be
Restricted Payments in an amount determined as set forth in the last sentence
of the definition of “Investment”. Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time under clause
(v) of Section 10.2(b)) and if such

 

90

 

Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries
will not be subject to any of the restrictive covenants set forth in this
Agreement.

 

SECTION 11. Events
of Default.

 

Upon the
occurrence of any of the following specified events (each an “Event of
Default”):

 

11.1.  Payments.
Either Borrower shall (a) default in the payment when due of any principal of
the Loans (whether or not such payment is prohibited by Section 3) or
(b) default, and such default shall continue (whether or not such payment is
prohibited by Section 3) for (i) 10 or more days, in the payment when
due of any interest or stamping fees on the Loans or any Fees or (ii) 30 or
more days, for any other amounts payable of any other payment Obligations; or

 

11.2.  Representations,
etc. Any representation, warranty or statement made or deemed made by any
Credit Party herein or in any Guarantee Agreement or any certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to be untrue
in any material respect on the date as of which made or deemed made; or

 

11.3.  Covenants.
Any Credit Party shall (a) default in the due performance or observance by it
of any term, covenant or agreement contained in Section 9.1(e) or Section 10
or (b) default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in Section 11.1 or 11.2
or clause (a) of this Section 11.3) contained in this
Agreement or any other Loan Document and such default shall continue unremedied
for a period of at least 30 days after receipt of written notice by either
Borrower from the US Administrative Agent or the Directing Lenders; or

 

11.4.  Defaults
Under Other Agreement. Holdings, either Borrower or any Restricted
Subsidiary defaults under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any Indebtedness for
money borrowed by Holdings, either Borrower or any Restricted Subsidiary or the
payment of which is guaranteed by Holdings, either Borrower or any Restricted
Subsidiary (other than Indebtedness owed to Holdings, either Borrower or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Closing Date, if both (i) such default either (A) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (B) relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and has resulted in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity and (ii) the principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness in default for failure to
pay principal at its stated final maturity (after giving effect to any
applicable grace periods), or the maturity of which has been so accelerated,
equals $50.0 million or more at any one time outstanding;

 

11.5.  Bankruptcy,
etc. Holdings, either Borrower or any Specified Subsidiary shall commence a
voluntary case, proceeding or action concerning itself under (a) Title 11
of the United States Code entitled “Bankruptcy”, (b) any of the Bankruptcy and
Insolvency Act

 

91

 

(Canada), the Companies’
Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act
(Canada) (collectively, the “Canadian Insolvency Laws”) or (c) in
the case of the Canadian Borrower and any Foreign Subsidiary that is a Specified
Subsidiary, any domestic or foreign law relating to bankruptcy, insolvency,
reorganization or relief of debtors legislation of its jurisdiction of
incorporation, in each case as now or hereafter in effect, or any successor
thereto (collectively, the “Bankruptcy Code”); or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not controverted within 10 days after
commencement of the case, proceeding or action; or an involuntary case,
proceeding or action is commenced against Holdings, either Borrower or any
Specified Subsidiary and the petition is not dismissed within 60 days after
commencement of the case, proceeding or action; or a custodian (as defined in
the Bankruptcy Code), receiver, interim receiver, receiver manager, examiner,
trustee, liquidator, assignee, sequestrator or similar person is appointed for,
or takes charge of, all or any substantial part of the property of Holdings,
either Borrower or any Specified Subsidiary and such appointment continues
undischarged or unstayed for a period of 60 days; or Holdings, either Borrower
or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, winding up, relief of debtors,
dissolution, receivership, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings, either
Borrower or any Specified Subsidiary; or there is commenced against Holdings,
either Borrower or any Specified Subsidiary any such proceeding or action that
remains undismissed for a period of 60 days; or Holdings, either Borrower or
any Specified Subsidiary is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding or action is
entered; or Holdings, either Borrower or any Specified Subsidiary makes a
general assignment for the benefit of creditors; or any corporate action is
taken by Holdings, either Borrower or any Specified Subsidiary for the purpose
of effecting any of the foregoing; or

 

11.6.  ERISA.
(a)  (i)  Any Plan shall fail
to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA
(including the giving of written notice thereof); an event shall have occurred
or a condition shall exist in either case entitling the PBGC to terminate any
Plan or to appoint a trustee to administer any Plan (including the giving of
written notice thereof); any Plan shall have an accumulated funding deficiency
(whether or not waived); Holdings or any Subsidiary thereof or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving
of written notice thereof); (ii) there could result from any event or events
set forth in clause (i) of this Section 11.6(a) the
imposition of a lien, the granting of a security interest, or a liability, or
the reasonable likelihood of incurring a lien, security interest or liability;
and (iii) such lien, security interest or liability will or would be
reasonably likely to have a Material Adverse Effect, or
(b)  (i) Holdings or any Subsidiary thereof shall have failed to
make any required contribution, installment or other payment pursuant to
applicable laws or regulations with respect to a Canadian Pension Plan or
Canadian Benefit Plan, or any other event shall have occurred, giving rise to a
lien (statutory or otherwise) against, or deemed trust in respect of, any of
the assets of Holdings or any Subsidiary thereof, or a waiver of the minimum
funding requirements or an extension of any amortization period under
applicable laws or regulations with respect to a Canadian Pension Plan or Canadian
Benefit Plan is sought or

