Document:

Exhibit 10(a)

 

[SUTHERLAND ASBILL &
BRENNAN LLP LETTERHEAD]

 

	
  DAVID S. GOLDSTEIN

  	
   

  	
   

  
	
  DIRECT LINE:
  202.383.0606

  	
   

  	
   

  
	
  Internet:
  david.goldstein@sablaw.com

  	
   

  	
   

  

 

 

April 18, 2005

 

 

Board of Directors

Protective Life Insurance
Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby
consent to the reference to our name under the caption “Legal Matters” in the
statement of additional information filed as part of post-effective amendment
number 1 to the registration statement on Form N-4 (File No. 333-112892) filed
by Protective Life Insurance Company and Protective Variable Annuity Separate
Account with the Securities and Exchange Commission.  In giving this consent, we do not admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SUTHERLAND
  ASBILL & BRENNAN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  David S. Goldstein

  	
   

  
	
   

  	
   

  	
        David
  S. GoldsteinExhibit 10(b)

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

 

We hereby consent to the use in this Registration Statement on Form N-4
(File No. 333-112892) of our report dated March 30, 2005, relating to the
consolidated financial statements and financial statement schedules of
Protective Life Insurance Company and subsidiaries, which appears in such
Registration Statement.  We also consent
to the use in this Registration Statement on  Form   N-4 of our
report dated April14, 2005, relating to the financial statements of The
Protective Variable Annuity Separate Account, which appears in such
Registration Statement.  We also consent
to the reference to us under the heading “Independent Registered Public
Accounting Firm,” in such Registration Statement.

 

 

PricewaterhouseCoopers LLP

Birmingham, Alabama

April 19, 2005Exhibit 10(a)

 

[SUTHERLAND ASBILL &
BRENNAN LLP LETTERHEAD]

 

	
  DAVID S. GOLDSTEIN

  	
   

  	
   

  
	
  DIRECT LINE:
  202.383.0606

  	
   

  	
   

  
	
  Internet:
  david.goldstein@sablaw.com

  	
   

  	
   

  

 

 

April 18, 2005

 

 

Board of Directors

Protective Life Insurance
Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby
consent to the reference to our name under the caption “Legal Matters” in the
statement of additional information filed as part of post-effective amendment
number 2 to the registration statement on Form N-4 (File No. 333-113070) filed
by Protective Life Insurance Company and Protective Variable Annuity Separate
Account with the Securities and Exchange Commission.  In giving this consent, we do not admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SUTHERLAND
  ASBILL & BRENNAN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  David S. Goldstein

  	
   

  
	
   

  	
   

  	
         David
  S. GoldsteinExhibit 10(b)

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

 

We hereby
consent to the use in this Registration Statement on Form N-4 (File No.
333-113070) of our report dated March 30, 2005, relating to the consolidated
financial statements and financial statement schedules of Protective Life
Insurance Company and subsidiaries, which appears in such Registration
Statement.  We also consent to the use in
this Registration Statement on Form N-4 of our report dated April 14,
2005, relating to the financial statements of The Protective Variable Annuity
Separate Account, which appears in such Registration Statement.  We also consent to the reference to us under
the heading “Independent Registered Public Accounting Firm,” in such
Registration Statement.

 

 

 

PricewaterhouseCoopers LLP

Birmingham, Alabama

April 19, 2005Exhibit 10(a)

 

[SUTHERLAND ASBILL & BRENNAN LLP LETTERHEAD]

 

	
  DAVID S. GOLDSTEIN

  	
   

  
	
  DIRECT LINE: 202.383.0606

  	
   

  
	
  Internet: david.goldstein@sablaw.com

  	
   

  

 

 

April 18, 2005

 

 

Board of Directors

Protective Life Insurance
Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby
consent to the reference to our name under the caption “Legal Matters” in the
statement of additional information filed as part of post-effective amendment
number 1 to the registration statement on Form N-4 (File No. 333-116814)
filed by Protective Life Insurance Company and Protective Variable Annuity
Separate Account with the Securities and Exchange Commission.  In giving this consent, we do not admit that
we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933.

 

	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUTHERLAND
  ASBILL & BRENNAN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  David S. Goldstein

  	
   

  
	
   

  	
   

  	
   

  	
  David S.
  GoldsteinExhibit 10(b)

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby
consent to the use in this Registration Statement on Form N-4 (File No. 333-116814)
of our report dated March 30, 2005, relating to the consolidated financial
statements and financial statement schedules of Protective Life Insurance
Company and subsidiaries, which appears in such Registration Statement.  We also consent to the use in this
Registration Statement on Form N-4 of our report dated April14, 2005,
relating to the financial statements of The Protective Variable Annuity
Separate Account, which appears in such Registration Statement.  We also consent to the reference to us under
the heading “Independent Registered Public Accounting Firm,” in such
Registration Statement.

 

PricewaterhouseCoopers LLP

Birmingham, Alabama

April 19, 2005Exhibit 10.1

 

 

SECOND AMENDED AND
RESTATED CREDIT AGREEMENT

 

Dated as of April 14, 2005

 

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

 

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Joint Lead Arranger, Joint Bookrunner and Syndication Agent

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent

 

and

 

ROYAL BANK OF CANADA,

as Co-Documentation Agent

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
   

  
	
   

  	
  1.1.

  	
   

  	
  Defined
  Terms

  	
   

  	
   

  
	
   

  	
  1.2.

  	
   

  	
  Exchange Rates

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
   

  	
  Amount
  and Terms of Credit

  	
   

  	
   

  
	
   

  	
  2.1.

  	
   

  	
  Commitments

  	
   

  	
   

  
	
   

  	
  2.2.

  	
   

  	
  Minimum
  Amount of Each Borrowing; Maximum Number of Borrowings

  	
   

  	
   

  
	
   

  	
  2.3.

