Document:

Exhibit
10.1

EXECUTION COPY

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of August
25, 2006

among

SEALY MATTRESS
COMPANY,

as Borrower

SEALY CANADA
LTD./LTEE,

as Canadian Borrower

CERTAIN SUBSIDIARIES OF BORROWER,

as Guarantors

SEALY MATTRESS CORPORATION,

as Holdings and a Guarantor

SEALY CORPORATION,

as Parent

The Several Lenders

from Time to Time Parties Hereto

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

J.P. MORGAN
SECURITIES INC.,

as Joint Lead Arranger and Joint Bookrunner

CITIGROUP GLOBAL
MARKETS INC.,

as Joint Lead Arranger and Joint Bookrunner

CITIBANK, N.A.,

as Syndication Agent

 GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent

WACHOVIA BANK,
NATIONAL ASSOCIATION,

as Co-Documentation Agent

and

LASALLE BANK NATIONAL ASSOCIATION,

as Co-Documentation Agent

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
  1.1.

  	
   

  	
  Defined Terms

  	
   

  	
  2

  
	
   

  	
  1.2.

  	
   

  	
  Exchange Rates

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  Amount and Terms of Credit

  	
   

  	
  43

  
	
   

  	
  2.1.

  	
   

  	
  Commitments

  	
   

  	
  43

  
	
   

  	
  2.2.

  	
   

  	
  Minimum Amount of Each Borrowing; Maximum Number of
  Borrowings

  	
   

  	
  46

  
	
   

  	
  2.3.

  	
   

  	
  Notice of Borrowing

  	
   

  	
  46

  
	
   

  	
  2.4.

  	
   

  	
  Disbursement of Funds

  	
   

  	
  48

  
	
   

  	
  2.5.

  	
   

  	
  Repayment of Loans; Evidence of Debt

  	
   

  	
  49

  
	
   

  	
  2.6.

  	
   

  	
  Conversions and Continuations

  	
   

  	
  52

  
	
   

  	
  2.7.

  	
   

  	
  Pro Rata Borrowings

  	
   

  	
  53

  
	
   

  	
  2.8.

  	
   

  	
  Interest

  	
   

  	
  53

  
	
   

  	
  2.9.

  	
   

  	
  Interest Periods

  	
   

  	
  54

  
	
   

  	
  2.10.

  	
   

  	
  Increased Costs, Illegality, etc.

  	
   

  	
  56

  
	
   

  	
  2.11.

  	
   

  	
  Compensation

  	
   

  	
  59

  
	
   

  	
  2.12.

  	
   

  	
  Change of Lending Office

  	
   

  	
  59

  
	
   

  	
  2.13.

  	
   

  	
  Notice of Certain Costs

  	
   

  	
  59

  
	
   

  	
  2.14.

  	
   

  	
  Bankers’ Acceptances

  	
   

  	
  60

  
	
   

  	
  2.15.

  	
   

  	
  Incremental Facilities

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  Letters of Credit

  	
   

  	
  64

  
	
   

  	
  3.1.

  	
   

  	
  Letters of Credit

  	
   

  	
  64

  
	
   

  	
  3.2.

  	
   

  	
  Letter of Credit Requests

  	
   

  	
  65

  
	
   

  	
  3.3.

  	
   

  	
  Letter of Credit Participations

  	
   

  	
  65

  
	
   

  	
  3.4.

  	
   

  	
  Agreement to Repay Letter of Credit Drawings

  	
   

  	
  68

  
	
   

  	
  3.5.

  	
   

  	
  Increased Costs

  	
   

  	
  69

  
	
   

  	
  3.6.

  	
   

  	
  Successor Letter of Credit Issuer

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  Fees; Commitments

  	
   

  	
  71

  
	
   

  	
  4.1.

  	
   

  	
  Fees

  	
   

  	
  71

  
	
   

  	
  4.2.

  	
   

  	
  Voluntary Reduction of Revolving Credit Commitments

  	
   

  	
  72

  
	
   

  	
  4.3.

  	
   

  	
  Mandatory Termination of Commitments

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  Payments

  	
   

  	
  73

  
	
   

  	
  5.1.

  	
   

  	
  Voluntary Prepayments.

  	
   

  	
  73

  
	
   

  	
  5.2.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  74

  
	
   

  	
  5.3.

  	
   

  	
  Method and Place of Payment

  	
   

  	
  78

  
	
   

  	
  5.4.

  	
   

  	
  Net Payments

  	
   

  	
  78

  
	
   

  	
  5.5.

  	
   

  	
  Computations of Interest and Fees

  	
   

  	
  82

  
	
   

  	
  5.6.

  	
   

  	
  Limit on Rate of Interest.

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Conditions Precedent to Initial Borrowing

  	
   

  	
  83

  
	
   

  	
  6.1.

  	
   

  	
  Credit Documents

  	
   

  	
  83

  
	
   

  	
  6.2.

  	
   

  	
  Collateral

  	
   

  	
  83

  

 

 i
 

 

 

	
   

  	
  6.3.

  	
   

  	
  Legal Opinions

  	
   

  	
  84

  
	
   

  	
  6.4.

  	
   

  	
  No Default

  	
   

  	
  84

  
	
   

  	
  6.5.

  	
   

  	
  Consent

  	
   

  	
  84

  
	
   

  	
  6.6.

  	
   

  	
  [Reserved]

  	
   

  	
  84

  
	
   

  	
  6.7.

  	
   

  	
  Effective Date Certificates

  	
   

  	
  84

  
	
   

  	
  6.8.

  	
   

  	
  Corporate Proceedings of Each Credit Party

  	
   

  	
  84

  
	
   

  	
  6.9.

  	
   

  	
  Corporate Documents

  	
   

  	
  84

  
	
   

  	
  6.10.

  	
   

  	
  Fees

  	
   

  	
  84

  
	
   

  	
  6.11.

  	
   

  	
  Representations and Warranties

  	
   

  	
  85

  
	
   

  	
  6.12.

  	
   

  	
  Governmental Authorizations and Consents

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  Conditions Precedent to All Credit Events

  	
   

  	
  85

  
	
   

  	
  7.1.

  	
   

  	
  No Default; Representations and Warranties

  	
   

  	
  85

  
	
   

  	
  7.2.

  	
   

  	
  Notice of Borrowing; Letter of Credit Request

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  Representations, Warranties and Agreements

  	
   

  	
  86

  
	
   

  	
  8.1.

  	
   

  	
  Corporate Status

  	
   

  	
  86

  
	
   

  	
  8.2.

  	
   

  	
  Corporate Power and Authority

  	
   

  	
  86

  
	
   

  	
  8.3.

  	
   

  	
  No Violation

  	
   

  	
  86

  
	
   

  	
  8.4.

  	
   

  	
  Litigation

  	
   

  	
  86

  
	
   

  	
  8.5.

  	
   

  	
  Margin Regulations

  	
   

  	
  87

  
	
   

  	
  8.6.

  	
   

  	
  Governmental Approvals

  	
   

  	
  87

  
	
   

  	
  8.7.

  	
   

  	
  Investment Company Act

  	
   

  	
  87

  
	
   

  	
  8.8.

  	
   

  	
  True and Complete Disclosure

  	
   

  	
  87

  
	
   

  	
  8.9.

  	
   

  	
  Financial Condition; Financial Statements

  	
   

  	
  87

  
	
   

  	
  8.10.

  	
   

  	
  Tax Returns and Payments

  	
   

  	
  88

  
	
   

  	
  8.11.

  	
   

  	
  Compliance with ERISA

  	
   

  	
  88

  
	
   

  	
  8.12.

  	
   

  	
  Subsidiaries

  	
   

  	
  89

  
	
   

  	
  8.13.

  	
   

  	
  Patents, etc.

  	
   

  	
  89

  
	
   

  	
  8.14.

  	
   

  	
  Environmental Laws

  	
   

  	
  89

  
	
   

  	
  8.15.

  	
   

  	
  Properties

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  Affirmative Covenants

  	
   

  	
  90

  
	
   

  	
  9.1.

  	
   

  	
  Information Covenants

  	
   

  	
  90

  
	
   

  	
  9.2.

  	
   

  	
  Books, Records and Inspections

  	
   

  	
  93

  
	
   

  	
  9.3.

  	
   

  	
  Maintenance of Insurance

  	
   

  	
  93

  
	
   

  	
  9.4.

  	
   

  	
  Payment of Taxes

  	
   

  	
  94

  
	
   

  	
  9.5.

  	
   

  	
  Consolidated Corporate Franchises

  	
   

  	
  94

  
	
   

  	
  9.6.

  	
   

  	
  Compliance with Statutes, Obligations, etc.

  	
   

  	
  94

  
	
   

  	
  9.7.

  	
   

  	
  ERISA

  	
   

  	
  94

  
	
   

  	
  9.8.

  	
   

  	
  Good Repair

  	
   

  	
  95

  
	
   

  	
  9.9.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  95

  
	
   

  	
  9.10.

  	
   

  	
  End of Fiscal Years; Fiscal Quarters

  	
   

  	
  95

  
	
   

  	
  9.11.

  	
   

  	
  Additional Guarantors and Grantors

  	
   

  	
  95

  
	
   

  	
  9.12.

  	
   

  	
  Pledges of Additional Stock and Evidence of
  Indebtedness

  	
   

  	
  96

  
	
   

  	
  9.13.

  	
   

  	
  Use of Proceeds

  	
   

  	
  97

  
	
   

  	
  9.14.

  	
   

  	
  Changes in Business

  	
   

  	
  97

  

 

 ii
 

 

 

	
   

  	
  9.15.

  	
   

  	
  Further Assurances

  	
   

  	
  97

  
	
   

  	
  9.16.

  	
   

  	
  Canadian Borrower

  	
   

  	
  98

  
	
   

  	
  9.17.

  	
   

  	
  Post-Closing Covenant

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  Negative Covenants

  	
   

  	
  99

  
	
   

  	
  10.1.

  	
   

  	
  Limitation on Indebtedness

  	
   

  	
  99

  
	
   

  	
  10.2.

  	
   

  	
  Limitation on Liens

  	
   

  	
  102

  
	
   

  	
  10.3.

  	
   

  	
  Limitation on Fundamental Changes

  	
   

  	
  102

  
	
   

  	
  10.4.

  	
   

  	
  Limitation on Sale of Assets

  	
   

  	
  105

  
	
   

  	
  10.5.

  	
   

  	
  Limitation on Investments

  	
   

  	
  106

  
	
   

  	
  10.6.

  	
   

  	
  Limitation on Dividends

  	
   

  	
  108

  
	
   

  	
  10.7.

  	
   

  	
  Limitations on Debt Payments and Amendments

  	
   

  	
  109

  
	
   

  	
  10.8.

  	
   

  	
  Limitations on Sale Leasebacks

  	
   

  	
  110

  
	
   

  	
  10.9.

  	
   

  	
  Consolidated Total Debt to Consolidated EBITDA Ratio

  	
   

  	
  110

  
	
   

  	
  10.10.

  	
   

  	
  Consolidated EBITDA to Consolidated Interest Expense
  Ratio

  	
   

  	
  110

  
	
   

  	
  10.11.

  	
   

  	
  Capital Expenditures

  	
   

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  Events of Default

  	
   

  	
  112

  
	
   

  	
  11.1.

  	
   

  	
  Payments

  	
   

  	
  112

  
	
   

  	
  11.2.

  	
   

  	
  Representations, etc.

  	
   

  	
  112

  
	
   

  	
  11.3.

  	
   

  	
  Covenants

  	
   

  	
  112

  
	
   

  	
  11.4.

  	
   

  	
  Default Under Other Agreements

  	
   

  	
  113

  
	
   

  	
  11.5.

  	
   

  	
  Bankruptcy, etc.

  	
   

  	
  113

  
	
   

  	
  11.6.

  	
   

  	
  ERISA

  	
   

  	
  114

  
	
   

  	
  11.7.

  	
   

  	
  Guarantee

  	
   

  	
  114

  
	
   

  	
  11.8.

  	
   

  	
  Pledge Agreement

  	
   

  	
  114

  
	
   

  	
  11.9.

  	
   

  	
  Security Agreement

  	
   

  	
  114

  
	
   

  	
  11.10.

  	
   

  	
  Mortgages

  	
   

  	
  114

  
	
   

  	
  11.11.

  	
   

  	
  Foreign Guarantees

  	
   

  	
  114

  
	
   

  	
  11.12.

  	
   

  	
  Canadian Security Documents

  	
   

  	
  115

  
	
   

  	
  11.13.

  	
   

  	
  Subordination

  	
   

  	
  115

  
	
   

  	
  11.14.

  	
   

  	
  Judgments

  	
   

  	
  115

  
	
   

  	
  11.15.

  	
   

  	
  Change of Control

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  The Administrative Agent

  	
   

  	
  116

  
	
   

  	
  12.1.

  	
   

  	
  Appointment

  	
   

  	
  116

  
	
   

  	
  12.2.

  	
   

  	
  Delegation of Duties

  	
   

  	
  116

  
	
   

  	
  12.3.

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  116

  
	
   

  	
  12.4.

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  117

  
	
   

  	
  12.5.

  	
   

  	
  Notice of Default

  	
   

  	
  117

  
	
   

  	
  12.6.

  	
   

  	
  Non-Reliance on Administrative Agent and Other
  Lenders

  	
   

  	
  117

  
	
   

  	
  12.7.

  	
   

  	
  Indemnification

  	
   

  	
  118

  
	
   

  	
  12.8.

  	
   

  	
  Administrative Agent in its Individual Capacity

  	
   

  	
  118

  
	
   

  	
  12.9.

  	
   

  	
  Successor Agent

  	
   

  	
  118

  
	
   

  	
  12.10.

  	
   

  	
  Withholding Tax

  	
   

  	
  119

  
	
   

  	
  12.11.

  	
   

  	
  Canadian Administrative Agent.

  	
   

  	
  119

  
	
   

  	
  12.12.

  	
   

  	
  Quebec.

  	
   

  	
  119

  

 

 iii
 

 

 

	
  SECTION 13.

  	
   

  	
  Collateral Allocation Mechanism

  	
   

  	
  120

  
	
   

  	
  13.1.

  	
   

  	
  Implementation of CAM

  	
   

  	
  120

  
	
   

  	
  13.2.

  	
   

  	
  Letters of Credit

  	
   

  	
  121

  
	
   

  	
  13.3.

  	
   

  	
  Net Payments Upon Implementation of CAM Exchange

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
   

  	
  Miscellaneous

  	
   

  	
  123

  
	
   

  	
  14.1.

  	
   

  	
  Amendments and Waivers

  	
   

  	
  123

  
	
   

  	
  14.2.

  	
   

  	
  Notices

  	
   

  	
  125

  
	
   

  	
  14.3.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  126

  
	
   

  	
  14.4.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  126

  
	
   

  	
  14.5.

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  	
  127

  
	
   

  	
  14.6.

  	
   

  	
  Successors and Assigns; Participations and
  Assignments

  	
   

  	
  127

  
	
   

  	
  14.7.

  	
   

  	
  Replacements of Lenders under Certain Circumstances

  	
   

  	
  132

  
	
   

  	
  14.8.

  	
   

  	
  Adjustments; Set-off

  	
   

  	
  132

  
	
   

  	
  14.9.

  	
   

  	
  Counterparts

  	
   

  	
  133

  
	
   

  	
  14.10.

  	
   

  	
  Severability

  	
   

  	
  133

  
	
   

  	
  14.11.

  	
   

  	
  Integration

  	
   

  	
  133

  
	
   

  	
  14.12.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  133

  
	
   

  	
  14.13.

  	
   

  	
  Submission to Jurisdiction; Waivers

  	
   

  	
  133

  
	
   

  	
  14.14.

  	
   

  	
  Acknowledgments

  	
   

  	
  134

  
	
   

  	
  14.15.

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  	
  134

  
	
   

  	
  14.16.

  	
   

  	
  Confidentiality

  	
   

  	
  134

  
	
   

  	
  14.17.

  	
   

  	
  Judgment Currency

  	
   

  	
  135

  
	
   

  	
  14.18.

  	
   

  	
  USA PATRIOT Act

  	
   

  	
  136

  
	
   

  	
  14.19.

  	
   

  	
  Reaffirmation and Grant of Security Interest

  	
   

  	
  136

  
	
   

  	
  14.20.

  	
   

  	
  Amendment and Restatement

  	
   

  	
  136

  

 

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1 (b)

  	
  Mortgaged Properties

  	
   

  
	
  Schedule 1.1(d)

  	
  EBITDA Add-Backs

  	
   

  
	
  Schedule 1.1 (c)

  	
  Commitments of Lenders

  	
   

  
	
  Schedule 1.1(e)

  	
  Excluded Subsidiaries

  	
   

  
	
  Schedule 8.11(ii)

  	
  Canadian Pension Plan Disclosures

  	
   

  
	
  Schedule 8.12

  	
  Subsidiaries

  	
   

  
	
  Schedule 10.1

  	
  Closing Date Indebtedness

  	
   

  
	
  Schedule 10.2

  	
  Closing Date Liens

  	
   

  
	
  Schedule 10.5

  	
  Closing Date Investments

  	
   

  
	
  Schedule 10.5(o)

  	
  Investments in newly formed Puerto Rican Subsidiary

  	
   

  

 

EXHIBITS

	
  Exhibit A-1

  	
   

  	
  Form of Canadian Guarantee

  
	
  Exhibit A-2

  	
   

  	
  Forms of Canadian Pledge Agreements

  
	
  Exhibit A-3

  	
   

  	
  Form of Canadian Security Agreement

  

 

 iv
 

 

 

	
  Exhibit C

  	
   

  	
  Form of Guarantee

  
	
  Exhibit D

  	
   

  	
  Form of Mortgage (Real Property)

  
	
  Exhibit E

  	
   

  	
  Form of Perfection Certificate

  
	
  Exhibit F

  	
   

  	
  Form of Pledge Agreement

  
	
  Exhibit G

  	
   

  	
  Form of Security Agreement

  
	
  Exhibit H-1

  	
   

  	
  Form of US Letter of Credit Request

  
	
  Exhibit H-2

  	
   

  	
  Form of Canadian Letter of Credit Request

  
	
  Exhibit I-1

  	
   

  	
  Form of Legal Opinion of Simpson Thacher &
  Bartlett LLP

  
	
  Exhibit I-2

  	
   

  	
  Form of Legal Opinions of Osler, Hoskin &
  Harcourt LLP

  
	
  Exhibit I-3

  	
   

  	
  Form of Legal Opinion of Calfee, Halter &
  Griswold LLP

  
	
  Exhibit I-4

  	
   

  	
  Form of Legal Opinion of general counsel

  
	
  Exhibit J

  	
   

  	
  Form of Effective Date Certificate

  
	
  Exhibit K

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit L-1

  	
   

  	
  Form of Promissory Note (Term Loans)

  
	
  Exhibit L-2

  	
   

  	
  Form of Promissory Note (Revolving Credit and
  Swingline Loans)

  
	
  Exhibit M

  	
   

  	
  Form of Joinder Agreement

  
	
  Exhibit N

  	
   

  	
  Form of Lender Addendum

  

 

 v

THIRD AMENDED AND
RESTATED CREDIT AGREEMENT dated as of August 25, 2006, among SEALY MATTRESS
COMPANY, an Ohio corporation (the “Borrower”), SEALY CANADA LTD./LTEE, a
company organized under the laws of Canada (the “Canadian Borrower”),
SEALY MATTRESS CORPORATION, a Delaware Corporation (“Holdings”), SEALY
CORPORATION, a Delaware corporation (“Parent”), the lending institutions
from time to time parties hereto (each a “Lender” and, collectively, the
“Lenders”), J.P. MORGAN SECURITIES INC., as Joint Lead Arranger
and Joint Bookrunner, CITIGROUP GLOBAL MARKETS INC., as Joint Lead Arranger and Joint
Bookrunner, CITIBANK, N.A., as Syndication Agent, JPMORGAN CHASE BANK, N.A. (as Administrative
Agent (such term and each other capitalized term used but not defined in this
introductory statement having the meaning provided in Section 1), JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as
Canadian Administrative Agent, and GENERAL ELECTRIC CAPITAL CORPORATION,
WACHOVIA BANK, NATIONAL ASSOCIATION, and LASALLE BANK NATIONAL ASSOCIATION, as
Co-Documentation Agents.

WHEREAS,
Borrower, Canadian Borrower, Holdings, Parent, the Guarantors, certain
financial institutions and other persons (the “Existing Lenders”), J.P.
Morgan Securities Inc., as joint lead arranger and joint bookrunner, Goldman
Sachs Credit Partners L.P., as joint lead arranger, joint bookrunner and
syndication agent, JPMorgan Chase Bank, as administrative agent, JPMorgan Chase
Bank, N.A., Toronto Branch, as Canadian administrative agent, and General
Electric Capital Corporation and Royal Bank of Canada, as co-documentation
agents, are parties to that certain Second Amended and Restated Credit
Agreement dated as of April 14, 2005 (as heretofore amended, supplemented or
otherwise modified, the “Existing Credit Agreement”), pursuant to which
the Existing Lenders have extended certain credit facilities to Company, the
proceeds of which have been used to consummate the Recapitalization and for
working capital and general corporate purposes;

WHEREAS,
Borrower desires that certain Existing Lenders and other Lenders party hereto
agree to amend and restate the Existing Credit Agreement in its entirety to (i)
refinance the existing term loans made under the Existing Credit Agreement (the
“Existing Term Loans”) with the Tranche A Term Loans and Tranche E Term
Loans made hereunder; (ii) permit the reduction in certain mandatory
prepayments; (iii) permit certain prepayments of the Subordinated Debt; (iv)
permit certain dividend payments; and (v) make certain other changes as more fully
set forth herein, which amendment and restatement shall become effective upon
satisfaction of the conditions precedent set forth herein;

WHEREAS,
(i) the proceeds of the Tranche A Term Loans and the Tranche E Term Loans made
on the Effective Date shall be used by the Borrower to repay in full the
outstanding Existing Term Loans; (ii) the proceeds of the Revolving Credit
Loans and Swingline Loans made on and after the Effective Date will continue to
be used by the Borrower and the Canadian Borrower for general corporate
purposes (including Permitted Acquisitions); and (iii) Letters of Credit will
continue to be used by the Borrower and the Canadian Borrower for general
corporate purposes;

WHEREAS,
Borrower has agreed to secure all of its Obligations by reaffirming its grant
to Administrative Agent, for the benefit of Secured Parties, of a Lien on
certain of its assets consistent with such liens existing on the Effective
Date, including a pledge of all of the 

 

Capital Stock of each of
its Domestic Subsidiaries and 65% of all the Capital Stock of each of its
Foreign Subsidiaries;

WHEREAS, it is
the intent of the parties hereto that this Agreement not constitute a novation
of the obligations and liabilities of the parties under the Existing Credit
Agreement and that this Agreement amend and restate in its entirety the
Existing Credit Agreement; and

WHEREAS, it is
the intent of the Credit Parties to confirm that all Obligations of the Credit
Parties under the other Credit Documents shall continue in full force and
effect and that, from and after the Effective Date, all references to the “Credit
Agreement” contained therein shall be deemed to refer to this Agreement.

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 unless the context
otherwise requires (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 (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the greatest of (a) the Prime Rate in effect on such day
and (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of
1%.  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 each Loan bearing interest at the rate provided in Section 2.8(a)
and, in any event, shall include all Swingline Loans.

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

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

“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
(i) the Tranche A Term Loan Commitments of all Defaulting Lenders, (ii) the
Tranche E Term Loan Commitments of all Defaulting Lenders and (iii) the New
Term Loan Commitments, if any, of all Defaulting Lenders.

“Administrative Agent”
shall mean JPMorgan Chase Bank, together with its affiliates, as the arranger
of the Commitments and as the administrative agent for the Lenders under this
Agreement and the other Credit Documents. 
With respect to Borrowings by the Canadian Borrower, the Canadian
Administrative Agent may be an Affiliate of JPMorgan Chase Bank for purposes of
administering such Borrowings, and 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 Borrower, the office of the Administrative Agent located at 270 Park Avenue, 5th Floor, New York, NY 10017,
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 200 Bay Street, Royal Bank Plaza, South Tower,
Toronto, Ontario M5J 2J2, 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).

“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 a corporation if such Person possesses, directly or indirectly, the
power (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (b) to direct
or cause the direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract or otherwise.

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

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

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

“Agreement” shall
mean this Third Amended and Restated Credit Agreement, as the same may be
amended, amended and restated, 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, (i) with respect to each ABR Loan, Cdn ABR Loan and
Canadian Prime Loan that is a Revolving Credit 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 Loans and Canadian

  Prime Loans)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I
  Status

  	
   

  	
  1.25

  	
  %

  
	
  Level II
  Status

  	
   

  	
  1.00

  	
  %

  
	
  Level III
  Status

  	
   

  	
  0.75

  	
  %

  
	
  Level IV
  Status

  	
   

  	
  0.50

  	
  %

  

 

(ii) with respect to
Tranche A Term Loans only, (a) initially, 0.25% per annum and (b) commencing at
the end of the first interest period so long as the Consolidated Total Debt to
Consolidated EBITDA Ratio is (x) greater than 4.50 to 1.00 as of such date,
0.50%, or (y) less than 2.25 to 1.00 as of such date, 0.0% per annum, and (iii)
with respect to Tranche E Term Loans only, 0.50% per annum.

“Applicable Eurodollar
Margin” shall mean at any date, (i) with respect to each Eurodollar
Loan that is a Revolving Credit or Swingline Loan, the applicable percentage
per annum set forth below based upon the Status in effect on such date:

	
  Status

  	
   

  	
  Applicable Eurodollar

  Margin for Revolving

  Credit and Swingline Loans

  	
   

  
	
  Level I
  Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II
  Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III
  Status

  	
   

  	
  2.00

  	
  %

  
	
  Level IV
  Status

  	
   

  	
  1.75

  	
  %

  

 

(ii) with respect to
Tranche A Term Loans only, (a) initially, 1.25% per annum and (b) commencing at
the end of the first interest period so long as the Consolidated Total Debt to
Consolidated EBITDA Ratio is (x) greater than 4.50 to 1.00 as of such date,
1.50%, or (y) less than 2.25 to 1.00 as of such date, 1.0% per annum, and (iii)
with respect to Tranche E Term Loans only, 1.50% per annum.

“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:

 4
 

 

 

	
  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 14.6.

“Asset Sale Prepayment
Event” shall mean any sale, transfer or other disposition of any business
units, assets or other properties of the Borrower 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 the
Borrower owned by the Borrower 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 Sections 10.4(b) and
(e).

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

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

“Available Amount”
shall mean, on any date (the “Reference Date”), an amount equal at such
time to (a) the sum of, without duplication, (i) for the purposes of
(x) Section 10.5(j), Section 10.5(m) and Section 10.11(b),
$125,000,000 in the aggregate and (y) the first proviso to Section 10.7(a), to
the extent that (a) the Consolidated Senior Debt to Consolidated EBITDA Ratio
at such time and after giving effect to the prepayment, repurchase, redemption
or defeasance, as applicable, to be completed on the Reference Date is less
than 3.50 to 1.00, $62,500,000 in the aggregate and (b) the Consolidated Total
Debt to Consolidated EBITDA Ratio at such time and after giving effect to the
prepayment, repurchase, redemption or defeasance, as applicable, to be
completed on the Reference Date is less than 2.25 to 1.00, an additional
$62,500,000 in the aggregate, (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 after the Closing Date and on or prior
to the Reference Date (or will be) applied to the prepayment of Loans in
accordance with Section 5.2(a)(ii), (iii) the amount of any capital
contributions (other than the Equity Proceeds) made in cash to the Borrower
from and including the Business Day immediately following the Closing Date
through and including the Reference Date, including contributions with the
proceeds from any issuance of equity securities by Holdings, (iv) the
aggregate amount of all cash dividends and other cash distributions received by
the Borrower or any Guarantor from any Minority Investments or Unrestricted
Subsidiaries after the Closing Date and on or prior to the 

 5
 

 

 

Reference Date (other
than the portion of any such dividends and other distributions that is used by
the Borrower or any Guarantor to pay taxes), (v) the aggregate amount of
all cash repayments of principal received by the Borrower or any Guarantor from
any Minority Investments or Unrestricted Subsidiaries after the Closing Date
and on or prior to the Reference Date in respect of loans made by the Borrower
or any Guarantor to such Minority Investments or Unrestricted Subsidiaries and
(vi) the aggregate amount of all net cash proceeds received by the
Borrower or any Guarantor in connection with the sale, transfer or other
disposition of its ownership interest in any Minority Investment or
Unrestricted Subsidiary after the Closing Date and on or prior to the Reference
Date minus (b) in the case of clauses (a)(i)(x), (a)(i)(y),
(a)(ii), (iii), (iv), (v) and (vi), the aggregate portion of such amounts used
for (i) any investments (including loans) made by the Borrower or any
Restricted Subsidiary pursuant to Section 10.5(j) or Section 10.5(m)
after the Closing Date and on or prior to the Reference Date, (ii) Capital
Expenditures made by the Borrower or any of the Restricted Subsidiaries after
the Closing Date and on or prior to the Reference Date pursuant to
Section 10.11(b) and (iii) any prepayment, repurchase or redemption of the
Subordinated Notes pursuant to Section 10.7(a) or 10.7(b), respectively,
after the Closing Date and on or prior to the Reference Date, in each case
without duplication in respect thereof from Excess Cash Flow for any period
included in such Available Amount.

“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 sum of (i) the aggregate principal
amount of all Canadian Revolving Credit Loans (but not Swingline Loans) then
outstanding and (ii) the aggregate Canadian Letter of Credit Outstanding
at such time.

“Available US
Commitment” shall mean an amount equal to the excess, if any, of
(a) the Dollar Equivalent of 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 Swingline Loans) then outstanding and
(ii) the aggregate US Letter of Credit Outstanding at such time.

“BA Discount Proceeds” shall mean,
with respect to any BA Loan, an amount (rounded to the nearest full Canadian
cent with one-half of one Canadian cent being rounded up), calculated on the date
of acceptance or advance of such BA Loan which is equal to the face or
principal amount of such BA Loan 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 product being rounded up or down to the fifth decimal
place and .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 Rate at or about 10:00 a.m. on the date of issuance and acceptance
of such Bankers’ Acceptance 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

 6
 

 

 

(b) with respect to an
issue of Bankers’ Acceptances or a BA Equivalent Loan to be accepted or
advanced by another Canadian Lender hereunder, 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. (New York time) on the date of issue and acceptance of such
Bankers’ Acceptances or advance of such BA Equivalent Loans 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’ Acceptance or
BA Equivalent Loans; and

(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 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 Dollars drawn by the Canadian Borrower and accepted 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).