 

92

 

granted; any Canadian
Pension Plan is or shall have been terminated or wound up in whole or in part
or is the subject of termination proceedings under applicable laws or regulations
(including the giving of written notice thereof); an event shall have occurred
or a condition shall exist in either case entitling any Governmental Authority
to terminate or wind up in whole or in part any Canadian Pension Plan or
Canadian Benefit Plan (including the giving of written notice thereof);
Holdings or any Subsidiary thereof has incurred or is likely to incur a
liability to or on account of a Canadian Pension Plan or Canadian Benefit Plan
arising due to breach by Holdings or any Subsidiary thereof of their respective
obligations pursuant to applicable laws or regulations (including the giving of
written notice thereof); (ii) there could result from any event or events
set forth in clause (i) of this Section 11.6(b) the
imposition of a lien, the granting of a security interest, or a liability, or
the reasonable likelihood of incurring a lien, security interest or liability;
and (iii) such lien, security interest or liability will or would be
reasonably likely to have a Material Adverse Effect; or

 

11.7.  Guarantee.
The Guarantee Agreements or any material provision thereof shall cease to be in
full force or effect or any Guarantor thereunder or any Credit Party shall deny
or disaffirm in writing any Guarantor’s obligations under any Guarantee
Agreement; or

 

11.8.  Judgments.
One or more judgments or decrees shall be entered against Holdings, either
Borrower or any of the Restricted Subsidiaries involving a liability of $50.0
million or more in the aggregate for all such judgments and decrees for
Holdings, the Borrowers and the Restricted Subsidiaries (to the extent not paid
or fully covered by insurance provided by a carrier not disputing coverage
after having been notified thereof) and any such judgments or decrees shall not
have been satisfied, vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof;

 

then, and in
any such event, and at any time thereafter, if any Event of Default shall then
be continuing, the US Administrative Agent, upon the request of the Directing
Lenders, shall, by written notice to either Borrower, take any or all of the
following actions, without prejudice to the rights of the US Administrative
Agent, the Canadian Administrative Agent or any Lender to enforce its claims
against any Credit Party, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 11.5
shall occur with respect to Holdings, the US Borrower, the Canadian Borrower or
any Specified Subsidiary, the result that would occur upon the giving of
written notice by the US Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such
notice):  (i) declare the Commitment
terminated, whereupon the Commitments of each Lender shall forthwith terminate
immediately and any Fees theretofore accrued shall forthwith become due and
payable without any other notice of any kind; and/or (ii) declare the
principal of and any accrued interest and fees in respect of all Loans and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the US Borrower and the
Canadian Borrower.

 

SECTION 12. The
Administrative Agents.

 

12.1.  Appointment.
Each Lender hereby irrevocably designates and appoints the US Administrative
Agent as the agent of such Lender under this Agreement and the other Loan

 

93

 

Documents, and each such
Lender irrevocably authorizes the US 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 US Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the US Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the US
Administrative Agent.

 

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

 

12.3.  Exculpatory
Provisions. Neither the US Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
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 for its or such Person’s own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the US Borrower, the Canadian
Borrower, any Guarantor, any other Credit 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 US Administrative Agent 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 the US Borrower, the Canadian Borrower, any Guarantor or any
other Credit Party to perform its obligations hereunder or thereunder. The US
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the US Borrower or
the Canadian Borrower.

 

12.4.  Reliance
by US Administrative Agent. The US Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any 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 US Borrower and/or the Canadian Borrower), independent
accountants and other experts selected by the US Administrative Agent. The US
Administrative Agent may deem and treat the Lender specified in the Register
with respect to any amount owing hereunder as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the US Administrative Agent. The US Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders

 

94

 

against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action or both. The US Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

12.5.  Notice
of Default. The US Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the US Administrative 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 the US Administrative Agent receives such a notice, the US
Administrative Agent shall give notice thereof to the Lenders. The US
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders; provided
that unless and until the US Administrative Agent shall have received such directions,
the US Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders (except to the extent that this Agreement requires that such action be
taken only with the approval of the Required Lenders or each of the Lenders, as
applicable).