  	
   

  	
  Notice of Borrowing

  	
   

  	
   

  
	
   

  	
  2.4.

  	
   

  	
  Disbursement of Funds

  	
   

  	
   

  
	
   

  	
  2.5.

  	
   

  	
  Repayment of Loans; Evidence of Debt

  	
   

  	
   

  
	
   

  	
  2.6.

  	
   

  	
  Conversions and Continuations

  	
   

  	
   

  
	
   

  	
  2.7.

  	
   

  	
  Pro Rata Borrowings

  	
   

  	
   

  
	
   

  	
  2.8.

  	
   

  	
  Interest

  	
   

  	
   

  
	
   

  	
  2.9.

  	
   

  	
  Interest
  Periods

  	
   

  	
   

  
	
   

  	
  2.10.

  	
   

  	
  Increased
  Costs, Illegality, etc.

  	
   

  	
   

  
	
   

  	
  2.11.

  	
   

  	
  Compensation

  	
   

  	
   

  
	
   

  	
  2.12.

  	
   

  	
  Change of Lending Office

  	
   

  	
   

  
	
   

  	
  2.13.

  	
   

  	
  Notice of Certain Costs

  	
   

  	
   

  
	
   

  	
  2.14.

  	
   

  	
  Bankers’ Acceptances

  	
   

  	
   

  
	
   

  	
  2.15.

  	
   

  	
  Incremental Facilities

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.

  	
   

  	
  Letters
  of Credit

  	
   

  	
   

  
	
   

  	
  3.1.

  	
   

  	
  Letters
  of Credit

  	
   

  	
   

  
	
   

  	
  3.2.

  	
   

  	
  Letter of Credit Requests

  	
   

  	
   

  
	
   

  	
  3.3.

  	
   

  	
  Letter of Credit Participations

  	
   

  	
   

  
	
   

  	
  3.4.

  	
   

  	
  Agreement to Repay Letter of Credit
  Drawings

  	
   

  	
   

  
	
   

  	
  3.5.

  	
   

  	
  Increased
  Costs

  	
   

  	
   

  
	
   

  	
  3.6.

  	
   

  	
  Successor Letter of Credit Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
   

  	
  Fees;
  Commitments

  	
   

  	
   

  
	
   

  	
  4.1.

  	
   

  	
  Fees

  	
   

  	
   

  
	
   

  	
  4.2.

  	
   

  	
  Voluntary Reduction of Revolving Credit
  Commitments

  	
   

  	
   

  
	
   

  	
  4.3.

  	
   

  	
  Mandatory Termination of Commitments

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  Payments

  	
   

  	
   

  
	
   

  	
  5.1.

  	
   

  	
  Voluntary Prepayments

  	
   

  	
   

  
	
   

  	
  5.2.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
   

  
	
   

  	
  5.3.

  	
   

  	
  Method and Place of Payment

  	
   

  	
   

  
	
   

  	
  5.4.

  	
   

  	
  Net Payments

  	
   

  	
   

  
	
   

  	
  5.5.

  	
   

  	
  Computations of Interest and Fees

  	
   

  	
   

  
	
   

  	
  5.6.

  	
   

  	
  Limit on Rate of Interest

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Conditions Precedent to Initial Borrowing

  	
   

  	
   

  
	
   

  	
  6.1.

  	
   

  	
  Credit
  Documents

  	
   

  	
   

  
	
   

  	
  6.2.

  	
   

  	
  Collateral

  	
   

  	
   

  

 

i

 

	
   

  	
  6.3.

  	
   

  	
  Legal
  Opinions

  	
   

  	
   

  
	
   

  	
  6.4.

  	
   

  	
  No Default

  	
   

  	
   

  
	
   

  	
  6.5.

  	
   

  	
  Consent

  	
   

  	
   

  
	
   

  	
  6.6.

  	
   

  	
  Senior Unsecured Term Loans

  	
   

  	
   

  
	
   

  	
  6.7.

  	
   

  	
  Effective Date Certificates

  	
   

  	
   

  
	
   

  	
  6.8.

  	
   

  	
  Corporate Proceedings of Each Credit Party

  	
   

  	
   

  
	
   

  	
  6.9.

  	
   

  	
  Corporate Documents

  	
   

  	
   

  
	
   

  	
  6.10.

  	
   

  	
  Fees

  	
   

  	
   

  
	
   

  	
  6.11.

  	
   

  	
  Representations and Warranties

  	
   

  	
   

  
	
   

  	
  6.12.

  	
   

  	
  Governmental Authorizations and Consents

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  Conditions Precedent to All Credit Events

  	
   

  	
   

  
	
   

  	
  7.1.

  	
   

  	
  No Default; Representations and Warranties

  	
   

  	
   

  
	
   

  	
  7.2.

  	
   

  	
  Notice of Borrowing; Letter of Credit Request

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  Representations, Warranties and Agreements

  	
   

  	
   

  
	
   

  	
  8.1.

  	
   

  	
  Corporate
  Status

  	
   

  	
   

  
	
   

  	
  8.2.

  	
   

  	
  Corporate Power and Authority

  	
   

  	
   

  
	
   

  	
  8.3.

  	
   

  	
  No Violation

  	
   

  	
   

  
	
   

  	
  8.4.

  	
   

  	
  Litigation

  	
   

  	
   

  
	
   

  	
  8.5.

  	
   

  	
  Margin Regulations

  	
   

  	
   

  
	
   

  	
  8.6.

  	
   

  	
  Governmental Approvals

  	
   

  	
   

  
	
   

  	
  8.7.

  	
   

  	
  Investment Company Act

  	
   

  	
   

  
	
   

  	
  8.8.

  	
   

  	
  True and Complete Disclosure

  	
   

  	
   

  
	
   

  	
  8.9.