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

“Borrowing” shall
mean and include (a) the incurrence of Swingline Loans from the Swingline
Lender on a given date, (b) the incurrence of one Type of Tranche A Term
Loan on the Effective Date (or resulting from conversions on a given date after
the Effective Date) having, in the case of Eurodollar 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
Eurodollar Term Loans), (c) the incurrence of one Type of Tranche E Term
Loan on the Effective Date (or resulting from conversions on a given date after
the Effective Date) having, in the case of Eurodollar 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
Eurodollar Term Loans) and (d) 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 Eurodollar 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 Eurodollar Revolving Credit Loans or BA Loans, as the case may be).

 7
 

 

 

“Business Day”
shall mean any day excluding Saturday, Sunday and any day that shall be in The
City of New York or Toronto, Canada a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close.

“Calculation Date”
means (a) the Closing Date, (b) each date on which a Borrowing of Canadian
Revolving Credit Loans is made, (c) the last Business Day of each calendar
month, (d) if at any time (i) the Aggregate US Revolving Credit
Outstandings exceed 75% of the US Total Revolving Credit Commitment or (ii) the
Aggregate Canadian Revolving Credit Outstandings exceed 75% of the Canadian
Total Revolving Credit Commitment, the last Business Day of each week and
(e) if a Default or an Event of Default shall have occurred and be
continuing, such additional dates as the Administrative Agent or the Required
Lenders shall specify.

“CAM” shall mean
the mechanism for the allocation and exchange of interests in the Credit
Facilities and collections thereunder established under Section 13.

“CAM Exchange”
shall mean the exchange of the Lender’s interests provided for in
Section 13.1.

“CAM Exchange Date”
shall mean the date on which (a) any event referred to in Section 11.5
shall occur in respect of any of Holdings, the Borrower or any Specified
Subsidiary or (b) an acceleration of the maturity of the Loans pursuant to
Section 11 shall occur.

“CAM Percentage”
shall mean, as to each Lender, a fraction, expressed as a decimal, of which
(a) the numerator shall be the aggregate Dollar Equivalent (determined on
the basis of Exchange Rates prevailing on the CAM Exchange Date) of the
Specified Obligations owed to such Lender and such Lender’s participation in
the aggregate Letter of Credit Outstanding immediately prior to the CAM
Exchange Date and (b) the denominator shall be the aggregate Dollar Equivalent
(as so determined) of the Specified Obligations owed to all the Lenders and the
aggregate Letter of Credit Outstanding immediately prior to such CAM Exchange
Date.  For purposes of computing each
Lender’s CAM Percentage, all Specified Obligations which are denominated in
Canadian Dollars shall be translated into Dollars at the Exchange Rate in
effect on the CAM Exchange Date.

“Canadian
Administrative Agent” shall mean JPMorgan Chase Bank, an authorized foreign
bank under the Bank Act  (Canada),
acting through its Toronto Branch, 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 of any nature
or kind whatsoever that are not Canadian Pension Plans and are maintained or
contributed to by any Credit Party in relation to 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.

 8
 

 

 

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

“Canadian Guarantee”
shall mean the Canadian Guarantee Agreement, made by each of the Canadian
Guarantors in favor of the Canadian Administrative Agent for the benefit of the
Lenders to the Canadian Borrower, substantially in the form of Exhibit A-1, as
the same may be amended, supplemented or otherwise modified from time to time.

“Canadian Guarantors”
shall mean (a) each Subsidiary of the Canadian Borrower on the Effective Date
and (b) each Subsidiary of the Borrower that becomes a party to the Canadian
Guarantee after the Effective Date pursuant to Section 9.11.

“Canadian Hypothec”
means a trust deed of hypothec granted or to be granted by any Credit Party in
favor of the Canadian Administrative Agent on moveable or immoveable property
pursuant to the laws of the Province of Quebec, together with all bonds, debentures
and pledges or hypothecs thereof, as amended, supplemented or otherwise
modified from time to time.

“Canadian Lenders”
means each Lender that
has a Canadian Revolving Credit Commitment or that holds Canadian Revolving
Credit Loans; provided, that (a) as of the Effective Date, any such
Lender shall be a Canadian Resident and (b) to the extent that all or any
portion of such Loans or Commitments of such Lender shall be allocated to the
Borrower, the relevant Canadian Lender in respect of such allocation shall also
be a “United States person” as specified in Section 2.1(b)(ii) or the Related
Affiliate of such Canadian Revolving Credit Lender, if any, designated by such
Lender in accordance with Section 2.1(b)(ii).

“Canadian Letter of
Credit” shall mean a Letter of Credit issued by the Canadian Letter of
Credit Issuer.

“Canadian Letter of
Credit Commitment” shall mean $10,000,000, as the same may be reduced from
time to time pursuant to Section 3.1.

“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) such Canadian Lender’s Canadian Revolving Credit Commitment
Percentage of the Canadian Letter 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)).

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

“Canadian
Letter of Credit Issuer” shall mean JPMorgan Chase Bank, N.A., Toronto
Branch or any affiliate thereof, or any other Canadian Lender with a Canadian
Revolving Credit Commitment designated as the Canadian Letter of Credit Issuer
in a written notice from the Canadian Administrative Agent and the
Canadian  Borrower to the Lenders with a
Canadian Revolving Credit Commitment; provided that to the extent that
any Canadian Letter 

 9
 

 

 

of
Credit shall be issued for the account of the Borrower, the Canadian Issuing
Lender shall, if it is not a “US person” (as defined in Section 7701(a)(30) of
the Code), make such Letters of Credit available through its Related Affiliate
in accordance with Section 3.1(a), and such Related Affiliate shall be deemed
to be the Canadian Letter of Credit Issuer for such purpose.

“Canadian Letter 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 Obligations”
shall have the meaning assigned to such term in the Canadian Security
Agreement.

“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 any Credit
Party in relation to any employees that it may have in Canada.

“Canadian Pledge
Agreements” shall mean the Canadian Pledge Agreement, entered into by the
parent of the Canadian Borrower, the Canadian Borrower, certain other
Restricted Subsidiaries and the Canadian Administrative Agent for the benefit
of the Canadian Lenders in each case, substantially in the form of Exhibit A-2,
as the same may be amended, supplemented or otherwise modified from time to
time.

“Canadian Prime Loan”
shall mean a Loan the rate of interest of which is based on the Canadian Prime
Rate.

“Canadian Prime Rate”
shall mean the higher of (a) the rate of interest publicly announced 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 Rate plus 1% per annum.

“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
or Canadian Letter of Credit Commitment pursuant to this Agreement.

“Canadian Revolving
Credit Commitment” shall mean, (a) with respect to each Lender that is a
Lender on the Closing Date, 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 Closing
Date, 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 aggregate amount of the Canadian
Revolving Credit Commitments as of the Closing Date is US $25,000,000.

 10
 

 

 

“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 aggregate amount of the Canadian
Revolving Credit Commitments, 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, and (b) such Lender’s Canadian Letter of Credit Exposure at such
time.

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

“Canadian Security
Agreement” shall mean the Canadian Security Agreement entered into by the
Canadian Borrower, certain other Restricted Subsidiaries and the Canadian
Administrative Agent for the benefit of the Lenders to the Canadian Borrower,
substantially in the form of Exhibit A-3, as the same may be amended,
supplemented or otherwise modified from time to time.

“Canadian Security
Documents” shall mean, collectively, (a) the Canadian Guarantee, (b) the
Canadian Pledge Agreements, (c) the Canadian Security Agreement, and the
Canadian Hypothecs, if any, with respect to collateral located in Quebec, (d)
any Mortgage or Canadian Hypothec, if applicable, over Mortgaged Property of a
Canadian Subsidiary and (e) any security document entered into by a Canadian
Subsidiary pursuant to Section 9.11 or 9.12.

“Canadian Subsidiary
Guarantees” shall mean the Canadian Guarantee and any guarantee agreement
entered into by a Restricted Foreign Subsidiary pursuant to Section 9.11 or
9.12.

“Canadian Subsidiary Guarantors”
shall mean the Canadian Guarantors and any Subsidiary that becomes a Canadian
Subsidiary Guarantor pursuant to Section 9.11.

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

“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 the Borrower and the 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 the Borrower and its Subsidiaries, provided
that the term “Capital Expenditures” shall not include (a) expenditures
made in connection with the replacement, substitution or restoration of assets
(i) to the extent financed from insurance proceeds paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with
awards of compensation arising from the taking by eminent 

 11
 

 

 

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 one year 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 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 or any of its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.

“Cdn
ABR” shall mean, for any day, a rate per annum equal to the higher of (a)
the rate of interest per annum publicly announced 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% per annum.

“Cdn
ABR Loans” shall mean Loans the rate of interest applicable to which is
based upon the Cdn ABR.

“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 Rate” 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. New York 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. (New York 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.

 12
 

 

 

“Change of Control”
shall mean and be deemed to have occurred if (a) (i) KKR, its
Affiliates, Permitted Investors 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 outstanding Voting Stock of Holdings (other than as the
result of one or more widely distributed offerings of Holdings or Parent common
stock, in each case whether by Holdings, Parent or by KKR, its Affiliates,
Permitted Investors or the 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) shall at any time have acquired
direct or indirect beneficial ownership of a percentage of the outstanding
Voting Stock of Holdings that exceeds the percentage of such Voting Stock then
beneficially owned, in the aggregate, by KKR, its Affiliates, Permitted
Investors and the Management Group, unless, in the case of either
clause (i) or (ii) above, KKR, its Affiliates, Permitted Investors 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 a majority of
the Board of Directors of Holdings; provided, however, for
purposes of this definition, Permitted Investors shall be deemed to own no more
than the aggregate amount of Voting Stock of Holdings that such Permitted
Investors owned as of the Effective Date; and/or (b) at any time
Continuing Directors shall not constitute a majority of the Board of Directors
of Holdings; and/or (c) any Person, other than Holdings acquires ownership,
directly or indirectly, beneficially or of record, of any equity interest
(other than any management or employee equity interests) of any nature in the
Borrower; (d) any Person, other than Parent acquires ownership, directly or
indirectly, beneficially or of record, of any equity interest of any nature in
Holdings and/or (e) a Change of Control (as defined in the Subordinated Note
Indenture) shall have occurred.

“Class”, when used
in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Credit Loans, New Revolving
Loans, Canadian Revolving Credit Loans, Tranche A Term Loans, Tranche E 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 Revolving
Credit Commitment, a New Revolving Loan Commitment, a Canadian Revolving Credit
Commitment, Tranche A Term Loan Commitment, Tranche E Term Loan Commitment or a
New Term Loan Commitment.

“Closing Date”
means the date of the initial Borrowing under the Initial Credit Agreement,
which date was April 6, 2004.

“Co-Documentation
Agents” shall mean General Electric Capital Corporation, together with its
affiliates, Wachovia Bank, National Association, together with its affiliates,
and LaSalle Bank National Association, together with its affiliates, as the
co-documentation agents for the Lenders under this Agreement and the other
Credit Documents.

“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.

“Collateral” shall
have the meaning provided in the Pledge Agreement, the Security Agreement, any
Foreign Security Document or any Mortgage, as applicable.

 13
 

 

 

“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

  	
   

  	
  0.500

  	
  %

  
	
  Level II Status

  	
   

  	
  0.500

  	
  %

  
	
  Level III Status

  	
   

  	
  0.500

  	
  %

  
	
  Level IV Status

  	
   

  	
  0.375

  	
  %

  

 

Notwithstanding the
foregoing, the term “Commitment Fee Rate” shall mean 0.500%, during the period
from and including the Closing Date to but excluding the Initial Financial
Statement Delivery Date.

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

“Confidential
Information” shall have the meaning provided in Section 14.16.

“Confidential
Information Memorandum” shall mean the Confidential Information Memorandum
of the Borrower dated March, 2004, delivered to the Lenders in connection with
this Agreement.

“Consolidated Earnings”
shall mean, for any period, “income (loss) before the deduction of income taxes”
of Holdings, the Borrower and the Restricted Subsidiaries, excluding
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).

“Consolidated EBITDA”
shall mean, for any period, the sum, without duplication, of the amounts for
such period of (a) Consolidated Earnings and to the extent already
deducted in arriving at Consolidated Earnings: (b) Consolidated Interest
Expense, (c) depreciation expense, (d) amortization expense,
including amortization of deferred financing fees, (e) extraordinary
losses and unusual or non-recurring charges (including severance, relocation costs
and one-time compensation charges), (f) 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),
(g) losses on asset sales, (h) restructuring charges or reserves
(including costs related to closure of facilities), (i) in the case of any
period that includes a period ending during the fiscal year ending November 28,
2004, Transaction Expenses, to the extent deducted in determining Consolidated
Earnings, (j) any expenses or charges incurred in connection with any issuance
of debt, equity securities or any refinancing transaction, (k) any fees
and expenses related to Permitted Acquisitions, (l) any deduction for
minority interest expense, (m) the amount of 

 14
 

 

 

management, monitoring,
consulting and advisory fees and related expenses paid to KKR and (n) those
items described on Schedule 1.1(d) annexed hereto, less the sum of the
amounts for such period of (o) extraordinary gains and non-recurring
gains, (p) 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) and (q) gains on asset sales, all as determined
on a consolidated basis for Holdings, the Borrower and the Restricted
Subsidiaries in accordance with GAAP, provided that (i) except as
provided in clause (iv) below, there shall be excluded from Consolidated
Earnings for any period the income from continuing operations before income
taxes and extraordinary items of all Unrestricted Subsidiaries for such period
to the extent otherwise included in Consolidated Earnings, except to the extent
actually received in cash by Holdings, the Borrower or its Restricted
Subsidiaries during such period through dividends or other distributions, (ii)
there shall be excluded from Consolidated Earnings for any period the income
from continuing operations before income taxes and extraordinary items of each
Foreign Joint Venture for such period corresponding to the percentage of
capital stock or other equity interests in such Foreign Joint Venture not owned
by the Borrower or its Restricted Subsidiaries (other than Foreign Joint
Ventures), (iii) there shall be excluded in determining Consolidated EBITDA non-operating currency transaction gains and
losses and (iv) (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 related Person, property, business or
assets to the extent not so acquired) by the Borrower 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
Acquired 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 the Borrower or any Restricted
Subsidiary during such period (each such Person, property, business or asset so
sold or disposed of, a “Sold Entity or Business”), and the Acquired
EBITDA of any Restricted Subsidiary that is converted into an Unrestricted
Subsidiary during such period (each, a “Converted Unrestricted Subsidiary”),
in each case based on the actual Acquired 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).

“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.

 15
 

 

 

“Consolidated Interest
Expense” shall mean, for any period, the cash interest expense (including
that attributable to Capital Leases in accordance with GAAP), net of cash
interest income, of Holdings, the Borrower and the Restricted Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings,
the Borrower and the Restricted Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing and net costs under Hedge Agreements (other than
currency swap agreements, currency future or option contracts and other similar
agreements), 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 (a) except as provided
in clause (b) below, there shall be excluded from Consolidated Interest
Expense for any period the cash interest expense (or income) of all Unrestricted
Subsidiaries for such period to the extent otherwise included in Consolidated
Interest Expense and (b) 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.

“Consolidated Lease
Expense” shall mean, for any period, all rental expenses of Holdings, the
Borrower and the 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.

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

“Consolidated Net
Sales” shall mean, for any fiscal year or any Test Period, as the case may
be, “net sales” of Holdings, the Borrower and the Restricted Subsidiaries as
set forth in the Section 9.1 Financials with respect to such Test Period or
fiscal year, as applicable.

“Consolidated Senior
Debt” shall mean, as of any date of determination, (x) the sum of all
Indebtedness of Holdings, the Borrower and the Restricted Subsidiaries for
borrowed money outstanding on such date minus (y) the sum of (i) the
Subordinated Notes and (ii) other subordinated Indebtedness issued or incurred
by Holdings, the Borrower and the Restricted 

 16
 

 

 

Subsidiaries subordinated
in right of payment to the payment in full of the Obligations outstanding on
such date.

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

“Consolidated Total
Debt” shall mean, as of any date of determination, (a) the sum of
(i) all Indebtedness of Holdings, the Borrower and the Restricted
Subsidiaries for borrowed money outstanding on such date and (ii) all
Capitalized Lease Obligations of Holdings, the Borrower 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 cash accounts listed on the consolidated balance sheet of Holdings, the
Borrower and the Restricted Subsidiaries as at such date up to a maximum amount
of $45,000,000 to the extent the use thereof for application to payment of
Indebtedness is not prohibited by law or any contract to which the Borrower or
any of the Restricted Subsidiaries is a party.

“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, the Borrower
and the 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, the Borrower and the 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 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 KKR or one of its Affiliates or Persons nominated by
KKR or one of its Affiliates 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”.

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

 17
 

 

 

“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 Facility”
shall mean a category of Commitments and extensions of credit thereunder.

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

“Cumulative
Consolidated Net Income Available to Stockholders” shall mean, as of any
date of determination, Consolidated Net Income less cash dividends paid by
Holdings with respect to its capital stock for the period (taken as one
accounting period) commencing on the Closing Date and ending on the last day of
the most recent fiscal quarter for which Section 9.1 Financials have been
delivered to the Lenders under Section 9.1.

“Debt Incurrence Prepayment
Event” shall mean any issuance or incurrence by the Borrower or any of the
Restricted Subsidiaries of any Indebtedness (including any issuance by the
Borrower of Permitted Additional Subordinated Notes but excluding any other
Indebtedness permitted to be issued or incurred under Section 10.1A other
than Section 10.1A(o)).

“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 Dollars issued by the
Borrower to a Non-Acceptance Lender to evidence a BA Equivalent
Loan.

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

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

“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 any Canadian Dollars, the equivalent in Dollars of such amount,
determined by the Administrative Agent pursuant to Section 1.2(b) using the
applicable Exchange Rate with respect to such Canadian Dollars at the time in
effect under the provisions of such Section 1.2.

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

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

 18
 

 

 

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

“Effective Date”
means the date upon which the conditions set forth in Section 6 are satisfied.

“Eligible Lender”
shall mean, at any time, a Person who, on any date on which interest is payable
under this Agreement, is a Person which is beneficially entitled to the
interest payable to it under this Agreement.

“Environmental Claims”
shall mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by the Borrower or any of
the Subsidiaries (a) in the ordinary course of such Person’s business or (b) as
required in connection with a financing transaction or an acquisition or
disposition of real estate) or proceedings relating in any way to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (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 resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

“Environmental Law”
shall mean any applicable Federal, state, foreign or local statute, law, rule,
regulation, ordinance, code and rule of common law now or hereafter in effect
and in each case as amended, and any binding judicial or administrative
interpretation thereof, including any binding judicial or administrative order,
consent decree or judgment, relating to the environment, human health or safety
or Hazardous Materials.

“Equity Proceeds”
shall have the meaning provided in the Initial Credit Agreement.

“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
the 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.

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

“Eurodollar Rate”
shall mean, in the case of any Eurodollar Term Loan or Eurodollar Revolving
Credit Loan, with respect to each day during each Interest Period pertaining to
such Eurodollar Loan, (a) the rate of interest determined on the basis of the
rate for 

 19
 

 

 

deposits in Dollars for a
period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 a.m. (London time) two Business Days prior to the beginning of such
Interest Period multiplied by (b) the Statutory Reserve Rate.  In the event that any such rate does not
appear on the applicable Page of the Telerate Service (or otherwise on such
service), the “Eurodollar Rate” for the purposes of this paragraph shall
be determined by reference to such other publicly available service for
displaying Eurodollar rates as may be agreed upon by the Administrative Agent
and the Borrower or, in the absence of such agreement, the “Eurodollar Rate”
for the purposes of this paragraph shall instead be the rate per annum notified
to the Administrative Agent by the Reference Lender as the rate at which the
Reference Lender is offered Dollar deposits at or about 11:00 a.m. (London
time) two Business Days prior to the beginning of such Interest Period in the
interbank Eurodollar market where the Eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its Eurodollar Term Loan
or Eurodollar Revolving Credit Loan, as the case may be, to be outstanding
during such Interest Period.

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

“Eurodollar Term Loan”
shall mean any Tranche A Term Loan or Tranche E Term Loan bearing interest at a
rate determined by reference to the Eurodollar Rate.

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

“Excess Cash Flow”
shall mean, for any period, an amount equal to the excess of (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 and (iv) an amount equal to the aggregate net
non-cash loss on the sale, lease, transfer or other disposition of assets by
the Borrower 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 over (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 aggregate amount actually paid by the
Borrower and the Restricted Subsidiaries in cash during such period on account
of Capital Expenditures (excluding the principal amount of Indebtedness
incurred in connection with such Capital Expenditures, whether incurred in such
period or in a subsequent period), (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 except to the extent not financed with the proceeds of other
Indebtedness of Holdings or its Restricted Subsidiaries, (iv) the
aggregate amount of all principal payments of Indebtedness of the Borrower 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 not
financed with the proceeds of other 

 20
 

 

 

Indebtedness of Holdings
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 Borrower 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, (vii) payments by the Borrower and the Restricted
Subsidiaries during such period in respect of long-term liabilities of the
Borrower and the Restricted Subsidiaries other than Indebtedness,
(viii) the amount of investments made during such period pursuant to
Section 10.5 to the extent that such investments were financed with
internally generated cash flow of the Borrower and the Restricted Subsidiaries,
(ix) the amount of dividends paid during such period pursuant to
clause (b), (c), (d) or (e) of the proviso to Section 10.6 to the
extent such dividends were paid with the proceeds of any amount referred to in
paragraph (a) of this definition, (x) the aggregate amount of
expenditures actually made by the Borrower 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
(xi) the aggregate amount of any premium, make-whole or penalty payments
actually paid in cash by the Borrower and the Restricted Subsidiaries during
such period that are required to be made in connection with any prepayment of
Indebtedness and that are accounted for as extraordinary items.

“Exchange Rate”
shall mean on any day (i) with respect to any Foreign Currency, the rate at
which such Foreign Currency may be exchanged into Dollars, as set forth at
approximately 11:00 a.m. (London time) on such day on the Reuters World
Currency Page for such Foreign Currency; in the event that such rate does not
appear on any Reuters World Currency Page, the Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Administrative Agent and the Borrower, or,
in the absence of such agreement, such Exchange Rate shall instead be the
arithmetic average of the spot rates of exchange of the Administrative Agent in
the market where its foreign currency exchange operations in respect of such
Foreign Currency are then being conducted, at or about 10:00 a.m. (New
York time) on such date for the purchase of Dollars for delivery
two Business Days later and (ii) with respect to calculations in
connection with Canadian Borrowings, 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 (New York 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 the Borrower, may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be conclusive absent manifest
error.

“Existing Credit
Agreement” as defined in the recitals hereto.

“Existing Indenture”
shall mean the Indenture, dated as of December 18, 1997, among the Borrower,
the subsidiary guarantors party thereto and The Bank of New York, as trustee.

“Existing Lenders”
as defined in the recitals hereto.

“Existing Term Loans”
as defined in the recitals hereto.

 21
 

 

 

“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
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 the date on which the Revolving Credit Commitments shall have terminated,
no Revolving Credit Loans shall be outstanding and the Letter of Credit
Outstandings shall have been reduced to zero.

“Foreign Borrowing
Base Amount” shall mean, at any time, the sum of (i) 85% of the book value
of all accounts receivable of all Restricted Foreign Subsidiaries of Holdings
and (ii) 60% of the book value of all inventory of all Restricted Foreign
Subsidiaries of Holdings.

“Foreign Currencies”
shall mean Canadian Dollars, Euro and Sterling.

“Foreign Joint Venture”
shall mean any Restricted Foreign Subsidiary in which the Borrower and its
Restricted Subsidiaries own, collectively, less than 100% of the equity
interests and designated as such in a written notice to the Administrative
Agent by the Borrower, provided that in the event a Restricted
Subsidiary not previously designated by the Borrower as a Foreign Joint Venture
is subsequently re-designated as a Foreign Joint Venture, (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in a Foreign Joint Venture in an amount equal to the product of
(i) the net worth of such re-designated Restricted Subsidiary immediately prior
to such re-designation (such net worth to be calculated without regard to any
guarantee provided by such re-designated Restricted Subsidiary) and (ii) the
percentage of capital stock or other equity interests in such Foreign Joint
Venture owned by the Borrower or its Restricted Subsidiaries (other than
Foreign Joint Ventures) and (y) no Default or Event of Default would result
from such re-designation.

“Foreign Subsidiary”
shall mean each Subsidiary of the Borrower that is not a Domestic Subsidiary,
including the Canadian Borrower.

“Foreign Subsidiary
Guarantors” shall mean any Foreign Subsidiary that becomes a Foreign
Subsidiary Guarantor pursuant to Section 9.11.

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

“Funded Debt”
shall mean all indebtedness of the Borrower and the Restricted Subsidiaries for
borrowed money that matures more than one year from the date of its creation or
matures within one year from such date that is renewable or extendable, at the
option of the Borrower or one of the Restricted Subsidiaries, 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 Borrower, Indebtedness in respect of the Loans.

 22
 

 

 

“GAAP” shall mean
generally accepted accounting principles in the United States of America or
Canada, as applicable, 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 Borrower 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 Borrower
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” shall
mean the Guarantee, made by each Guarantor in favor of the Administrative Agent
for the benefit of the Secured Parties, substantially in the form of Exhibit C,
as the same may be amended, supplemented or otherwise modified from time to
time.

“Guarantee and
Collateral Exception Amount” shall mean, at any time: (a) $100,000,000
minus (b) the sum of (i) the aggregate amount of Indebtedness
incurred or assumed prior to such time pursuant to Section 10.1(j) or (k)
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 lesser of (x) the aggregate
Increased Commitment Amount at such time and (y) $50,000,000 and (iii) any
Indebtedness incurred by any Foreign Joint Venture, provided that if
such amount is a negative number, the Guarantee and Collateral Exception Amount
shall be zero.

“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 (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.

 23

 

 

“Guarantors” shall
mean Holdings, the US Subsidiary Guarantors and the Foreign Subsidiary
Guarantors, other than the immaterial Subsidiaries listed on Schedule 1.1(e).

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

“Hedge 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 the Borrower
or the Canadian Borrower in the ordinary course of business (and not for
speculative purposes) in order to protect the Borrower, the Canadian Borrower
or any of the Restricted Subsidiaries against fluctuations in interest rates,
currency exchange rates or commodity prices.

“Historical Financial
Statements” means as of the Closing Date, the audited financial statements
of Parent and its Subsidiaries, for the immediately preceding three fiscal
years, consisting of balance sheets and the related consolidated statements of
income, stockholders’ equity and cash flows for such fiscal years.

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

“Increased Amount Date”
as defined in Section 2.15.

“Increased Commitment
Amount” shall have the meaning given to that term in Section 14.1.

“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, commodity price protection agreements or other commodity price
hedging agreements and other similar agreements and (g) without duplication,
all Guarantee Obligations of such Person, provided that Indebtedness
shall not include trade payables and accrued expenses, in each case payable
directly or through a bank clearing arrangement and arising in the ordinary
course of business.

 24
 

 

 

“Initial Credit
Agreement” shall mean the Credit Agreement, dated as of April 6, 2004,
among Borrower, Holdings, the lenders from time to time party thereto, the
Administrative Agent, the Joint Lead Arrangers and the other parties thereto.

“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 first full
fiscal quarter commencing after the Closing Date.

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

“JPMCB” shall mean
JPMorgan Chase Bank, N.A. and any successor thereto by merger, consolidation or
otherwise.

“Joinder Agreement”
means an agreement substantially in the form of Exhibit M.

“Judgment Currency”
shall have the meaning set forth in Section 14.17.

“Judgment Currency
Conversion Date” shall have the meaning set forth in Section 14.17.

“Junior Subordinated
Seller Notes” means the Junior Subordinated Seller Notes issued in the
initial principal amount of $25,000,000 on December 18, 1997 by Holdings in
favor of Zell/Chilmark Fund, L.P., and any additional amount of such notes as
are permitted to be issued under the Existing Credit Agreement.

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

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

“L/C
Participants”: means
collectively the Cdn L/C Participants and the US L/C Participants and each is
an “L/C Participant”

“L/C Reserve Account”
shall have the meaning provided in Section 13.2(a)

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

“Lender Addendum”
shall mean a lender addendum substantially in the form of Exhibit N.

“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 or (b) a Lender having notified the
Administrative Agent and/or the 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

 25
 

 

 

receiver or conservator
with respect to such Lender at the direction or request of any regulatory
agency or authority.

“Letter of Credit”
shall mean each standby letter of credit issued pursuant to Section 3.1.

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

“Letter of Credit
Issuers” means 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 have the meaning provided in Section 3.2.

“Level I Status”
shall mean, on any date, the Consolidated Total Debt to Consolidated EBITDA
Ratio is greater than or equal to 5.25 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.

“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.

“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, Tranche A Term Loan, Tranche E Term
Loan or New Term Loan made by any Lender hereunder.

“Management Group”
shall mean, at any time, the Chairman of the Board, any President, any
Executive Vice President or Vice President, any Managing Director, any
Treasurer and any Secretary of any of Holdings, the Borrower or any
Subsidiaries at such time.

“Management Investors”
means the management officers and employees of Holdings and its Subsidiaries
who are investors in Holdings on the Effective Date.

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

“Material Adverse
Change” shall mean any change in the business, assets, operations,
properties or financial condition of Holdings, the Borrower and its
Subsidiaries, taken as a whole, that would materially adversely affect the
ability of Holdings, the Borrower

 26
 

 

 

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, the Borrower and the
Subsidiaries, taken as a whole, that would materially adversely affect
(a) the ability of Holdings, the Borrower 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 Agent 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 the
Borrower (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 the Borrower and the 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 the Borrower and the
Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP.

“Maturity Date”
shall mean the Tranche A Term Loan Maturity Date, Tranche E Term Loan Maturity
Date or the Revolving Credit Maturity Date.

“Merger” shall
have the meaning provided in the Initial Credit Agreement.

“Merger Agreement”
shall mean that certain Agreement and Plan of Merger dated as of March 3, 2004,
by and among Sealy Corporation and SAC (as assignee of the rights and
obligations of Posturepedic Acquisition Corp.).

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

“Minority Investment”
shall mean any Person (other than a Subsidiary) in which the 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.

“Mortgage” shall
mean a Mortgage, 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 Administrative Agent for the benefit of the Lenders
in respect of that Mortgaged Property, substantially in the form of Exhibit D
or, in the case of Mortgaged Properties located outside the United States of
America, in such form as agreed between the Borrower 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.

 27
 

 

 

“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.