 

12.6.  Non-Reliance
on US Administrative Agent and Other Lenders. Each Lender expressly acknowledges
that neither the US Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the US Administrative Agent hereinafter
taken, including any review of the affairs of the US Borrower, the Canadian
Borrower, any Guarantor or any other Credit Party, shall be deemed to
constitute any representation or warranty by the US Administrative Agent to any
Lender. Each Lender represents to the US Administrative Agent that it has,
independently and without reliance upon the US Administrative 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 US Borrower,
the Canadian Borrower, any Guarantor and any other Credit Party 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
the US Administrative 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
US Borrower, the Canadian Borrower, any Guarantor and any other Credit Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the US Administrative Agent hereunder, the US Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, assets, operations,
properties, financial condition, prospects or creditworthiness of the US
Borrower, the Canadian Borrower, any Guarantor or any other Credit Party that
may come into the possession of the US Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

95

 

12.7.  Indemnification.
The Lenders agree to indemnify the US Administrative Agent in its capacity as
such (to the extent not reimbursed by the US Borrower or the Canadian Borrower
and without limiting the obligation of the US Borrower and the Canadian
Borrower to do so), ratably according to their respective portions of the Total
Credit Exposure in effect on the date on which indemnification is sought (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 their respective portions of the Total Credit Exposure in effect 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 (including at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the US Administrative 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 the US
Administrative 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 resulting from the US Administrative Agent’s gross
negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.

 

12.8.  US
Administrative Agent in its Individual Capacity. The US Administrative
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the US Borrower, the Canadian Borrower, any
Guarantor and any other Credit Party as though the US Administrative Agent were
not the US Administrative Agent hereunder and under the other Loan Documents. With
respect to the Loans made by it, the US Administrative 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 the US Administrative
Agent, and the terms “Lender” and “Lenders” shall include the US
Administrative Agent in its individual capacity.

 

12.9.  Successor
Agent. The US Administrative Agent may resign as US Administrative Agent
upon 20 days’ prior written notice to the Lenders and the Borrowers. If the US
Administrative Agent shall resign as US Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrowers (which approval shall not be unreasonably
withheld) so long as no Default or Event of Default is continuing, whereupon
such successor agent shall succeed to the rights, powers and duties of the US
Administrative Agent, and the term “US Administrative Agent” shall mean
such successor agent effective upon such appointment and approval, and the
former US Administrative Agent’s rights, powers and duties as US Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former US Administrative Agent or any of the parties to this Agreement
or any holders of the Loans. After any retiring US Administrative Agent’s
resignation as US Administrative Agent, the provisions of this Section 12
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was US Administrative Agent under this Agreement and the other Loan
Documents.

 

96

 

12.10.  Withholding
Tax. To the extent required by any applicable law, the US Administrative
Agent may withhold from any interest payment to any Lender an amount equivalent
to any applicable withholding tax. If the Internal Revenue Service, Canada
Revenue Agency or any authority of the United States, Canada or other jurisdiction
asserts a claim that the US Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender
failed to notify the US Administrative Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason), such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as
tax or otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs and any out of pocket
expenses.

 

12.11.  Canadian
Administrative Agent. Each of the Lenders hereby agrees and confirms that
the provisions of this Section 12 shall apply mutatis mutandis
to the Canadian Administrative Agent as if each reference to the US
Administrative Agent were a reference to the Canadian Administrative Agent
unless the context clearly indicates otherwise upon the same terms and subject
to the same conditions as provided in this Section 12; provided
that any successor Canadian Administrative Agent shall be a Canadian Resident
with an office in Toronto, Canada or Montreal, Canada having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank which is
also a bank and a Canadian Resident.

 

12.12.  Other
Agents; Arrangers and Bookrunners. Each Loan Party hereby irrevocably
designates and appoints each Guarantee Agent as agent for the benefit of such
Loan Party under each Guarantee Agreement. None of the Lenders or other Persons
identified on the cover page of this Agreement as a “joint lead arranger,” “joint
bookrunner,” “co-syndication agent” or “co-documentation agent” shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement in their respective capacities as such, but shall be entitled to all
the benefits of this Section 12 applicable to the US Administrative
Agent. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.

 

SECTION 13. Miscellaneous.

 

13.1.  Amendments
and Waivers. Neither this Agreement nor 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 13.1. Without notice
to or the consent of any Lenders and without any further action necessary by
the parties hereto, effective as of the Initial Loan Repayment Date, (A) the
provisions of Sections 2.10, 2.12 and 2.13 shall not apply to the Term Loans
(B) the provisions of Section 3 shall be replaced with the provisions of
Article 14 of the Exchange Note Indenture (as applicable and with such
modifications as the circumstances require), (C) the provisions of Sections
5.1, 5.2 and 5.4 shall be replaced by Sections 1101 and 1102
and the first paragraph of Section 1105 and Section 1021 of the
Exchange Note Indenture (as applicable and with such modifications as the
circumstances require), (D) the provisions of Section 9 and Section 10 shall be
replaced with the provisions of Articles 8 and 10 of the

 

97

 