  	
   

  	
  Financial Condition; Financial Statements

  	
   

  	
   

  
	
   

  	
  8.10.

  	
   

  	
  Tax Returns and Payments

  	
   

  	
   

  
	
   

  	
  8.11.

  	
   

  	
  Compliance with ERISA

  	
   

  	
   

  
	
   

  	
  8.12.

  	
   

  	
  Subsidiaries

  	
   

  	
   

  
	
   

  	
  8.13.

  	
   

  	
  Patents, etc.

  	
   

  	
   

  
	
   

  	
  8.14.

  	
   

  	
  Environmental Laws

  	
   

  	
   

  
	
   

  	
  8.15.

  	
   

  	
  Properties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  Affirmative Covenants

  	
   

  	
   

  
	
   

  	
  9.1.

  	
   

  	
  Information Covenants

  	
   

  	
   

  
	
   

  	
  9.2.

  	
   

  	
  Books, Records and Inspections

  	
   

  	
   

  
	
   

  	
  9.3.

  	
   

  	
  Maintenance of Insurance

  	
   

  	
   

  
	
   

  	
  9.4.

  	
   

  	
  Payment
  of Taxes

  	
   

  	
   

  
	
   

  	
  9.5.

  	
   

  	
  Consolidated Corporate Franchises

  	
   

  	
   

  
	
   

  	
  9.6.

  	
   

  	
  Compliance with Statutes, Obligations, etc.

  	
   

  	
   

  
	
   

  	
  9.7.

  	
   

  	
  ERISA

  	
   

  	
   

  
	
   

  	
  9.8.

  	
   

  	
  Good Repair

  	
   

  	
   

  
	
   

  	
  9.9.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
   

  
	
   

  	
  9.10.

  	
   

  	
  End of Fiscal Years; Fiscal Quarters

  	
   

  	
   

  
	
   

  	
  9.11.

  	
   

  	
  Additional Guarantors and Grantors

  	
   

  	
   

  
	
   

  	
  9.12.

  	
   

  	
  Pledges of Additional Stock and Evidence of
  Indebtedness

  	
   

  	
   

  
	
   

  	
  9.13.

  	
   

  	
  Use of Proceeds

  	
   

  	
   

  
	
   

  	
  9.14.

  	
   

  	
  Changes in Business

  	
   

  	
   

  

 

ii

 

	
   

  	
  9.15.

  	
   

  	
  Further Assurances

  	
   

  	
   

  
	
   

  	
  9.16.

  	
   

  	
  Canadian Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  Negative Covenants

  	
   

  	
   

  
	
   

  	
  10.1.

  	
   

  	
  Limitation on Indebtedness

  	
   

  	
   

  
	
   

  	
  10.2.

  	
   

  	
  Limitation on Liens

  	
   

  	
   

  
	
   

  	
  10.3.

  	
   

  	
  Limitation on Fundamental Changes

  	
   

  	
   

  
	
   

  	
  10.4.

  	
   

  	
  Limitation on Sale of Assets

  	
   

  	
   

  
	
   

  	
  10.5.

  	
   

  	
  Limitation on Investments

  	
   

  	
   

  
	
   

  	
  10.6.

  	
   

  	
  Limitation on Dividends

  	
   

  	
   

  
	
   

  	
  10.7.

  	
   

  	
  Limitations on Debt Payments and Amendments

  	
   

  	
   

  
	
   

  	
  10.8.

  	
   

  	
  Limitations on Sale Leasebacks

  	
   

  	
   

  
	
   

  	
  10.9.

  	
   

  	
  Consolidated Total Debt to Consolidated
  EBITDA Ratio

  	
   

  	
   

  
	
   

  	
  10.10.

  	
   

  	
  Consolidated EBITDA to Consolidated
  Interest Expense Ratio

  	
   

  	
   

  
	
   

  	
  10.11.

  	
   

  	
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  Events of Default

  	
   

  	
   

  
	
   

  	
  11.1.

  	
   

  	
  Payments

  	
   

  	
   

  
	
   

  	
  11.2.

  	
   

  	
  Representations, etc.

  	
   

  	
   

  
	
   

  	
  11.3.

  	
   

  	
  Covenants

  	
   

  	
   

  
	
   

  	
  11.4.

  	
   

  	
  Default Under Other Agreements

  	
   

  	
   

  
	
   

  	
  11.5.

  	
   

  	
  Bankruptcy, etc.

  	
   

  	
   

  
	
   

  	
  11.6.

  	
   

  	
  ERISA

  	
   

  	
   

  
	
   

  	
  11.7.

  	
   

  	
  Guarantee

  	
   

  	
   

  
	
   

  	
  11.8.

  	
   

  	
  Pledge Agreement

  	
   

  	
   

  
	
   

  	
  11.9.

  	
   

  	
  Security Agreement

  	
   

  	
   

  
	
   

  	
  11.10.

  	
   

  	
  Mortgages

  	
   

  	
   

  
	
   

  	
  11.11.

  	
   

  	
  Foreign Guarantees

  	
   

  	
   

  
	
   

  	
  11.12.

  	
   

  	
  Canadian Security Documents

  	
   

  	
   

  
	
   

  	
  11.13.

  	
   

  	
  Subordination

  	
   

  	
   

  
	
   

  	
  11.14.

  	
   

  	
  Judgments

  	
   

  	
   

  
	
   

  	
  11.15.

  	
   

  	
  Change of Control

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  The Administrative Agent

  	
   

  	
   

  
	
   

  	
  12.1.

  	
   

  	
  Appointment

  	
   

  	
   

  
	
   

  	
  12.2.

  	
   

  	
  Delegation of Duties

  	
   

  	
   

  
	
   

  	
  12.3.

  	
   

  	
  Exculpatory Provisions

  	
   

  	
   

  
	
   

  	
  12.4.