“Net Cash Proceeds”
shall mean, with respect to any Prepayment Event or the issuance after the
Closing Date by the Borrower of any capital stock, (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, the Borrower or any of the
Restricted Subsidiaries in respect of such Prepayment Event or issuance, as the
case may be, 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 any of
Holdings, the Borrower 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 any of Holdings, the Borrower 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 a 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 (other than a transaction permitted by Section 10.4(e)), the
amount of any proceeds of such Asset Sale Prepayment Event that the Borrower
has reinvested (or intends to reinvest within one year of the date of such
Asset Sale Prepayment Event) in the business of the Borrower 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 one-year period shall (x) be deemed to be Net
Cash Proceeds of an Asset Sale Prepayment Event occurring on the last day of
such one-year period and (y) be applied to the repayment of Term Loans in
accordance with Section 5.2(a)(i); provided further that, for purposes of the preceding
proviso, such one-year period shall be extended by up to twelve months (or, if
less, extended by up to the shortest period of time in excess of one year that
such a reinvestment period exists pursuant to, or may be extended under the
terms of, any instrument governing any publicly offered or privately placed
Indebtedness of Holdings or the Borrower) from the last day of such one-year
period so long as (A) such proceeds are to be reinvested within such
additional twelve-month period under the Borrower’s business plan as most
recently adopted in good faith by its Board of Directors and (B) the
Borrower believes in good faith that such proceeds will be so reinvested within
such additional twelve-month period, and

 28
 

 

 

(v)           in the case of any Prepayment Event
or the issuance by the Borrower of any capital stock, reasonable and customary
fees, commissions, expenses, issuance costs, discounts and other costs paid by
Holdings, the 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, the Borrower or any Subsidiary of the
Borrower), in each case only to the extent not already deducted in arriving at
the amount referred to in clause (a) above.

“New Revolving
Loan Commitments” as defined in Section 2.15.

“New Revolving
Loan Lender” as defined in Section 2.15.

“New Revolving
Loans” as defined in Section 2.15.

“New Term Loan
Commitments” as defined in Section 2.15.

“New Term Loan
Lender” as defined in Section 2.15.

“New Term Loan
Maturity Date” means the date that New Term Loans of  a Series shall become due and payable in full
hereunder, as specified in the applicable Joinder Agreement, including by
acceleration or otherwise.

“New Term Loans”
as defined in Section 2.15.

“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).

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

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

“Obligations”
shall have the meaning assigned to such term in the Security Documents.

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

“Participant”
shall have the meaning provided in Section 14.6(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 the Borrower and the Canadian
Borrower in the form of Exhibit E or any other form approved by the Administrative
Agent.

 29
 

 

 

“Permitted Acquisition”
shall mean the acquisition, by merger or otherwise, by the 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) (x) in
the case of a Restricted Domestic Subsidiary, a Subsidiary Guarantor or
(y) in the case of a Restricted Foreign Subsidiary, a Foreign Subsidiary
Guarantor, in each case 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 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 Borrower 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(j) and
10.1(k), 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
Sections as if such acquisition had occurred on the first day of such Test
Period.

“Permitted Additional
Subordinated Notes” shall mean Subordinated Notes other than Subordinated
Notes issued as Permitted Subordinated Debt, provided that the aggregate
principal amount of Permitted Additional Subordinated Notes outstanding at any
time shall not exceed $100,000,000, plus accrued interest thereon as provided
in the Subordinated Note Indenture.

“Permitted Capital
Expenditure Amount” shall have the meaning given to such term in Section
10.11.

“Permitted Investments”
shall mean (a) securities issued or unconditionally guaranteed by the United
States 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 political
subdivision of any such state or any public instrumentality thereof or any
political subdivision of any such state 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 Eurodollar certificates of deposit
or bankers’ acceptances maturing no more than two years after the date of
acquisition thereof issued by any Lender or any other bank having combined
capital and surplus of not less than $250,000,000 in the case of domestic banks
and $100,000,000 (or the dollar equivalent thereof) in the case of foreign
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 

 30
 

 

 

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);
(h) shares of investment companies that are registered under the
Investment Company Act of 1940 and invest solely in 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 Investors”
shall mean the Management Investors and certain other investors in Parent as of
the Effective Date.

“Permitted Liens”
shall mean (a) Liens for taxes, assessments or governmental charges or claims
not yet due or which are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established in accordance
with GAAP; (b) Liens in respect of property or assets of the Borrower or any of
the Subsidiaries imposed by law, such as carriers’, warehousemen’s and
mechanics’ Liens and other similar Liens arising in the ordinary course of
business, in each case so long as such Liens arise in the ordinary course of
business and do not individually or in the aggregate have a Material Adverse
Effect; (c) Liens arising from judgments or decrees in circumstances not
constituting an Event of Default under Section 11.14; (d) Liens incurred or
deposits made in connection with workers’ compensation, unemployment insurance
and other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business; (e) ground leases in respect of
real property on which facilities owned or leased by the Borrower 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, the
Borrower and its Subsidiaries, taken as a whole or the Canadian Borrower 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 the Borrower or any of
its Subsidiaries, provided that such Lien secures only the obligations
of the Borrower 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,
the Borrower and its Subsidiaries, taken as a whole; and (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 any of Holdings, the
Borrower and the Restricted Subsidiaries held at such banks or financial
institutions, as the case may be, to facilitate the operation of cash pooling
and/or interest set-off arrangements in respect of such bank accounts in the
ordinary course of business.

“Permitted Sale Leaseback”
shall mean any Sale Leaseback consummated by the 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

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faith by the Borrower
and, in the case of any Sale Leaseback (or series of related Sales Leasebacks)
the aggregate proceeds of which exceed $20,000,000, the Board of Directors of
the Borrower (which such determination may take into account any retained
interest or other investment of the Borrower or such Restricted Subsidiary in
connection with, and any other material economic terms of, such Sale
Leaseback).

“Permitted
Subordinated Debt” shall mean the Subordinated Notes, provided that
the aggregate principal amount of such Subordinated Notes outstanding at any
time shall not exceed $490,000,000.

“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 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
five plan years maintained or contributed to by (or to which there is or was an
obligation to contribute or to make payments to) the Borrower, a Subsidiary or
an ERISA Affiliate.

“Pledge Agreement”
shall mean the Pledge Agreement, entered into by any of Holdings, the Borrower,
the other pledgors party thereto and the Administrative Agent for the benefit
of the Lenders, substantially in the form of Exhibit F, as the same may be
amended, supplemented or otherwise modified from time to time.

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

“Prime Rate” shall
mean the rate of interest per annum publicly announced from time to time by the
Administrative Agent as its reference rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by JPMCB in connection with extensions of credit to debtors).

“Pro Forma Adjustment”
shall mean, for any test period that includes any of the six 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 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 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
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 the entire such period; provided  further
that any such pro forma increase or decrease to such Acquired EBITDA or
such Consolidated EBITDA, as the case may be, shall be without duplication for
net cost savings or

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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 the
Borrower delivered pursuant to Section 9.1(h) or setting forth the
information described in clause (iv) to Section 9.1(d).

“Qualified PIK
Securities” shall mean (1) any preferred capital stock or preferred equity
interest of Parent (a) that does not provide for any cash dividend
payments or other cash distributions in respect thereof on or prior to the
Tranche E Term Loan 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 Tranche E
Term Loan 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 Parent which has payments terms at least as favorable to the
Borrower and Lenders as described in clause (1)(a) above and is subordinated
and has other terms, other than with respect to interest rates, at least as
favorable to the Borrower and Lenders as the Subordinated Notes.

“Real Estate”
shall have the meaning given to that term in Section 9.1(f).

“Recalculation Date”
shall have the meaning provided in Section 1.2.

“Recapitalization”
shall mean the consummation of the Merger and the Refinancing (as such term is
defined in the Initial Credit Agreement).

“Reference Lender”
shall mean JPMCB.

 “Register” shall have the meaning
provided in Section 14.6(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.

“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

 

 33

 

 

make
its Canadian Revolving Credit Commitment, Canadian Letters of Credit and
Canadian Revolving Credit Loans available to the Borrower under this Agreement.

“Related Parties”
means, 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.

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

“Required Canadian
Revolving Credit Lenders” shall mean, at any date, (a) Non-Defaulting
Lenders having or holding a majority of the Dollar Equivalent of the
Adjusted Canadian Total Revolving Credit Commitment that relates to Canadian
Revolving Credit Loans at such date or (b) if the Canadian Total Revolving
Credit Commitment has been terminated, the holders (excluding Defaulting
Lenders) of a majority of the outstanding principal amount of the Dollar
Equivalent of the Canadian Revolving Credit Loans in the aggregate at such
date.

“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,  (iv) the outstanding principal
amount of the Tranche A Term Loans (excluding the Tranche A Term Loans held by
Defaulting Lenders) at such date, (v) 
the outstanding principal amount of the Tranche E Term Loans (excluding
the Tranche E Term Loans held by Defaulting Lenders) at such date and (vi) the
outstanding principal amount of the New Term Loans (excluding the New Term
Loans held by Defaulting Lenders) 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 US Revolving
Credit Lenders” shall mean, at any date, (a) Non-Defaulting Lenders
having or holding a majority of the Adjusted US Total Revolving Credit
Commitment that relates to US Revolving Credit Loans at such date or
(b) if the US Total Revolving Credit Commitment has been terminated, the
holders (excluding Defaulting Lenders) of a majority of the outstanding
principal amount of the US Revolving Credit 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 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 Total 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.

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“Required Tranche A
Term 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 Tranche A Term Loan Commitments at such
date and (b) the outstanding principal amount of the Tranche A Term Loans
(excluding the Tranche A Term Loans held by Defaulting Lenders) in the
aggregate at such date.

“Required Tranche E
Term 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 Tranche E Term Loan Commitments at such
date and (b) the outstanding principal amount of the Tranche E Term Loans
(excluding the Tranche E 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 Domestic
Subsidiary” shall mean each Restricted Subsidiary that is also a Domestic
Subsidiary.

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

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

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

“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.

“SAC” shall have
the meaning provided in the Initial Credit Agreement.

“Sale Leaseback”
shall mean any transaction or series of related transactions pursuant to which
the 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.

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

“Schedule II/III
Reference Lenders” means 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.

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“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(e).

“Secured Parties”
shall have the meaning assigned to such term in the applicable Security
Documents.

“Security Agreement”
shall mean the Security Agreement entered into by the Borrower, the other
grantors party thereto and the Administrative Agent for the benefit of the
Lenders, substantially in the form of Exhibit G, as the same may be amended,
supplemented or otherwise modified from time to time.

“Security Documents”
shall mean, collectively, (a) the Guarantee, (b) the Pledge Agreement, (c) the
Security Agreement, (d) the Mortgages, (e) the Canadian Security Documents
and (f) each other security agreement or other instrument or document executed
and delivered pursuant to Section 9.11 or 9.12 or pursuant to any of the
Security Documents to secure any of the Obligations.

“Series” as
defined in Section 2.15.

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

“Solvent” means,
with respect to the Borrower, that as of the Closing Date, both (i) (a) the sum
of the Borrower’s debt (including contingent liabilities) does not exceed the
present fair saleable value of the Borrower’s present assets; (b) the Borrower’s
capital is not unreasonably small in relation to its business as contemplated
on the Closing Date; and (c) the 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 Person is “solvent” 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 Statement of Financial Accounting Standard No.5).

“Specified Obligations”
shall mean Obligations consisting of (a) the principal and interest on
Loans and (b) reimbursement obligations in respect of Letters of Credit.

“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 15% of the consolidated total assets of the Borrower and the Subsidiaries
at such date or (ii) whose gross revenues for such Test Period

 36
 

 

 

were equal to or greater
than 15% of the consolidated gross revenues of the Borrower and the
Subsidiaries for such period, in each case determined in accordance with GAAP.

“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 the 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 the 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 to be
effected pursuant to this definition, provided that (i) if the
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 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 the 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 Eurodollar 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. Eurodollar 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 Note
Indenture” shall mean the Indenture dated as of the Closing Date, among the
Borrower, the guarantors party thereto and The Bank of New York, as trustee,
pursuant to which the Subordinated Notes are issued, as the same may be amended,
supplemented or otherwise modified from time to time to the extent permitted by
Section 10.7(b).

“Subordinated Notes”
shall mean (a) the Subordinated Notes defined in the Initial Credit
Agreement and (b) any replacement or refinancing thereof having terms no
more adverse to the interests of the Lenders than the terms thereof, provided
that any such amendment,

 37
 

 

 

replacement or
refinancing shall bear a rate of interest determined by the Board of
Directors of the Borrower 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.

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

“Swingline Commitment”
shall mean $25,000,000.

“Swingline Lender”
shall mean JPMCB in its capacity as lender of Swingline Loans hereunder.

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

“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.

“Syndication Agent”
shall mean Citibank, N.A., together with its affiliates, as the syndication
agent for the Lenders under this Agreement and the other Credit Documents.

“Tax Act” means
the Income Tax Act (Canada), as
amended from time to time, and regulations promulgated thereunder.

“Term Loans” shall
mean, collectively, the Tranche A Term Loans and the Tranche E Term Loans.

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

“Total Commitment”
shall mean the sum of the Total Term Loan Commitment, the US Total Revolving
Credit Commitment and the Canadian Total Revolving Credit Commitment.

“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.

 38
 

 

 

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

“Tranche A Repayment
Amount” shall have the meaning provided in Section 2.5(b)(i).

“Tranche A Repayment
Date” shall have the meaning provided in Section 2.5(b)(i).

“Tranche A Term Loan”
shall have the meaning provided in Section 2.1(a)(i).

“Tranche A 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 “Tranche A 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 “Tranche A 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 Tranche A
Term Loan Commitments as of the Effective Date is $300,000,000.

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

“Tranche E Repayment
Amount” shall have the meaning provided in Section 2.5(b)(ii).

“Tranche E Repayment
Date” shall have the meaning provided in Section 2.5(b)(ii).

 “Tranche E Term Loan” shall have the
meaning provided in Section 2.1(a)(ii).

“Tranche E 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 “Tranche E 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 “Tranche E 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 Tranche
E Term Loan Commitments as of the Effective Date is $140,000,000.

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

 39
 

 

 

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

“Transferee” shall
have the meaning provided in Section 14.6(e).

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

“Unfunded Current
Liability” of any Plan shall mean the amount, if any, by which the present
value of the accrued benefits under the Plan as of the close of its most recent
plan year, determined in accordance with Statement of Financial Accounting
Standards No. 87 as in effect on the date hereof, based upon the actuarial
assumptions that would be used by the Plan’s actuary in a termination of the
Plan, exceeds the fair market value of the assets allocable thereto and in relation to a Canadian Pension Plan
shall mean the amount, if any, by which (A) the present value of the accrued
benefits under the Canadian Pension Plan as of the close of business of its
most recent plan year, determined in accordance with (I) the Statement of
Financial Accounting Standards No. 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 Plans, the Canadian equivalent of Statement of
Financial Accounting Standards No. 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 in the termination of that Canadian Pension 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 the Borrower that is formed or acquired after the
Closing Date (other than a Subsidiary that becomes or is required to become a
Credit Party hereunder), provided that at such time (or promptly
thereafter) the Borrower designates such Subsidiary an Unrestricted Subsidiary
in a written notice to the Administrative Agent, (b) any Restricted
Subsidiary (other than a Restricted Subsidiary that is or becomes a Credit
Party) subsequently re-designated as an Unrestricted Subsidiary by the Borrower
in a written notice to the Administrative Agent, provided that (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in an Unrestricted Subsidiary in an amount equal to the sum of
(i) the net worth of such re-designated Restricted Subsidiary immediately
prior to such re-designation (such net worth to be calculated without regard to
any guarantee provided by such re-designated Restricted Subsidiary) and
(ii) the aggregate principal amount of any Indebtedness owed by such
re-designated Restricted Subsidiary to the Borrower or any other Restricted
Subsidiary immediately prior to such 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 re-designation and (c) each Subsidiary of an Unrestricted Subsidiary;
provided, however, that at the time of any written re-designation
by the Borrower 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 

 40
 

 

 

Default would result from
such re-designation. On or promptly after the date of its formation,
acquisition or re-designation, as applicable, each Unrestricted Subsidiary
(other than an Unrestricted Subsidiary that is a Foreign Subsidiary) shall have
entered into a tax sharing agreement containing terms that, in the reasonable
judgment of the Administrative Agent, provide for an appropriate allocation of
tax liabilities and benefits.

“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
Commitment” shall mean $35,000,000, as the same may be reduced from time to
time pursuant to Section 3.1.

“US Letter of Credit
Exposure” shall mean, with respect to any Lender, at any time, the sum of
(a) the Dollar Equivalent of 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 Letter 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
Issuer” shall mean JPMCB, any of its Affiliates or any successor pursuant
to Section 3.6. The Letter of Credit Issuer may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Letter of Credit Issuer, and in each such case the term “Letter of Credit
Issuer” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate. In the event that there is more than one Letter of
Credit Issuer at any time, references herein and in the other Credit Documents
to the Letter of Credit Issuer shall be deemed to refer to the Letter of Credit
Issuer in respect of the applicable Letter of Credit or to all 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 Revolving Credit
Commitment” shall mean, (a) with respect to each Lender that is a Lender on
the Closing Date, 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 Closing Date, 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 same may be changed from time
to time pursuant to terms hereof. The aggregate amount of the US 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 aggregate amount of the US Revolving Credit Commitments, provided

 41
 

 

 

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, and (b) such Lender’s US Letter of Credit
Exposure at such time.

“US Revolving Credit
Loan” shall mean a Revolving Credit Loan denominated in Dollars and made
pursuant to Section 2.1(b).

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

“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 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”.

1.2.          Exchange
Rates.  (a)     Not later than 1:00 p.m.
(New York time) on each Calculation Date, the Administrative Agent shall
(i) determine the Exchange Rate as of such Calculation Date with respect
to Canadian Dollars to be used for calculating the Dollar Equivalent and
(ii) give notice thereof to the Lenders and the Borrower. The Exchange
Rates so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a “Recalculation Date”),
shall remain effective until the next succeeding Recalculation Date, and shall
for all purposes of this Agreement (other than any provision expressly
requiring the use of a current Exchange Rate) be the Exchange Rates employed in
converting any amounts between Dollars and Canadian Dollars.

(b)           Not
later than 5:00 p.m. (New York time) on each Recalculation Date and
each date on which Canadian Revolving Loans are made, the Administrative Agent
shall (i) determine the aggregate amount of the Dollar Equivalents of the
principal amounts of the Canadian Revolving Loans then outstanding (after
giving effect to any Canadian Revolving Loans made or repaid on such date), and
(ii) notify the Lenders and the Borrower of the results of such
determination.

(c)           For
purposes of determining compliance under Sections 10.4, 10.5, 10.6, 10.9,
10.10 and 10.11 with respect to any amount in a Foreign Currency, such amount
shall be deemed to equal the Dollar Equivalent thereof based on the average
Exchange Rate for a Foreign

 42
 

 

 

Currency for the most recent twelve-month period immediately
prior to the date of determination determined in a manner consistent with that
used in calculating Consolidated EBITDA for the related period. For purposes of
determining compliance with Sections 10.1 and 10.2, with respect to any amount
of Indebtedness in a Foreign Currency, compliance will be determined at the
time of incurrence thereof using the Dollar Equivalent thereof at the Exchange
Rate in effect at the time of such incurrence.

SECTION 2.           Amount and Terms of Credit

2.1.  
       Commitments.  (a)     (i) 
Subject to and upon the terms and conditions herein set forth, each
Lender having a Tranche A Term Loan Commitment severally agrees to make a loan
or loans (each a “Tranche A Term Loan”) to the Borrower
in Dollars, which Tranche A Term Loans shall not exceed for any such Lender the
Tranche A Term Loan Commitment of such Lender; and

Such
Tranche A Term Loans (i) shall be made on the Effective Date,
(ii) may at the option of the Borrower be incurred and maintained as,
and/or converted into, ABR Loans or Eurodollar Term Loans, provided that
all such Tranche A Term Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Tranche A 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 Tranche A
Term Loan Commitment, of such Lender and (v) shall not exceed in the
aggregate the total of all Tranche A Term Loan Commitments. On the Tranche A
Term Loan Maturity Date, all Tranche A Term Loans shall be repaid in full.

 

(ii)  Subject to and upon the terms and conditions
herein set forth, each Lender having a Tranche E Term Loan Commitment severally
agrees to make a loan or loans (each a “Tranche E Term Loan”) to the
Borrower in Dollars, which Tranche E Term Loans shall not exceed for any such
Lender the Tranche E Term Loan Commitment of such Lender; and

 

Such
Tranche E Term Loans (i) shall be made on the Effective Date,
(ii) may at the option of the Borrower be incurred and maintained as,
and/or converted into, ABR Loans or Eurodollar Term Loans, provided that
all such Tranche E Term Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Tranche E 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 Tranche E
Term Loan Commitment, of such Lender and (v) shall not exceed in the
aggregate the total of all Tranche E Term Loan Commitments. On the Tranche E
Term Loan Maturity Date, all Tranche E Term Loans shall be repaid in full.

 

(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
Borrower which US 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) may, at the option of the Borrower be incurred
and maintained as, and/or

 43

 

converted into, ABR Loans or Eurodollar Revolving Credit
Loans, provided that all US Revolving Credit Loans made by each of the
Lenders pursuant to the same Borrowing shall, unless 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 US Total Revolving Credit Commitment then in effect.

(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 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 C$ or (y) as Cdn ABR
Loans or Eurodollar Loans if denominated in US$ and made to the Canadian
Borrower, or (z) as ABR Loans or Eurodollar Loans if denominated in US$ and
made to the 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 allocated to the Canadian
Borrower at such time exceeding such Canadian Lender’s Canadian Revolving
Credit Commitment allocated to the Canadian Borrower at such time, (E) 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 Lender’s Canadian
Revolving Credit Exposure allocated to the Borrower at such time exceeding such
Canadian Lender’s Canadian Revolving Credit Commitment allocated to the
Borrower at such time, (F) 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 Canadian Total Revolving Credit Commitment then in effect, and
(G) 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 14.6(b)(ii).  The allocation of
the Canadian Total Revolving Credit Commitment as between the Borrower (the “Borrower
Allocation”) on the one hand and the Canadian Borrower (the “Canadian
Borrower Allocation”) on the other hand shall be fixed by the Borrower at
the beginning of each calendar month by providing written notice to the Administrative
Agent and the Canadian Administrative Agent (which notice must be received by
each such agent prior to 10:00 a.m. (New York time), three (3) Business
Days before the date on which such allocations shall be revised) specifying the
revised allocation of the Canadian Total Revolving Credit Commitment as between
the Borrower and the Canadian Borrower, respectively.  As of the Closing Date, $0 of the Canadian
Revolving Credit Commitment is allocated to the Borrower and $25,000,000 of the
Canadian Revolving Credit Commitment is allocated to the Canadian

 44
 

 

Borrower.  The portion
of each Canadian Lender’s Canadian Revolving Credit Commitment allocated to the
Borrower and the Canadian Borrower, respectively, shall be its Canadian
Revolving Credit Percentage of the Borrower Allocation and the Canadian
Borrower Allocation, respectively.  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 which
is either a “United States 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 Borrower.

(iii)          Each
Lender may at its option make any Eurodollar 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 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 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
Eurodollar 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 14.6(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 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, to make a loan or loans (each a “Swingline
Loan” and, collectively, the “Swingline Loans”) to the Borrower in
Dollars, which Swingline Loans (i) shall be ABR Loans, (ii) shall
have the benefit of the provisions of Section 2.1(d), (iii) shall not
exceed at any time outstanding the Swingline Commitment, (iv) 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 US Total Revolving Credit Commitment then
in effect and (v) may be repaid and reborrowed in accordance with the
provisions hereof.  On the Swingline
Maturity Date, each outstanding Swingline Loan shall be repaid in full.  The Swingline Lender shall not make any
Swingline Loan after receiving a written notice from the Borrower, the Canadian
Borrower or any Lender stating that a Default or Event of Default exists and is
continuing until such time as the Swingline Lender shall have received written
notice of (i) rescission of all such notices from the party or parties
originally delivering such notice or (ii) the waiver of such Default or
Event of Default in accordance with the provisions of Section 14.1.

(d)  
        On any Business Day, the
Swingline Lender may, in its sole discretion, give notice to the Lenders that
all then-outstanding 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 Borrowing”) shall be made
on the

 45
 

 

immediately succeeding Business Day by all Lenders with US
Revolving Credit Commitments pro  rata based on each Lender’s US
Revolving Credit Commitment Percentage, and the proceeds thereof shall be
applied directly to the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans.  Each Lender
with US Revolving Credit Commitments hereby irrevocably agrees to make such US
Revolving Credit Loans upon one Business Day’s notice pursuant to each
Mandatory 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 (i) that the amount of the Mandatory Borrowing may not comply
with the minimum amount for each Borrowing specified in Section 2.2, (ii)
whether any conditions specified in Section 7 are then satisfied, (iii) whether
a Default or an Event of Default has occurred and is continuing, (iv) the date
of such Mandatory Borrowing or (v) any reduction in the Total Commitment after
any such Swingline Loans were made.  In
the event that, in the sole judgment of the Swingline Lender, any Mandatory
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 the Borrower), each Lender with US Revolving Credit Commitments
hereby agrees that it shall forthwith purchase from the Swingline Lender
(without recourse or warranty) such participation of the outstanding Swingline
Loans as shall be necessary to cause such Lenders to share in such Swingline
Loans ratably based upon their respective US Revolving Credit Commitment
Percentages, provided that all principal and interest payable on such
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 with US Revolving Credit
Commitments 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 Tranche A Term Loans, Tranche E
Term Loans or Revolving Credit Loans shall be in a multiple of $1,000,000 or
C$100,000 (in the case of a Borrowing denominated in C$) and Swingline Loans
shall be in a multiple of $100,000 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 20
Borrowings of Eurodollar Loans and BA loans under this Agreement.

2.3.          Notice
of Borrowing .  (a)   The 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 Tranche A Term Loans or Tranche E
Term Loans if all or any of such Tranche A Term Loans or Tranche E Term Loans
are to be initially Eurodollar 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 Tranche A Term Loans or Tranche E
Term Loans if all such Tranche A Term Loans or Tranche E Term Loans are to be
ABR Loans.  Such notice (together with
each notice of a Borrowing of Revolving Credit Loans pursuant to
Section 2.3(b) 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 such Tranche A
Term Loans or Tranche E Term Loans to be made, (ii) the date of the
borrowing (which shall be the Effective Date) and (iii) whether such
Tranche A Term Loans or Tranche E Term Loans shall consist of ABR Loans and/or
Eurodollar Term Loans and, if such Tranche A

 46
 

 

Term Loans or Tranche E
Term Loans are to include Eurodollar 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
Tranche A Term Loans or Tranche E Term Loans, of such Lender’s proportionate
share thereof and of the other matters covered by the related Notice of
Borrowing.

(b)  
        Whenever the Borrower
desires to incur US Revolving Credit Loans or Canadian Revolving Credit Loans
in Dollars (subject to its allocated portion of the Canadian Revolving Credit
Commitment) hereunder (other than Mandatory Borrowings or borrowings to repay
Unpaid Drawings), it shall give the Administrative Agent at the Administrative
Agent’s Office, (i) prior to 12:00 Noon (NY Time) at least three Business Days’
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Eurodollar Revolving Credit Loans, and (ii) prior to
12:00 Noon (New York time) at least one Business Day’s prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing
of 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 Eurodollar Revolving Credit Loans and, if Eurodollar Revolving Credit
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 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 (subject to its allocated portion of the Canadian Revolving
Credit Commitment) hereunder (other than Mandatory 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 (New York time)
at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of each Canadian Borrowing of BA Loans or
Eurodollar Loans, and (ii) prior to 12:00 Noon (New York time) at least
one Business Day’s prior written notice (or telephonic notice promptly
confirmed in writing) of each Canadian Borrowing of Cdn ABR 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, Eurodollar Loans, Canadian Prime Loans or Cdn ABR Loans
and, if BA Loans or Eurodollar Loans, the Interest Period to be initially
applicable thereto.  The Canadian
Administrative Agent shall promptly give each 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.

(d)  
        Whenever the Borrower
desires to incur Swingline Loans hereunder, it shall give the 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

 47
 

 

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 Administrative Agent shall promptly give
the 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 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 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
Borrower or the Canadian Borrower, as the case may be.  In each such case, the 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 Swingline Lender no
later than 3:00 p.m. (New York time) on the date requested.

(b)  
        Each Lender shall make
available all amounts it is to fund to the Borrower under any Borrowing in the
applicable currency for its applicable Commitments, and in immediately
available funds to the Administrative Agent at the Administrative Agent’s
Office and the Administrative Agent will (except in the case of Mandatory
Borrowings and Borrowings to repay Unpaid Drawings) make available to the
Borrower, by depositing to the Borrower’s account at the Administrative Agent’s
Office the aggregate of the amounts so made available in Dollars.  Each Canadian Lender shall make available all
amounts it is to fund to the Canadian Borrower under any Canadian Borrowing in
the applicable currency for its applicable Commitments, and in immediately
available funds 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 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 and 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

 48
 

 

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 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 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 (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 Borrower or the Canadian
Borrower, as the case may be, and the 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 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 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 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.

 

(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 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 Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, (i) on the Tranche A Term
Loan Maturity Date, the then-unpaid Tranche A Term Loans, in Dollars and (ii)
on the Tranche E Term Loan Maturity Date, the then-unpaid Tranche E Term Loans,
in Dollars.  The 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

 49
 

 

Revolving Credit Loans
made to the Borrower.  The Canadian
Borrower shall repay to the Canadian Administrative Agent in Dollars or C$, 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.  The Borrower
shall repay to the Administrative Agent in Dollars, for the account of the
Swingline Lender, on the Swingline Maturity Date, the then-unpaid Swingline
Loans.

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

	
  Number of Months

  From Effective Date

  	
   

  	
  Tranche A Term Loan

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  0.0%

  	
   

  
	
  6

  	
   

  	
  0.0%

  	
   

  
	
  9

  	
   

  	
  0.0%

  	
   

  
	
  12

  	
   

  	
  0.0%

  	
   

  
	
  15

  	
   

  	
  1.25%

  	
   

  
	
  18

  	
   

  	
  1.25%

  	
   

  
	
  21

  	
   

  	
  1.25%

  	
   

  
	
  24

  	
   

  	
  1.25%

  	
   

  
	
  27

  	
   

  	
  1.25%

  	
   

  
	
  30

  	
   

  	
  1.25%

  	
   

  
	
  33

  	
   

  	
  1.25%

  	
   

  
	
  36

  	
   

  	
  1.25%

  	
   

  
	
  39

  	
   

  	
  1.25%

  	
   

  
	
  42

  	
   

  	
  1.25%

  	
   

  
	
  45

  	
   

  	
  1.25%

  	
   

  
	
  48

  	
   

  	
  1.25%

  	
   

  
	
  51

  	
   

  	
  21.25%

  	
   

  
	
  54

  	
   

  	
  21.25%

  	
   

  
	
  57

  	
   

  	
  21.25%

  	
   

  
	
  Tranche A Term Loan
  Maturity Date

  	
   

  	
  21.25%

  	
   

  

 

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

 50
 

 

 

	
  Number of Months

  From Effective Date

  	
   

  	
  Tranche E Term Loan

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  0.25%

  	
   

  
	
  6

  	
   

  	
  0.25%

  	
   

  
	
  9

  	
   

  	
  0.25%

  	
   

  
	
  12

  	
   

  	
  0.25%

  	
   

  
	
  15

  	
   

  	
  0.25%

  	
   

  
	
  18

  	
   

  	
  0.25%

  	
   

  
	
  21

  	
   

  	
  0.25%

  	
   

  
	
  24

  	
   

  	
  0.25%

  	
   

  
	
  27

  	
   

  	
  0.25%

  	
   

  
	
  30

  	
   

  	
  0.25%

  	
   

  
	
  33

  	
   

  	
  0.25%

  	
   

  
	
  36

  	
   

  	
  0.25%

  	
   

  
	
  39

  	
   

  	
  0.25%

  	
   

  
	
  42

  	
   

  	
  0.25%

  	
   

  
	
  45

  	
   

  	
  0.25%

  	
   

  
	
  48

  	
   

  	
  0.25%

  	
   

  
	
  51

  	
   

  	
  0.25%

  	
   

  
	
  54

  	
   

  	
  0.25%

  	
   

  
	
  57

  	
   

  	
  0.25%

  	
   

  
	
  60

  	
   

  	
  0.25%

  	
   

  
	
  63

  	
   

  	
  0.25%

  	
   

  
	
  66

  	
   

  	
  0.25%

  	
   

  
	
  69

  	
   

  	
  0.25%

  	
   

  
	
  Tranche E Term Loan
  Maturity Date

  	
   

  	
  94.25%

  	
   

  

 

; provided,
in the event any New Term Loans are made, such New Term Loans shall be repaid
on each Installment Date occurring on or after the applicable Increased Amount
Date in an amount equal to (i) the aggregate principal amount of New Term Loans
of the applicable Series of New Term Loans, times (ii) the ratio (expressed as
a percentage) of (y) the amount of all other Term Loans being repaid on such
Installment Date and (z) the total aggregate principal amount of all other Term
Loans outstanding on such Increased Amount Date.