Exchange Note Indenture
(as applicable and with such modifications as the circumstances require), (E)
the provisions of Section 11 shall be replaced with the provisions of Sections
501 and 502 of the Exchange Note Indenture and (F) the provisions of Article 11
and 13 of the Exchange Note Indenture (as applicable and with such
modifications as the circumstances require) shall apply to the Term Loans,
which replacement provisions, along with the relevant defined terms used
therein for the purposes thereof, will thereupon be deemed incorporated by
reference herein, with references therein to the “US Issuer”, “Canadian Issuer”,
the “US Trustee”, “Canadian Trustee” and both “Notes” being deemed to be
references to the “US Borrower”, “Canadian Borrower”, the “US Administrative
Agent”, “Canadian Administrative Agent” and “Loans”, respectively, and with
such other modifications to this Agreement necessary to give effect to the
foregoing; in furtherance of the foregoing, the US Administrative Agent will
(and the Lenders hereby authorize and direct the US Administrative Agent to),
at the request of the Borrowers, enter into such technical amendments to this
Agreement as are reasonably necessary to effect the foregoing. The Required
Lenders may, or, with the written consent of the Required Lenders, the US
Administrative Agent may, from time to time, (a) enter into with the
relevant Credit Party or Credit Parties 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 Credit Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the US Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall directly (i) forgive any portion of any Loan or extend the Maturity Date
of any Loan or reduce the stated rate, or forgive any portion, or extend the
date for the payment, of any interest or fee payable hereunder (other than as a
result of waiving the applicability of any post-default increase in interest
rates), or extend the final expiration date of any Lender’s Commitment, or
increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 13.8(a), in each case without the
written consent of each Lender directly and adversely affected thereby, or
(ii) amend, modify or waive any provision of this Section 13.1
or reduce the percentages specified in the definitions of the terms “Required
Lenders” or consent to the assignment or transfer by the US Borrower or the
Canadian Borrower of its rights and obligations under any Loan Document to
which it is a party (except as permitted pursuant to Section 10.3),
in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12
without the written consent of the then-current US Administrative Agent, or
(iv) release all or substantially all of the Guarantors under the Guarantee
Agreements (except as expressly permitted by the applicable Guarantee
Agreement), without the prior written consent of each Lender, or (v) amend Section 2.9
so as to permit Interest Period intervals greater than six months without
regard to availability to Lenders, without the written consent of each Lender
directly and adversely affected thereby, or (vi) amend, modify or waive any
provision in the Exchange Note Indenture) that requires (or would, if any
Exchange Notes were outstanding, require) the approval of all holders of
Exchange Notes, in each case without the

 

98

 

consent of all Lenders,
or (vii) restrict the right of any Lender to exchange Loans for Exchange
Notes or amend the rate of such exchange or amend the terms of the Exchange
Notes in any manner that requires (or would, if the Exchange Notes were
outstanding, require) the approval of all holders of Exchange Notes, in each
case without the consent of each Lender directly affected thereby. Any such
waiver and any such amendment, supplement or modification shall apply equally
to each of the affected Lenders and shall be binding upon Holdings, the US
Borrower, the Canadian Borrower, such Lenders, the US Administrative Agent and
all future holders of the affected Loans. In the case of any waiver, the
Borrowers, the Lenders and the US Administrative Agent shall be restored to
their former positions 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, it being understood that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon. For the purposes of this Section 13.1, where a particular provision
of the Exchange Note Indenture is deemed hereby to be incorporated by reference
herein, and (A) either (i) such provision is identified in the form of Exchange
Note Indenture attached hereto as Exhibit F (the “Form of Indenture”) as
applying to the “Canadian form”, or other words or symbols of similar import
are used, or (ii) if the Canadian Borrower has entered into a Canadian Exchange
Note Indenture as issuer of Exchange Notes, 
such provision is contained only in such Canadian Exchange Note Indenture,
such provision shall be understood to apply to the Canadian Term Loans and the
Canadian Borrower and not to the US Term Loans or the US Borrower; or (B) such
provision is identified in the Form of Indenture as applying to the “US form”,
or other words or symbols of similar import are used, or, if the US Borrower
has entered into a US Exchange Note Indenture as issuer of Exchange Notes,  such provision is contained only in such US
Exchange Note Indenture, such provision shall be understood to apply to the US
Term Loans and the US Borrower and not to the Canadian Term Loans or the
Canadian Borrower; and any provision not so identified or appearing in both the
Canadian Exchange Note Indenture and the US Exchange Note Indenture shall be
understood to apply equally to all the Term Loans and both Borrowers.

 

13.2.  Notices.
All notices, requests and demands to or upon the respective parties hereto to
be effective shall be in writing (including by facsimile transmission), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
as follows in the case of Holdings, the US Borrower, the Canadian Borrower, the
US Administrative Agent and the Canadian Administrative Agent, and as set forth
on Schedule 1.1(a) in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:

 

	
  The US Borrower:

  	
  Suite 950

  1 North Dale Mabry

  Tampa, Florida 33609

  USA

  
	
   

  	
  Attn:

  	
  Legal Department

  
	
   

  	
  Fax:

  	
  (813) 739-0112

  

 

99

 

	
  Holdings or the Canadian Borrower:

  	
  1600 Britannia Rd East

  Mississauga, Ontario

  L4W 1J2

  Canada

  
	
   

  	
  Attn:  General Counsel

  
	
   

  	
  Fax:   (905) 670-6520

  
	
   

  	
   

  
	
  The US Administrative Agent:

  	
  The Bank of Nova Scotia

  One Liberty Plaza, 25th Floor

  New York, New York 10006

  
	
   

  	
  Attn:  John Hall
          Senior
  Manager

  
	
   

  	
  Fax:   (212) 225-5090 

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
  Attn:  Mark S. Wojciechowski,
  Esq.