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
   

  
	
   

  	
  12.5.

  	
   

  	
  Notice of Default

  	
   

  	
   

  
	
   

  	
  12.6.

  	
   

  	
  Non-Reliance on Administrative Agent and
  Other Lenders

  	
   

  	
   

  
	
   

  	
  12.7.

  	
   

  	
  Indemnification

  	
   

  	
   

  
	
   

  	
  12.8.

  	
   

  	
  Administrative Agent in its Individual
  Capacity

  	
   

  	
   

  
	
   

  	
  12.9.

  	
   

  	
  Successor Agent

  	
   

  	
   

  
	
   

  	
  12.10.

  	
   

  	
  Withholding Tax

  	
   

  	
   

  
	
   

  	
  12.11.

  	
   

  	
  Canadian Administrative Agent

  	
   

  	
   

  
	
   

  	
  12.12.

  	
   

  	
  Quebec

  	
   

  	
   

  

 

iii

 

	
  SECTION 13.

  	
   

  	
  Collateral Allocation Mechanism

  	
   

  	
   

  
	
   

  	
  13.1.

  	
   

  	
  Implementation of CAM

  	
   

  	
   

  
	
   

  	
  13.2.

  	
   

  	
  Letters of Credit

  	
   

  	
   

  
	
   

  	
  13.3.

  	
   

  	
  Net Payments Upon Implementation of CAM
  Exchange

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
   

  	
  Miscellaneous

  	
   

  	
   

  
	
   

  	
  14.1.

  	
   

  	
  Amendments and Waivers

  	
   

  	
   

  
	
   

  	
  14.2.

  	
   

  	
  Notices

  	
   

  	
   

  
	
   

  	
  14.3.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
   

  
	
   

  	
  14.4.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
   

  
	
   

  	
  14.5.

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  	
   

  
	
   

  	
  14.6.

  	
   

  	
  Successors and Assigns; Participations and
  Assignments

  	
   

  	
   

  
	
   

  	
  14.7.

  	
   

  	
  Replacements of Lenders under Certain
  Circumstances

  	
   

  	
   

  
	
   

  	
  14.8.

  	
   

  	
  Adjustments; Set-off

  	
   

  	
   

  
	
   

  	
  14.9.

  	
   

  	
  Counterparts

  	
   

  	
   

  
	
   

  	
  14.10.

  	
   

  	
  Severability

  	
   

  	
   

  
	
   

  	
  14.11.

  	
   

  	
  Integration

  	
   

  	
   

  
	
   

  	
  14.12.

  	
   

  	
  GOVERNING LAW

  	
   

  	
   

  
	
   

  	
  14.13.

  	
   

  	
  Submission to Jurisdiction; Waivers

  	
   

  	
   

  
	
   

  	
  14.14.

  	
   

  	
  Acknowledgments

  	
   

  	
   

  
	
   

  	
  14.15.

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  	
   

  
	
   

  	
  14.16.

  	
   

  	
  Confidentiality

  	
   

  	
   

  
	
   

  	
  14.17.

  	
   

  	
  Judgment Currency

  	
   

  	
   

  
	
   

  	
  14.18.

  	
   

  	
  USA PATRIOT Act

  	
   

  	
   

  
	
   

  	
  14.19.

  	
   

  	
  Reaffirmation and Grant of Security
  Interest

  	
   

  	
   

  
	
   

  	
  14.20.

  	
   

  	
  Amendment and Restatement

  	
   

  	
   

  

 

SCHEDULES

 

	
  Schedule 1.1 (b)

  	
   

  	
  Mortgaged Properties

  
	
  Schedule 1.1 (c)

  	
   

  	
  Commitments and Addresses of Lenders

  
	
  Schedule 1.1(d)

  	
   

  	
  EBITDA Add-Backs

  
	
  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

  

 

iv

 

	
  Exhibit A-3

  	
   

  	
  Form of Canadian Security Agreement

  
	
  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 (Tranche D Term Loans)

  
	
  Exhibit L-2

  	
   

  	
  Form of Promissory Note (Revolving Credit and Swingline Loans)

  
	
  Exhibit M

  	
   

  	
  Form of Joinder Agreement

  
	
   

  	
   

  	
   

  

 

v

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of April 14, 2005, 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”) and 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,GOLDMAN SACHS
CREDIT PARTNERS L.P., as Joint Lead Arranger, Joint Bookrunner and Syndication
Agent, JPMORGAN CHASE BANK, N.A.
(f/k/a JPMORGAN CHASE BANK, 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, TORONTO BRANCH, as Canadian
Administrative Agent, and GENERAL ELECTRIC CAPITAL CORPORATION and
ROYAL BANK OF CANADA, as Co-Documentation Agents.

 

WHEREAS, Borrower,
Canadian Borrower, Holdings, 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, 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 Amended and Restated
Credit Agreement dated as of August 6, 2004 (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 D Term Loans made hereunder; (ii)
permit the repayment in full amounts outstanding under the Senior Unsecured
Term Loans on the Effective Date; (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 D Term Loans made on the Effective Date shall
be used by the Borrower to repay in full the outstanding (a) Existing Term
Loans and (b) Senior Unsecured 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, 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”.

 

2

 

“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.

 

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

 

“Adjusted Total Term Loan Commitment”
shall mean at any time the Total Term Loan Commitment less the Tranche D Term
Loan Commitments 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 Documentation Agents.

 

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

 

3

 

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

 

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

 

“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

  	
  %

  

 

and (ii) with
respect to Tranche D Term Loans only, (a) 0.50% per annum so long as the
Consolidated Total Debt to Consolidated EBITDA Ratio is less than 5.50:1:00 and
(b) 0.75% per annum so long as the Consolidated Total Debt to Consolidated
EBITDA Ratio is greater than or equal to 5.50:1:00.