(c)  
        Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the 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 14.6(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, whether such
Loan is a Tranche A Term Loan, a Tranche E Term Loan, a US Revolving Credit
Loan, a Canadian Revolving Credit Loan or a Swingline Loan, the Type of each
Loan made and the

 51
 

 

Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower and the Canadian Borrower, as the case may be, to each Lender or the
Swingline Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent and the Canadian Administrative Agent hereunder from the
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
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 Borrower or the Canadian
Borrower to repay (with applicable interest) the Loans made to the 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 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 Tranche A Term Loans,
Tranche E 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 Borrower or the Canadian Borrower, as the case may be, shall
have the option on any Business Day to continue the outstanding principal
amount of any Eurodollar Term Loans or Eurodollar Revolving Credit Loans as
Eurodollar Term Loans or Eurodollar Revolving Credit Loans, as the case may be,
for an additional Interest Period, provided that (i) no partial conversion of
BA Loans or Eurodollar Term Loans
or Eurodollar Revolving Credit Loans shall reduce the outstanding principal
amount of BA Loans or Eurodollar Term Loans or Eurodollar 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 Eurodollar
Term Loans or Eurodollar 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 Eurodollar Loans may not be continued as BA
Loans or Eurodollar 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 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 and
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 Tranche A Term Loans, Tranche E Term Loans or Revolving Credit
Loans to be so converted or continued, the Type of Tranche A Term Loans,
Tranche E Term Loans or Revolving Credit Loans to be converted or continued
into and, if such Tranche A

 52
 

 

Term Loans, Tranche E Term Loans or Revolving Credit Loans are to be
converted into or continued as BA Loans or Eurodollar 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 Tranche A Term Loans, Tranche E 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 Eurodollar 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 Eurodollar Loans shall be
automatically converted on the last day of the current Interest Period
(i) in respect of Eurodollar Loans, into ABR Loans or Cdn ABR Loans (in
the case of the Canadian Borrower) 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 Eurodollar Loans,
the 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 Borrower or the Canadian Borrower, as the case may be, shall be
deemed to have elected to continue such Borrowing of BA Loans or Eurodollar
Loans, as the case may be, into a Borrowing of Canadian Prime Loans or ABR
Loans or Cdn ABR Loans (in the case of the Canadian Borrower), as the case may
be, effective as of the expiration date of such current Interest Period.

2.7.          Pro
Rata Borrowings.  Each Borrowing of
Tranche A Term Loans and Tranche E Term Loans under this Agreement shall be
granted by the Lenders pro rata on the basis of their then-applicable Tranche A
Term Loan Commitments and Tranche E 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 allocated
to the Canadian Borrower or the Borrower, as applicable.  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 until maturity (whether by acceleration
or otherwise) 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 until maturity (whether by acceleration or otherwise) 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
until maturity (whether by acceleration or otherwise) 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.

 53

 

(b)  
        (i) The unpaid principal
amount of each Eurodollar Loan shall bear interest from the date of the
Borrowing thereof until maturity thereof (whether by acceleration or otherwise)
at a rate per annum that shall at all times be the Applicable Eurodollar Margin
in effect from time to time plus the relevant Eurodollar Rate 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)  
        If all or a portion of
(i) the principal amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum that is (x) in the case of overdue principal, the rate that would otherwise
be applicable thereto plus 2% or (y) in the case of any overdue
interest, to the extent permitted by applicable law, the rate described in
Section 2.8(a) plus 2% from and including the date of such
non-payment to but excluding the date on which such amount is paid in full
(after as well as before judgment).

(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 day of
each March, June, September and December, (ii) in respect of each Eurodollar
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,
(iii) in respect of each Loan (except, other than in the case of
prepayments, any Canadian Prime Loan, Cdn ABR Loan or ABR Loan), on any
prepayment (on the amount prepaid), 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 Eurodollar Loans, shall
promptly notify the Borrower (on its own behalf and on behalf of the Canadian
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 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 Eurodollar 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 Eurodollar Loans, the 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

 54
 

 

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 Borrower or the Canadian Borrower, as
applicable, be a one, two, three, six or (in the case of Revolving Credit
Loans, 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 Borrower (on its own behalf and on
behalf of the Canadian Borrower) and the Agents.  Notwithstanding anything to the contrary
contained above:

 

(i)            the
initial Interest Period for any Borrowing of Eurodollar 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 each Interest
Period occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;

(ii)           if
any Interest Period relating to a Borrowing of Eurodollar Credit 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 Eurodollar 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 next preceding Business Day; and

(iv)          the
Borrower shall not be entitled to elect any Interest Period in respect of any
Eurodollar 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 Continuation in respect of
the making of, or continuation into or continuation as, a Borrowing of BA Loans
prior to 12:00 noon. (New York 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 one, two, three or six months (or in
the case of Canadian Revolving Credit Loans, 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 as well; provided
that, in each case, the initial Interest Period for BA Loans advanced on the
Closing Date may be for a period less than one month if agreed upon by the
Canadian Borrower and the Canadian Administrative Agent.  Notwithstanding anything to the contrary
contained above:

 55
 

 

 

(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 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 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
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 Eurodollar Rate for any Interest Period that
(x) deposits in the principal amounts of the Loans comprising such
Eurodollar 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 Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Eurodollar Rate; 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 Eurodollar 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 Eurodollar market or the position of such Lender in
such market; or

(iii)          at
any time, that the making or continuance of any Eurodollar 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

 56
 

 

result of a contingency
occurring after the date hereof that materially and adversely affects the
interbank Eurodollar 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 Borrower (on its own behalf and on behalf of the
Canadian 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, Eurodollar Term Loans and Eurodollar Revolving
Credit Loans shall no longer be available until such time as the Administrative
Agent notifies the Borrower (on its own behalf and on behalf of the Canadian
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), and any
Notice of Borrowing or Notice of Conversion given by the Borrower or the
Canadian Borrower with respect to Eurodollar Term Loans or Eurodollar Revolving
Credit Loans that have not yet been incurred shall be deemed rescinded by the
Borrower or the Canadian Borrower (y) in the case of clause (ii)
above, the 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
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
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
Eurodollar Loan is affected by the circumstances described in Section
2.10(a)(ii) or (iii), the Borrower or the Canadian Borrower, as the case may
be, may (and in the case of a Eurodollar Loan affected pursuant to Section
2.10(a)(iii) shall) either (x) if the affected Eurodollar 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 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 Eurodollar Loan is then outstanding, upon at least
three Business Days’ notice to the Administrative Agent, require the affected
Lender to convert each such Eurodollar Revolving Credit Loan and Eurodollar
Term Loan into an ABR Loan or Cdn ABR Loan, if 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 Administrative Agent shall within a reasonable time thereafter
give notice (if by telephone confirmed in writing) to the Borrower, the
Canadian Borrower and each of the other Lenders of

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such determination.  Thereafter
BA Loans shall no longer be available until such time as the Administrative
Agent notifies the Borrower, the Canadian 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), and any Notice of Borrowing or Notice of
Continuation given by the Borrower with respect to BA Loans that have not yet
been incurred shall be deemed rescinded by the Borrower.  Any maturing BA Loans shall thereafter, and
until contrary notice is provided by the Administrative Agent, be continued as
a Canadian Prime Loan.

 

(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 Related 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 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 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 Borrower (on its own behalf and
on behalf of the Canadian 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 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)  
        Notwithstanding the
foregoing, in the case of Canadian Revolving Credit Loans affected by the
circumstances described in Section 2.10(a)(i), as promptly as practicable
but in no event later than three Business Days after the giving of the required
notice by the Canadian Administrative Agent with respect to such circumstances,
the Administrative Agent (in consultation with the Lenders) shall negotiate
with the Borrower in good faith in order to ascertain whether a substitute
interest rate (a “Substitute Rate”) may be agreed upon for the
maintaining of existing Canadian Revolving Credit Loans. If a Substitute Rate
is agreed upon by the Borrower and all the Lenders, such Substitute Rate shall
apply.  If a Substitute Rate is not so
agreed upon by the Borrower and all the Lenders within such time, each Lender’s
Canadian Revolving Credit Loans shall thereafter bear interest at a rate equal
to the sum of (i) the rate certified by such Lender to be its costs of
funds (from such sources as it may reasonably select

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out of those sources then available to it) for such Canadian Revolving
Credit Loans, plus (ii) the Applicable Eurodollar Margin.

 

2.11.        Compensation.  If (a) any payment of principal of any BA
Loan or Eurodollar Loan is made by the Borrower or the Canadian Borrower, 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 Eurodollar Loan as a result of a
payment or conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 14.7, 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 Loan or
Eurodollar Loans is not made as a result of a withdrawn Notice of Borrowing,
(c) any ABR Loan is not converted into a Eurodollar Loan as a result of a
withdrawn Notice of Conversion or Continuation, (d) any Canadian Prime
Loan is not continued into a BA Loan as a result of a withdrawn Notice of
Continuation, (e) any BA Loan or Eurodollar Loan is not continued as a BA
Loan or Eurodollar 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 Eurodollar Loan is not made as a result of a withdrawn notice of
prepayment pursuant to Section 5.1 or 5.2, the 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 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
Eurodollar 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 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 or
postpone any of the obligations of the 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 giving of such notice to the Borrower or the Canadian Borrower, as the case
may be.

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2.14.        Bankers’
Acceptances  

 

(a)  
        The Canadian Administrative
Agent, promptly following receipt of a Notice of Borrowing or Notice of
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 C$100,000 minimum face amount of Bankers’ Acceptances
for each Lender shall not apply to BA Equivalent Loans.

(b)  
        On the date specified in a
Notice of Borrowing or Notice of 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
sell and each Canadian Lender shall 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 should concurrently pay to the Canadian
Administrative Agent any positive difference between the Maturing Amount and
such BA Discount Proceeds.

(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
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

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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 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.

(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 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;

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(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
Facilities

 

Borrower may by written
notice to Syndication Agent elect to request (A) prior to the Revolving Credit
Commitment Maturity Date, an increase to the existing US Revolving Credit
Commitments (any such increase, the “New Revolving Loan Commitments”)
and/or (B) the establishment of one or more new term loan commitments (the “New
Term Loan Commitments”), by an amount not in excess of $100,000,000 in the
aggregate and not less than $25,000,000 individually (or such lesser amount
which shall be approved by Administrative Agent and Syndication Agent or such
lesser amount that shall constitute the difference between $100,000,000 and all
such New Revolving Loan Commitments and New Term Loan Commitments obtained
prior to such date), and integral multiples of $5,000,000 in excess of that
amount.  Each such notice shall specify
(A) the date (each, an “Increased Amount Date”) on which Borrower
proposes that the New Revolving Loan Commitments or New Term Loan Commitments,
as applicable, shall be effective, which shall be a date not less than 10
Business Days after the date on which such notice is delivered to Syndication
Agent and (B) the identity of each Lender or other Person that is an eligible
assignee pursuant to Section 14.6(b) 
(each, a “New Revolving Loan Lender” or “New Term Loan Lender”,
as applicable) to whom Borrower proposes any portion of such New Revolving Loan
Commitments or New Term Loan Commitments, as applicable, be allocated and the
amounts of such allocations; provided that Borrower shall first approach
the Lenders to provide all of the New Revolving Loan Commitments or New Term
Loan Commitments prior to approaching any other Person that is an eligible
assignee pursuant to Section 14.6(b); provided  further that any
Lender approached to provide all or a portion of the New Revolving Loan
Commitments or New Term Loan Commitments may elect or decline, in its sole
discretion, to provide a New Revolving Loan Commitment or a New Term Loan
Commitment.  Such New Revolving Loan
Commitments or 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 Revolving Loan Commitments or New Term Loan Commitments, 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) Borrower and its Subsidiaries shall be in pro forma
compliance with each of 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 Revolving Loan Commitments or New Term Loan Commitments, as
applicable; (4) the New Revolving Loan Commitments or New Term Loan
Commitments, as applicable, shall be effected pursuant to one or more Joinder
Agreements executed and delivered by Borrower, Syndication Agent and
Administrative Agent, 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) Borrower shall make any payments required pursuant to Section 2.11 in
connection with the New Revolving Loan Commitments or New Term Loan Commitments,
as applicable; and (6) Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably

 62
 

 

requested by Administrative Agent in connection with any such
transaction. Any New Term Loans made on an Increased Amount Date shall be
designated, a separate series (a “Series”) of New Term Loans for all
purposes of this Agreement.

 

On any Increased Amount
Date on which New Revolving Loan Commitments are effected, subject to the
satisfaction of the foregoing terms and conditions, (a) each of the Lenders
with US Revolving Credit Commitments shall assign to each of the New Revolving
Loan Lenders, and each of the New Revolving Loan Lenders shall purchase from
each of the Lenders with US Revolving Credit Commitments, at the principal amount
thereof (together with accrued interest), such interests in the US Revolving
Credit Loans outstanding on such Increased Amount Date as shall be necessary in
order that, after giving effect to all such assignments and purchases, such US
Revolving Credit Loans will be held by existing Lenders with US Revolving
Credit Loans and New Revolving Loan Lenders ratably in accordance with their US
Revolving Credit Commitments after giving effect to the addition of such New
Revolving Loan Commitments to the US Revolving Credit Commitments, (b) each New
Revolving Loan Commitment shall be deemed for all purposes a US Revolving
Credit Commitment and each Loan made thereunder (a “New Revolving Loan”)
shall be deemed, for all purposes, a US Revolving Credit Loan and (c) each New
Revolving Loan Lender shall become a Lender with respect to the New Revolving
Loan Commitment and all matters relating thereto.

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 New
Term Loan Lender of any Series shall make a Loan to Company (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.

Administrative Agent
shall notify Lenders promptly upon receipt of Borrower’s notice of each
Increased Amount Date and in respect thereof (y) the New Revolving Loan
Commitments and the New Revolving Loan Lenders or the Series of New Term Loan
Commitments and the New Term Loan Lenders of such Series, as applicable, and
(z) in the case of each notice to any Lender with US Revolving Credit Loans,
the respective interests in such Lender’s Revolving Credit Loans, in each case
subject to the assignments contemplated by this Section.

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 to the extent they are secured by the Collateral on a pari passu basis with the Term Loans.  The terms and provisions of the New Revolving
Loans shall be identical to the US Revolving Credit Loans.  In any event (i) the weighted average life to
maturity of all New Term Loans of any Series shall be no shorter than the
weighted average life to maturity of the Revolving Credit Loans and the Terms
Loans, (ii) the applicable New Term Loan Maturity Date of each Series shall be
no shorter than the final maturity of the Revolving Credit Loans and the Term
Loans, (iii) the rate of interest applicable to the New Term Loans of each
Series shall be determined by Borrower and the applicable new Lenders and shall
be set forth in each applicable Joinder Agreement; provided  however
that the interest rate margin applicable to the New Term Loans shall not be
greater than the highest interest rate that may,

 63

 

 

under any circumstances
(including, without limitation, any issuance at a discount or as a result of
the payment of any fees), be payable with respect to the Term Loans plus
0.25% per annum unless the interest rate margin with respect to the Term Loans
is increased so as to be equal to, or be 0.25% per annum lower than, the
interest rate margin applicable to the New Term Loans, provided that
such limitation shall not apply to the extent such New Term Loans are junior in
collateral rights to the Term Loans, in which case customary terms shall apply
consistent with the other provisions of this Agreement and the then prevailing
market conditions.  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 Syndication Agent and Administrative Agent,
to effect the provision of this Section 2.15.

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 Borrower, may request
that the US Letter of Credit Issuer issue for the account of the Borrower a
standby letter of credit or letters of credit in Dollars (the “US Letters of
Credit”) and (ii) the Canadian Borrower may request that the Canadian
Letter of Credit Issuer issue for the account of the Canadian Borrower a
standby letter of credit or letters of credit in Canadian Dollars (the “Canadian
Letters of Credit” and 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 Letter 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
Lender’s US Revolving Credit Exposures at such time to exceed the US Revolving
Credit Commitment then in effect; (iii) no Canadian Letter of Credit shall be
issued the Stated Amount of which when added to Canadian Letter of Credit
Outstanding would exceed the Canadian Letter of Credit Commitment then in
effect, (iv) no Canadian Letter of Credit shall be issued the Stated Amount of
which would cause the aggregate amount of the Canadian Lender’s Revolving
Credit Exposure at such time to exceed the Canadian Revolving Credit
Commitment, (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 Letter of Credit Issuer, provided that in no
event shall such expiration date occur later than the L/C Maturity Date;
(vi) each US Letter of Credit shall be denominated in Dollars; (vii) each
Canadian Letter of Credit shall be denominated in US Dollars or Canadian
Dollars, (viii) 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; (ix) no Letter of Credit shall be
issued by a Letter of Credit Issuer after it has received a written notice from
the Borrower or the Canadian Borrower or any Lender stating that a Default or
Event of Default has occurred and is continuing until such time as the 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 14.1; and (x) any Letter of Credit issued for the

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account of the Canadian Borrower shall be made by a Canadian Lender
described in clause (a) of that definition or a permitted assigned of such
Canadian Lender that is a Canadian Resident. 
Notwithstanding anything herein to the contrary, the issuance of US
Letters of Credit for the account of the Borrower shall be deemed a utilization
of the US Revolving Credit Commitments allocated to the Borrower, and the
issuance of the Canadian Letters of Credit for the account of the Canadian
Borrower shall be deemed a utilization of the Canadian Revolving Credit
Commitments.

 

(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 (which notice the
Administrative Agent shall promptly transmit to each of the applicable
Lenders), the Borrower shall have the right, on any day, permanently to
terminate or reduce the US Letter of Credit Commitment in whole or in part, provided
that, after giving effect to such termination or reduction, the US Letter of
Credit Outstanding shall not exceed the US Letter of Credit Commitment.

3.2.          Letter
of Credit Requests.   (a)     Whenever the Borrower desires that a US
Letter of Credit be issued for its account, 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 notice shall be executed by the Borrower and shall be in the form
of Exhibit H-1 (each a “US Letter of Credit Request”). The Administrative
Agent shall promptly transmit copies of each US Letter of Credit Request to
each Lender.

 

(b)           Whenever the Canadian Borrower desires
that a Canadian Letter of Credit be issued for its account, 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 in the form of an executed Canadian Letter of Credit
Request in the form of Exhibit H-2 (which shall, among other things, specify
whether such Letter of Credit is to be denominated in Dollars or Canadian
Dollars) (each a “Canadian Letter of Credit Request” and, together with
the US Letter of Credit Request, the “Letter of Credit Request”).

(c)           The making of each Letter of Credit
Request shall be deemed to be a representation and warranty by the 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, an “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 warranty,
an undivided interest and participation (each an “US L/C Participation”),
to the extent of such US L/C Participant’s US Revolving Credit Commitment
Percentage in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder and the obligations of the

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Borrower under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto (although 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 the US L/C Participants shall
have no right to receive any portion of any Fronting Fees).

 

(b)           Immediately upon the issuance by the
Canadian Letter of Credit Issuer of any Canadian Letter of Credit on the
account of the Canadian Borrower, the Canadian Letter of Credit Issuer shall be
deemed to have sold and transferred to each other Canadian Lender that has a
Canadian Revolving Credit Commitment, to the extent  the Canadian Letter of Credit Obligations are
owed by the Canadian Borrower, (each such other Lender, in its capacity under
this Section 3.3, an “Cdn L/C Participant”  and collectively the “Cdn L/C Participants”),
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 Borrower and the Canadian Borrower, as
the case may be, under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto.

(c)           Letter of Credit Fees will be paid
directly to the Canadian Administrative Agent for the ratable account of the
Cdn L/C Participants for Letters of Credit issued on behalf of the Canadian
Borrower as provided in Section 4.1(d). 
The Cdn L/C Participants shall have no right to receive any portion of
any 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 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 the Letter of Credit
Issuer any resulting liability.

(e)           In the event that the Letter of Credit
Issuer makes any payment under any Letter of Credit issued by it and the
Borrower or the Canadian Borrower, as applicable, shall not have repaid such
amount in full to the respective Letter of Credit Issuer pursuant to Section
3.4(a), the 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 Letter of Credit
Issuer, the amount of such L/C Participant’s Revolving Credit Commitment
Percentage of such unreimbursed payment in Dollars 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 respective Letter of Credit Issuer
its Revolving Credit Commitment Percentage of such unreimbursed amount arising
from any wrongful payment made by the 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 the Letter of

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Credit Issuer.  If the 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 the 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 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 the
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 the Letter of Credit Issuer at the Federal Funds Effective
Rate.  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 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 the 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 the Letter of Credit Issuer receives
a payment in respect of an unpaid reimbursement obligation as to which the
Administrative Agent has received for the account of the Letter of Credit
Issuer any payments from the L/C Participants pursuant to paragraph (c) above,
the Letter of Credit Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each L/C Participant that has paid
its Revolving Credit Commitment Percentage of such reimbursement obligation, in
Dollars 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 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
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 the Borrower may
have at any time against a beneficiary named in a Letter of Credit, any

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transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Canadian Administrative Agent the 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 Borrower 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
the Letter of Credit Issuer its US Revolving Credit Commitment Percentage or
Canadian Revolving Credit Commitment Percentage of any unreimbursed amount
arising from any wrongful payment made by the 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 the Letter of Credit Issuer.

3.4.          Agreement
to Repay Letter of Credit Drawings. 
(a)     The 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 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 the 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 the 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 the 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 (or the Cdn ABR or Canadian Prime Rate, as
applicable, in the case of the Canadian Letter of Credit Issuer) as in effect
from time to time, provided that, notwithstanding anything contained in this
Agreement to the contrary, (i) unless the Borrower (or the Canadian
Borrower) shall have notified the Administrative Agent (or the Canadian
Administrative Agent) and the relevant Letter of Credit Issuer prior to
10:00 a.m. (New York time) on the date of such drawing that the 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 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, that 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 Commitment make Canadian Revolving Credit Loans (in the currency in
which the Canadian

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Letter of Credit is denominated which shall initially be Cdn ABR Loans
or Canadian Prime Rate Loans, as applicable) 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 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 Letter of Credit Issuer for the related Unpaid
Drawing.

 

(b)           The obligations of the Borrower and the
Canadian Borrower under this Section 3.4 to reimburse the 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
Borrower, the Canadian Borrower or any other Person may have or have had
against the 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 Borrower nor the
Canadian Borrower shall be obligated to reimburse the Letter of Credit Issuer
for any wrongful payment made by the 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 the 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 the 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 the Letter of Credit Issuer, or any L/C
Participant’s L/C Participation therein, or (b) impose on the 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 L/C Participation
therein, and the result of any of the foregoing is to increase the cost to the
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 the 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 Borrower by the Letter of Credit Issuer
or such L/C Participant, as the case may be, (a copy of which notice shall be
sent by the Letter of Credit

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Issuer or such L/C Participant to the Administrative Agent (with
respect to Letter of Credit issued on account of the Borrower) and to the
Canadian Administrative Agent with respect to Letters of Credit issued on
account of the Canadian Borrower)), the Borrower or the Canadian Borrower, as
applicable, shall pay to the Letter of Credit Issuer or such L/C Participant
such additional amount or amounts as will compensate the Letter of Credit
Issuer or such L/C Participant for such increased cost or reduction, it being
understood and agreed, however, that the 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 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 the Letter of Credit Issuer or such L/C Participant to
the Administrative Agent (with respect to Letters of Credit issued on account of
the Borrower) and to the Canadian Administrative Agent with respect to Letters
of Credit issued on account of the Canadian Borrower)) setting forth in
reasonable detail the basis for the determination of such additional amount or
amounts necessary to compensate the Letter of Credit Issuer or such L/C
Participant as aforesaid shall be conclusive and binding on the Borrower or the
Canadian Borrower, as applicable, absent clearly demonstrable error.

 

3.6.          Successor
Letter of Credit Issuer.  A Letter of
Credit Issuer may resign as Letter of Credit Issuer upon 60 days’ prior written
notice to the Administrative Agent, the Canadian Administrative Agent, the
Lenders and the Borrower.  If the US
Letter of Credit Issuer shall resign as US Letter of Credit Issuer under this
Agreement, then the Borrower shall appoint from among the Lenders with US
Revolving Credit Commitments a successor issuer of US Letters of Credit,
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 Borrower shall pay to the resigning US Letter of Credit Issuer
all accrued and unpaid fees pursuant to Sections 4.1(c) and (e).  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 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 Letter of Credit Issuer under this Agreement and the other Credit
Documents.  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 Lenders with
Canadian Revolving Credit Commitments a successor issuer of Canadian Letters of
Credit, 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 and the Borrower, as
applicable shall pay to the resigning Letter of Credit Issuer all accrued and
unpaid fees pursuant to Sections 4.1(d ) and (e).  After the resignation of the 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 Loan 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 Letter of
Credit Issuer, the provisions of this Agreement relating to the Letter of
Credit Issuer shall inure to its benefit as to

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any actions taken or omitted to be taken by it (a) while it was 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
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 in arrears (i) on the last day of each
March, June, September and December (for the three-month period (or portion
thereof) ended on such day for which no payment has been received) and
(ii) on the Final Date (for the period ended on such date for which no
payment has been received pursuant to clause (i) 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 Commitments in
effect on such day.

(ii)           The
Canadian Borrower agrees to pay to the Canadian Administrative Agent for the
account of each Canadian Lender with a Canadian Revolving Credit Commitment
allocated to the Canadian Borrower (in each case pro rata according to the
respective 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 in arrears
(i) on the last day of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no payment has
been received) and (ii) on the Final Date (for the period ended on such
date for which no payment has been received pursuant to
clause (i) 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 portion of the Available Canadian Commitments allocated to the
Canadian Borrower on such day.

(iii)          The
Borrower agrees to pay to the Administrative Agent for the account of each
Canadian Lender with a Canadian Revolving Credit Commitment allocated to the
Borrower (in each case pro rata according to the respective 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 in arrears (i) on the last day of each March, June,
September and December (for the three-month period (or portion thereof) ended
on such day for which no payment has been received) and (ii) on the Final
Date (for the period ended on such date for which no payment has been received
pursuant to clause (i) 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 portion of the Available Canadian Commitments
allocated to the Borrower on such day.

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

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

(c)           The 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 “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 Fronting Fees shall be due and payable
quarterly in arrears on the last day of each March, June, September and
December and on the date upon which the US Total Revolving Credit Commitment
terminates and the US Letter of Credit Outstandings shall have been reduced to
zero.

(d)           The Canadian Borrower agrees to pay to
the Canadian Administrative Agent in for the account of the Lenders with a
Canadian Revolving Credit Commitment 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 Eurodollar
Margin for Revolving Credit Loans minus 0.125% per annum on the average daily
Stated Amount of such Letter of Credit. 
Such Letter of Credit Fees shall be due and payable quarterly in arrears
on the last day of each March, June, September and December and on the date
upon which the Canadian Total Revolving Credit Commitment terminates and the
Canadian Letter of Credit Outstandings shall have been reduced to zero.

(e)           The Borrower agrees to pay directly to
the Letter of Credit Issuer in Dollars upon each issuance of, drawing under,
and/or amendment of, a Letter of Credit issued by it such amount as the Letter
of Credit Issuer and the Borrower shall have agreed upon for issuances of,
drawings under or amendments of, letters of credit issued by it.

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 Administrative Agent at the
Administrative Agent’s Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower (on behalf of itself
and the Canadian Borrower) shall have the right, without premium or penalty, on
any day, permanently

 72
 

 

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 the Dollar Equivalent of $1,000,000 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 US Total Revolving Credit Commitment (ii) the aggregate amount of the
Canadian Lenders’ Canadian Revolving Credit Exposure to the Canadian Borrower
shall not exceed the portion of the Canadian Total Revolving Credit Commitment
allocated to the Canadian Borrower and (iii) the aggregate amount of the
Canadian Lenders’ Canadian Revolving Credit Exposures to the Borrower shall not
exceed the portion of the Canadian Total Revolving Credit Commitment allocated
to the Borrower.

 

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

 

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

(c)           The Swingline Commitment shall terminate
at 5:00 p.m. (New York time) on the Swingline Maturity Date.