  
	
   

  	
  Fax:    (212) 262-1910

  
	
   

  	
   

  
	
  The Canadian Administrative Agent:

  	
  The Bank of Nova Scotia 

  Wholesale Banking Operations 

  720 King Street West, 3rd Floor 

  Toronto, Ontario 

  M5V 2T3 

  
	
   

  	
  Attention:  John Hall

                    Senior
  Manager 

  
	
   

  	
  Facsimile:   (416) 866-5991 

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  

  Mayer, Brown, Rowe & Maw LLP

  1675 Broadway

  New York, New York 10019

  
	
   

  	
  Attn:  Mark S. Wojciechowski,
  Esq.

  
	
   

  	
  Fax:    (212)
  262-1910

  

 

provided
that any notice, request or demand to or upon the US Administrative Agent, the
Canadian Administrative Agent or the Lenders pursuant to Sections 2.3,
2.6, 2.9 and 5.1 shall not be effective until received.

 

100

 

13.3.  No
Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the US Administrative Agent, the Canadian
Administrative 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.

 

13.4.  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 hereunder until one
year after repayment of all the outstanding Loans including, for greater
certainty Exchange Notes.

 

13.5.  Payment
of Expenses. The Borrowers agree (a) to pay or reimburse the Agents for all
their reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby, including
the reasonable fees, disbursements and other charges of counsel to the Agents,
(b) to pay or reimburse each Lender and Agent for all its reasonable and
documented costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the reasonable fees, disbursements and
other charges of counsel to each Lender and of counsel to the Agents, (c) to
pay, indemnify, and hold harmless each Lender and Agent from any and all recording
and filing fees and (d) to pay, indemnify, and hold harmless each Lender and
Agent and their respective directors, officers, employees, trustees and agents
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable and documented fees,
disbursements and other charges of counsel, with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents, the Exchange Note Indenture, the Exchange Notes, the
Guarantees of the Exchange Notes and any such other documents, including any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law or to any actual or alleged presence, release or
threatened release of Hazardous Materials involving or attributable to the operations
of either Borrower, any of its Subsidiaries or any of the Real Estate (all the
foregoing in this clause (d), collectively, the “indemnified
liabilities”), provided that the US Borrower and the Canadian
Borrower shall have no obligation hereunder to the US Administrative Agent or
any Lender nor any of their respective directors, officers, employees and
agents with respect to indemnified liabilities to the extent attributable to
(i) the gross negligence or willful misconduct of the party to be indemnified
to the extent so determined in the final, non-appealable judgment of a court of
competent jurisdiction or (ii) disputes among the US Administrative Agent,
the Lenders and/or their transferees. The agreements in this Section 13.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

101

 

13.6.  Successors
and Assigns; Participations and Assignments. (a)   The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that (i) Holdings, the US Borrower and the Canadian Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by
Holdings, the US Borrower or the Canadian Borrower without such consent shall
be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c)
of this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the US Administrative Agent, the Canadian Administrative
Agent and the Lenders or holders of Senior Indebtedness, to the extent set forth
in Section 3) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

(b)  (i)
Subject to the conditions set forth in clause (b)(ii) below, any Lender
may assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it) with the prior written consent of:

 

(A)  at any time prior to the Designated 1 Date,
but then only if any such assignment would result in the Agents holding less
than 50.1% in the aggregate of the aggregate outstanding amount of all Loans,
the applicable Borrower (which consent shall not be unreasonably withheld or
delayed; it being understood that either Borrower shall have the right to withhold
consent to any assignment if, in order for such assignment to comply with
applicable law, such Borrower would be required to obtain the consent of, or
make any filing or registration with, any Governmental Authority); provided
that no Borrower consent shall be required for an assignment to a Lender, an
Affiliate of a Lender (unless increased costs or additional amounts under Section
5.4(a) (other than with respect to Canadian Withholding taxes) would result
therefrom except if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing), an Approved Fund, or if an Event of Default
under Section 11.1 or Section 11.5 has occurred and is
continuing, any other assignee; and

 

(B)  the US Administrative Agent (which consent
shall not be unreasonably withheld or delayed).

 

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

 

(A)  except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the US

 

102

 

Administrative Agent)
shall not be less than $1,000,000, and increments of $1,000,000 in excess
thereof, unless each of the US Borrower and the US Administrative Agent
otherwise consents; provided that no such consent of the US Borrower
shall be required if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing; provided, further, that
contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;

 

(B)  each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement; provided that this clause shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender’s rights and obligations in respect of one Class of
Commitments or Loans;

 

(C)  the parties to each assignment shall execute
and deliver to the US Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500; provided that
only one such fee shall be payable in the event of simultaneous assignments to
or from two or more Approved Funds; and

 

(D)  the assignee, if it shall not be a Lender,
shall deliver to the US Administrative Agent an administrative questionnaire in
a form approved by the US Administrative Agent (the “Administrative
Questionnaire).”