 

“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

  	
  %

  

 

and (ii) with
respect to Tranche D Term Loans only, (a) 1.75% per annum and so long as the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than 5.50:1:00 and (b) 

 

4

 

2.00% per
annum so long as the Consolidated Total Debt to Consolidated EBITDA Ratio is
greater than or equal to 5.50:1:00.

 

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

 

	
  Status

  	
   

  	
  Applicable Stamping Fee

  	
   

  
	
  Level I Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III Status

  	
   

  	
  2.00

  	
  %

  
	
  Level IV Status

  	
   

  	
  1.75

  	
  %

  

 

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

 

“Approved Fund” shall have the meaning
provided in Section 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 

 

5

 

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 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 

 

6

 

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

 

(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.

 

7

 

“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 D 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 (c) the
incurrence of one Type of Revolving Credit Loan on a given date (or resulting
from conversions on a given date) having, in the case of 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).

 

“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 

 

8

 

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.

 

“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.

 

9

 

“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, 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 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.

 

10

 

“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 date
hereof, the amount set forth opposite such Lender’s name on
Schedule 1.1(c) as such Lender’s “Canadian Revolving Credit Commitment”
and (b) in the case of any Lender that becomes a Lender after the date
hereof, the amount specified as such Lender’s “Canadian Revolving Credit
Commitment” in the Assignment and Acceptance pursuant to which such Lender
assumed a portion of the Canadian Total Revolving Credit Commitment, in each
case as the same may be changed from time to time pursuant to the terms
hereof.  The aggregate amount of the
Canadian Revolving Credit Commitments as of the Closing Date is US $25,000,000.

 

“Canadian Revolving Credit Commitment
Percentage” shall mean at any time, for each Canadian Lender, the
percentage obtained by dividing (a) such Lender’s Canadian Revolving
Credit Commitment by (b) the 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, 

 

11

 

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 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 

 

12

 

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.

 

“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 

 

13

 

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 D 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 D 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.

 

“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.

 

“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.

 

14

 

“Commitments” shall mean, with respect
to each Lender, such Lender’s Tranche D 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 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 

 

15

 

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).  Notwithstanding anything to the contrary
contained herein, Consolidated EBITDA shall be deemed to be $49,900,000,
$47,300,000 and $47,500,000, respectively, for the fiscal quarters ended August
31, 2003, November 30, 2003 and February 29, 2004.

 

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

 

“Consolidated Interest Expense” shall
mean, for any period, the cash interest expense (including that attributable to
Capital Leases in accordance with GAAP), 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 

 

16

 

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.
Notwithstanding anything to the contrary contained herein, for purposes of
determining Consolidated Interest Expense for any period ending prior to the
first anniversary of the Closing Date, Consolidated Interest Expense shall be
an amount equal to actual Consolidated Interest Expense from the Closing Date
through the date of determination multiplied by a fraction the numerator of
which is 365 and the denominator of which is the number of days from the
Closing Date through the date of determination.

 

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

 

17

 

“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 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.

 

18

 

 “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.

 

“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.

 

“Documentation Agents” shall mean General Electric
Capital Corporation, together with its affiliates, and Royal Bank of
Canada, together with its affiliates, as the 

 

19

 

co-documentation
agents for the Lenders under this Agreement and the other Credit Documents.

 

“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.

 

“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.

 

20

 

“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
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
D 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 

 

21

 

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 Tranche D 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 Tranche
D 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 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

 

22

 

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.

 

“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.

 

23

 

“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.

 

“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.

 

24

 

“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.

 

“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.

 

25

 

“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.

 

“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 D Term Loan or Revolving Credit Loan, the interest
period applicable thereto, as determined pursuant to Section 2.9.

 

26

 

“JPMCB” shall mean JPMorgan Chase
Bank, N.A. (f/k/a JPMorgan Chase Bank, a New York banking corporation, 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 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 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.”

 

27

 

“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 D 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
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 

 

28

 

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
D 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 Tranche D 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.

 

“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.

 

29

 

“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 Tranche D 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

 

30

 

(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.

 

31

 

“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.

 

“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 

 

32

 

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 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 

 

33

 

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 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 

 

34

 

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 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 D 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 D 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).

 

35

 

“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 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.

 

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

 

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

 

“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 D Term Loans (excluding the Tranche D Term Loans held by Defaulting
Lenders) at such date and (v) the outstanding principal amount of the New Term
Loans (excluding the New Term Loans held by 

 

36

 

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 Tranche D Term Loan Commitments at such
date and (b) the outstanding principal amount of the Tranche D Term Loans
(excluding the Tranche D 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)

 

37

 

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.

 

“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.

 

“Senior Unsecured Term Loan Agreement”
shall mean the Senior Unsecured Term Loan Agreement, dated as of the Closing
Date, among the Company, Holdings, 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, JPMCB, as administrative agent and the other
agents and the lenders party thereto as it may be amended, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.

 

“Senior Unsecured Term Loans” shall
mean the Indebtedness incurred under the Senior Unsecured Term Loan Agreement
on the Closing Date in an aggregate principal amount of $100,000,000.

 

“Series” as defined in Section 2.15.

 

38

 

“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 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

 

39

 

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, 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.

 

40

 

“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 JPMCB,
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.

 

 “Test
Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrower then last ended; provided, however,
that for any period ending prior to one year after the end of the first fiscal
quarter ending after the Closing Date, pro forma adjustments shall be made with
respect to the relevant determination in accordance with Schedule 1.1(d).

 

“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 Tranche D Term Loans at such date.

 

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

 

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

 

“Tranche D 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 D 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 D 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 D Term Loan Commitments as of the Effective Date is $565,000,000.

 

41

 

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

 

“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 Tranche
D 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 

 

42

 

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 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.