SECTION 5.           Payments

 

5.1.          Voluntary
Prepayments. (a)   The Borrower shall
have the right to prepay Tranche A Term Loans, Tranche E Term Loans, US
Revolving Credit Loans and Swingline Loans, and the Canadian Borrower shall
have the right to prepay Canadian Revolving Credit Loans in whole or in part
from time to time on the following terms and conditions: (a) the Borrower (on
its own behalf and on behalf of the Canadian 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 or the Canadian Borrower’s intent to make such
prepayment, the amount of such prepayment and (in the case of BA Loans and
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which
notice shall be given by the Borrower no later than (i) in the case of Tranche
A Term Loans, Tranche E Term Loans or Revolving Credit Loans, 10:00 a.m.
(New York time) one Business Day prior to, or (ii) in the case of Swingline
Loans, 10:00 a.m. (New York time) on, 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 Lenders or the Swingline
Lender, as the case may be; (b) each partial prepayment of any Borrowing of
Tranche A Term Loans, Tranche E Term Loans or Revolving Credit Loans shall be
in a multiple of the Dollar Equivalent of $100,000 or C$100,000 and in an
aggregate principal amount of the Dollar Equivalent of at least $1,000,000 or
C$1,000,000 and each partial prepayment of Swingline Loans shall be in a
multiple of the Dollar Equivalent of $100,000 and in an aggregate principal
amount of at least the Dollar Equivalent of $100,000, provided that no partial
prepayment of Eurodollar Term

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Loans or Eurodollar Revolving Credit Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Term Loans or
Eurodollar Revolving Credit Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount for Eurodollar Term Loans or Eurodollar
Revolving Credit Loans; (c) any prepayment of Eurodollar Term Loans or
Eurodollar 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 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 any Term Loans pursuant to this
Section 5.1 shall be (a) applied to Tranche A Term Loans and Tranche
E Term Loans in such manner as the Borrower may determine and (b) applied
to reduce Tranche A Repayment Amounts and Tranche E Repayment Amounts in such
order as the Borrower may determine; provided, that (i) each Tranche E
Term Loan Lender will have the right to refuse any such voluntary prepayment by
giving notice of such refusal to the Administrative Agent (and the Borrower
shall not prepay any such Tranche E Term Loans), (ii) any prepayment so refused
shall be applied to the Tranche A Term Loans in such manner as the Borrower may
determine and (iii) after the prepayment or repayment in full of the Tranche A
Term Loans, each Tranche E Term Loan Lender may not refuse any such voluntary
prepayments pursuant to this Section 5.1. 
At the Borrower’s election (on its own behalf and on behalf of the
Canadian Borrower) in connection with any prepayment pursuant to this
Section 5.1, such prepayment shall not be applied to any Tranche A Term
Loan, Tranche E Term Loan or Revolving Credit Loan of a Defaulting Lender.

5.2.          Mandatory
Prepayments.  (a)     Term Loan Prepayments.  (i)  On
each occasion that a Prepayment Event occurs, the Borrower 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,
provided that, at the option of the Borrower, the Net Cash Proceeds from any
transaction permitted by Section 10.4(e) (including pursuant to any
securitization) may be applied to repay Revolving Credit Loans, which repayment
shall automatically result in the reduction of the Revolving Credit Commitment
of each Lender by an amount equal to the amount of the Revolving Credit Loans
prepaid to such Lender.

 

(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, 2004),  the Borrower 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 such
percentage shall be reduced to (i) 25% 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 and (ii) 0% if the Consolidated Total Debt to Consolidated EBITDA Ratio
as of the end of such fiscal year is less than 3.25 to 1.00), minus (y) the amount of any such Excess Cash Flow that
the Borrower has, after the end of such fiscal year and prior to such date,
reinvested in the business of the Borrower or any of its Subsidiaries (subject
to Section 9.14) and minus (z) the principal amount of
Term Loans voluntarily prepaid pursuant to Section 5.1 during such fiscal
year.

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(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 100% of the US Total Revolving Credit Commitment as
then in effect, the Borrower shall forthwith repay on such date the principal
amount of Swingline Loans and, after all Swingline Loans have been paid in
full, Revolving Credit Loans in an amount equal to such excess.  If, after giving effect to the prepayment of
all outstanding Swingline Loans and Revolving Credit Loans, the Aggregate US
Revolving Credit Outstandings exceed the US Total Revolving Credit Commitment
then in effect, the 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 Borrower
hereunder (including obligations in respect of Letter of Credit Outstandings)
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 103% of the Canadian Total
Revolving Credit Commitment as then in effect, each of the Borrower and the
Canadian Borrower, as the case may be, shall forthwith repay on such date
Canadian Revolving Credit Loans owing by each of them, respectively, in an
aggregate amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Canadian
Revolving Credit Loans (other than BA Loans), the Aggregate Canadian Revolving
Credit Outstandings exceed the Canadian Total Revolving Credit Commitment then
in effect, the 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 Borrower and
the Canadian Borrower hereunder (including obligations in respect of Canadian
Letter of Credit Outstandings 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.  Each prepayment of Term
Loans required by Section 5.2(a) shall be applied to reduce Tranche A Repayment
Amounts and Tranche E Repayment Amounts in such order as the Borrower may
determine up to an amount equal to the aggregate amount of the applicable
Tranche A Repayment Amounts and Tranche E Repayment Amounts required to be made
by the Borrower 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

 75
 

 

Tranche A Repayment Amounts and Tranche E Repayment Amounts.  With respect to each such prepayment, (i) the
Borrower will, not later than the date specified in Section 5.2(a) for
offering to make such prepayment, give the Administrative Agent telephonic
notice (promptly confirmed in writing) requesting that the Administrative Agent
provide notice of such prepayment to each Term Loan Lender, (ii) each
Tranche E Term Loan Lender will have the right to refuse any such prepayment by
giving written notice of such refusal to the Borrower within fifteen Business
Days after such Lender’s receipt of notice from the Administrative Agent of
such prepayment (and the Borrower shall not prepay any such Tranche E Term
Loans until the date that is specified in the immediately following clause),
(iii) the Borrower will make all such prepayments not so refused upon the
earlier of (x) such fifteenth Business Day and (y) such time as the
Borrower has received notice from each Lender that it consents to or refuses
such prepayment and (iv) any prepayment so refused may be retained by the
Borrower, provided that any prepayment so refused that relates to Net
Cash Proceeds from a Debt Incurrence Prepayment Event in respect of the
issuance of Permitted Additional Subordinated Notes shall be allocated to the
then outstanding Term Loans on a pro rata basis and shall be applied as set
forth above in this paragraph (c).

 

(d)  
        Application to Term
Loans.  With respect to each prepayment of Term Loans required by
Section 5.2(a), the Borrower may designate the Types of Loans that are to
be prepaid and the specific Borrowing(s) pursuant to which made, provided
that (i) Eurodollar Term Loans may be designated for prepayment pursuant
to this Section 5.2 only on the last day of an Interest Period applicable
thereto unless all Eurodollar Term Loans with Interest Periods ending on such
date of required prepayment and all ABR Loans have been paid in full; and
(ii) Eurodollar 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 Eurodollar Loans such Borrowing
shall immediately be converted into ABR Loans. 
In the absence of a designation by the 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.

(e)  
        Application to Revolving
Credit Loans.  With respect to each
prepayment of Revolving Credit Loans elected by the Borrower pursuant to
Section 5.2(a) or required by Section 5.2(b), the 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 (w) Eurodollar Revolving Credit Loans may be
designated for prepayment pursuant to this Section 5.2 only on the last day of
an Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required prepayment and all ABR Loans have been
paid in full; (x) if any prepayment by the Borrower or the Canadian Borrower of
Eurodollar 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 Eurodollar Revolving Credit Loans, as the case may be, 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

 76
 

 

Lender.  In the absence of a
designation by the 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 Eurodollar
Interest Periods.  In lieu of making
any payment pursuant to this Section 5.2 in respect of any BA Loan or
Eurodollar 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 Borrower or the Canadian Borrower, as the case may be, at its option may
deposit with the Administrative Agent an amount equal to the amount of the BA
Loan or Eurodollar Loan to be prepaid and such BA Loan or Eurodollar 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 Administrative Agent in a corporate time deposit
account established on terms reasonably satisfactory to the 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 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.

(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.

(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, 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 (the 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 Borrower (on its own
behalf and on behalf of the Canadian Borrower) 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 so retained would
otherwise have been required to be applied to reinvestments or prepayments
pursuant to Section 5.2(a) (or such Excess Cash Flow would have

 77
 

 

been so required if it were Net Cash Proceeds), (x) the 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 reinvestments or prepayments as
if such Net Cash Proceeds or Excess Cash Flow had been received by the 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 Foreign Subsidiary) or (y) such
Net Cash Proceeds or Excess Cash Flow 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 Borrower or the
Canadian Borrower, without set-off, counterclaim or deduction of any kind, to
the Administrative Agent for the ratable account of the Lenders entitled
thereto, the Letter of Credit Issuer, the Canadian Letter of Credit Issuer or
the 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 Administrative Agent’s
Office or at such other office as the Administrative Agent shall specify for
such purpose by notice to the Borrower, it being understood that written or
facsimile notice by the Borrower or the Canadian Borrower, as the case may be,
to the Administrative Agent to make a payment from the funds in the Borrower’s
or the Canadian Borrower’s, as the case may be, account at the Administrative
Agent’s Office shall constitute the making of such payment to the extent of
such funds held in such account.  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 will thereafter cause to be distributed on the
same day (if payment was actually received by the Administrative Agent 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.  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 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

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(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 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 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
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 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-U.S. Lender”) if such Lender fails to comply
with the requirements of paragraph (b) of this Section 5.4.  Whenever any Non-Excluded Taxes are payable
by the Borrower or the Canadian Borrower, as the case may be, as promptly as
possible thereafter such Borrower or Canadian 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 official receipt (or other evidence acceptable to such Lender, acting
reasonably) received by such Borrower or Canadian Borrower showing payment thereof.  If the 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 or Canadian 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-U.S. Lender (other
than a Canadian Lender making Loans only to the Canadian Borrower) shall:

(i)            deliver
to the Borrower and the Administrative Agent two copies of either (x) in
the case of Non-U.S. Lender claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest”, United States Internal Revenue Service Form W-8BEN
(together with a certificate representing that such Non-U.S. 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 Borrower and is not a controlled foreign corporation related to the
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-U.S. Lender claiming complete

 79
 

 

exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the Borrower under
this Agreement;

 

(ii)           deliver
to the 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 Borrower; and

(iii)          obtain
such extensions of time for filing and complete such forms or certifications as
may reasonably be requested by the 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 would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender so advises the Borrower and
the Administrative Agent.  Each Person
that shall become a Participant pursuant to Section 14.6 or a Lender pursuant
to Section 14.6 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 the Lender
from which the related participation shall have been purchased.

(c)  
        The Borrower shall not be
required to indemnify any Non-U.S. Lender, or to pay any additional amounts to
any Non-U.S. Lender, in respect of U.S. Federal withholding tax pursuant to
paragraph (a) above to the extent that (i) the obligation to withhold
amounts with respect to U.S. Federal withholding tax existed on the date such
Non-U.S. Lender became a party to this Agreement (or, in the case of a
Participant that is not organized under the laws of the United States of
America or a state thereof (a “Non-U.S. Participant”), on the date such
Non-U.S. Participant became a Participant hereunder); provided, however,
that this clause (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 (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, or (y) such assignment, participation or transfer had been
requested by the Borrower or the Canadian Borrower, (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender or Non-U.S. Participant to comply with the provisions of
paragraph (b) above or (iii) any of the representations or
certifications made by a Non-U.S. Lender or Non-U.S. Participant pursuant to
paragraph (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. The Canadian
Borrower shall not be required to indemnify or pay additional amounts to a
Lender or Administrative Agent in respect of Canadian withholding tax pursuant
to paragraph (a) above to the extent that such Non-Excluded Taxes result from a
failure by the Lender or Administrative 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,

 80
 

 

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 the Lender or the Canadian Administrative Agent, as applicable, that
the Lender or Administrative Agent comply with the particular Reporting
Requirement (identified specifically in such request) and the Lender or
Administrative 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 Administrative 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
the Lender or Canadian Administrative 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 Administrative Agent, as applicable, is unable to duly
comply with such Reporting Requirement, or (z) to the extent that the
additional payment or indemnity compensates the Lender or Administrative Agent
for an amount to which the Lender or Administrative Agent would have been
entitled to receive under paragraph (a) had the Lender or Administrative Agent,
as applicable complied with the Reporting Requirement.

 

(d)  
        If the 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 or Canadian Borrower in
challenging such taxes at Borrower’s or Canadian Borrower’s expense if so
requested by Borrower or Canadian 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 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 or Canadian Borrower, then the Lender, the
Canadian Administrative Agent or the Administrative Agent, as the case may be,
shall reimburse Borrower or Canadian 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.  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 Lender, the Canadian Administrative Agent nor the Administrative
Agent shall be obliged to disclose any information regarding its tax affairs or
computations to the Borrower or the Canadian Borrower in connection with this
paragraph (d) or any other provision of this Section 5.4.

(e)  
        Each Lender represents and
agrees that, on the date hereof and at all times during the term of this
Agreement, it is not and will not be a conduit entity participating in a
conduit financing arrangement (as defined in Section 7701(1) of the Code and
the regulations thereunder) with respect to the Borrowings hereunder unless the
Borrower has consented to such arrangement prior thereto.

 81
 

 

(f)            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 or Canadian Letters of Credit 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 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 Eurodollar 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.  Interest on (i) Canadian Prime Loans and
(ii) ABR Loans in respect of which the rate of interest is calculated on
the basis of the Prime Rate and 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)  
        Fees and Letter of Credit
Outstanding 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 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 principles and practices.

 

(b)  
        Payment at Highest
Lawful Rate.  If either the 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 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 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 in the
case of the Canadian Borrower, 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

 82
 

 

so prohibited by law (in the case of the Borrower or the Canadian
Borrower) or so result in a receipt by that Lender of interest at a criminal
rate (in the case of the Canadian Borrower), 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 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 Borrower or the Canadian Borrower to the affected Lender where, in
the case of the Canadian Borrower, 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 Borrower or the Canadian Borrower an
amount in excess of the maximum permitted by any applicable law, rule or
regulation or in the case of the Canadian Borrower, an amount in excess of the
maximum permitted under the Criminal Code
(Canada), then the 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 that 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 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 the 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
Borrowing

The initial Borrowing of
Term Loans under this Agreement is subject to the satisfaction of the following
conditions precedent:

6.1.          Credit
Documents. (a)   The Administrative
Agent shall have received this Agreement, executed and delivered by a duly
authorized officer of each of Holdings, the Borrower, the Canadian Borrower,
Required Lenders under the Existing Credit Agreement (whom may provide written
consent via a consent supplement to this Agreement) and each Term Loan Lender.

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

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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 the Borrower, substantially in
the form of Exhibit I-1 and (b) Kenneth L. Walker, General Counsel to the
Borrower.  The Borrower, the Canadian
Borrower, the other Credit Parties and the Administrative Agent hereby instruct
such counsel to deliver such legal opinions.

6.4.          No
Default.  After giving effect to the
Borrowings on the Effective Date and the other transactions contemplated
hereby, no Default or Event of Default has occurred and is continuing.

6.5.          Consent.  Borrower, Holdings, Required Lenders (as such
term is defined under the Existing Credit Agreement and whom may provide written
consent via a consent supplement to this Agreement) and the Term Loan Lenders
shall have indicated their consent by the execution and delivery of the
signature pages hereof to the Administrative Agent.

6.6.          [Reserved].

6.7.          Effective
Date Certificates.  The
Administrative Agent shall have received a certificate of each Credit Party,
dated the Effective Date, substantially in the form of Exhibit J, with
appropriate insertions, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Credit Party, and attaching the
documents referred to in Sections 6.8 and 6.9 (if applicable).

6.8.          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 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 of the Borrower and the Canadian Borrower, the extensions of credit
contemplated hereunder; provided that in lieu of delivery of each of the
resolutions set forth in this Section 6.8, the Borrower may deliver a
certificate executed by the President or any Vice President of such Credit
Party certifying that there have been no material amendments to those
resolutions previously delivered to the Administrative Agent on the Closing
Date pursuant to Section 6.8 of the Existing Credit Agreement.

6.9.          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; provided that in lieu of delivery of each of the documents
set forth in this Section 6.9, the Borrower may deliver a certificate executed
by the President or any Vice President of such Credit Party certifying that
there have been no material amendments to those documents previously delivered
to the Administrative Agent on the Closing Date pursuant to Section 6.9 of the
Existing Credit Agreement.

6.10.        Fees.  (a)    
The Lenders shall have received the fees in the amounts previously
agreed in writing by the Agents and such Lenders to be received on the
Effective 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 Effective Date shall have been paid.

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6.11.        Representations
and Warranties.  On the Effective
Date, the representations and warranties made by each of Holdings, the Borrower
and the Canadian Borrower in Section 8, as they relate to the Credit
Parties at such time, shall be true and correct in all material respects.

6.12.        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 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 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.

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 the obligation of the Letter of Credit Issuer to
issue Letters 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 Tranche A Term Loan, each Tranche E 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 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 and the Letter of Credit Issuer
shall have received a Letter of Credit Request meeting the requirements of
Section 3.2(a).

The acceptance of the
benefits of each Credit Event shall constitute a representation and warranty by
each Credit Party to each of the Lenders that all the applicable conditions
specified above exist as of that time.

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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, Holdings, the Borrower
and the Canadian Borrower make 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 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) is 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.  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.          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 Recapitalization 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 any of Holdings, the
Borrower, the Canadian Borrower or any of the Restricted Subsidiaries (other
than Liens created under the Credit Documents) pursuant to, the terms of any
material indenture (including the Subordinated Note Indenture), loan agreement,
lease agreement, mortgage, deed of trust, agreement or other material
instrument to which Holdings, the Borrower, the Canadian Borrower 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
Borrower, the Canadian Borrower or any of the Restricted Subsidiaries.

8.4.          Litigation.  There are no actions, suits, investigations
or proceedings (including Environmental Claims) pending or, to the knowledge of
Holdings, the Borrower or the Canadian Borrower, threatened with respect to
Holdings, the Borrower, the Canadian 

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Borrower or any of its
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect.

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.  No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any Governmental Authority is required to
authorize or is required in connection with (a) the execution, delivery and
performance of any Credit Document or (b) the legality, validity, binding
effect or enforceability of any Credit Document, except any of the foregoing
the failure to obtain or make could not reasonably be expected to have a
Material Adverse Effect.

8.7.          Investment
Company Act.  Neither Holdings nor
the 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 any of
Holdings, the Borrower, the Canadian Borrower, any of the 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 paragraph (a) above were based on good faith estimates and assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections may differ from the projected results.

8.9.          Financial
Condition; Financial Statements.  The
(a) unaudited historical consolidated financial information of the Parent as
set forth in the Confidential Information Memorandum, and (b) the
Historical Financial Statements, in each case present or will, when provided,
present fairly in all material respects the combined financial position of the
Borrower at the respective dates of said information, statements and results of
operations for the respective periods covered thereby.  The financial statements referred to in
clause (b) of this Section 8.9 have been prepared in accordance with
GAAP consistently applied except to the extent provided in the notes to said
financial statements.  There has been no
Material Adverse Change since November 30, 2003, other than solely as a result
of changes in general economic conditions.

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8.10.        Tax
Returns and Payments.  Each of
Holdings, the Borrower, the Canadian Borrower and the 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 and
assessments payable by it that have become due, other than those not yet
delinquent or contested in good faith. 
Each of Holdings, the Borrower, the Canadian Borrower and each of the
Subsidiaries have paid, or have provided adequate reserves (in the good faith
judgment of the management of the Borrower) in accordance with GAAP for the
payment of, all material federal, state, provincial and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
Effective Date.

8.11.        Compliance
with ERISA.  (i) 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 any of Holdings, the Borrower, any Subsidiary
or any ERISA Affiliate; no Plan (other than a multiemployer plan) has an
accumulated or waived funding deficiency (or is reasonably likely to have such
a deficiency); none of Holdings, the Borrower, any Subsidiary or any ERISA
Affiliate has incurred (or is reasonably likely expected to incur) any
liability to or on account of a Plan 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 any of
Holdings, the Borrower, any Subsidiary or any ERISA Affiliate; and no lien
imposed under the Code or ERISA on the assets of any of Holdings, the Borrower
or any Subsidiary or any ERISA Affiliate exists (or is reasonably likely to
exist) nor has Holdings, the Borrower, any Subsidiary or any ERISA Affiliate
been notified in writing that such a lien will be imposed on the assets of any
of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate on account of
any Plan, except to the extent that a breach of any of the representations,
warranties or agreements in this Section 8.11(i) 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 Borrower 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(i),
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(i), other than any made with respect to (a)
liability under Section 4201 or 4204 of ERISA or (b) liability for termination
or reorganization of such Plans under ERISA, are made to the best knowledge of
the Borrower.

(ii)           the Canadian Pension Plans are duly
registered under all applicable provincial 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 therefore have been performed in accordance with applicable
laws and regulations; there are no outstanding disputes concerning the assets
held pursuant to any such 

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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, or applications of, the
assets of any of the Canadian Pension Plans; other than as disclosed in
Schedule 8.11(ii), there have been no partial terminations of any Canadian
Pension Plan with a defined benefit provision; 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 is 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(ii) 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 Borrower
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(ii) be
reasonably likely to have a Material Adverse Effect;

8.12.        Subsidiaries.  On the Effective Date, Holdings does not have
any Subsidiaries other than the Borrower and its Subsidiaries.  Schedule 8.12 lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Effective Date.  To the knowledge of the Borrower, after due
enquiry, each Material Subsidiary as of the Effective Date has been so
designated on Schedule 8.12.

8.13.        Patents,
etc.  Holdings, the Borrower, the
Canadian Borrower 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) each of Holdings, the Borrower, the
Canadian Borrower and each of the Subsidiaries are in compliance with all
Environmental Laws in all jurisdictions in which Holdings, the Borrower and
each of the Subsidiaries are currently doing business (including having
obtained all material permits required under Environmental Laws);
(ii) each of Holdings, the Borrower and the Canadian Borrower will comply
and cause each of the Subsidiaries to comply with all such Environmental Laws
(including all permits required under Environmental Laws); and (iii) none of
Holdings, the Borrower, the Canadian Borrower and each of the Subsidiaries has
become subject to any Environmental Claim or any other liability under any
Environmental Law.

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(b)           None
of Holdings, the Borrower, the Canadian Borrower or any of the Subsidiaries has
treated, stored, transported, released or disposed of Hazardous Materials at or
from any currently or formerly owned Real Estate or facility relating to its
business in a manner that could reasonably be expected to have a Material Adverse
Effect.

8.15.        Properties.  Each of Holdings, the Borrower, the Canadian
Borrower and each of the Subsidiaries have good and marketable title to or
leasehold interest in all properties that are necessary for the operation of
their respective businesses as currently conducted and as proposed to be
conducted, free and clear of all Liens (other than any Liens permitted by this
Agreement) and except where the failure to have such good title could not
reasonably be expected to have a Material Adverse Effect.

SECTION 9.           Affirmative
Covenants

Each of Holdings, the
Borrower and the Canadian Borrower hereby covenants and agrees that on the
Effective Date and thereafter, until the Commitments, the Swingline Commitment
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.  Holdings or the 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, if such financial statements are not
required to be filed with the SEC, on or before the date that is 90 days
after the end of each such fiscal year), the consolidated balance sheet of
(i) Holdings, the Borrower and the Restricted Subsidiaries and
(ii) Holdings and its Subsidiaries, in each case 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 certified by independent certified public
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit or as to the status of Holdings, the
Borrower, the Canadian Borrower or any of the Material Subsidiaries 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,
the Borrower, the Canadian Borrower and the Material Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of Default
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.  The requirements of this Section 9.1(a) shall
be satisfied by delivery of financial statements of Parent and its Subsidiaries
which otherwise meet the requirements hereof and are accompanied by
reconciliations for any difference between what is delivered hereunder and what
would have been delivered by Holdings and its Subsidiaries pursuit to this
Section 9.1(a).

(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 with respect to each of the first three quarterly
accounting periods in each fiscal year of Holdings (or, 

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if such financial
statements are not required to be filed with the SEC, on or before the date
that is 45 days after the end of each such quarterly accounting period),
the consolidated balance sheet of (i) Holdings, the Borrower and the
Restricted Subsidiaries and (ii) Holdings and its Subsidiaries, in each
case 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, all of which shall be certified by an
Authorized Officer of the Borrower, subject to changes resulting from audit and
normal year-end audit adjustments. The requirements of this Section 9.1(b)
shall be satisfied by delivery of financial statements of Parent and its
Subsidiaries which otherwise meet the requirements hereof and are accompanied
by reconciliations for any difference between what is delivered hereunder and
what would have been delivered by Holdings and its Subsidiaries pursuit to this
Section 9.1(b).

(c)  
        Budgets.  Within 60 days after the commencement of
each fiscal year of Holdings and the Borrower, budgets of Holdings, the
Borrower and the Canadian Borrower in reasonable detail for the fiscal year as
customarily prepared by management of Holdings, the Borrower and the Canadian
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 the Borrower 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, the Borrower and the
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 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), (i) a certificate of an
Authorized Officer of the Borrower setting forth in reasonable detail the
Available Amount as at the end of the fiscal year to which such financial
statements relate and (ii) a certificate of an Authorized Officer and the chief
legal officer of the Borrower (x) setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that
there has been no change in such information since the Closing Date or the date
of the most recent certificate delivered pursuant to this subsection (d)(ii),
as the case may be, and (ii) certifying that all Uniform Commercial Code
and Personal Property Security Act financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations, 

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containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (x) above to the extent
necessary to protect and perfect the security interests under the Security
Documents.

(e)  
        Notice of Default or
Litigation.  Promptly after an
Authorized Officer of any of Holdings, the Borrower, the Canadian Borrower or
any of the 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 any
of Holdings, the Borrower or the Canadian Borrower proposes to take with
respect thereto, and (ii) any litigation or governmental proceeding pending against
any of Holdings, the Borrower, the Canadian Borrower or any of the Subsidiaries
that could reasonably be expected to result in a Material Adverse Effect.

(f)  
         Environmental Matters.  Holdings, the Borrower and the Canadian
Borrower will promptly advise the Lenders 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 any of Holdings, the
Borrower, the Canadian Borrower or any of the Subsidiaries or any Real Estate;

(ii)           Any
condition or occurrence on any Real Estate that (x) results in noncompliance by
any of Holdings, the Borrower, the Canadian Borrower or any of the Subsidiaries
with any applicable Environmental Law or (y) could reasonably be anticipated to
form the basis of an Environmental Claim against any of Holdings, the Borrower,
the Canadian Borrower or any of the 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
taking of any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on 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 any of Holdings,
the Borrower, the Canadian Borrower or any of the 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 10-K, 10-Q or 8-K) or registration statements
with, and reports to, the SEC or any analogous Government Authority in any
relevant jurisdiction by any of Holdings, the Borrower, the Canadian Borrower
or any of the Subsidiaries (other than amendments to any registration statement
(to the extent such registration statement, in the form it becomes effective, 

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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 Borrower, the Canadian Borrower or any of the Subsidiaries shall
send to the holders of any publicly issued debt of Holdings, the Borrower, the
Canadian Borrower and/or any of the Subsidiaries (including any Subordinated
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 the
consummation of the acquisition of any Acquired Entity or Business by the
Borrower or any Restricted Subsidiary for which there shall be a Pro Forma
Adjustment or 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 Borrower or any Restricted Subsidiary for
which there shall be a Pro Forma Adjustment, a certificate of an Authorized
Officer of the Borrower setting forth the amount of such Pro Forma Adjustment
and, in reasonable detail, the calculations and basis therefor.

(i)  
         Perfection Certificate.  The Borrower shall deliver to the
Administrative Agent on the Closing Date a completed Perfection Certificate
dated the Closing Date and signed by an Authorized Officer and the chief legal
officer of the Borrower, together with all attachments contemplated thereby.

9.2.          Books,
Records and Inspections.  Each of
Holdings, the Borrower and the Canadian Borrower will, and will cause each of
the 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 Holdings, the 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 of account
Holdings, the Borrower, the Canadian Borrower and any such Subsidiary and
discuss the affairs, finances and accounts Holdings, the 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.  Each of Holdings, the
Borrower and the Canadian Borrower will, and will cause each of the Material
Subsidiaries to, at all times maintain in full force and effect, with insurance
companies that the Borrower believes (in the good faith judgment of the
management of the Borrower) are financially sound and responsible at the time
the relevant coverage is placed or renewed, 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.

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9.4.          Payment
of Taxes.  Each of Holdings, the
Borrower and the Canadian Borrower will pay and discharge, and will cause each
of the Subsidiaries to pay and discharge, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful material claims that, if unpaid, could
reasonably be expected to become a material Lien upon any properties of the
Borrower, the Canadian Borrower or any of the Restricted Subsidiaries, provided
that neither Holdings, the Borrower, the Canadian Borrower nor any of the
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
the Borrower) with respect thereto in accordance with GAAP.

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

9.6.          Compliance
with Statutes, Obligations, etc. 
Each of Holdings, the Borrower and the Canadian Borrower will, and will
cause each Subsidiary to, comply with all applicable laws, rules, regulations
and orders, except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

9.7.          ERISA.  Promptly after Holdings, the Borrower or any
Subsidiary or any ERISA Affiliate knows or has reason to know of the occurrence
of any of the following events that, individually or in the aggregate (including
in the aggregate such events previously disclosed or exempt from disclosure
hereunder, to the extent the liability therefor remains outstanding), would be
reasonably likely to have a Material Adverse Effect, the Parent Companies,
Holdings or the Borrower will deliver to each of the Lenders a certificate of
an Authorized Officer or any other senior officer of the Borrower setting forth
details as to such occurrence and the action, if any, that Holdings, the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices (required, proposed or otherwise) given to or
filed with or by Holdings, the Borrower, such Subsidiary, such ERISA Affiliate,
the PBGC, a Plan participant (other than notices relating to an individual
participant’s benefits) or the Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency has been
incurred or an application is to be made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan; that a Plan having an Unfunded Current
Liability has been or is to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA (including the giving of written notice
thereof); that a Plan has an Unfunded Current Liability that has or will result
in a lien under ERISA or the Code; that proceedings will be or have been
instituted to terminate a Plan having an Unfunded Current Liability (including
the giving of written notice thereof); that a proceeding has been instituted
against the Borrower, a Subsidiary or an ERISA Affiliate pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that the PBGC has
notified Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of its 

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intention to appoint a
trustee to administer any Plan; that Holdings, the Borrower, any Subsidiary or
any ERISA Affiliate has failed to make a required installment or other payment
pursuant to Section 412 of the Code with respect to a Plan; or that Holdings,
the Borrower, any Subsidiary or any ERISA Affiliate has incurred or will incur
(or has been notified in writing that it will incur) any liability (including
any contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA
or Section 4971 or 4975 of the Code.

9.8.          Good
Repair.  Each of Holdings,  the Borrower and the Canadian Borrower 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,
the Borrower and the Canadian Borrower will conduct, and cause each of the
Restricted Subsidiaries to conduct, all transactions with any of its Affiliates
on terms that are substantially as favorable to Holdings, the Borrower, the
Canadian 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 KKR and/or its Affiliates for management,
consulting and financial services rendered to Holdings, the Borrower, the
Canadian Borrower and the Subsidiaries and customary investment banking fees
paid to KKR and its Affiliates for services rendered to Holdings, the 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 Holdings, the Borrower, the Canadian
Borrower and the Subsidiaries and (c) transactions permitted by
Section 10.6.