 

For the purpose of this Section 13.6(b), the term “Approved
Fund” shall mean any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course and that is administered, advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers, advises or manages a Lender.

 

(iii)  Subject to acceptance and recording thereof
pursuant to clause (b)(v) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.10, 2.11, 3.5,
5.4 and 13.5). Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this Section
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with clause (c)
of this Section.

 

103

 

(iv)  The US Administrative Agent, acting for this
purpose as an agent of the US Borrower and the Canadian Borrower, shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). Further, the Register shall contain the name and address of
the US Administrative Agent and the Canadian Administrative Agent and the
lending office through which each such Person acts under this Agreement. The
entries in the Register shall be conclusive, and the US Borrower, the Canadian
Borrower, the US Administrative Agent, the Canadian Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the US Borrower, the Canadian Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

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

 

(c)  (i)
    Any Lender may, without the
consent of the US Borrower, the Canadian Borrower, the US Administrative Agent
or the Canadian Administrative Agent, sell participations to one or more banks
or other entities (each, a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitments and/or the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the US Borrower, the Canadian Borrower,
the US Administrative Agent, the Canadian Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 13.1 that affects such Participant. Subject
to clause (c)(ii) of this Section, the US Borrower and the Canadian
Borrower agree that each Participant shall be entitled to the benefits of Sections
2.10, 2.11 and 5.4 to the same extent as if it were a Lender
(subject to the requirements of those Sections) and had acquired its interest
by assignment pursuant to clause (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 13.8(b)
as

 

104

 

though it were a Lender, provided
such Participant agrees to be subject to Section 13.8(a) as though
it were a Lender. Each Lender that sells a participation hereunder shall record
in book entries maintained by such Lender the name and the amount of the
participating interest of each Participant entitled to receive payments in
respect of such participating interest.

 

(ii)  A Participant shall not be entitled to
receive any greater payment under Section 2.10 or 5.4 (other
than with respect to Canadian withholding taxes) than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the US Borrower’s and the Canadian Borrower’s prior written consent
(which consent shall not be unreasonably withheld).

 

(d)  Any
Lender may, without the consent of or notice to the US Borrower, the Canadian
Borrower or the US Administrative Agent or any other Person, at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. In
order to facilitate such pledge or assignment, the US Borrower and the Canadian
Borrower hereby agree that, upon request of any Lender at any time and from
time to time after each of the US Borrower and the Canadian Borrower has made
its initial borrowing hereunder, the US Borrower or the Canadian Borrower, as
the case may be, shall provide to such Lender, at the US Borrower’s or the
Canadian Borrower’s own expense, a promissory note, substantially in the form
of Exhibit D, as the case may be, evidencing the Loans, owing to such
Lender.

 

(e)  Subject
to Section 13.16, the US Borrower and the Canadian Borrower
authorize each Lender to disclose to any Participant, secured creditor of such
Lender or assignee (each, a “Transferee”) and any prospective Transferee
any and all financial information in such Lender’s possession concerning each
Borrower and its Affiliates that has been delivered to such Lender by or on
behalf of each Borrower and its Affiliates pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of each Borrower and its Affiliates
in connection with such Lender’s credit evaluation of each Borrower and its
Affiliates prior to becoming a party to this Agreement.

 

13.7.  Replacements
of Lenders under Certain Circumstances. (a)      The US
Borrower (on its own behalf and on behalf of the Canadian Borrower) shall be
permitted to replace any Lender that (i) requests reimbursement for amounts
owing pursuant to Section 2.10, 2.12, 3.5 or 5.4,
(ii) is affected in the manner described in Section 2.10(a)(iii)
and as a result thereof any of the actions described in such Section is
required to be taken, or (iii) becomes a Defaulting Lender, with a replacement
bank or other financial institution; provided that (1) such replacement
does not conflict with any Requirement of Law, (2) the US Borrower and/or the
Canadian Borrower, as applicable, shall repay (or the replacement bank or institution
shall purchase, at par) all Loans and other amounts (other than any disputed
amounts), pursuant to Section 2.10, 2.11, 2.12, 3.5
or 5.4, as the case may be) owing to such replaced Lender prior to the
date of replacement, (3) the replacement bank or institution, if not already a
Lender, and the

 

105

 

terms and conditions of
such replacement, shall be reasonably satisfactory to the US Administrative
Agent, (4) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 13.6 (provided
that the US Borrower and the Canadian Borrower shall be obligated to pay the registration
and processing fee referred to therein) and (5) any such replacement shall
not be deemed to be a waiver of any rights that the US Borrower, the Canadian
Borrower, the US Administrative Agent or any other Lender shall have against
the replaced Lender.