 

43

 

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

 

44

 

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

 

Such Tranche D 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 D Term Loans made by each of the
Lenders pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of Tranche D 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 D Term Loan Commitment, of such Lender and
(v) shall not exceed in the aggregate the total of all Tranche D Term Loan
Commitments.  On the Tranche D Term Loan
Maturity Date, all Tranche D 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, 

 

45

 

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 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 

 

46

 

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 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 

 

47

 

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 immediately succeeding Business Day by all Lenders pro  rata
based on each Lender’s US Revolving Credit Commitment Percentage, and the
proceeds thereof shall be applied directly to the Swingline Lender to repay the
Swingline Lender for such outstanding Swingline Loans.  Each Lender 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 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 the 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 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 D 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 

 

48

 

promptly confirmed in
writing) of the Borrowing of Tranche D Term Loans if all or any of such Tranche
D 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 D Term Loans if all
such Tranche D 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 the Tranche D Term Loans to be made, (ii) the date of the borrowing
(which shall be the Effective Date) and (iii) whether the Tranche D Term
Loans shall consist of ABR Loans and/or Eurodollar Term Loans and, if the
Tranche D 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 D 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

 

49

 

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 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.

 

50

 

(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 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

 

51

 

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

 

52

 

	
  Number
  of Months

  From Closing Date

  	
   

  	
  Tranche D Term Loan

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  0.0

  	
  %

  
	
  9

  	
   

  	
  0.0

  	
  %

  
	
  12

  	
   

  	
  0.0

  	
  %

  
	
  15

  	
   

  	
  0.0

  	
  %

  
	
  18

  	
   

  	
  0.0

  	
  %

  
	
  21

  	
   

  	
  0.0

  	
  %

  
	
  24

  	
   

  	
  0.0

  	
  %

  
	
  27

  	
   

  	
  0.0

  	
  %

  
	
  30

  	
   

  	
  0.0

  	
  %

  
	
  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

  	
  %

  
	
  72

  	
   

  	
  0.25

  	
  %

  
	
  75

  	
   

  	
  0.25

  	
  %

  
	
  78

  	
   

  	
  0.25

  	
  %

  
	
  81

  	
   

  	
  0.25

  	
  %

  
	
  84

  	
   

  	
  0.25

  	
  %

  
	
  87

  	
   

  	
  0.25

  	
  %

  
	
  90

  	
   

  	
  0.25

  	
  %

  
	
  93

  	
   

  	
  0.25

  	
  %

  
	
  Tranche D Term Loan Maturity Date

  	
   

  	
  94.75

  	
  %

  

 

; 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
Tranche D Term Loans being repaid on such Installment Date and (z) the total aggregate
principal amount of all other Tranche D 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

 

53

 

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 D Term Loan, a US Revolving Credit Loan, a Canadian Revolving Credit
Loan or a Swingline Loan, the Type of each Loan made and the 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 D 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

 

54

 

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 D Term
Loans or Revolving Credit Loans to be so converted or continued, the Type of
Tranche D Term Loans or Revolving Credit Loans to be converted or continued
into and, if such Tranche D 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 D 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 D Term Loans under
this Agreement shall be granted by the Lenders pro rata on the basis of their
then-applicable Tranche D 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

 

55

 

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.

 

(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.

 

56

 

(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 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

 

57

 

(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:

 

(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):

 

58

 

(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 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

 

59

 

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 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

 

60

 

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 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

 

61

 

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.

 

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.

 

62

 

(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 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

 

63

 

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;

 

(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.

 

64

 

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 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.

 

65

 

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 Tranche D Term Loans to
the extent they are secured by the Collateral on a pari passu basis with the Tranche D 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 Tranche D
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

 

66

 

rate that may, 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 Tranche D
Term Loans plus 0.25% per annum unless the interest rate margin with respect
to the Tranche D 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 Tranche D 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

 

67

 

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 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

 

68

 

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 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

 

69

 

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 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.

 

70

 

(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
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

 

71

 

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 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.

 

72

 

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
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

 

73

 

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 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

 

74

 

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.

 

(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

 

 

75

 

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 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

 

76

 

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 D Term Loans, US
Revolving Credit Loans and Swingline Loans, and the Canadian Borrower shall
have the right to prepay Canadian Revolving Credit Loans, in each case, subject
to Section 5.1(b), 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 D 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 D 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
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 tranche of Tranche D Term Loans
pursuant to this Section 5.1 shall be (a) applied to Tranche D Term
Loans in such manner as the Borrower may determine and (b) applied to
reduce Repayment Amounts in such order as the Borrower may determine.  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 D Term Loan or Revolving Credit Loan of a Defaulting Lender.

 

77

 

(b)           Tranche D Term Loan Call Protection.  All voluntary prepayments of Tranche D Term
Loans effected on or prior to the first anniversary of the Effective Date with
the proceeds of a substantially concurrent issuance or incurrence of term loans
under this Agreement, as amended, amended and restated, supplemented, waived or
otherwise modified from time to time (excluding a refinancing of all the Credit
Facilities in connection with another transaction not permitted by this
Agreement (as determined prior to giving effect to any amendment or waiver of
this Agreement being adopted in connection with such transaction)), shall be
accompanied by a prepayment fee equal to 1.0% of the aggregate amount of such
prepayments if any of the interest rates payable in respect of such term loans
is less than the corresponding interest rate that would have been payable in
respect of the Tranche D Term Loans.

 

5.2.          Mandatory Prepayments.  (a)    
Tranche D 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 Tranche D 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 Tranche D Term Loans in an amount
equal to (x) 50% of Excess Cash Flow for such fiscal year (provided such
percentage shall be reduced to 25% if the Consolidated Total Debt to
Consolidated EBITDA Ratio as of the end of such fiscal year is less than 4.00
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 Tranche D Term Loans voluntarily prepaid
pursuant to Section 5.1 during such fiscal year.