9.10.        End
of Fiscal Years; Fiscal Quarters. 
Holdings and the Borrower will, for financial reporting purposes, cause
(a) each of its, and each of its Subsidiaries’, fiscal years to end on the
Sunday closest to November 30 of each year (but in no event later than December
2) and (b) each of its, and each of its Subsidiaries’, fiscal quarters to end
on dates consistent with such fiscal year-end and Holdings and the Borrower’s
past practice; provided, however, that Holdings and the Borrower 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 and
the Borrower 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 provided in Section 10.1(j) or
(k), each of Holdings, the Borrower and the Canadian Borrower will cause (i) any
direct or indirect Domestic Subsidiary (other than any Unrestricted Subsidiary)
formed or 

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otherwise purchased or
acquired after the date hereof (including pursuant to a Permitted Acquisition),
(ii) any Subsidiary (other than any Unrestricted Subsidiary) that is not a
Domestic Subsidiary on the date hereof but subsequently becomes a Domestic
Subsidiary (other than any Unrestricted Subsidiary) and (iii) any inactive
Subsidiary listed on Schedule 1.1(e) (unless such Subsidiary is designated an
Unrestricted Subsidiary in accordance with terms of this Agreement) which
acquires any material assets or is otherwise no longer deemed inactive, in each
case to execute a supplement to each of the Guarantee and the Security
Agreement, substantially in the form of Annex B or Annex 1, as applicable, to
the respective agreement in order to become a Guarantor under the Guarantee and
a grantor under the Security Agreement.

(b)  
        Except as provided in
Section 10.1(j) or (k), each of Holdings, the Borrower and the Canadian
Borrower will cause each Foreign Subsidiary that is a Restricted Foreign
Subsidiary, or that is required to become a Restricted Foreign Subsidiary for
an investment to constitute a Permitted Acquisition, in each case that makes an
investment constituting a Permitted Acquisition pursuant to
Section 10.5(j) to enter into guarantee and security arrangements in
relation to the Obligations of the Borrower and/or the Canadian Obligations of
the Canadian Borrower, as the case may be, in respect of the capital stock
and/or assets acquired pursuant to such Permitted Acquisition, in a form and to
an extent agreed between the Borrower 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 guarantee
and collateral arrangements entered into pursuant to the Guarantees and the
Security Documents, and to comply with Section 9.15 in respect of such
arrangements, provided that no such Restricted Foreign Subsidiary shall
be required to enter into such arrangements to the extent that such
arrangements would (i) be prohibited by the law of the jurisdiction of
incorporation or formation of such Restricted Subsidiary or of the entity whose
capital stock is acquired or (ii) have material adverse tax consequences
for any of Holdings, the Borrower or any of the Restricted Subsidiaries.

9.12.        Pledges
of Additional Stock and Evidence of Indebtedness.  (a)    
Except as provided in Section 10.1(j) or (k), the Borrower will pledge,
and, if applicable, will cause each Domestic Subsidiary to pledge, to the
Administrative Agent, for the benefit of the Secured Parties, (i) all the
capital stock of each Domestic Subsidiary (other than any Unrestricted Subsidiary)
and each Foreign Subsidiary (other than an Unrestricted Subsidiary or any
capital stock representing in excess of 65% of the issued and outstanding
capital stock in any Foreign Subsidiary) held by the Borrower or a Domestic
Subsidiary, in each case, formed or otherwise purchased or acquired after the
date hereof, in each case pursuant to a supplement to the Pledge Agreement in
form and substance reasonably satisfactory to the Administrative Agent,
(ii) all evidences of Indebtedness in excess of $5,000,000 received by the
Borrower or any of the Domestic Subsidiaries (other than any Unrestricted
Subsidiary) in connection with any disposition of assets pursuant to
Section 10.4(b), in each case pursuant to a supplement to the Pledge
Agreement, substantially in the form of Annex A thereto and (iii) any
global promissory notes executed after the date hereof evidencing Indebtedness
of any of Holdings, the Borrower and each Subsidiary that is owing to any of
the Borrower or any Domestic Subsidiary (other than any Unrestricted
Subsidiary), in each case pursuant to a supplement to the Pledge Agreement,
substantially in the form of Annex A thereto.

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(b)           Except
as provided in Section 10.1(j) or (k), the Borrower will pledge, and, if
applicable, will cause each Subsidiary (other than any Foreign Joint Venture)
to pledge, to the Canadian Administrative Agent, for the benefit of the
Lenders, to the Canadian Borrower, (i) all the capital stock of each
Subsidiary of the Canadian Borrower and of any Canadian Subsidiary Guarantor
formed or otherwise purchased or acquired after the date hereof, in each case
pursuant to a supplement to the applicable Canadian Security Documents in form
and substance reasonably satisfactory to the Administrative Agent (or pledge
arrangements in relation to the Canadian Obligations of the Canadian Borrower,
in a form and to an extent agreed between the Borrower 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 (ii) all evidences of Indebtedness with a Dollar Equivalent
in excess of $5,000,000 received by any of the Canadian Subsidiary Guarantors
in connection with any disposition of assets pursuant to Section 10.4(b),
in each case pursuant to a supplement to the applicable Canadian Security
Documents in form and substance reasonably satisfactory to the Administrative
Agent (or pledge arrangements in relation to the Obligations of the Canadian
Borrower, in a form and to an extent agreed between the Borrower 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).

(c)  
        Holdings will pledge to the
Administrative Agent, for the benefit of the Lenders, all capital stock of the
Borrower acquired by it after the Effective Date (including any capital stock
issued in connection with (i) loans and advances made pursuant to Section
10.5(c)(i) and (ii) dividends paid by the Borrower solely in its capital
stock pursuant to Section 10.6) and the Borrower will pledge to the
Administrative Agent, for the benefit of the Secured Parties, pursuant to the
Pledge Agreement or the Canadian Pledge Agreements, as the case may be, all
capital stock of the Canadian Borrower acquired by it after the Effective Date.

(d)  
        Holdings, the Borrower and
the Canadian Borrower agree that all Indebtedness in excess of $5,000,000 of
any of Holdings, the Borrower and each Subsidiary that is owing to any Credit
Party to the Pledge Agreement shall be evidenced by one or more global
promissory notes.

9.13.        Use
of Proceeds.  The Borrower and the
Canadian Borrower will use the Letters of Credit and the proceeds of all Loans
for the purposes set forth in the recitals to this Agreement.

9.14.        Changes
in Business.  Holdings, the Borrower,
the Canadian Borrower and the Subsidiaries, taken as a whole, will not
fundamentally and substantively alter the character of their business, taken as
a whole, from the business conducted by Holdings, the Borrower, the Canadian
Borrower and the 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)     Each of Holdings, the Borrower and the
Canadian Borrower 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 

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(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 the
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 Agreement,
the Pledge Agreement or any Mortgage, all at the expense of Holdings, the
Borrower 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 $1,000,000 are acquired by the
Borrower, the Canadian Borrower or any other Credit Party after the Closing
Date (other than assets constituting Collateral under the Security Agreement
that become subject to the Lien of the Security Agreement upon acquisition
thereof) that are of the nature secured by the Security Agreement or any
Mortgage, as the case may be, the Borrower will notify the Administrative Agent
and the Lenders thereof, and, if requested by the Administrative Agent or the
Required Lenders, the Borrower will cause such assets to be subjected to a Lien
securing the applicable Obligations and will take, and cause the other Credit
Parties to take, such actions as shall be necessary or reasonably requested by
the 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
Agent in accordance with the preceding sentence shall 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 the Administrative Agent may reasonably request
and (y) an opinion of local counsel to the Borrower (or in the event a
Subsidiary of the Borrower is the Mortgagor, to such Subsidiary) substantially
in the form of Exhibit I-3.

9.16.        Canadian
Borrower.  Holdings and the Borrower
shall ensure that the Canadian Borrower is on the Effective Date, and shall at
all times thereafter be, an indirect or direct wholly owned Subsidiary of the
Borrower, Holdings and the Borrower agree that the Canadian Borrower is not
permitted to be sold, transferred or otherwise disposed of pursuant to
Section 10.4.

9.17.        Post-Closing
Covenant.  Borrower shall deliver,
furnish and/or cause to be furnished all of the obligations set forth below
within the time periods specified therewith: within thirty (30) days after the
Effective Date, (i) execute and deliver a second modification of Mortgage, in
favor of the Administrative Agent, for the benefit of the Lenders, with respect
to each Mortgaged Property, (ii) furnish to the Administrative Agent in respect
of each Mortgaged Property an endorsement to the existing mortgagee’s title
insurance policy to insure that (a) the Mortgage insured thereby creates a
valid first lien in such Mortgaged Property, free and clear of all defects and
encumbrances, except as disclosed therein, (b) names the Administrative Agent
for the benefit of the Lenders as the insured thereunder and (c) to be issued
by title companies reasonably satisfactory to the Administrative Agent and the
Borrower (including any such title companies acting as co-insurers or reinsurers,
at the option of the Administrative Agent), and (iii) deliver flood
certificates with respect to all Mortgaged Properties in Schedule 1.1(b) and
evidence of flood insurance with respect to each Mortgaged Property that is
located in a special 

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flood hazard and is
located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the
Board, in form and substance reasonably satisfactory to Collateral Agent; provided,
such thirty (30) day period may be extended an additional thirty (30) days with
the consent of Administrative Agent.

SECTION 10.                      Negative Covenants

Each of Holdings, the
Borrower and the Canadian Borrower hereby covenant and agree that on the
Effective Date and thereafter, until the Commitments, the Swingline Commitment
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)  The Borrower will not, and will not permit
any of the Restricted Subsidiaries to, create, incur, assume or suffer to exist
any Indebtedness, except:

(a)  
        Indebtedness arising under
the Credit Documents;

(b)  
        Indebtedness of
(i) the Borrower to any Subsidiary of the Borrower and (ii) any
Subsidiary to the Borrower or any other Restricted Subsidiary of the Borrower;

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

(d)  
        except as provided in
clauses (j) and (k) below, Guarantee Obligations incurred by
(i) Restricted Subsidiaries in respect of Indebtedness of the Borrower or
other Restricted Subsidiaries that is permitted to be incurred under this
Agreement and (ii) the Borrower in respect of Indebtedness of the
Restricted Subsidiaries that is permitted to be incurred under this Agreement, provided
that there shall be no Guarantee (a) by a Restricted Foreign Subsidiary of
any Indebtedness of the Borrower and (b) in respect of the Permitted
Subordinated Debt, unless such Guarantee is made by a Guarantor and such
Guarantee is unsecured and subordinated to the Obligations to the same extent
as the applicable Permitted Subordinated Debt;

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

(f)  
         (i) 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 permitted by Section 10.11, (ii) Indebtedness arising under
Capital Leases entered into in connection with Permitted Sale Leasebacks and
(iii) Indebtedness arising under Capital Leases, other than Capital Leases
in effect on the date hereof and Capital Leases entered into pursuant to
subclauses (i) and (ii) above, provided that the aggregate amount
of Indebtedness incurred pursuant to this subclause (iii) shall not exceed
$75,000,000 at any time outstanding, and (iv) any refinancing, refunding,
renewal or extension of any Indebtedness specified in subclause (i), (ii)
or (iii) above, 

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provided that the principal amount thereof is not increased
above the principal amount thereof outstanding immediately prior to such
refinancing, refunding, renewal or extension;

(g)  
        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, except to the extent otherwise permitted hereunder and (ii) the
direct and contingent obligors with respect to such Indebtedness are not
changed;

(h)  
        Indebtedness in respect of
Hedge Agreements;

(i)  
         Indebtedness in respect of
Permitted Subordinated Debt;

(j)  
         (i) 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 the Borrower 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 the Borrower or any Restricted Subsidiary (other than any
such person that so becomes a Restricted Subsidiary), (y)(A) the capital
stock of such Person is pledged to the Administrative Agent to the extent
required under Section 9.12 and (B) such Person executes a supplement to
each of the Guarantee, the Security Agreement and the Pledge Agreement (or
alternative guarantee and security arrangements in relation to the Obligations)
to the extent required under Sections 9.11 or 9.12, 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 (1) such
Indebtedness and (2) all Indebtedness as to which the proviso to
clause (k)(i)(y) below then applies, and (z) the aggregate amount of
such Indebtedness and all Indebtedness incurred under clause (k) below,
when taken together, does not exceed $150,000,000 in the aggregate at any time
outstanding, and (ii) any refinancing, refunding, renewal or extension of
any Indebtedness specified in subclause (i) 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 and (y) the direct and contingent obligors with respect to
such Indebtedness are not changed;

(k)  
        (i) Indebtedness of
the Borrower or any Restricted Subsidiary incurred to finance a Permitted
Acquisition, provided that (x) such Indebtedness is not guaranteed
in any respect by any Restricted Subsidiary (other than any Person acquired
(the “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, by the Borrower, (y)(A) the
Borrower pledges the capital stock of such acquired Person to the
Administrative Agent to the extent required under Section 9.12 and
(B) such acquired Person executes a supplement to the Guarantee, the
Security Agreement and the Pledge Agreement (or alternative guarantee and
security arrangements in relation to the Obligations) to the extent required
under Sections 9.11 or 9.12, as applicable, provided that the
requirements of this subclause (y) shall not 

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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 (1) such Indebtedness and (2) all
Indebtedness as to which the proviso to clause (j)(i)(y) above then applies,
and (z) the aggregate amount of such Indebtedness and all Indebtedness assumed
or permitted to exist under clause (j) above, when taken together, does
not exceed $150,000,000 in the aggregate at any time outstanding, and
(ii) any refinancing, refunding, renewal or extension of any Indebtedness
specified in subclause (i) above, provided that (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 and (y) the direct and contingent obligors with respect to
such Indebtedness are not changed, except to the extent otherwise permitted
hereunder;

(l)  
         Indebtedness of Restricted
Foreign Subsidiaries in an aggregate amount at any time outstanding not to
exceed the Dollar Equivalents of $125,000,000 (which amount shall include the
aggregate outstanding amount at any time of any Indebtedness of Restricted
Foreign Subsidiaries existing at the Closing Date);

(m)  
       (i) Indebtedness
incurred in connection with any Permitted Sale Leaseback and (ii) any
refinancing, refunding, renewal or extension of any Indebtedness specified in
subclause (i) 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 and (y) the direct
and contingent obligors with respect to such Indebtedness are not changed;

(n)  
        (i) additional
Indebtedness, provided that the aggregate amount of Indebtedness
incurred and remaining outstanding pursuant to this clause (n) shall not
at any time exceed $100,000,000; and (ii) any refinancing, refunding,
renewal or extension of any Indebtedness specified in subclause (i) above;
and

(o)  
        Indebtedness in respect of
Permitted Additional Subordinated Notes to the extent that the Net Cash
Proceeds therefrom are, immediately after the receipt thereof, applied to the
prepayment of Term Loans in accordance with Section 5.2

(B)           Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Indebtedness except (1) with
respect to Parent, Qualified PIK Securities and (2) the guarantee obligations
of Parent and Holdings of the Subordinated Notes under the Subordinated Note
Indenture (provided that Holdings shall not guarantee the Subordinated
Notes unless (i) Holdings also has guaranteed the Obligations pursuant to
the Guarantee, (ii) such guarantee of the Subordinated Notes is unsecured
and subordinated to such guarantee of the Obligations on terms no less
favorable to the Lenders than the subordination provisions of the Subordinated
Notes and (iii) such guarantee of the Subordinated Notes provides for the
release and termination thereof, without action by any party, upon any release
and termination of such guarantee of the Obligations).

(C)           Neither of Parent, Holdings nor the
Borrower will, nor will they permit any Subsidiary to, issue any preferred
stock or other preferred equity interests, other than, in the case of Parent,
Qualified PIK Securities.

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10.2.        Limitation
on Liens.  (A) The Borrower and the
Canadian Borrower will not, and will not permit any of the Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
property or assets of any kind (real or personal, tangible or intangible) of
the Borrower 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(f), provided that such Liens
attach at all times only to the assets so financed, and Liens on the assets of
Foreign Subsidiaries securing Indebtedness permitted pursuant to Section
10.1(l);

(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 clauses
(f) and (g) 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(j), 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 the Borrower or any other Restricted
Subsidiary incurred pursuant to Section 10.1(k) 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 or
any such Indebtedness of the Borrower or any other Restricted Subsidiary; and

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

(B)           Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect thereof, except
(a) liens of the nature set forth in clauses (a), (c) and (h) of the
definition of the term “Permitted Liens” and (b) Liens created under the
Pledge Agreement.

10.3.        Limitation
on Fundamental Changes.  (A) Except
as expressly permitted by Section 10.4 or 10.5, each of Holdings, the
Borrower and the Canadian Borrower will not, and will not permit any of the
Restricted Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), 

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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
Borrower or any other Person may be merged or consolidated with or into the
Borrower, provided that (i) the Borrower shall be the continuing or
surviving corporation or the Person formed by or surviving any such merger or
consolidation (if other than the Borrower) shall be an entity organized or
existing under the laws of the United States, any state thereof, the District
of Columbia or any territory thereof (the Borrower or such Person, as the case
may be, being herein referred to as the “Successor Borrower”),
(ii) the Successor Borrower (if other than the Borrower) shall expressly
assume all the obligations of the 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) the Successor Borrower 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) each Guarantor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the Guarantee confirmed that its
Guarantee shall apply to the Successor Borrower’s obligations under this
Agreement, (vi) each Subsidiary grantor and each Subsidiary pledgor, unless it
is the other party to such merger or consolidation, shall have by a supplement
to the Security Agreement or the Pledge Agreement, as applicable, confirmed
that its obligations thereunder shall apply to the Successor 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 Borrower’s obligations
under this Agreement, and (viii) the Borrower shall have delivered to the
Administrative Agent 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; provided  further
that if the foregoing are satisfied, the Successor Borrower (if other than the
Borrower) will succeed to, and be substituted for, the Borrower under this
Agreement;

(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
(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) the Borrower 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,

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(v) the Borrower, each Guarantor and each Foreign
Subsidiary Guarantor, unless it is the other party to such merger, amalgamation
or consolidation, shall have by a supplement to the Guarantee or Canadian
Subsidiary Guarantee, as the case may be, confirmed that its Guarantee or
Canadian Subsidiary Guarantee, as the case may be, 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 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; 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 the
Borrower (other than the Canadian Borrower) or any other Person may be merged,
amalgamated or consolidated with or into any one or more Subsidiaries of the Borrower
(other than the Canadian 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 Borrower shall take all steps necessary
to cause the Person formed by or surviving any such merger, amalgamation or
consolidation (if other than a Restricted Subsidiary) to become a Restricted
Subsidiary, (ii) in the case of any merger, amalgamation or consolidation
involving one or more Guarantors and/or Canadian Subsidiary Guarantors, as the
case may be, a Guarantor or Canadian 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
Guarantor or Canadian Subsidiary Guarantor, as the case may be) shall execute a
supplement to the Guarantee Agreement, the Pledge Agreement and the Security
Agreement and any applicable Mortgage or the analogous Canadian Security
Documents, as the case may be, in form and substance reasonably satisfactory to
the Administrative Agent in order to become a Guarantor or Canadian Subsidiary
Guarantor, as the case may be, 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) the Borrower 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 Borrower shall have delivered to the
Administrative Agent an Officers’ 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 Guarantor or a Foreign Subsidiary Guarantor may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary 

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liquidation or otherwise) to the Borrower, the Canadian
Borrower, a Guarantor, a Foreign Subsidiary Guarantor or any other Restricted
Subsidiary of the Borrower;

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

(f)  
         any Restricted Subsidiary
(other than the Canadian Borrower) may liquidate or dissolve if (x) the
Borrower determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower 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.

(B)           Holdings will not engage in any
business or activity other than (a) the ownership of all the outstanding
shares of capital stock of the Borrower, (b) maintaining its corporate
existence, (c) participating in tax, accounting and other administrative
matters as a member of the consolidated group of Holdings and Borrower,
(d) the performance of the Credit Documents to which it is a party,
(e) making any Dividend permitted by Section 10.6 or holding any cash
received in connection with Dividends made by the Borrower in accordance with
Section 10.6 pending application thereof by Holdings in the manner
contemplated by Section 10.6 and (f) activities incidental to the
businesses or activities described in clauses (a) to (e) of this
Section 10.3(B).  Holdings will not
own or acquire any assets (other than shares of capital stock of the Borrower,
cash and Permitted Investments) or incur any liabilities (other than
liabilities under the Credit Documents, liabilities under its guarantee of the
Subordinated Notes and liabilities imposed by law, including tax liabilities,
and other liabilities incidental to its existence and business and activities
permitted by this Agreement).

(C)           Parent will not engage in any business
or activity other than (a) the ownership of all the outstanding shares of
capital stock of Holdings, (b) maintaining its corporate existence,
(c) participating in tax, accounting and other administrative matters as a
member of the consolidated group of Holdings and Borrower, (d) the
performance of the Credit Documents to which it is a party, (e) holding
any cash received in connection with Dividends made by Holdings in accordance
with Section 10.6 pending application thereof by Parent in the manner
contemplated by Section 10.6, (f) activities related to Qualified PIK
Securities and other permitted capital stock and (g) activities incidental to
the businesses or activities described in clauses (a) to (e) of this
Section 10.3(C).  Parent will not
own or acquire any assets (other than shares of capital stock of Holdings, cash
and Permitted Investments) or incur any liabilities (other than those
liabilities permitted by Section 10.1(B) or liabilities imposed by law,
including tax liabilities, and other liabilities incidental to its existence
and business and activities permitted by this Agreement).

10.4.        Limitation
on Sale of Assets.  Each of Holdings,
the Borrower and the Canadian Borrower 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 

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(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 the Borrower or the Restricted
Subsidiaries) or (ii) sell to any Person (other than the Borrower, a
Guarantor or a Restricted Foreign Subsidiary) any shares owned by it of any
Restricted Subsidiary’s capital stock, except that:

(a)  
        the Borrower and the
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)  
        the Borrower and the
Restricted Subsidiaries may sell, transfer or otherwise dispose of other assets
(other than accounts receivable) for fair value, provided that
(i) the aggregate amount of such sales, transfers and disposals by the
Borrower and the Restricted Subsidiaries, taken as a whole, pursuant to this
clause (b) shall not exceed in the aggregate $200,000,000, (ii) any
consideration in excess of $5,000,000 received by the Borrower or any Guarantor
in connection with such sales, transfers and other dispositions of assets
pursuant to this clause (b) that is in the form of Indebtedness shall be
pledged to the Administrative Agent pursuant to Section 9.12,
(iii) with respect to any such sale, transfer or disposition (or series of
related sales, transfers or dispositions) in an aggregate amount in excess of
$10,000,000 the Borrower 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)  
        the Borrower and the
Restricted Subsidiaries may make sales of assets to the Borrower or to any
Restricted Subsidiary, provided that any such sales to Restricted
Foreign Subsidiaries shall be for fair value;

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

(e)  
        in addition to selling or
transferring accounts receivable pursuant to the other provisions hereof, the
Borrower and the 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 customary receivables
financing facilities so long as, in the case of clauses (i) and (ii), the Net
Cash Proceeds thereof to the Borrower and its Restricted Subsidiaries (except
in the case of transactions permitted by Section 10.4(e)(i) to the extent the
Net Cash Proceeds of any such transaction do not exceed $10,000) are promptly
applied to the prepayment and/or commitment reductions as provided for in
Section 5.2.

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

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

(b)  
        Permitted Investments;

(c)  
        loans and advances to
officers, directors and employees of Holdings or any of its Subsidiaries
(i) to finance the purchase of capital stock of Holdings (provided
that the amount of such loans and advances used to acquire such capital stock
shall be contributed by Holdings to the Borrower in cash as common equity) and
(ii) for additional purposes not contemplated by subclause (i) above
in an aggregate principal amount at any time outstanding with respect to this
clause (ii) not exceeding $10,000,000;

(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;

(e)  
        investments in Hedge
Agreements permitted by Section 10.1(h);

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

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

(h)  
        investments constituting
non-cash proceeds of sales, transfers and other dispositions of assets to the
extent permitted by Section 10.4;

(i)  
         investments in any
Guarantor (other than Holdings), the Borrower, the Canadian Borrower or any
Foreign Subsidiary Guarantor;

(j)  
         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 the Borrower or any Restricted Subsidiary
in any Restricted Foreign Subsidiary, to the extent that such Restricted
Foreign Subsidiary does not become a Foreign Subsidiary Guarantor pursuant to
Section 9.11 and does not enter into the guarantee and collateral arrangements
contemplated thereby, shall not exceed the Available 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);

(k)  
        investments in the equity
interests of one or more newly formed persons that are received in
consideration of the contribution by the Borrower or its applicable Restricted
Subsidiaries of assets (including capital stock) to such person or persons, provided
that (i) the fair market value of such assets, determined on arms-length
basis, so contributed pursuant to this paragraph (k) shall not in the aggregate
exceed $50,000,000, (ii) with respect to investments in 

 107
 

 

 

Foreign Joint Ventures, the sum of all investments in Foreign
Joint Ventures made pursuant to this Section 10.5 (k) prior to the date thereof
and all investment in Foreign Joint Ventures made pursuant to Section 10.5(m)
below prior to the date thereof, when taken together, as valued at the fair
market value of such investment at the time each such investment is made, does
not exceed $50,000,000 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) in the aggregate and (iii) in respect
of each such contribution, an Authorized Officer of the Borrower shall certify,
in a form to be agreed upon by the Borrower and the Administrative Agent
(x) after giving effect to such contribution, no Default or Event of
Default shall have occurred and be continuing, (y) the fair market value
of the assets so contributed and (z) that the requirements of
paragraph (i) of this proviso remain satisfied;

(l)  
         investments made to
repurchase or retire common stock of Holdings owned by any employee stock
ownership plan or key employee stock ownership plan of Holdings or the
Borrower;

(m)  
       additional investments
(including investments in Minority Investments and Unrestricted Subsidiaries),
as valued at the fair market value of such investment at the time each such
investment is made, in an aggregate amount at the time of such investment not
in excess of the Available Amount at such time 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), provided,
that with respect to investments in Foreign Joint Ventures, the sum of all
investments in Foreign Joint Ventures made pursuant to Section 10.5 (k) above
prior to the date thereof and all investment in Foreign Joint Ventures made
pursuant to this Section 10.5(m) prior to the date thereof, when taken
together, as valued at the fair market value of such investment at the time
each such investment is made, does not exceed $50,000,000 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) in the
aggregate;

(n)  
        investments permitted under
Section 10.6; and

(o)  
        the initial investment in a newly formed Puerto Rican Subsidiary as described on Schedule 10.5(o).

10.6.        Limitation
on Dividends.  None of Holdings, the
Borrower or the Canadian Borrower will declare or pay any dividends (other
than, (a) in respect of  Holdings,
dividends payable solely in its capital stock or rights, warrants or options to
purchase its capital stock and (b) in respect of the Borrower, 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 

 108
 

 

 

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 or the Borrower, 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 or the Borrower 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 (or pay dividends
with such proceeds), 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 or the Borrower may or may pay Dividends to Parent
to repurchase shares of its or Parent’s capital stock (or any options or
warrants or stock appreciation rights issued with respect to any of its or
Parent’s capital stock) held by officers, directors and employees of Parent,
Holdings and its Subsidiaries, with the proceeds of dividends from, seriatim,
the Borrower and Holdings, as applicable, which shall also be permitted, 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) the Borrower and the Restricted Subsidiaries
may make investments permitted by Section 10.5, (d) Holdings may declare
and pay Dividends on its capital stock, with the proceeds of dividends from,
the Borrower, which shall also be permitted to declare and pay dividends on its
capital stock, provided that (i) subject to clause (ii) below, the
aggregate amount of such Dividends paid by Holdings pursuant to this
clause (d) shall not at any time exceed the sum of (x) $30,000,000 in the
aggregate per annum and (y) 50% of Cumulative Consolidated Net Income Available
to Stockholders at such time less the amount of Dividends previously paid
pursuant to clause (i)(x) or (i)(y) of this proviso following the last day of
the most recent fiscal quarter for which Section 9.1 Financials have been
delivered to the Lenders under Section 9.1, (ii) with respect to each of
clauses (x) and (y), at the time of the payment of any such Dividends and after
giving effect thereto, both (a) the Consolidated Total Debt to Consolidated
EBITDA Ratio on the date of such payment of such dividends shall be less than
5.00:1.00 and (b) the Consolidated Senior Debt to Consolidated EBITDA Ratio on
the date of such payment of such dividends shall be less than 3.50:1.00 and (e)
the Borrower and Holdings may declare and pay dividends and/or make
distributions on its capital stock, as applicable, the proceeds of which will
be used by Parent or Holdings solely to pay taxes of Parent, Holdings, the
Borrower and the Subsidiaries as part of a consolidated tax filing group for
U.S. federal, state or local tax purposes, along with franchise taxes,
administrative and similar expenses related to its existence and ownership of
the Borrower, as applicable, provided that the amount of such dividends does
not exceed in any fiscal year the amount of such taxes and expenses payable for
such fiscal year (it being understood that such expenses shall in no event
exceed $1,000,000 in the aggregate per fiscal year).

10.7.        Limitations
on Debt Payments and Amendments. 
(a)     The Borrower will not prepay,
repurchase or redeem or otherwise defease any Subordinated Notes (it being
understood that any payment of principal prior to April 6, 2014 shall be deemed
a prepayment for purposes of this Section 10.7); provided, however,
that so long as (i) no Default or Event of 

 109
 

 

 

Default has occurred and
is continuing and (ii) on the date of such determination the Consolidated
Senior Debt to Consolidated EBITDA Ratio is less than 3.50 to 1.00, the
Borrower may prepay, repurchase or redeem any Subordinated Notes; provided,
that to the extent such prepayment, repurchase or redemption is made with
the proceeds of subordinated Indebtedness that is permitted by
Section 10.1 (other than Permitted Additional Subordinated Notes), such
subordinated Indebtedness shall have terms material to the interests of the
Lenders not materially less advantageous to the Lenders than those of the
Subordinated Notes.

(b)  
        The Borrower will not
waive, amend, modify, terminate or release the Subordinated Note Indenture to
the extent that any such waiver, amendment, modification, termination or
release would be adverse to the Lenders in any material respect.