 

(b)  If
any Lender (such Lender, a “Non-Consenting Lender”) has failed to
consent to a proposed amendment, waiver, discharge or termination which
pursuant to the terms of Section 13.1 requires the consent of such
Lender affected and with respect to which the Required Lenders shall have
granted their consent, the Borrowers shall have the right (unless such
Non-Consenting Lender grants such consent) to replace such Non-Consenting
Lender by requiring such Non-Consenting Lender to assign its Loans and/or its
Commitments hereunder to one or more assignees reasonably acceptable to the
Administrative Agent; provided that: (i) all Obligations with respect to
such assigned Loans or Commitments owing to such Non-Consenting Lender being
replaced shall be paid in full to such Non-Consenting Lender concurrently with
such assignment, and (ii) the replacement Lender shall purchase the foregoing
by paying to such Non-Consenting Lender a price equal to the principal amount
thereof plus accrued and unpaid interest thereon. In connection with any such
assignment, the Borrowers, US Administrative Agent, such Non-Consenting Lender
and the replacement Lender shall otherwise comply with Section 13.1.

 

13.8.  Adjustments;
Set-off. (a)      Subject to Section 3, If any
Lender (a “benefited Lender”) shall at any time receive any payment of
all or part of its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 11.5, or
otherwise), in a greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of such other Lender’s Loans, or
interest thereon, such benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender’s
Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such benefited
Lender to share the excess payment or benefits of such collateral or proceeds
ratably with each of the Lenders; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.

 

(b)  After
the occurrence and during the continuance of an Event of Default, in addition
to any rights and remedies of the Lenders provided by law, subject to Section
3, each Lender shall have the right, without prior notice to the US
Borrower or the Canadian Borrower, any such notice being expressly waived by
the US Borrower and the Canadian Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the US Borrower or the
Canadian Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or

 

106

 

agency thereof to or for
the credit or the account of the US Borrower or the Canadian Borrower, as the
case may be. Each Lender agrees promptly to notify the US Borrower or the
Canadian Borrower, as the case may be, and the US Administrative Agent after
any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

13.9.  Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by facsimile or other
electronic transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the US Borrower and
the US Administrative Agent.

 

13.10.  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.

 

13.11.  [Intentionally
Omitted].

 

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

 

13.13.  Submission
to Jurisdiction; Waivers. Each of Holdings, the US Borrower and the
Canadian Borrower each hereby irrevocably and unconditionally:

 

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

 

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

 

(c)  agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each Borrower at its address set
forth in Section 13.2 or at such other address of which the US
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

 

107

 

(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 13.13
any special, exemplary, punitive or consequential damages.

 

13.14.  Acknowledgments.
Each of Holdings, the US Borrower and the Canadian 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)  none
of the US Administrative Agent, the Canadian Administrative Agent or any Lender
has any fiduciary relationship with or duty to Holdings, the US Borrower or the
Canadian Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the US Administrative
Agent, the Canadian Administrative Agent and Lenders, on one hand, and
Holdings, the US Borrower or the Canadian Borrower, 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 Holdings, the US Borrower, the Canadian Borrower and the Lenders.

 

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

 

13.16.  Confidentiality.
The US Administrative Agent, the Canadian Administrative Agent and each Lender
shall hold all non-public information furnished by or on behalf of the US
Borrower or the Canadian Borrower in connection with such Lender’s evaluation
of whether to become a Lender hereunder or obtained by such Lender or the US
Administrative Agent or the Canadian Administrative Agent pursuant to the
requirements of this Agreement (“Confidential Information”),
confidential in accordance with its customary procedure for handling
confidential information of this nature and (in the case of a Lender that is a
bank) in accordance with safe and sound banking practices and in any event may
make disclosure as required or requested by any regulatory or governmental
agency or representative thereof or pursuant to legal process or to such Lender’s
or the US Administrative Agent’s or the Canadian Administrative Agent’s
attorneys, professional advisors or independent auditors or Affiliates, provided
that unless specifically prohibited by applicable law or court order, each
Lender and the US Administrative Agent and the Canadian Administrative Agent
shall notify each Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Person or Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided, further, that in no event shall any Lender,
the US Administrative Agent or the Canadian Administrative Agent be obligated
or required to return

 

108

 

any materials furnished
by such Borrower or any Subsidiary of such Borrower. Each Lender, the US
Administrative Agent and the Canadian Administrative Agent agrees that it will
not provide to prospective Transferees or to prospective direct or indirect
contractual counterparties in swap agreements to be entered into in connection
with Loans made hereunder any of the Confidential Information unless such
Person is advised of and agrees to be bound by the provisions of this Section 13.16.

 

13.17.  Language. The parties hereto confirm
that it is their wish that this Agreement, as well as any other documents
relating to this Agreement, including notices, schedules and authorizations,
have been and shall be drawn up in the English language only. Les signataires confirment leur volonté que la présente convention, de
même que tous les documents s’y rattachant, y compris tout avis, annexe et
autorisation, soient rédigés en anglais seulement.