 

(b)           Repayment of Revolving Credit Loans.

 

(i)            Aggregate
US Revolving Credit Outstandings.  If on
any date the aggregate amount of the Lenders’ US Revolving Credit Exposures
(all the foregoing, collectively, the “Aggregate US Revolving Credit
Outstandings”) exceeds 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

 

78

 

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 Tranche D Term Loans
required by Section 5.2(a) shall be applied to reduce Repayment Amounts in such
order as the Borrower may determine up to an amount equal to the aggregate
amount of the applicable 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 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 Tranche D Term Loan Lender, (ii) each Tranche D 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 D Term Loans until the date that is
specified in the immediately following clause), (iii) the Borrower will
make all such

 

79

 

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 Tranche D Term Loans and shall be applied as set forth above
in this paragraph (c).

 

(d)           Application to Tranche D Term Loans.  With
respect to each prepayment of Tranche D 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
Tranche D 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 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.

 

80

 

(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
Tranche D 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 Tranche D 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
Tranche D 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 been so required if it were Net Cash Proceeds),
(x) the Borrower or the Canadian Borrower, as

 

81

 

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

 

82

 

other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding (i) net income taxes and franchise taxes (imposed in
lieu of net income taxes) and capital taxes imposed on the Administrative
Agent, the Canadian Administrative Agent or any Lender and (ii) any taxes
imposed on the Administrative Agent, the Canadian Administrative Agent or any
Lender as a result of 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. 

 

83

 

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 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

 

84

 

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, 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

 

85

 

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.

 

(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

 

86

 

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 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.

 

87

 

SECTION 6.                            Conditions Precedent to
Initial Borrowing

 

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

 

6.1.          Credit Documents.  The Administrative Agent shall have received
this Agreement, executed and delivered by a duly authorized officer of each of
the 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 Tranche D Term Loan Lender.

 

6.2.          Collateral. 
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.

 

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 Tranche D Term Loan Lenders shall have
indicated their consent by the execution and delivery of the signature pages
hereof to the Administrative Agent.

 

6.6.          Senior Unsecured Term Loans.  Borrower shall have paid in full all
outstanding amounts under the Senior Unsecured Term Loan Agreement.

 

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

 

88

 

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.

 

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:

 

89

 

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 D 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.

 

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) has duly qualified and is authorized to do business and
is in good standing in all jurisdictions where it is required to be so
qualified, except where the failure to be so qualified could not reasonably be
expected to result in a Material Adverse Effect.

 

8.2.          Corporate Power and Authority.  Each Credit Party has the corporate or other
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Credit Documents to which it is a party.  Each Credit Party has 

 

90

 

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 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
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.

 

91

 

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.

 

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

 

92

 

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 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

 

93

 

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.

 

(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

 

94

 

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, 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

 

95

 

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, containing a
description of the Collateral have been filed of record in each governmental,
municipal or

 

96

 

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

 

97

 

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, 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

 

98

 

a similar business;
and will furnish to the Lenders, upon written request from the Administrative
Agent, information presented in reasonable detail as to the insurance so
carried.

 

9.4.          Payment of Taxes.  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

 

99

 

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
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

 

100

 

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 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

 

101

 

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.

 

(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

 

102

 

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 (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.

 

103

 

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.

 

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

 

104

 

incurred pursuant to this subclause (iii) shall not exceed $25,000,000
at any time outstanding, and (iv) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (i), (ii) or
(iii) above, 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

 

105

 

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 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 (i) the greater of (x) $70,000,000 (which amount
shall include the aggregate outstanding amount at any time of any Indebtedness
of Restricted Foreign Subsidiaries existing at the Closing Date) or (y) the
Foreign Borrowing Base Amount in effect at such time minus (ii) the
amount, if any, by which the aggregate amount of Indebtedness incurred and
outstanding at such time pursuant to clause (n) below
exceeds the Dollar Equivalent of $100,000,000;

 

(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 the sum of (x)
$100,000,000 and (y) the amount, if any, by which $70,000,000
exceeds the aggregate amount of Indebtedness then outstanding under
clause (l) above, and (ii) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (i) above; provided,
further, at no time shall Indebtedness of Restricted Foreign
Subsidiaries in an aggregate amount at any time outstanding pursuant to
subclause (l) above and this subclause (n) exceed the aggregate amount
permitted by subclause (l) above; and

 

(o)                                 Indebtedness in respect of Permitted
Additional Subordinated Notes to the extent that the Net Cash Proceeds therefrom
are, immediately after the

 

106

 

receipt thereof, applied to the prepayment of Tranche D 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.

 

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;

 

107

 

(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 $25,000,000 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), 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

 

108

 

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, (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),

 

109

 

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 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,

 

110

 

(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 (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

 

111

 

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:

 

(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

 

112

 

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 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

 

113

 

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 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

 

114

 

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, seriatim, the Borrower, which shall also be
permitted, provided that (i) subject to clauses (ii) and
(iii) below, the aggregate amount of such dividends paid by Holdings
pursuant to this clause (d) shall not at any time exceed the greater
of (x) $50,000,000 in the aggregate from the Closing Date 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 clause (x), at the time of the
payment of any such dividends and after giving effect thereto, 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 (iii) with respect to clause
(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 4.50:1.00 and
(b) the Consolidated Senior Debt to Consolidated EBITDA Ratio on the date
of such payment of such dividends shall be less than 2.50:1.00 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

 

115

 

as no Default or Event of Default has occurred and is continuing, the
Borrower may prepay, repurchase or redeem Subordinated Notes (x) for an
aggregate price not in excess of the Available Amount at the time of such
prepayment, repurchase or redemption, or (y) with the proceeds of
subordinated Indebtedness that (1) is permitted by Section 10.1
(other than Permitted Additional Subordinated Notes) and (2) has 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:

 

116

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 28,
  2005 to May 29, 2005

  	
   

  	
  7.25 to 1.00

  	
   

  
	
  May 30,
  2005 to August 28, 2005

  	
   

  	
  7.25 to 1.00

  	
   

  
	
  August 29
  2005 to November 27, 2005

  	
   

  	
  7.00 to 1.00

  	
   

  
	
  November 28,
  2005 to February 26, 2006

  	
   

  	
  6.75 to 1.00

  	
   

  
	
  February 27,
  2006 to May 28, 2006

  	
   

  	
  6.75 to 1.00

  	
   

  
	
  May 29,
  2006 to August 27, 2006

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  August 28
  2006 to November 26, 2006

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  November 27,
  2006 to February 25, 2007

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  February 26,
  2007 to May 27, 2007

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  May 28,
  2007 to August 26, 2007

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  August 27,
  2007 December 2, 2007

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  December 3,
  2007 to March 2, 2008

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  March 3,
  2008 to June 1, 2008

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  June 2,
  2008 to August 31, 2008

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  September 1,
  2008 to November 30, 2008

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  December 1,
  2008 to March 1, 2009

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  March 2,
  2009 to May 31, 2009

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  June 1,
  2009 to August 30, 2009

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  August 31,
  2009 to November 29, 2009

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  November 30,
  2009 to February 28, 2010

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  March 1,
  2010 to May 30, 2010

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  June 1,
  2010 to August 29, 2010

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  August 30,
  2010 to November 28, 2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  November 29,
  2010 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:

 

117

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 28,
  2005 to May 29, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  May 30,
  2005 to August 28, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  August 29
  2005 to November 27, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  November 28,
  2005 to February 26, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  February 27,
  2006 to May 28, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  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.

 

118

 

	
  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

  	
   

  
	
  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

 

119

 

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

 

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

 

120

 

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 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

 

121

 

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

 

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

 

122

 

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 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 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.

 

123

 

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.

 

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

 

124

 

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 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,

 

125

 

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 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

 

126

 

circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason), such Lender shall
indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including
penalties and interest, together with all expenses incurred, including legal
expenses, allocated staff costs and any out of pocket expenses.

 

12.11.                  Canadian Administrative Agent.                    Each of the Lenders hereby agrees and confirms that the provisions of
this Section 12 shall apply to JPMorgan Chase Bank, 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.    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
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.

 

127

 

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 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

 

128

 

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 Revolving Credit
Commitment or Canadian 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 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

 

129

 

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 9.01.  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
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

 

130

 

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

 

131

 

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” 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) change any Revolving Credit Commitment to
a Tranche D Term Loan Commitment, or change any Tranche D Term Loan Commitment
to a Revolving Credit Commitment, in each case without the prior written
consent of each Lender directly and adversely affected thereby, or
(vii) release all or substantially all of the Guarantors under the
Guarantee (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 Repayment Amount, extend any scheduled
Repayment Date or decrease the amount or allocation of any mandatory prepayment
to be received by any Lender holding any Tranche D Term Loans, in each case
without the written consent of the Required Term Lenders 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
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

 

132

 

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
as set forth on Schedule 1.1(c) in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto:

 

	
  The 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

  

 

133

 

	
  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,
  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,
  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.

 

134

 

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

 

135

 

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 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 Tranche D 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 D Term Loan Commitment or Tranche D Term Loan, the Dollar Equivalent of
$1,000,000 unless each of

 

136

 

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;

 

(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

 

137

 

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 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

 

138

 

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
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 D Term Loans and Revolving Credit Loans and
Swingline Loans, respectively, owing to such Lender.

 

139

 

(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 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 or
5.4, 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

 

140

 

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 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.

 

141

 

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;

 

(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

 

142

 

(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 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

 

143

 

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
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

 

144

 

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 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

 

145

 

that, from and after the Effective Date, all references to the “Credit
Agreement” contained therein shall be deemed to refer to this Agreement.

 

146

 

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:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY MATTRESS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY CANADA LTD./LTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  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:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, as
  Administrative

  	
   

  
	
   

  	
  Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  TORONTO

  	
   

  
	
   

  	
  BRANCH, as Canadian
  Administrative Agent and

  	
   

  
	
   

  	
  as a Canadian Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
  GOLDMAN SACHS CREDIT
  PARTNERS, L.P.,

  	
   

  
	
   

  	
  as Joint Lead Arranger,
  Joint Bookrunner,

  	
   

  
	
   

  	
  Syndication Agent and as a
  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL

  	
   

  
	
   

  	
  CORPORATION, as
  Co-Documentation Agent and

  	
   

  
	
   

  	
  as a Lender,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
  ROYAL BANK OF CANADA, as
  Co-

  	
   

  
	
   

  	
  Documentation Agent and as
  a Lender,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
  Institution Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  as a Lender,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

SCHEDULE 1.1(d)

 

EBITDA ADD-BACKS

 

1.                                       Costs associated with the introduction of new
products and incurred prior to May 31, 2004.

 

2.                                       Expenses related to the implementation of
enterprise resource planning systems in an aggregate amount not greater than
$45,000,000 less the amount of expenditures related thereto that are
capitalized.

 

3                                          The amount of management, monitoring,
consulting and advisory fees and related expenses paid to Bain Capital, LLC to
the extent such fees are incurred prior to the Closing Date.

 

4.                                       Expenses associated with the following items,
which expenses are incurred prior to the Closing Date:

 

a)                                      Workers compensation expenses;

b)                                     Facilities rationalization;

c)                                      Write-offs related to Affiliates;

d)                                     Stock based compensation;

e)                                      A/R process improvement; and

f)                                        Deferred debt write-offs.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]