10.8.        Limitations
on Sale Leasebacks.  Holdings and the
Borrower 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 and the Borrower will not permit the Consolidated Total Debt to
Consolidated EBITDA Ratio for any Test Period ending during any period set
forth below to be greater than the ratio set forth below opposite such period:

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 29, 2006 to
  August 27, 2006

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  August 28 2006
  to November 26, 2006

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  November 27,
  2006 to February 25, 2007

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  February 26,
  2007 to May 27, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  May 28, 2007 to
  August 26, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  August 27, 2007
  December 2, 2007

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  December 3, 2007
  to March 2, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  March 3, 2008 to
  June 1, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  June 2, 2008 to
  August 31, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  September 1,
  2008 to November 30, 2008

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  December 1, 2008 and
  thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

10.10.      Consolidated EBITDA to Consolidated
Interest Expense Ratio.  Holdings and
the Borrower will not permit the Consolidated EBITDA to Consolidated
Interest Expense Ratio for any Test Period ending during any period set forth
below to be less than the ratio set forth below opposite such period:

 110
 

 

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 29, 2006 to
  August 27, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  August 28 2006
  to November 26, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  November 27,
  2006 to February 25, 2007

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  February 26,
  2007 to May 27, 2007

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  May 28, 2007 to
  August 26, 2007

  	
   

  	
  2.20 to 1.00

  	
   

  
	
  August 27, 2007
  December 2, 2007

  	
   

  	
  2.20 to 1.00

  	
   

  
	
  December 3, 2007
  to March 2, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  March 3, 2008 to
  June 1, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  June 2, 2008 to
  August 31, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  September 1,
  2008 to November 30, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  December 1, 2008
  to March 1, 2009

  	
   

  	
  2.40 to 1.00

  	
   

  
	
  March 2, 2009 to
  May 31, 2009

  	
   

  	
  2.40 to 1.00

  	
   

  
	
  June 1, 2009 to
  August 30, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  August 31, 2009
  to November 29, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  November 30,
  2009 to February 28, 2010

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  March 1, 2010 to
  May 30, 2010

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  June 1, 2010 to
  August 29, 2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  August 30, 2010
  to November 28, 2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  November 29, 2010 and
  thereafter

  	
   

  	
  2.75 to 1.00

  	
   

  

 

10.11.      Capital Expenditures.  Holdings, the Borrower and the Canadian
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
make any Capital Expenditures (other than Permitted Acquisitions that
constitute Capital Expenditures), that would cause the aggregate amount of such
Capital Expenditures made by the Borrower and the Restricted Subsidiaries in
any fiscal year of the Borrower set forth below to exceed (i) the sum of
(a) the greater of (x) the amount set forth in the table below opposite
such fiscal year and (y) an amount equal to 6.00% multiplied by
Consolidated Net Sales for such fiscal year (such greater amount, the “Permitted
Capital Expenditure Amount”) and (b) the Available Amount as of the last
day of such fiscal year (provided that no portion of the Available Amount may
be used for Capital Expenditures until the entire amount of the sum of (x) the
Permitted Capital Expenditure Amount for such year and (y) the carry-forward
amount (as defined below in this Section 10.11) for such year shall have been
used to make Capital Expenditures) less (ii) to the extent deducted in
arriving at Consolidated Earnings in the prior fiscal year, the amount of
expenses related to the implementation of enterprise resource planning systems
of such prior fiscal year.

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  March 1, 2004 to
  November 28, 2004

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  November 29,
  2004 to November 27, 2005

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
  November 28,
  2005 to November 26, 2006

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  November 27, 2006 to
  December 2, 2007

  	
   

  	
  $

  	
  40,000,000

  	
   

  

 111
 

 

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  December 3, 2007
  to November 30, 2008

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  December 1, 2008
  to November 29, 2009

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  November 30,
  2009 to November 28, 2010

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  November 29, 2010 to
  the Maturity Date

  	
   

  	
  $

  	
  40,000,000

  	
   

  

 

To the extent that
Capital Expenditures (other than Permitted Acquisitions that constitute Capital
Expenditures) made by the Borrower and the Restricted Subsidiaries during any
fiscal year are less than the Permitted Capital Expenditure Amount for such
fiscal year, 100% of such unused amount (each such amount, a “carry-forward
amount”) may be carried forward to the immediately succeeding fiscal year
and utilized to make such Capital Expenditures in such succeeding fiscal year
in the event the amount set forth above for such succeeding fiscal year has
been used (it being understood and agreed that (a) no carry-forward amount
may be carried forward beyond the first two fiscal years immediately succeeding
the fiscal year in which it arose, (b) no portion of the carry-forward
amount available for any fiscal year may be used until the entire amount of the
Permitted Capital Expenditure Amount for such fiscal year (without giving
effect to such carry-forward amount) shall have been used to make Capital
Expenditures and (c) if the carry-forward amount available for any fiscal
year is the sum of amounts carried forward from each of the two immediately
preceding fiscal years, no portion of such carry-forward amount from the
earlier of the two immediately preceding fiscal years may be used until the
entire portion of such carry-forward amount from the more recent immediately
preceding fiscal year shall have been used for such Capital Expenditures made
in such fiscal year).

SECTION 11.         Events
of Default

Upon the occurrence of
any of the following specified events (each an “Event of Default”):

11.1.        Payments.  The Borrower or the Canadian 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 amounts owing hereunder or under any other
Credit Document; 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), Section 9.16 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 Security Document and such default
shall continue unremedied for a period of at least 30 days after receipt of
written notice by the Borrower from the Administrative Agent or the Required
Lenders; or

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11.4.        Default
Under Other Agreements.  (a) Any of
Holdings, the Borrower, the Canadian Borrower or any of the Restricted
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) in excess of $20,000,000 in the aggregate, for
Holdings, the Borrower, the Canadian Borrower and such Subsidiaries, beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist (other than, with respect to
Indebtedness consisting of any Hedge Agreements, termination events or
equivalent events pursuant to the terms of such Hedge Agreements), the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, any such Indebtedness to become due prior to its
stated maturity; or (b) without limiting the provisions of clause (a)
above, any such Indebtedness shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment
or as a mandatory prepayment (and, with respect to Indebtedness consisting of any
Hedge Agreements, other than due to a termination event or equivalent event
pursuant to the terms of such Hedge Agreements), prior to the stated maturity
thereof; or

11.5.        Bankruptcy,
etc.  Holdings, the Borrower, the
Canadian 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,” or (b) 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 any of Holdings, the Borrower, the Canadian 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 any of Holdings, the Borrower, the
Canadian 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, receiver manager, trustee or
similar person is appointed for, or takes charge of, all or substantially all
of the property of any of Holdings, the Borrower, the Canadian Borrower or any
Specified Subsidiary; or any of Holdings, the Borrower, the Canadian Borrower
or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to any of Holdings, the Borrower,
the Canadian Borrower or any Specified Subsidiary; or there is commenced
against any of Holdings, the Borrower, the Canadian Borrower or any Specified
Subsidiary any such proceeding or action that remains undismissed for a period
of 60 days; or any of Holdings, the Borrower, the Canadian 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 any of Holdings, the Borrower, the Canadian Borrower or any
Specified Subsidiary suffers any appointment of any custodian receiver,
receiver manager, trustee or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or any
of Holdings, the Borrower, the Canadian Borrower or any Specified Subsidiary
makes a general assignment for

 113

 

 

the benefit of creditors; or any corporate action is
taken by any of Holdings, the Borrower, the Canadian Borrower or any Specified
Subsidiary for the purpose of effecting any of the foregoing; or

11.6.        ERISA.  (a) Any Plan shall fail to satisfy the
minimum funding standard required for any plan year or part thereof or a waiver
of such standard or extension of any amortization period is sought or granted
under Section 412 of the Code; any Plan is or shall have been terminated or is
the subject of termination proceedings under ERISA (including the giving of
written notice thereof); an event shall have occurred or a condition shall
exist in either case entitling the PBGC to terminate any Plan or to appoint a
trustee to administer any Plan (including the giving of written notice
thereof); any Plan shall have an accumulated funding deficiency (whether or not
waived); any of Holdings, the Borrower or any Subsidiary or any ERISA Affiliate
has incurred or is likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA
or Section 4971 or 4975 of the Code (including the giving of written notice
thereof); (b) there could result from any event or events set forth in clause
(a) of this Section 11.6 the imposition of a lien, the granting of a security
interest, or a liability, or the reasonable likelihood of incurring a lien,
security interest or liability; and (c) such lien, security interest or
liability will or would be reasonably likely to have a Material Adverse Effect;
or

11.7.        Guarantee.  The Guarantees 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 the Guarantee; or

11.8.        Pledge Agreement.  The Pledge 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 any Lender) or any pledgor thereunder or any Credit
Party shall deny or disaffirm in writing any pledgor’s obligations under the
Pledge Agreement; or

11.9.        Security Agreement.  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 any Lender) or any grantor thereunder or any Credit
Party shall deny or disaffirm in writing any grantor’s obligations under the
Security Agreement; or

11.10.           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 Administrative 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

11.11.           Foreign Guarantees.  The Canadian Guarantee or any material
provision of the Canadian Guarantee shall cease to be in full force or effect
or any grantor thereunder or any Credit Party shall deny or disaffirm in
writing any grantors obligations under the Canadian Guarantee; or

 114
 

 

 

11.12.           Canadian Security Documents.  Any Canadian Security Document or any
material provision of any Canadian 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 Agent or any Lender) or any
grantor thereunder or any Credit Party shall deny or disaffirm in writing any
grantors obligations under any Canadian Security Document; or

11.13.           Subordination.  The Obligations of the Borrower and the
Canadian Borrower, or the obligations of Holdings or any Subsidiaries pursuant
to the Guarantee or the Canadian Guarantee, shall cease to constitute senior
indebtedness under the subordination provisions of any document or instrument
evidencing the Subordinated Notes or any other permitted 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; or

11.14.           Judgments.  One or more judgments or decrees shall be
entered against the Borrower, the Canadian Borrower or any of the Restricted
Subsidiaries involving a liability of $20,000,000 or more in the aggregate for
all such judgments and decrees for the Borrower and the Restricted Subsidiaries
(to the extent not paid or fully covered by insurance provided by a carrier not
disputing coverage) and any such judgments or decrees shall not have been
satisfied, vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or

11.15.           Change of Control.  A Change of Control shall occur;

then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the Required Lenders,
by written notice to the 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 the Borrower and
the Canadian Borrower, 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 the 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 Lender, 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 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 Borrower and the Canadian
Borrower to pay (and the 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 the 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 Borrower’s and the
Canadian

 115
 

 

 

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.

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. 
Neither the Syndication Agent nor the Co-Documentation Agents, in their
respective capacities as such, shall have any obligations, duties or
responsibilities under this Agreement but shall be entitled to all benefits of
this Section 12.

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 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 Borrower, the
Canadian Borrower, any Guarantor, any Canadian Subsidiary 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 Borrower, the
Canadian Borrower, any Guarantor, any Canadian Subsidiary 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 Borrower or the Canadian Borrower.

 116
 

 

 

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 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 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.  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 and all
future holders of the Loans.

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 the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders, 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 Borrower, the Canadian Borrower, any Guarantor, any Canadian Subsidiary
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 Borrower, the Canadian Borrower, any Guarantor, any
Canadian Subsidiary 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

 117
 

 

 

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 Borrower, the Canadian Borrower, any Guarantor, any
Canadian Subsidiary 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 Borrower, the Canadian
Borrower, any Guarantor, any Canadian Subsidiary Guarantor or any other Credit
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 Borrower or the Canadian Borrower and without limiting the obligation of
the 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 Borrower, the Canadian
Borrower, any Guarantor, any Canadian Subsidiary 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
Borrower.  If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the other Credit

 118
 

 

 

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 Borrower (which approval shall not be unreasonably
withheld), 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 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 or any
authority of the United States 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.  (a)   Each
of the Lenders hereby agrees and confirms that the provisions of this Section
12 shall apply to JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian
Administrative Agent with respect to the Canadian Revolving Credit Loans upon
the same terms and subject to the same conditions as provided in this Section
12 mutatis mutandis; 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.

12.12.      Quebec.  (a)   For
greater certainty, and without limiting the powers of the Agents or any other
Person acting as an agent, attorney-in-fact or mandatary for the Agents under
this Agreement or under any of the other Credit Documents, each Lender, hereby
(a) irrevocably constitutes, to the extent necessary, the Canadian
Administrative Agent as the holder of an irrevocable power of attorney (fondé
de pouvoir within the meaning of Article 2692 of the Civil Code of
Québec) for the purposes of holding any Liens, including hypothecs, granted
or to be granted by any Credit Party on movable or immovable property pursuant
to the laws of the Province of Quebec to secure obligations of a Credit Party
under any bond issued by a Credit Party; and (b) appoints and agrees that
the Canadian Administrative Agent, acting as agent for the Lenders, may act as
the bondholder and mandatary with respect to any bond that may be issued and
pledged from time to time for the benefit of the Lenders.

The said constitution of
the fondé de pouvoir (within
the meaning of Article 2692 of the Civil Code of Quebec) as the holder
of such irrevocable power of attorney and of the Canadian Administrative Agent
as bondholder and mandatary with respect to any bond that may be issued

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and pledged from time to time for the benefit of the
Lenders shall be deemed to have been ratified and confirmed by any assignee by
the execution of an Assignment and Acceptance.

Notwithstanding the
provisions of Section 32 of An Act respecting the special powers of legal
persons (Quebec), the Canadian Administrative Agent may purchase, acquire
and be the holder of any bond issued by any Credit Party.  Each Credit Party hereby acknowledges that
any such bond shall constitute a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec.

The Canadian
Administrative Agent herein appointed as fondé de pouvoir shall have the
same rights, powers and immunities as the Agents as stipulated in this Article
XII, which shall apply mutatis mutandis. 
Without limitation, the provisions of Section 12.9 of this Agreement
shall apply mutatis mutandis to the resignation and appointment of a
successor to the Canadian Administrative Agent acting as fondé de pouvoir.

SECTION 13.                                      Collateral
Allocation Mechanism

13.1.        Implementation of CAM.  (a)     On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Section 11, (ii) the Lenders shall automatically and
without further act (and without regard to the provisions of Section 14.6)
be deemed to have exchanged interests in the Credit Facilities such that in
lieu of the interest of each Lender in each Credit Facility in which it shall
participate as of such date (including such Lender’s interest in the Specified
Obligations of each Credit Party in respect of each such Credit Facility), such
Lender shall hold an interest in every one of the Credit Facilities (including
the Specified Obligations of each Credit Party in respect of each such Credit
Facility and each L/C Reserve Account established pursuant to Section 13.2
below), whether or not such Lender shall previously have participated therein,
equal to such Lender’s CAM Percentage thereof and (iii) simultaneously
with the deemed exchange of interests pursuant to clause (ii) above, in the
case of (A) any Canadian Lender that has prior to the date thereof notified the
Canadian Administrative Agent and the Borrower in writing that it has elected
to have this clause (iii) apply to it, and (B) any other Lender that has
notified the Administrative Agent in writing that it desires to have its deemed
participation following the CAM Exchange Date converted to Dollars, the
interests in the Canadian Obligations to be received by such Lender in such
deemed exchange shall, automatically and with no further action required, be
converted into the Dollar Equivalent, determined using the Exchange Rate
calculated as of such date, of such amount and on and after such date all
amounts accruing and owed to such Lender in respect of such Obligations shall
accrue and be payable in Dollars at the rate otherwise applicable hereunder,
provided that such CAM Exchange will not affect the aggregate amount of the
Obligations of the Borrower and the Canadian Borrower to the Lenders under the
Credit Documents.  Each Lender and each
Credit Party hereby consents and agrees to the CAM Exchange, and each Lender
agrees that the CAM Exchange shall be binding upon its successors and assigns
and any person that acquires a participation in its interests in any Credit
Facility.  Each Credit Party agrees from
time to time to execute and deliver to the Administrative Agent all promissory
notes and other instruments and documents as the Administrative Agent shall
reasonably request to evidence and confirm the respective interests of the
Lenders after giving effect to the CAM Exchange, and each Lender agrees to
surrender any promissory notes originally received by it in connection with its
Loans hereunder to the Administrative Agent

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against delivery of new promissory notes evidencing
its interests in the Credit Facilities; provided, however, that the failure of
any Credit Party to execute or deliver or of any Lender to accept any such
promissory note, instrument or document shall not affect the validity or
effectiveness of the CAM Exchange.

(b)           As a result of the CAM Exchange, upon
and after the CAM Exchange Date, each payment received by the Administrative
Agent pursuant to any Credit Document in respect of the Specified Obligations,
and each distribution made by the Administrative Agent pursuant to any Credit
Document in respect of the Specified Obligations, shall be distributed to the
Lenders pro rata in accordance with their respective CAM Percentages.  Any direct payment received by a Lender upon
or after the CAM Exchange Date, including by way of setoff, in respect of a
Specified Obligation shall be paid over to the Administrative Agent for
distribution to the Lenders in accordance herewith.

13.2.        Letters of Credit.  (a)     In the event that on the CAM Exchange Date
any Letter of Credit shall be outstanding and undrawn in whole or in part, or
any amount drawn under a Letter of Credit shall constitute an Unpaid Drawing,
each Lender with a U.S. Revolving Credit Commitment or Canadian Revolving
Credit Commitment, as applicable, in respect of Unpaid Drawings on Letters of
Credit shall, before giving effect to the CAM Exchange, promptly pay over to
the Administrative Agent, in immediately available funds and in the currency
that such Letters of Credit are denominated (or at the request of a Lender,
such amount in the Dollar Equivalent thereof at such time), an amount equal to
such Lender’s Revolving Credit Commitment Percentage (as notified to such
Lender by the Administrative Agent), of such Letter of Credit’s undrawn face
amount or (to the extent it has not already done so) such Letter of Credit’s
Unpaid Drawing, as the case may be, together with interest thereon from the CAM
Exchange Date to the date on which such amount shall be paid to the
Administrative Agent at the rate that would be applicable at the time to a
Revolving Credit Loan that is an ABR Loan in a principal amount equal to such
amount, as the case may be.  The
Administrative Agent shall establish a separate account or accounts for each
Lender (each, an “L/C Reserve Account”) for the amounts received with
respect to each such Letter of Credit pursuant to the preceding sentence.  The Administrative Agent shall deposit in
each Lender’s L/C Reserve Account such Lender’s CAM Percentage of the amounts
received from the Lenders as provided above. 
The Administrative Agent shall have sole dominion and control over each
L/C Reserve Account, and the amounts deposited in each L/C Reserve Account
shall be held in such L/C Reserve Account until withdrawn as provided in
paragraph (b), (c), (d) or (e) below. 
The Administrative Agent shall maintain records enabling it to determine
the amounts paid over to it and deposited in the L/C Reserve Accounts in
respect of each Letter of Credit and the amounts on deposit in respect of each
Letter of Credit attributable to each Lender’s CAM Percentage.  The amounts held in each Lender’s L/C Reserve
Account shall be held as a reserve against the Letter of Credit Exposure, shall
be the property of such Lender, shall not constitute Loans to or give rise to
any claim of or against any Credit Party and shall not give rise to any
obligation on the part of the Borrower or the Canadian Borrower to pay interest
to such Lender, it being agreed that the reimbursement obligations in respect
of Letters of Credit shall arise only at such times as drawings are made
thereunder, as provided in Section 3.

(b)           In the event that after the CAM
Exchange Date any drawing shall be made in respect of a Letter of Credit, the
Administrative Agent shall, at the request of the Letter of

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Credit Issuer withdraw from the L/C Reserve Account of
each Lender any amounts, up to the amount of such Lender’s CAM Percentage of
such drawing, deposited in respect of such Letter of Credit and remaining on
deposit and deliver such amounts to the Letter of Credit Issuer in satisfaction
of the reimbursement obligations of the Lenders under Section 3 (but not
of the Borrower and the Canadian Borrower under Section 3, respectively).  In the event any Lender shall default on its
obligation to pay over any amount to the Administrative Agent in respect of any
Letter of Credit as provided in this Section 13.2, the Letter of Credit
Issuer shall, in the event of a drawing thereunder, have a claim against such
Lender to the same extent as if such Lender had defaulted on its obligations
under Section 2.5(e), but shall have no claim against any other Lender in
respect of such defaulted amount, notwithstanding the exchange of interests in
the reimbursement obligations pursuant to Section 13.1.  Each other Lender shall have a claim against
such defaulting Lender for any damages sustained by it as a result of such
default, including, in the event such Letter of Credit shall expire undrawn,
its CAM Percentage of the defaulted amount.

(c)           In the event that after the CAM
Exchange Date any Letter of Credit shall expire undrawn, the Administrative
Agent shall withdraw from the L/C Reserve Account of each Lender the amount
remaining on deposit therein in respect of such Letter of Credit and distribute
such amount to such Lender.

(d)           With the prior written approval of
the Administrative Agent and the Letter of Credit Issuer, any Lender may
withdraw the amount held in its L/C Reserve Account in respect of the undrawn
amount of any Letter of Credit.  Any
Lender making such a withdrawal shall be unconditionally obligated, in the
event there shall subsequently be a drawing under such Letter of Credit, to pay
over to the  Administrative Agent, for
the account of the Letter of Credit Issuer on demand, its CAM Percentage of
such drawing.

(e)           Pending the withdrawal by any Lender
of any amounts from its L/C Reserve Account as contemplated by the above
paragraphs, the Administrative Agent will, at the direction of such Lender and
subject to such rules as the Administrative Agent may prescribe for the avoidance
of inconvenience, invest such amounts in Permitted Investments.  Each Lender that has not withdrawn its CAM
Percentage of amounts in its L/C Reserve Account as provided in
paragraph (d) above shall have the right, at intervals reasonably
specified by the Administrative Agent, to withdraw the earnings on investments
so made by the Administrative Agent with amounts in its L/C Reserve Account and
to retain such earnings for its own account.

13.3.        Net Payments Upon Implementation of
CAM Exchange.  Notwithstanding any
other provision of this Agreement, if, as a direct result of the implementation
of the CAM Exchange, the Borrower or the Canadian Borrower is required to
withhold Non-Excluded Taxes from amounts payable to the Administrative Agent,
any Lender or any Participant hereunder, the amounts so payable to the
Administrative Agent, such Lender or such Participant shall be increased to the
extent necessary to yield to the Administrative Agent, such Lender or such
Participant (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 Borrower and the
Canadian Borrower shall not be required to increase any such amounts payable to
such Lender or Participant under this Section 13.3 (but, rather, shall be
required to increase any such amounts payable to such Lender or Participant to
the extent required by

 122
 

 

 

Section 5.4) if such Lender or Participant was prior
to or on the CAM Exchange Date already a Lender or Participant with respect to
such Borrower or Canadian Borrower.  If a
Non-U.S. Lender (or Non-U.S. Participant), in its good faith judgment, is
eligible for an exemption from, or reduced rate of, U.S. Federal withholding
tax on payments by the Borrower under this Agreement, the Borrower shall not be
required to increase any such amounts payable to such Non-U.S. Lender (or
Non-U.S. Participant) if such Non-U.S. Lender (or Non-U.S. Participant) fails
to comply with the requirements of paragraph (b) of Section 5.4.  The Canadian Borrower shall not be required
to indemnify or pay any additional amounts to any Lender in respect of Canadian
withholding tax pursuant to this Section 13.3 to the extent that such taxes
result from a failure by the Lender to comply with any Reporting Requirement
described in Section 5.4(c) of this Agreement 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 tax, and (ii) the Canadian borrower has first made written
request to the Lender that such Lender comply with the particular Reporting
Requirement (identified specifically in such request) and the Lender 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 (x) where such obligation arose prior to
the Canadian Borrower’s written request to the Lender 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, as applicable, is unable to duly comply with such Reporting
Requirement, or (z) to the extent that the additional payment or indemnity
compensates the Lender for an amount to which the Lender would have been
entitled to received under this Section 13.3 had the Lender complied with the
Reporting Requirement.  Upon a CAM
Exchange, a Lender (or Participant) will use commercially reasonable efforts,
and complete any procedural formalities necessary, to become an Eligible Lender
with respect to the Canadian Borrower and, if such Lender (or Participant)
fails to do so, the Canadian Borrower shall not be required to increase any
such amounts payable to such Lender (or Participant) (unless such Lender is
prohibited from becoming a Canadian Lender by its governing documents).  If the Borrower or the Canadian Borrower, as
the case may be, fails to pay any such Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, such Borrower or
Canadian Borrower shall indemnify the Administrative Agent, the Lenders and the
Participants for any incremental taxes, interest, costs or penalties that may
become payable by the Administrative Agent, such Lenders or such Participants
as a result of any such failure.

SECTION 14.                                      Miscellaneous

14.1.        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 14.1.  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 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

 123

 

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 14.8(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 14.1 or
reduce the percentages specified in the definitions of the terms “Required
Canadian Revolving Credit Lenders”, “Required US Revolving Credit Lenders”, “Required
Lenders” “Required Tranche A Term Lenders”, “Required Tranche E Term Lenders”
and “Required Term Lenders” or consent to the assignment or transfer by the
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 the Letter of Credit Issuer, or (v) amend, modify or
waive any provisions hereof relating to Swingline Loans without the written
consent of the Swingline Lender, or (vi) (a) change any Revolving Credit
Commitment to a Tranche A Term Loan Commitment or Tranche E Term Loan
Commitment, (b) change any Tranche A Term Loan Commitment or Tranche E Term
Loan Commitment to a Revolving Credit Commitment, (c) change any Tranche A Term
Loan Commitment to a Tranche E Term Loan Commitment or (d) change any Tranche E
Term Loan Commitment to a Tranche A Term Loan 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 (except as expressly permitted by the Guarantee), release all or
substantially all of the Canadian Subsidiary Guarantors under any Canadian
Subsidiary Guarantee (except as permitted by any Canadian Subsidiary Guarantee)
or release all or substantially all of the Collateral under the Pledge
Agreement, the Security Agreement, the Canadian Security Documents and the
Mortgages, in each case without the prior written consent of each Lender, or
(viii) amend Section 2.9(a) 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 Tranche A Repayment Amount or Tranche E Repayment
Amount, extend any scheduled Tranche A Repayment Date or Tranche E Repayment
Date or decrease the amount or allocation of any mandatory prepayment to be
received by any Lender holding any Tranche A Term Loans or Tranche E Term
Loans, in each case without the written consent of the Required Tranche A Term
Lenders and Tranche E Term Loans, as applicable, and; provided,  further,
that at any time that no Default or Event of Default has occurred and is
continuing, the Revolving Credit Commitment of any Lender may be increased to
finance a Permitted Acquisition, with the consent of such Lender, the Borrower
and the Administrative Agent (which consent, in the case of the Administrative
Agent, shall not be unreasonably withheld) and without the consent of the
Required Lenders, so long as (i) the Increased Commitment Amount at such
time, when added to the amount of Indebtedness incurred pursuant to
Section 10.1(k) and outstanding at such time, does not exceed the limits
set forth therein, (ii) the Borrower or its applicable Restricted

 124
 

 

Subsidiary shall pledge
the capital stock of any person acquired pursuant thereto to the Administrative
Agent for the benefit of the Lenders to the extent required under
Section 9.12 and (iii) to the extent determined by the Administrative
Agent to be necessary to ensure pro rata borrowings commencing with the initial
borrowing after giving effect to such increase, the Borrower shall prepay any
BA Loans or Eurodollar Loans outstanding immediately prior to such initial
borrowing; as used herein, the “Increased Commitment Amount” means, at
any time, aggregate amount of all increases pursuant to this proviso made at or
prior to such time less the aggregate amount of all voluntary reductions of the
Revolving Credit Commitments made prior to such time.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the affected Lenders
and shall be binding upon the Borrower, the Canadian Borrower, such Lenders,
the Administrative Agent and all future holders of the affected Loans.  In the case of any waiver, the Borrower, 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.

14.2.        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 the Borrower, the Canadian Borrower and the
Administrative Agent, and in the case of the other parties hereto to such other
address as may be hereafter notified by the respective parties hereto:

	
  The Borrower and the

  	
   

  	
  Sealy Mattress
  Company

  
	
  Canadian
  Borrower:

  	
   

  	
  One Office
  Parkway

  
	
   

  	
   

  	
  Trinity, NC
  27370

  
	
   

  	
   

  	
  Attention:
  Kenneth L. Walker

  
	
   

  	
   

  	
  Fax:
  +-336-861-3786

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kohlberg Kravis
  Roberts & Co., L.P.

  
	
   

  	
   

  	
  9 West 57th Street

  
	
   

  	
   

  	
  Suite 4200

  
	
   

  	
   

  	
  New York, NY
  10019

  
	
   

  	
   

  	
  Attention: Brian
  Carroll

  
	
   

  	
   

  	
  Fax:
  212-750-0003

  

 

 125
 

 

 

	
  The Administrative

  	
   

  	
  JPMorgan Chase
  Bank

  
	
  Agent:

  	
   

  	
  Agent Bank
  Services Group

  
	
   

  	
   

  	
  1111 Fannin,
  10th Floor

  
	
   

  	
   

  	
  Houston, Texas
  77002

  
	
   

  	
   

  	
  Attention:
  Vaughan Nguyen

  
	
   

  	
   

  	
  Fax: (713)
  750-2932

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMorgan Chase
  Bank

  
	
   

  	
   

  	
  270 Park Avenue,
  4th Floor

  
	
   

  	
   

  	
  New York, New
  York 10017

  
	
   

  	
   

  	
  Attention:
  Kathryn Duncan

  
	
   

  	
   

  	
  Fax:
  212-270-6637

  
	
   

  	
   

  	
   

  
	
  The Canadian

  	
   

  	
  JPMorgan Chase
  Bank, N.A., Toronto Branch

  
	
  Administrative
  Agent:

  	
   

  	
  200 Bay Street,
  Suite 1800

  
	
   

  	
   

  	
  Royal Bank
  Plaza, South Tower

  
	
   

  	
   

  	
  Toronto, Ontario
  M5J 2J2

  
	
   

  	
   

  	
  Attention:
  Corporate Banker

  
	
   

  	
   

  	
  Fax:
  416-981-9138

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMorgan Chase
  Bank, N.A., Toronto Branch

  
	
   

  	
   

  	
  200 Bay Street,
  Suite 1800

  
	
   

  	
   

  	
  Royal Bank
  Plaza, South Tower

  
	
   

  	
   

  	
  Toronto, Ontario
  M5J 2J2

  
	
   

  	
   

  	
  Attention:
  Corporate Banking Officer

  
	
   

  	
   

  	
  Fax:
  416-981-9128

  

 

provided
that any notice, request or demand to or upon the 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.

14.3.        No
Waiver; Cumulative Remedies.   No failure to exercise and no
delay in exercising, on the part of the 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.

14.4.        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.

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14.5.        Payment
of Expenses and Taxes.   The Borrower and the Canadian
Borrower 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 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, (b) to pay or
reimburse each Lender and the Administrative 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 Administrative
Agent, (c) to pay, indemnify, and hold harmless each Lender and the
Administrative Agent from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Credit Documents and any such other documents, and
(d) to pay, indemnify, and hold harmless each Lender and the Administrative
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 or liability under,
any Environmental Law or any actual or alleged presence of Hazardous Materials
applicable to the operations of the 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 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 arising from (i) the gross negligence or willful
misconduct of the party to be indemnified or (ii) disputes among the
Administrative Agent, the Lenders and/or their transferees.  The agreements in this Section 14.5 shall
survive repayment of the Loans and all other amounts payable hereunder.

14.6.        Successors
and Assigns; Participations and Assignments.   (a)      The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Letter of Credit Issuer that issues any Letter
of Credit), except that (i) the 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 the 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 the Letter of Credit Issuer that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to

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the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Letter of Credit Issuer 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
paragraph (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 (such consent not be unreasonably withheld; it being
understood that, without limitation, the Borrower shall have the right to withhold
its consent to any assignment if, in order for such assignment to comply with
applicable law, the Borrower would be required to obtain the consent of, or
make any filing or registration with, any Governmental Authority) of:

(A)          the Borrower, provided that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender (unless increased costs 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 Administrative Agent, and, in the
case of Revolving Credit Commitments or Revolving Credit Loans or Canadian
Letters of Credit only, the Swingline Lender and the applicable Letter of
Credit Issuer, provided that no consent of the Administrative Agent, the
Swingline Lender or the Letter of Credit Issuer shall be required for an
assignment of (1) any Commitment to an assignee that is a Lender with a
Commitment of the same Class immediately prior to giving effect to such
assignment or (2) any Term Loan to a Lender, an Affiliate of a Lender or an
Approved Fund.