 

13.18.  Judgment
Currency. (a)   The obligations of the US Borrower and the
Canadian Borrower hereunder and under the other Loan Documents to make payments
in Dollars (the “Obligation Currency”), shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the US
Administrative Agent, the Canadian Administrative Agent or a Lender of the full
amount of the Obligation Currency expressed to be payable to the US
Administrative Agent, the Canadian Administrative Agent or Lender under this
Agreement or the other Loan Documents. If, for the purpose of obtaining or
enforcing judgment against Holdings, the US Borrower, the Canadian Borrower or
any other Credit Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall
be made, at the rate of exchange prevailing, in each case, as of the date
immediately preceding the day on which the judgment is given (such Business Day
being hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b)  If
there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due,
Holdings, the US Borrower and the Canadian Borrower each covenant and agree to
pay, or cause to be paid, such additional amounts, if any (but in any event not
a lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the
date of payment, will produce the amount of the Obligation Currency which could
have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.

 

(c)  For
purposes of determining the prevailing rate of exchange, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.

 

13.19.  National
Security Laws. Each Lender hereby notifies the US Borrower and the Canadian
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), the Criminal Code, the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the United
Nations Suppression of Terrorism Regulations, the Anti-Terrorism Act and any equivalent
Law applicable under any relevant

 

109

 

foreign jurisdiction
(collectively, the “National Security Laws”), it is required to obtain,
verify and record information that identifies the US Borrower and the Canadian
Borrower, which information includes the name and address of the US Borrower
and the Canadian Borrower and other information that will allow such Lender to
identify the US Borrower and the Canadian Borrower in accordance with
applicable National Security Laws.

 

110

 

IN WITNESS
WHEREOF, each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.

 

	
   

  	
  STILE U.S.
  ACQUISITION CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STILE
  ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STILE
  CONSOLIDATED CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar C.
  Olson

  	
   

  
	
   

  	
   

  	
  Name: Tagar
  C. Olson

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA, as US

  Administrative Agent, as Canadian Administrative

  Agent and as Joint Lead Arranger and Joint

  Bookrunner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  
					

 

S-1

 

	
   

  	
  DEUTSCHE
  BANK SECURITIES INC., as Joint

  Lead Arranger, Joint Bookrunner and as

  Co-Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Eydenberg

  	
   

  
	
   

  	
   

  	
  Name:  John Eydenberg

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie L. Perry

  	
   

  
	
   

  	
   

  	
  Name: Stephanie
  Perry

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS SECURITIES
  LLC, as Joint Bookrunner and

  as Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A.
  Juge

  	
   

  
	
   

  	
   

  	
  Name:  David A. Juge

  
	
   

  	
   

  	
  Title:    Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren
  Jervey

  	
   

  
	
   

  	
   

  	
  Name: Warren
  Jervey

  
	
   

  	
   

  	
  Title:   Director and Counsel Region Americas
            Legal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  MONTREAL, as Co-Documentation

  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shahrokh
  Z. Shah

  	
   

  
	
   

  	
   

  	
  Name:  Shahrokh Z. Shah

  
	
   

  	
   

  	
  Title:    Managing Director

  
					

 

S-2

 

	
   

  	
  SUNTRUST
  BANK, as Co-Documentation Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M.
  Burt

  	
   

  
	
   

  	
   

  	
  Name:  Ian M. Burt

  
	
   

  	
   

  	
  Title:   Managing Director

  
					

 

S-3

 

	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hopmans

  	
   

  
	
   

  	
   

  	
  Name:  John Hopmans

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG CAYMAN ISLANDS

  BRANCH, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  O’Leary

  	
   

  
	
   

  	
   

  	
  Name:  Paul O’Leary

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory
  Shefrin

  	
   

  
	
   

  	
   

  	
  Name: Gregory
  Shefrin

  
	
   

  	
   

  	
  Title:   Director

  

 

S-4

 

	
   

  	
  DEUTSCHE
  BANK AG, CANADA BRANCH, as

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Maynard

  	
   

  
	
   

  	
   

  	
  Name:  John Maynard

  
	
   

  	
   

  	
  Title:   Managing Director& COO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Gynn

  	
   

  
	
   

  	
   

  	
  Name:  David Gynn

  
	
   

  	
   

  	
  Title:    Vice President

  
					

 

S-5

 

	
   

  	
  UBS LOAN
  FINANCE LLC, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wilfred
  V. Salm

  
	
   

  	
   

  	
  Name: Wilfred
  V. Salm

  
	
   

  	
   

  	
  Title:   Director Banking Products Services,
           US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard
  Tavrow

  
	
   

  	
   

  	
  Name: Richard
  L. Tavrow

  
	
   

  	
   

  	
  Title:   Director Banking Products Services,
           US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS AG
  CANADA BRANCH, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amy Fung

  
	
   

  	
   

  	
  Name:  Amy Fung

  
	
   

  	
   

  	
  Title:    Director Banking Products Services

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  Gerry

  
	
   

  	
   

  	
  Name: Stephen
  Gerry

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST
  BANK, as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M.
  Burt

  
	
   

  	
   

  	
  Name:  Ian M. Burt

  
	
   

  	
   

  	
  Title:   Managing Director

  

 

S-6

 

	
   

  	
  BANK OF
  MONTREAL, as Lender 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shahrokh
  Z. Shah

  
	
   

  	
   

  	
  Name:  Shahrokh Z. Shah

  
	
   

  	
   

  	
  Title:    Managing Director

  

 

S-7

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