(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 the Dollar Equivalent of $2,500,000 or, in the case of a
Tranche A Term Loan Commitment, Tranche E Term Loan Commitment, Tranche A Term
Loan or Tranche E Term Loan, the Dollar Equivalent of $1,000,000 unless each of
the Borrower and the Administrative Agent otherwise consents, provided
that no such consent of the 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;

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(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;

(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; and

(E)           so long as no Event of Default has
occurred and is continuing, with respect to any assignment of the Canadian
Revolving Credit Commitments allocated to the Canadian Borrower in accordance
with Section 2.1(b)(ii), the Assignee shall be a Canadian Resident and a pro
rata portion of the Canadian Revolving Credit Commitments of the Canadian
Lender or its Related Affiliate, as applicable, allocated to the Borrower in
accordance with Section 2.1(b)(ii) shall be assigned to a Related Affiliate, if
applicable, of such assignee, that is either a “United States 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 of Section 5.4(b).

For the purpose of
this Section 14.6(b), the term “Approved Fund” has the following meaning:

“Approved Fund”
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered, 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 paragraph (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 14.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 14.6
shall be treated for purposes of this Agreement as a sale by such Lender of a

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participation in such
rights and obligations in accordance with paragraph (c) of this Section.

(iv)          The Administrative Agent, acting for
this purpose as an agent of the Borrower 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 the 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 Borrower, the Canadian Borrower, the Administrative
Agent, the Letter of Credit Issuer and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower, the Canadian Borrower, the Letter of
Credit Issuer 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 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 Borrower, the Canadian Borrower, the
Administrative Agent, the Letter of Credit Issuer or the 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 the Loans owing to
it), provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Canadian Borrower, the Administrative Agent, the Letter of Credit
Issuer 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

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amendment,
modification or waiver described in the first proviso to Section 14.1 that
affects such Participant.  Subject to
paragraph (c)(ii) of this Section, the 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 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  14.8(b) as
though it were a Lender, provided such Participant agrees to be subject
to Section 14.8(a) as though it were a Lender.

(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 Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lender
if it were a Lender shall not be entitled to the benefits of Section 5.4
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower and the Canadian
Borrower, to comply with Section 5.4(b) as though it were a Lender.

(d)           Any
Lender may, without the consent of the Borrower or the Administrative Agent, 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 Borrower and the Canadian Borrower hereby agree that, upon
request of any Lender at any time and from time to time after the Borrower has
made its initial borrowing hereunder, the Borrower or the Canadian Borrower, as
the case may be, shall provide to such Lender, at the Borrower’s or the
Canadian Borrower’s own expense, a promissory note, substantially in the form
of Exhibit L-1 or L-2, as the case may be, evidencing the Tranche A Term Loans,
Tranche E Term Loans and Revolving Credit Loans and Swingline Loans,
respectively, owing to such Lender.

(e)           Subject
to Section 14.16, the 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 the Borrower and its
Affiliates that has been delivered to such Lender by or on behalf of the
Borrower and its Affiliates pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrower and its Affiliates in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.

(f)            Each
Person that is or becomes a Lender or 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 14.6(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

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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.

14.7.        Replacements
of Lenders under Certain Circumstances.   The Borrower (on
its own behalf and on behalf of the Canadian Borrower) shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.10, 2.12, 3.5 or 5.4, (b) 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 (c) becomes a Defaulting Lender, with a
replacement bank or other financial institution, provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the 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, 5.4 or 14.5, as the case may be, owing to such replaced Lender prior
to the date of replacement, (iv) 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, (v) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions
of Section 14.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (vi) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Canadian Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.

14.8.        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 Borrower or the Canadian Borrower,
any such notice being expressly waived by the Borrower and the Canadian
Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by the 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

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the credit or the
account of the Borrower or the Canadian Borrower, as the case may be.  Each Lender agrees promptly to notify the
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.

14.9.        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 Borrower and the Administrative Agent.

14.10.           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.

14.11.           Integration.   This
Agreement and the other Credit Documents represent the agreement of the
Borrower, the Canadian Borrower, the 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 or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Credit Documents.

14.12.           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.

14.13.           Submission
to Jurisdiction; Waivers.   The 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 the Borrower at its address set
forth in Section 14.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;

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

(e)           waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section 14.13 any special,
exemplary, punitive or consequential damages.

14.14.           Acknowledgments.  The Borrower and the Canadian Borrower each
hereby acknowledge that:

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

(b)           neither the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to the 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
and Lenders, on one hand, and the 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 the Borrower, the Canadian
Borrower and the Lenders.

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

14.16.           Confidentiality.  The Administrative Agent and each Lender
shall hold all non-public information furnished by or on behalf of the 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 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 governmental agency
or representative thereof or pursuant to legal process or to such Lender’s or
the Administrative Agent’s attorneys, or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty’s professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual party agrees to be bound by the provisions of this Section
14.16.) or independent auditors or Affiliates, provided that unless
specifically prohibited by applicable law or court order, each Lender and the
Administrative Agent shall notify the 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 Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information, and

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provided further
that in no event shall any Lender or the Administrative Agent be obligated or
required to return any materials furnished by the Borrower or any Subsidiary of
the Borrower.  Each Lender and the
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 advises of and agrees to be
bound by the provisions of this Section 14.16.

Notwithstanding anything express or implied to the
contrary herein or by the documents referred to or incorporated by reference
herein, or any other prior or future oral or written statements by any parties
hereto with respect to the transactions contemplated herein or by the other
Credit Documents, and whether or not any of them are legally binding, the
obligations of confidentiality contained herein and therein, as they relate to
the transactions contemplated by this Agreement, shall not apply to the tax
structure or tax treatment of such transactions, and each recipient (and its
employees, representatives, or other agents) may immediately disclose to any
and all persons, without limitation of any kind, the U.S. Federal income tax
structure and such recipient’s U.S. Federal income tax treatment of such
transactions and any opinions or other tax analyses that have been provided by
the parties hereto (or any agent thereof) to the recipient regarding such tax
structure or tax treatment.  However, no
such recipient shall disclose any information relating to such tax structure or
tax treatment to the extent that non-disclosure is reasonably necessary to
comply with applicable securities law. 
This paragraph is intended to cause the transactions contemplated by
this Agreement not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose.

14.17.           Judgment Currency.  (a)    The
obligations of the Borrower and the Canadian Borrower hereunder and under the
other Loan 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 the 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, the 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

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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.

14.18.           USA PATRIOT Act.  Each Lender hereby notifies the 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 “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Patriot Act.

14.19.           Reaffirmation and Grant of
Security Interest. (a) Each Credit Party has (i) guarantied the Obligations
and (ii) created Liens in favor of Lenders on certain Collateral to secure its
obligations hereunder, under the Guarantee and the Canadian Guarantee, as the
case may be.  Each Credit Party hereby
acknowledges that it has reviewed the terms and provisions of this Agreement
and consents to the amendment and restatement of the Existing Credit Agreement
effected pursuant to this Agreement. 
Each Credit Party hereby (i) confirms that each Credit Document to which
it is a party or is otherwise bound and all Collateral encumbered thereby will
continue to guarantee or secure, as the case may be, to the fullest extent
possible in accordance with the Credit Documents, the payment and performance
of the Obligations and all Guarantee Obligations, as the case may be, including
without limitation the payment and performance of all such Obligations and all
Guarantee Obligations which are joint and several obligations of each grantor
now or hereafter existing, and (ii) grants to the Administrative Agent for the
benefit of the Secured Parties a continuing lien on and security interest in
and to such Credit Party’s right, title and interest in, to and under all
Collateral as collateral security for the prompt payment and performance in
full when due of the Obligations and all Guarantee Obligations (whether at
stated maturity, by acceleration or otherwise).

(b)           Each Credit Party acknowledges and
agrees that any of the Credit Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of the amendment and restatement of the
Existing Credit Agreement.  Each Credit
Party represents and warrants that all representations and warranties contained
in the Credit Documents to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Effective Date
to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on and
as of such earlier date.

14.20.           Amendment and Restatement.  It is the intention of each of the parties
hereto that the Existing Credit Agreement be amended and restated so as to
preserve the perfection and priority of all security interests securing
indebtedness and obligations under the Existing Credit Agreement and that all
Indebtedness and Obligations  and
Guarantee Obligations

 136
 

 

of Borrower and its
Subsidiaries hereunder and thereunder shall be secured by the Security
Documents and that this Agreement does not constitute a novation of the
obligations and liabilities existing under the Existing Credit Agreements.  The parties hereto further acknowledge and
agree that this Agreement constitutes an amendment of the Existing Credit
Agreement made under and in accordance with the terms of subsection 14.1 of the
Existing Credit Agreement.  In addition,
unless specifically amended hereby, each of the Credit Documents, the Exhibits
and Schedules to the Existing Credit Agreement shall continue in full force and
effect and that, from and after the Effective Date, all references to the “Credit
Agreement” contained therein shall be deemed to refer to this Agreement.

[Signature
Pages Follow]

 137

 

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.

	
  

  	
  SEALY MATTRESS
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark D.
  Boehmer

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY MATTRESS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark D.
  Boehmer

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark D.
  Boehmer

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY CANADA
  LTD./LTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark D.
  Boehmer

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

SUBSIDIARY GUARANTORS:

SEALY MATTRESS
COMPANY OF PUERTO RICO

OHIO-SEALY
MATTRESS MANUFACTURING CO., INC.

OHIO-SEALY
MATTRESS MANUFACTURING CO.

SEALY MATTRESS
COMPANY OF KANSAS CITY, INC.

SEALY MATTRESS
COMPANY OF MEMPHIS

SEALY MATTRESS
COMPANY OF ILLINOIS

SEALY MATTRESS
COMPANY OF ALBANY, INC.

SEALY OF MARYLAND
AND VIRGINIA, INC.

SEALY OF
MINNESOTA, INC.

NORTH AMERICAN
BEDDING COMPANY

SEALY, INC.

MATTRESS HOLDINGS
INTERNATIONAL LLC

THE OHIO MATTRESS
COMPANY LICENSING AND COMPONENTS GROUP

SEALY MATTRESS
MANUFACTURING COMPANY, INC.

SEALY TECHNOLOGY
LLC

SEALY KOREA, INC.

SEALY REAL ESTATE,
INC.

SEALY TEXAS
MANAGEMENT, INC.

SEALY TEXAS
HOLDINGS LLC

SEALY TEXAS L.P.

WESTERN MATTRESS
COMPANY

GESTION CENTURION INC.

	
  By: 

  	
  /s/ Mark D.
  Boehmer

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

 

	
  

  	
  JPMORGAN CHASE
  BANK, N.A.,

  
	
   

  	
  as
  Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kathryn A.
  Duncan

  	
   

  
	
   

  	
   

  	
  Name: Kathryn A. Duncan

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE
  BANK, N.A.,

  
	
   

  	
  TORONTO BRANCH,

  
	
   

  	
  as Canadian
  Administrative Agent and as a

  
	
   

  	
  Canadian Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Drew
  McDonald

  	
   

  
	
   

  	
   

  	
  Name: Drew McDonald

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

 

	
  

  	
  J.P. MORGAN
  SECURITIES INC.,

  
	
   

  	
  as Joint Lead
  Arranger and Joint Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael K.
  Ryan

  	
   

  
	
   

  	
   

  	
  Name: Michael K. Ryan

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

 

	
  

  	
  CITIGROUP GLOBAL
  MARKETS INC.,

  
	
   

  	
  as Joint Lead
  Arranger and Joint Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  Conway

  	
   

  
	
   

  	
   

  	
  Name: Christopher Conway

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

 

	
  

  	
  CITIBANK, N.A.,

  
	
   

  	
  as Syndication
  Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  Conway

  	
   

  
	
   

  	
   

  	
  Name: Christopher Conway

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
  

  	
  GENERAL ELECTRIC
  CAPITAL

  CORPORATION,

  
	
   

  	
  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M. Cunningham

  	
   

  
	
   

  	
   

  	
  Name:  James M. Cunningham

  
	
   

  	
   

  	
  Title:  Duly Authorized Signatory

  

 

 

 

	
  

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,

  
	
   

  	
  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Harper

  	
   

  
	
   

  	
   

  	
  Name:  Thomas M. Harper

  
	
   

  	
   

  	
  Title:  Senior Vice President

  

 

 

 

	
  

  	
  LASALLE BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher J. Cona

  	
   

  
	
   

  	
   

  	
  Name:  Christopher J. Cona

  
	
   

  	
   

  	
  Title:  Vice President

  

 

 

 

	
  

  	
  Institution Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank of America, N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alysa A. Trakas

  	
   

  
	
   

  	
   

  	
  Name:  Alysa A. Trakas

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Carolina First Bank,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles D. Chamberlain

  	
   

  
	
   

  	
   

  	
  Name:  Charles D. Chamberlain

  
	
   

  	
   

  	
  Title:  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Goldman Sachs Credit Partners, L.P.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walt Jackson

  	
   

  
	
   

  	
   

  	
  Name:  Walt Jackson

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Mizuho Corporate Bank, Ltd.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Fayen

  	
   

  
	
   

  	
   

  	
  Name:  James R. Fayen

  
	
   

  	
   

  	
  Title:  Deputy General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STATE BANK OF INDIA,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rakesh Chandra

  	
   

  
	
   

  	
   

  	
  Name:  Rakesh Chandra

  
	
   

  	
   

  	
  Title:  Vice President & Head (Credit)

  
	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  BABSON CLO LTD. 2005-I,

  
	
   

  	
  Babson Capital Management LLC as Collateral

  
	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dongbing Hu

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS MUTUAL LIFE

  
	
   

  	
  INSURANCE COMPANY,

  
	
   

  	
  Babson Capital Management LLC as Investment

  
	
   

  	
  Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dongbing Hu

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MAPLEWOOD (CAYMAN) LIMITED,

  
	
   

  	
  Babson Capital Management LLC as Investment

  
	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dongbing Hu

  	
   

  
	
   

  	
   

  	
  Dongbing Hu

  
	
   

  	
   

  	
  Associate
  Director

  
	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  Franklin CLO I,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Ardini

  	
   

  
	
   

  	
   

  	
  Name:  David Ardini

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Franklin CLO II,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Ardini

  	
   

  
	
   

  	
   

  	
  Name:  David Ardini

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Franklin CLO IV,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Ardini

  	
   

  
	
   

  	
   

  	
  Name:  David Ardini

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Franklin CLO V,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Ardini

  	
   

  
	
   

  	
   

  	
  Name:  David Ardini

  
	
   

  	
   

  	
  Title:  Vice PresidentExhibit 4.1

    Exhibit
      4.1

    SECURED
      TERM NOTE

     

    FOR
      VALUE
      RECEIVED, BLAST
      ENERGY SERVICES, INC.,
      a
      California corporation (the “Company”),
      promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate Services
      Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand
      Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”)
      or its
      registered assigns or successors in interest, the sum of Forty Million Six
      Hundred Thousand Dollars ($40,600,000), together with any accrued and unpaid
      interest hereon, on August 25, 2009 (the “Maturity
      Date”)
      if not
      sooner indefeasibly paid in full.

    Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in that certain Securities Purchase Agreement dated as of the date hereof
      between the Company and the Holder (as amended, modified and/or supplemented
      from time to time, the “Purchase
      Agreement”).

    The
      following terms shall apply to this Secured Term Note (this “Note”):

     

    ARTICLE
      I

    CONTRACT
      RATE AND AMORTIZATION

     

    1.1 Contract
      Rate. Subject to Sections 3.2 and 4.10, interest payable on the outstanding
      principal amount of this Note (the “Principal
      Amount”)
      shall
      accrue at a rate per annum equal to the “prime rate” published in The Wall
      Street Journal from time to time (the “Prime
      Rate”),
      plus
      two and one-half percent (2.5%) (the “Contract
      Rate”).
      The
      Contract Rate shall be increased or decreased as the case may be for each
      increase or decrease in the Prime Rate in an amount equal to such increase
      or
      decrease in the Prime Rate; each change to be effective as of the day of the
      change in the Prime Rate. The Contract Rate shall not at any time be less than
      nine percent (9.0%). Interest shall be (i) calculated on the basis of a 360
      day
      year, and (ii) payable monthly, in arrears, commencing on October 1, 2006,
      on
      the first business day of each consecutive calendar month thereafter through
      and
      including the Maturity Date, and on the Maturity Date, whether by acceleration
      or otherwise. 

    1.2 Contract
      Rate Payments. The Contract Rate shall be calculated on the last business day
      of
      each calendar month hereafter (other than for increases or decreases in the
      Prime Rate which shall be calculated and become effective in accordance with
      the
      terms of Section 1.1) until the Maturity Date.

    1.3 Principal
      Payments. Amortizing payments of the aggregate principal amount outstanding
      under this Note at any time (the “Principal
      Amount”)
      shall
      be made by the Company on April 1, 2007 and on the first business day of each
      succeeding month thereafter through and including the Maturity Date (each,
      an
“Amortization
      Date”).
      Commencing on the first Amortization Date, the Company shall make monthly
      payments to the Holder on each Amortization Date, each such payment in the
      amount of (a) $800,000 from April 1, 2007 through and including March 1, 2008,
      (b) $900,000 from March 1, 2008 through and including March 1, 2009 and (c)
      $1,000,000 on each succeeding Amortization Date thereafter until the Maturity
      Date, in each case together with any accrued and unpaid interest on such portion
      of the Principal

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Amount
      plus any and all other unpaid amounts which are then owing under this Note,
      the
      Purchase Agreement and/or any other Related Agreement (collectively, the
“Monthly
      Amount”).
      Any
      outstanding Principal Amount together with any accrued and unpaid interest
      and
      any and all other unpaid amounts which are then owing by the Company to the
      Holder under this Note, the Purchase Agreement and/or any other Related
      Agreement shall be due and payable on the Maturity Date.

     

    ARTICLE
      II

    REDEMPTION

     

    2.1 Optional
      Redemption in Cash. The Company may prepay this Note (“Optional
      Redemption”)
      by
      paying to the Holder a sum of money equal to the Applicable Principal Amount
      (as
      defined below) together with accrued but unpaid interest thereon and any and
      all
      other sums due, accrued or payable to the Holder arising under this Note, the
      Purchase Agreement and/or any other Related Agreement (the “Redemption
      Amount”)
      outstanding on the Redemption Payment Date (as defined below). The Company
      shall
      deliver to the Holder a written notice of redemption (the “Notice
      of Redemption”)
      specifying the date for such Optional Redemption (the “Redemption
      Payment Date”),
      which
      date shall be seven (7) business days after the date of the Notice of Redemption
      (the “Redemption
      Period”).
      On
      the Redemption Payment Date, the Redemption Amount must be paid in good funds
      to
      the Holder. In the event the Company fails to pay the Redemption Amount on
      the
      Redemption Payment Date as set forth herein, then such Notice of Redemption
      will
      be null and void. For purposes of this Section 2.1, the “Applicable
      Principal Amount”
shall
      mean (a) during the period commencing on the date hereof and ending on the
      first
      anniversary of the date hereof, 110% of the Principal Amount outstanding at
      the
      time of such prepayment, (b) during the period commencing on the day immediately
      succeeding the first anniversary of the date hereof and ending on the second
      anniversary of the date hereof, 105% of the Principal Amount outstanding at
      the
      time of such prepayment and (c) during the period commencing on the day
      immediately succeeding the second anniversary of the date hereof and ending
      on
      the Maturity Date, 100% of the Principal Amount outstanding at the time of
      such
      prepayment.

     

    ARTICLE
      III

    EVENTS
      OF DEFAULT

     

    3.1 Events
      of
      Default. The occurrence of any of the following events set forth in this Section
      3.1 shall constitute an event of default (“Event
      of Default”)
      hereunder:

    (a) Failure
      to Pay.
      The
      Company fails to pay when due any installment of principal, interest or other
      fees hereon in accordance herewith, or the Company fails to pay any of the
      other
      Obligations (under and as defined in the Master Security Agreement) when due,
      and, in any such case, such failure shall continue for a period of three (3)
      days following the date upon which any such payment was due;

    (b) Breach
      of Covenant.
      The
      Company or any of its Subsidiaries breaches any covenant or any other term
      or
      condition of this Note in any material respect and

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such
      breach, if subject to cure, continues for a period of fifteen (15) days after
      the occurrence thereof;

    (c) Breach
      of Representations and Warranties.
      Any
      representation, warranty or statement made or furnished by the Company or any
      of
      its Subsidiaries in this Note, the Purchase Agreement or any other Related
      Agreement shall at any time be false or misleading in any material respect
      on
      the date as of which made or deemed made;

    (d) Default
      Under Other Agreements.
      The
      occurrence of any default (or similar term) in the observance or performance
      of
      any other agreement or condition relating to any indebtedness or contingent
      obligation of the Company or any of its Subsidiaries beyond the period of grace
      (if any), the effect of which default is to cause, or permit the holder or
      holders of such indebtedness or beneficiary or beneficiaries of such contingent
      obligation to cause, such indebtedness to become due prior to its stated
      maturity or such contingent obligation to become payable;

    (e) Material
      Adverse Effect.
      Any
      change or the occurrence of any event which could reasonably be expected to
      have
      a Material Adverse Effect;

    (f) Bankruptcy.
      The
      Company or any of its Subsidiaries shall (i) apply for, consent to or
      suffer to exist the appointment of, or the taking of possession by, a receiver,
      custodian, trustee or liquidator of itself or of all or a substantial part
      of
      its property, (ii) make a general assignment for the benefit of creditors,
      (iii) commence a voluntary case under the federal bankruptcy laws (as now or
      hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file
      a
      petition seeking to take advantage of any other law providing for the relief
      of
      debtors, (vi) acquiesce to, without challenge within ten (10) days of the filing
      thereof, or failure to have dismissed, within thirty (30) days, any petition
      filed against it in any involuntary case under such bankruptcy laws, or (vii)
      take any action for the purpose of effecting any of the foregoing;

    (g) Judgments.
      Attachments or levies in excess of $50,000 in the aggregate are made upon the
      Company or any of its Subsidiary’s assets or a judgment is rendered against the
      Company’s property involving a liability of more than $50,000 which shall not
      have been vacated, discharged, stayed or bonded within thirty (30) days from
      the
      entry thereof;

    (h) Insolvency.
      The
      Company or any of its Subsidiaries shall admit in writing its inability, or
      be
      generally unable, to pay its debts as they become due or cease operations of
      its
      present business;

    (i) Change
      of Control.
      A
      Change of Control (as defined below) shall occur with respect to the Company,
      unless Holder shall have expressly consented to such Change of Control in
      writing. A “Change of Control” shall mean any event or circumstance as a result
      of which (i) any “Person” or “group” (as such terms are defined in Sections
      13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other
      than the Holder, is or becomes the “beneficial owner” (as defined in Rules
      13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 42%
      or
      more on a fully diluted basis of the then outstanding voting equity interest
      of
      the Company, (ii) the Board of Directors of the Company shall cease to consist
      of a majority

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    of
      the
      Company’s board of directors on the date hereof (or directors appointed by a
      majority of the board of directors in effect immediately prior to such
      appointment), (iii) the Company or any of its Subsidiaries merges or
      consolidates with, or sells all or substantially all of its assets to, any
      other
      person or entity or (iv) the Company fails to own 100% of the membership
      interests in Eagle Domestic Drilling Operations LLC;

    (j) Indictment;
      Proceedings.
      The
      indictment of the Company or any of its Subsidiaries or any executive officer
      of
      the Company or any of its Subsidiaries under any criminal statute, or
      commencement of criminal or civil proceeding against the Company or any of
      its
      Subsidiaries or any executive officer of the Company or any of its Subsidiaries
      pursuant to which statute or proceeding penalties or remedies sought or
      available include forfeiture of any of the property of the Company or any of
      its
      Subsidiaries; or

    (k) The
      Purchase Agreement and Related Agreements.
      (i) An
      Event of Default shall occur under and as defined in the Purchase Agreement
      or
      any other Related Agreement, (ii) the Company or any of its Subsidiaries shall
      breach any term or provision of the Purchase Agreement or any other Related
      Agreement in any material respect and such breach, if capable of cure, continues
      unremedied for a period of fifteen (15) days after the occurrence thereof,
      (iii)
      the Company or any of its Subsidiaries attempts to terminate, challenges the
      validity of, or its liability under, the Purchase Agreement or any Related
      Agreement, (iv) any proceeding shall be brought to challenge the validity,
      binding effect of the Purchase Agreement or any Related Agreement or (v) the
      Purchase Agreement or any Related Agreement ceases to be a valid, binding and
      enforceable obligation of the Company or any of its Subsidiaries (to the extent
      such persons or entities are a party thereto).

    3.2 Default
      Interest. Following the occurrence and during the continuance of an Event of
      Default, the Company shall pay additional interest on the outstanding principal
      balance of this Note in an amount equal to one percent (1%) per month, and
      all
      outstanding obligations under this Note, the Purchase Agreement and each other
      Related Agreement, including unpaid interest, shall continue to accrue interest
      at such additional interest rate from the date of such Event of Default until
      the date such Event of Default is cured or waived.

     

    ARTICLE
      IV

    MISCELLANEOUS

     

    4.1 Issuance
      of New Note. Upon any partial redemption of this Note, a new Note containing
      the
      same date and provisions of this Note shall, at the request of the Holder,
      be
      issued by the Company to the Holder for the principal balance of this Note
      and
      interest which shall not have been paid as of such date. Subject to the
      provisions of Article III of this Note, the Company shall not pay any costs,
      fees or any other consideration to the Holder for the production and issuance
      of
      a new Note.

    4.2 Cumulative
      Remedies. The remedies under this Note shall be cumulative.

    4.3 Failure
      or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof
      in the exercise of any power, right or privilege hereunder shall operate as
      a
      waiver thereof, nor shall any single or partial exercise of any such power,
      right or privilege preclude

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    other
      or
      further exercise thereof or of any other right, power or privilege. All rights
      and remedies existing hereunder are cumulative to, and not exclusive of, any
      rights or remedies otherwise available.

    4.4 Notices.
      Any notice herein required or permitted to be given shall be in writing and
      provided in accordance with the terms of the Purchase Agreement. 

    4.5 Amendment
      Provision. The term “Note” and all references thereto, as used throughout this
      instrument, shall mean this instrument as originally executed, or if later
      amended or supplemented, then as so amended or supplemented, and any successor
      instrument as such successor instrument may be amended or
      supplemented.

    4.6 Assignability.
      This Note shall be binding upon the Company and its successors and assigns,
      and
      shall inure to the benefit of the Holder and its successors and assigns, and
      may
      be assigned by the Holder in accordance with the requirements of the Purchase
      Agreement. The Company may not assign any of its obligations under this Note
      without the prior written consent of the Holder, any such purported assignment
      without such consent being null and void.

    4.7 Cost
      of
      Collection. In case of any Event of Default under this Note, the Company shall
      pay the Holder the Holder’s reasonable costs of collection, including reasonable
      attorneys’ fees.

    4.8 Governing
      Law, Jurisdiction and Waiver of Jury Trial.

    (a) THIS
      NOTE
      SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAW.

    (b) THE
      COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
      IN
      THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
      TO
      HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND,
      AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER
      RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE
      OR
      ANY OF THE RELATED AGREEMENTS; PROVIDED,
      THAT
      THE COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
      HEARD
      BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
      FURTHER PROVIDED,
      THAT
      NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM
      BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT
      THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
      OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
      HOLDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
      JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY
      HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    UPON
      LACK
      OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
      NON CONVENIENS.
      THE
      COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
      PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
      SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
      MAIL
      ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT
      AND
      THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S
      ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
      POSTAGE PREPAID.

    (c) THE
      COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
      APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
      OF
      THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY HERETO WAIVES ALL RIGHTS
      TO
      TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
      WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER AND THE
      COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
      RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
      RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

    4.9 Severability.
      In the event that any provision of this Note is invalid or unenforceable under
      any applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision of this Note.

    4.10 Maximum
      Payments. Nothing contained herein shall be deemed to establish or require
      the
      payment of a rate of interest or other charges in excess of the maximum
      permitted by applicable law. In the event that the rate of interest required
      to
      be paid or other charges hereunder exceed the maximum rate permitted by such
      law, any payments in excess of such maximum rate shall be credited against
      amounts owed by the Company to the Holder and thus promptly refunded to the
      Company in cash.

    4.11 Security
      Interest and Guarantee. The Holder has been granted a security interest (i)
      in
      certain assets of the Company and its Subsidiaries as more fully described
      in
      the Master Security Agreement dated as of the date hereof, (ii) in certain
      assets of the Company and Eagle Domestic Drilling Operations LLC as more fully
      described in the Intellectual Property Security Agreement dated as of the date
      hereof and (iii) in the equity interests of the Company’s Subsidiaries pursuant
      to the Member Pledge Agreement dated as of the date hereof. The obligations
      of
      the Company under this Note are guaranteed by certain Subsidiaries of the
      Company pursuant to the Subsidiary Guaranty dated as of the date
      hereof.

    4.12 Construction.
      Each party acknowledges that its legal counsel participated in the preparation
      of this Note and, therefore, stipulates that the rule of construction
      that

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ambiguities
      are to be resolved against the drafting party shall not be applied in the
      interpretation of this Note to favor any party against the other.

    4.13 Registered
      Obligation. This Note is intended to be a registered obligation within the
      meaning of Treasury Regulation Section 1.871-14(c)(1)(i) and the Company (or
      its
      agent) shall register this Note (and thereafter shall maintain such
      registration) as to both principal and any stated interest. Notwithstanding
      any
      document, instrument or agreement relating to this Note to the contrary,
      transfer of this Note (or the right to any payments of principal or stated
      interest thereunder) may only be effected by (i) surrender of this Note and
      either the reissuance by the Company of this Note to the new holder or the
      issuance by the Company of a new instrument to the new holder, or (ii) transfer
      through a book entry system maintained by the Company (or its agent), within
      the
      meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

    

    [Balance
      of page intentionally left blank; signature page follows]

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Secured Term Note to be signed in its name effective
        as
        of this 25th day of August, 2006.

    

    

      

      
        	 	
                BLAST
                  ENERGY SERVICES, INC.

                 

                 

              
	 	
                By:

              	
                /s/
                  John O’Keefe

              
	 	
                Name:

              	
                John
                  O’Keefe

              
	 	
                Title:

              	
                EVP,
                  CFO, and Co-CEO

              

      

      WITNESS:

      

      

      
        	
                /s/
                  John MacDonald

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